1
Fair Work Act 2009
s 394 - Application for unfair dismissal remedy
Ms Julie Crowe
v
R and R Poultry Pty Ltd t/a R&R Poultry
(U2016/14959)
DEPUTY PRESIDENT SAMS SYDNEY, 1 JUNE 2017
Application for an unfair dismissal remedy – Quality Assurance Manager – Company in
voluntary administration – no prior warnings – no procedural fairness – provisions of the
Corporations Act – Commission not a ‘court’ – no bar to Commission’s jurisdiction – ex-
parte hearing of merits – no contradictor – applicant’s dismissal ‘harsh, unjust and
unreasonable – compensation ordered.
[1] This decision concerns an application filed by Ms Julie Mary Crowe, pursuant to s 394
of the Fair Work Act 2009 (the ‘Act’), in which Ms Crowe seeks a remedy for her alleged
unfair dismissal by R and R Poultry Pty Ltd (the ‘Company’) on 25 November 2016. The
Company was involved in the processing and supply of fresh and frozen poultry and
associated products. The Company’s F3 disclosed that it employed 66 employees. Ms Crowe
had been employed by the Company as its Quality Assurance Manager since 15 February
2010 on a part time (22.8 hour a week) salary of $49,599.00 per annum. Ms Crowe’s letter of
termination was brief and signed by the General Manager, Warren Keating. It reads:
‘As of the [sic] 12.30 on the 25/11/2016 Julie Crowe has been Terminated from PnR
poultry Julie has been spoken to a number of times in relation to matters
corresponding with QA all documentation has been filed with RR and we have spoken
to fare [sic] work Australia.
General Manager
Witness Operations.’
[2017] FWC 2954
DECISION
E AUSTRALIA FairWork Commission
[2017] FWC 2954
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[2] Ms Crowe (hereinafter referred to as the ‘applicant’) filed her s 394 application on 15
December 2016. She set out the background to her dismissal and claimed the following
matters demonstrated the unfairness of her dismissal:
‘11. No valid reason for termination relating to my performance or conduct
12. No prior written or verbal warnings
13. Lack of procedural fairness:
(a) No notice of termination meeting and therefore no opportunity to bring
support person
(b) Inadequate opportunity to respond to allegations / reasons for dismissal
14. Additional factors:
(a) Over 6 years’ service with no prior issues
(b) I feel that the instant dismissal was also in part to avoid my entitlement to
pro rata long service leave in early 2017.’
[3] In its F3 response, dated 16 January 2017, and filed late, the Company’s General
Manager, Mr Keating objected to the application on the basis that it was filed ‘out of time’.
However, the ‘out of time’ contention was not pursued, as the application was filed on the
twentieth day after Ms Crowe’s dismissal. As to the merits of the matter, it was said that Ms
Crowe had received four written warning for various mistakes she had made in carrying out
her quality assurance duties.
[4] A delayed unsuccessful phone conciliation took place on 3 February 2017 during
which directions were issued for the filing and service of evidence and outlines of
submissions and hearing dates set. On 20 February 2017, Mr Craig Pollard from CTMA
Workplace Consulting filed a Notice of Representative Commencing to Act for the
respondent. On 28 March 2017, Mr Pollard advised that he was having difficulties in
contacting key witnesses to provide evidence and sought an extension to file the respondent’s
material until 7 April 2017. This was perhaps a portent that a dramatic turn of events would
shortly take place which would ultimately alter the usual course of events for the hearing of
the matter, with regrettable consequences for the outcomes the applicant was seeking in her
claim of unfair dismissal.
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[5] Commissioner Spencer listed the matter for further conciliation on 7 April 2017. The
respondent did not appear and was not represented. On 5 April, two days prior to when the
conciliation was listed to take place, Ms Crowe advised the Commission that she had been
contacted by Mr Pollard who had informed her that the Company was closing on 7 April 2017
as ‘the business is being wound up due to bankruptcy of the Director and sole owner, Mr Rhys
Jones’. Unsurprisingly, the applicant sought advice as to the status and future of her
application.
[6] Mr Pollard advised the Commission on 6 April 2017 as follows:
R and R Poultry would be closing on Friday, 7 April 2017. It was not due to
bankruptcy and the business is not in administration;
the Company is unable to continue trading and only has enough reserves to pay its
debts as of that day;
all Production employees were made redundant on 5 April 2017 and paid redundancy
pay in accordance with the Award and the NES;
all remaining employees would finish up on 7 April 2017;
he understood the Company would be wound up in the next 3-4 weeks and would
then no longer exist;
no witnesses statements had been prepared by the respondent;
the Company believed that the applicant was almost ‘single-handedly responsible’ for
the Company’s closure; and
further conciliation was ‘doomed to failure’.
[7] On 11 April 2017, Mr Pollard advised the Commission that the respondent had been
placed in voluntary administration that day and he was awaiting instructions from the
Administrators as to what further action would be taken in respect to the applicant’s claim. On
12 April 2017, Chartered Accountants Pilot Partners advised the Commission that Mr Nigel
Robert Markey and Ms Ann Fordyce had been appointed voluntary administrators of the
respondent on 11 April 2017, under s 436A of the Corporations Act 2001, which provides as
follows:
SECT 436A - Company may appoint administrator if board thinks it is or will
become insolvent
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(1) A company may, by writing, appoint an administrator of the company if the board
has resolved to the effect that:
(a) in the opinion of the directors voting for the resolution, the company is
insolvent, or is likely to become insolvent at some future time; and
(b) an administrator of the company should be appointed.
(2) Subsection (1) does not apply to a company if a person holds an appointment as
liquidator, or provisional liquidator, of the company.
[8] On 20 April 2017, Pilot Partners advised the Commission as follows:
the financial position of the Company, including whether any funds would be
available to meet any outcome of the unfair dismissal case, is currently unknown;
the Administrators were appointed on 11 April 2017 and did not have any knowledge
of the Company or the unfair dismissal case prior to this date;
the Company has ceased trading and all employees were terminated prior to our
appointment. Any employees with knowledge of the matter are unlikely to assist given
the termination of their employment;
they understood Mr Craig Pollard was previously acting for the Company in respect of
this matter, however, they did not currently have funds to engage Mr Pollard (or any
other legal representative);
We are undertaking investigations into the Company’s affairs and financial position
and will present our findings at the second meeting of creditors to be held no later than
23 May 2017, except with leave of the Court, as required by section 439A of the
Corporations Act 2001; and
We foresee no disadvantage to the applicant in adjourning the matter.
[9] Further information from Pilot Partners indicated a meeting of creditors was held on
21 April 2017. A second meeting was to be held between 9 to 23 May 2017 to decide the
future of the Company. 49 employees are listed as preferred creditors. The applicant did not
appear on that list.
[10] In response to the request for an adjournment, Commissioner Spencer replied as
follows:
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‘The Commissioner advises that the Fair Work Commission has previously considered
circumstances where Respondents have moved into voluntary administration, and
specifically whether as a consequence section 440A of the Corporations Act 2001
(‘the Act’) represents a bar to unfair dismissal remedy applications. Those decisions
have concluded that the Act does not prevent the Commission from proceeding to hear
and determine an unfair dismissal remedy application. Examples of such decisions are
reported at Clifford v S & N Civil Constructions Pty Ltd [2013] FWC 235 and Letizia v
Australian Music Group T/A Allans Billy Hyde Music [2012] FWA 9609.
Accordingly, given that the Employer has gone into a voluntary winding up, this does
not provide grounds for an adjournment and therefore such will not be granted. The
matter will be delisted for Monday 24 April 2017 and is listed for a Hearing, before
Deputy President Sams at 10am 8 May 2017 in the Fair Work Commission at Level
14, Central Plaza Two, 66 Eagle Street, Brisbane, Qld, 4000.’
[11] Accordingly, the matter was listed for arbitration before me on 8 May 2017 in
Brisbane. Ms Crowe appeared for herself. There was no appearance by, or on behalf of the
respondent or the Administrators.
[12] It is firstly necessary for the Commission to determine whether it has jurisdiction to
deal with Ms Crowe’s application, given the respondent is under voluntary administration.
Relevant provisions of the Corporations Act
[13] Section 440D of the Corporations Act provides as follows:
SECT 440D - Stay of proceedings
(1) During the administration of a company, a proceeding in a court against the
company or in relation to any of its property cannot be begun or proceeded with,
except:
(a) with the administrator's written consent; or
(b) with the leave of the Court and in accordance with such terms (if any)
as the Court imposes.
(2) Subsection (1) does not apply to:
(a) a criminal proceeding; or
(b) a prescribed proceeding.
[14] Section 471B of the Corporations Act reads as follows:
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‘SECT 471B - Stay of proceedings and suspension of enforcement process
While a company is being wound up in insolvency or by the Court, or a provisional
liquidator of a company is acting, a person cannot begin or proceed with:
(a) a proceeding in a court against the company or in relation to property of
the company; or
(b) enforcement process in relation to such property;
except with the leave of the Court and in accordance with such terms (if any) as the
Court imposes.’
[15] In Smith et al v Trollope Silverwood & Beck Pty Ltd (In liquidation) [PR940508]
(‘Smith’) the Full Bench of the Australian Industrial Relations Commission (as the
Commission was then known) considered whether the Commission had jurisdiction to hear
and determine an unfair dismissal application in circumstances where the respondent
employer was in liquidation and the applicant employee had not obtained the leave of a court
of competent jurisdiction to commence or proceed with the application. In short, the Full
Bench considered whether the Commission was a ‘court’ for the purposes of s 471B and
consequently s 440D of the Corporations Act. At paras [7]-[10], the Full Bench said:
‘[7] Section 471B includes the terms "court" and "Court". Each of these terms is
defined in s.9 of the Corporations Act. Section 9 provides that unless the contrary
intention appears, "court" and "Court" have the meanings given by s.58AA. Section
58AA relevantly provides:
"(1) Subject to subsection (2), in this Act:
court means any court.
Court means any of the following courts:
(a) the Federal Court;
(b) the Supreme Court of a State or Territory;
(c) the Family Court of Australia;
(d) a court to which section 41 of the Family Law Act
1975 applies because of a Proclamation made under subsection
41(2) of that Act.
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(2) Except where there is a clear expression of a contrary intention (for
example, by use of the expression "the Court"), proceedings in relation to a
matter under this Act may, subject to Part 9.7, be brought in any court."
[8] As indicated, pursuant to s.9 of the Corporations Act "court" has the meaning it
bears in s.58AA of the same Act unless the contrary intention appears. The first
question is, therefore, what meaning does the term "court" bear in s.58AA?
[9] It seems clear that in s.58AA, the terms of which we have just set out, "court"
means a body capable of being invested with the judicial power of the
Commonwealth. In other words, the term is confined in meaning to Federal and State
courts. This conclusion arises primarily from the terms of s.58AA(2). Proceedings in
relation to a matter under the Act would require to be brought in a curial body
exercising judicial power. It is beyond argument that the Commission is not a body
capable of exercising the judicial power of the Commonwealth: R v Kirby; Ex parte
Boilermakers' Society of Australia; Miller v University of New South Wales. If the
term "court" is to be given its defined meaning it excludes the Commission. Therefore
the Commission is not a court within the definition of that term in s.9. This was the
conclusion reached by a justice of the Federal Court of Australia in Australian Liquor,
Hospitality and Miscellaneous Workers Union v Home Care Transport Pty Ltd. We
respectfully agree.
[10] It follows from the terms of s.9 that the expression "any court" in s.471B includes
only courts capable of exercising the judicial power of the Commonwealth, unless the
contrary intention appears. Does an intention appear, either in s.471B itself or from the
statutory context, that in s.471B "court" includes the Commission?’ (references
omitted)
[16] In respect to the question posed above, the Full Bench concluded at para [20]:
‘[20] If the legislature had intended to make proceedings in the Commission subject to
the leave requirement it could have done so by express provision. An example of such
a provision may be found in s.5 of the Suitors' Fund Act 1951 (NSW) which defines
court in these words: "includes such tribunals or other bodies as are prescribed."’
[17] The ratio in Smith has been consistently applied by the Commission in appropriate
cases. There is no basis to conclude that the Commission is a ‘court’ for the purposes of s
440D or 471B of the Corporations Act. But that may not be the end of the matter in the
context of the present circumstances.
[18] Section 500 of the Corporations Act serves as a statutory bar to civil proceedings
being proceeded with, or commenced except, by leave of a Court, in specific circumstances.
The section reads as follows:
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‘SECT 500 - Execution and civil proceedings
(1) Any attachment, sequestration, distress or execution put in force against the
property of the company after the passing of the resolution for voluntary winding up is
void.
(2) After the passing of the resolution for voluntary winding up, no action or other
civil proceeding is to be proceeded with or commenced against the company except by
leave of the Court and subject to such terms as the Court imposes.
(3) The Court may require any contributory, trustee, receiver, banker, agent, officer or
employee of the company to pay, deliver, convey, surrender or transfer forthwith or
within such time as the Court directs to the liquidator any money, property of the
company or books in his, her or its hands to which the company is prima facie
entitled.’
[19] In Ramirez v Inner West Skills Centre [2015] FWC 7983, the Commission was able to
deal with an unfair dismissal application after the Supreme Court of NSW granted leave (on
terms) for the applicant to proceed with her application. There is no doubt that unfair
dismissal proceedings in the Commission are civil proceedings for the purposes of s 500(2) of
the Act; see: Woolley v Glenjac Pty Ltd [2014] FWC 7833 at [17].
[20] In Clifford v S & N Civil Constructions Pty Ltd [2013] FWC 235 (‘Clifford’), SDP
Richards considered the interaction of the above sections of the Act and said at paras [21]-
[32]:
‘[21] Section 500 of the Corporations Act provides a complete bar to the
commencement of any action or other civil proceedings proceeding in respect of a
Company which has entered into voluntary winding up.
[22] Both ss.471B and 500 of the Corporations Act relate to circumstances in which a
Company is being wound up.
[23] The difference between the provisions is that s.500 of the Corporations
Act applies when a Company is being wound up voluntarily, and s.471 of
the Corporations Act applies when a Company is being wound up involuntarily, by a
court initiated application or otherwise.
[24] Section 440D of the Corporations Act, by contrast, deals with the circumstances
in which a Company has moved into administration voluntarily, which provides for a
more gradual process of considering the prospects of the business before moving to
any future resolution of the Company's affairs through a DOCA or the handing back of
the business to the original Director(s). Of course, a DOCA may result in the
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Company being wound up, in which case s.500 of the Corporations Act would have
effect from the date the DOCA was executed or took effect.
[25] But does s.440D of the Corporations Act represent a bar to proceedings against a
company after such time as it moves in voluntary administration?
[26] In the current circumstances, section 440D of the Corporations Act appears to be
a relevant provision. This is because S&N Constructions have moved into voluntary
administration.
[27] Section 440D of the Corporations Act generally proscribes a proceeding in a
court against the Company proceeding other than with the Administrators’ consent or
with the leave of the court.
[28] However, section 440D of the Corporations Act - seemingly - does not represent
a bar to the Applicant lodging his application under s.394 of the Act. The reason for
this is as follows.
[29] A Full Bench of the Australian Industrial Relations Commission (as it then was)
has determined (in the decision in Smith and Ors v Trollope Silverwood and Beck Pty
Ltd. (Re: Smith)) that the reference to a court in section 471B of the Corporations
Act does not include a reference to what was then the Australian Industrial Relations
Commission.
[30] While the Full Bench of the AIRC in Re: Smith was concerned with
circumstances relating to s.471B of the Corporations Act (which concerns a
compulsory winding up), it nonetheless made findings in respect of whether or not a
proceeding in a court was akin to a proceeding in an administrative tribunal, such as
the Australian Industrial Relations Commission, as it then was.
[31] The Full Bench determined that the Australian Industrial Relations Commission
was not a court, and therefore s.471B of the Corporations Act did not present a bar to
a proceeding being commenced in that Commission:
[20] If the legislature had intended to make proceedings in the Commission
subject to the leave requirement it could have done so by express provision. An
example of such a provision may be found in s.5 of the Suitors' Fund Act
1951 (NSW) which defines court in these words: "includes such tribunals or
other bodies as are prescribed." (references omitted)
[32] It appears to follow that a similarly worded provision in respect of s.440D of
the Corporations Act (which concerns a company in voluntary administration) would
not exclude the jurisdiction the Fair Work Commission. But I do make one
observation in passing, however.’
See also: Letizia [2012] FWA 9609.
[21] From the information I have before me, the relevant circumstances identified by SDP
Richards in Clifford are not dissimilar from those in the present proceedings in that:
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R & R Poultry Pty Ltd entered into voluntary administration on 11 April 2017;
Pilot Partners were appointed as Administrators the same day;
a meeting of creditors was held on 21 April 2017 and a further meeting is to be held
before 23 May 2017; and
the Company has not been wound up and is not in liquidation.
[22] As the respondent is in voluntary administration, as contemplated by s 440D of the
Corporations Act, and the Commission is not a Court for the purposes of that section, there is
no statutory bar to Ms Crowe proceeding with her application, nor is there a bar to the
Commission determining her application, notwithstanding the non-appearance of the
Administrators or any person acting on their behalf. I intend to do so.
Applicant’s evidence
[23] In her role, the applicant was required to look after product safety and quality and
workplace health and safety. Her day to day duties included:
‘managing, reviewing and updating the quality management system, all internal and
external audits and informal factory visits, staff training, investigating and responding
to customer complaints and enquiries, writing product specifications, ensuring
ingredient labels were created and accurate, microbiological testing of product and
environment, creating and checking production paperwork, and liaising with
ingredient and packaging suppliers, plus other general QA duties.’
[24] In or around August 2016, the applicant was asked by the General Manager, Mr
Warren Keating, to spend more time in the production area to check that production staff were
abiding by safety rules and to identify any issues of concern in respect to cleaning and
maintenance. Each day, the applicant provided a written report of her visit to production and
identified actions taken.
[25] The applicant was involved in a customer audit in September 2016. This audit was of a
higher standard than previously required and involved a 180-page document of requirements.
On 11-13 October 2016, the auditor (customer) attended the premises and carried out the
audit. The applicant’s involvement in the audit required many extra hours of work on site. At
a final meeting with the auditor, the applicant, Mr Keating, Mr Chapman, Operations
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Manager and Mr Jones, the Owner of the Company, each of them were given a report
outlining areas of improvement.
[26] The applicant was tasked to oversee and work through some 30-40 items highlighted
for updating or correction. She said this was very unusual for an audit, as all previous audits
had typically only identified 3-4 areas of improvement. She liaised with each department
manager as to what was required and solutions for improvement. The applicant met briefly
with Mr Chapman during this process. However, Mr Keating did not ask her how the audit
follow up was going. Up to the end of November, 2016 the applicant was working through the
issues with the auditor and progress was being made.
[27] The applicant was directed to attend a meeting Mr Keating and Mr Chapman at
12.30pm on 25 November 2016. She asked twice about the purpose of the meeting, but was
not told. The applicant recalled the conversation at the meeting as follows:
Mr Keating: “We want to talk about the audit responses.”
applicant: “Ok” and got out my list of all of the points of improvement.
Mr Keating: “Were you deliberately trying to make the company look bad?”
applicant: “Of course not, what do you mean?”
Mr Keating: “We’ve had a consultant look at the responses on the system and they reckon
you were trying to get us in trouble.”
applicant: “What! Who was the consultant?”
Mr Keating: “I’m not going to tell you.”
applicant: “Can I see what points you are talking about then?”
Mr Keating: “It doesn't matter which points it’s about.”
The applicant was then handed a termination letter
Mr Keating : “We are dismissing you, here is your termination letter, you need to leave.”
applicant: She quickly read the letter and asked “What about the notice period?”
Mr Keating said “We’re going to pay it to you, you need to leave immediately.”
Mr Keating: “Jim (Mr Jim Rodgers, the Purchasing Manager) is waiting downstairs to see
you out.”
applicant: “Sorry for any issues caused, but I don’t think I’ve done anything wrong.”
Mr Keating: “Ok, please go and collect your things.”
Mr Keating then stood up and ushered the applicant out of the room.
[28] The applicant replied to the respondent’s F3 by putting that:
she did not recall any warnings being issued to her by Mr Chapman;
in any event, she reported to the General Manager or Managing Director, and as Mr
Chapman was of equivalent seniority to herself, he was not in a position to issue her
with any warnings;
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she did not receive any warning from Mr Keating. His requests were to do with her
duties, not to any issues as to her performance;
she was unaware of issues with her paperwork, recipe errors or attention to machine
cleanliness;
she did not receive four written warnings.
[29] The applicant believed her dismissal was unfair in that:
there was no valid reason for her dismissal;
she was not told the purpose of the 25 November 2016 meeting;
she was given no opportunity to respond to allegations against her; and
she was not given any opportunity for a support person to be present.
[30] The applicant did not seek reinstatement. She had been unemployed for 12 weeks
since her dismissal. She had applied for about 20 jobs in the past three months, but given her
senior role, it was difficult to find a commensurate position. However, at the hearing of the
matter on 8 May 2017, the applicant advised that she had obtained comparable alternative
employment at the end of March, after four months of being out of work. The applicant
reaffirmed her statement evidence concerning the lead up to her dismissal and the
conversation during the termination meeting. She said that the meeting lasted about 10
minutes. The management had prepared the letter of termination before the meeting, without
ever giving her an opportunity to respond or for Mr Keating to consider her response.
CONSIDERATION
[31] At this juncture, pursuant to s 396 of the Act, I dispose of any preliminary issues by
making the following findings:
(a) the applicant was a national system employee and the respondent is a national
system employer, as defined (ss 13, 14);
(b) the applicant’s unfair dismissal application was lodged within the 21 day statutory
time period set out in s 394(2)(a) of the Act;
(c) as the respondent is not a small business, the Small Business Fair Dismissal Code
is not relevant in this case (s 396(c));
(d) the applicant’s dismissal was not a case of genuine redundancy (ss 382, 396(d));
(e) the applicant was a person protected from unfair dismissal in that:
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(i) she had completed the minimum employment period (s 383); and
(ii) her rate of earnings was less than the high income threshold (ss 382(b)(iii).
[32] The only matter remaining to be determined by the Commission is whether the
applicant’s dismissal was ‘harsh, unjust or unreasonable’ (s 385(b)), within the meaning of s
387 of the Act. It is to these matters to which I now turn.
[33] Section 387 of the Act sets out the criteria that the Commission must consider in
determining whether a dismissal was ‘harsh, unjust or unreasonable’. It is expressed as
follows:
“387 Criteria for considering harshness etc.
In considering whether it is satisfied that a dismissal was harsh, unjust or
unreasonable, the FWC must take into account:
(a) whether there was a valid reason for the dismissal related to the
person’s capacity or conduct (including its effect on the safety and welfare of
other employees); and
(b) whether the person was notified of that reason; and
(c) whether the person was given an opportunity to respond to any reason
related to the capacity or conduct of the person; and
(d) any unreasonable refusal by the employer to allow the person to have a
support person present to assist at any discussions relating to dismissal; and
(e) if the dismissal related to unsatisfactory performance by the person—
whether the person had been warned about that unsatisfactory performance
before the dismissal; and
(f) the degree to which the size of the employer’s enterprise would be
likely to impact on the procedures followed in effecting the dismissal; and
(g) the degree to which the absence of dedicated human resource
management specialists or expertise in the enterprise would be likely to impact
on the procedures followed in effecting the dismissal; and
(h) any other matters that the FWC considers relevant.”
[34] The meaning of the phrase ‘harsh, unjust and unreasonable’ is to be found in the well-
known quote from Byrne & Frew v Australian Airlines Ltd (1995) 185 CLR 410,
where McHugh and Gummow JJ said:
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‘It may be that the termination is harsh but not unjust or unreasonable, unjust but not
harsh or unreasonable, or unreasonable but not harsh or unjust. In many cases the
concepts will overlap. Thus, the one termination of employment may be unjust because
the employee was not guilty of the misconduct on which the employer acted, may be
unreasonable because it was decided upon inferences which could not reasonably
have been drawn from the material before the employer, and may be harsh in its
consequences for the personal and economic situation of the employee or because it is
disproportionate to the gravity of the misconduct in respect of which the employer
acted.’
[35] As mentioned earlier, the only evidence presented in this case was the applicant’s
evidence in support of her case. As this evidence has not been contradicted, her evidence
stands unchallenged. Accordingly, I accept the denials by the applicant of the allegations in
relation to her conduct and performance. I also accept her description of the unfair process
embarked on by the respondent, leading up to her dismissal. I turn now to specifically address
the criteria set out in s 387 of the Act.
Was there a valid reason for the applicant’s dismissal (s 387(a))?
[36] A ‘valid reason’ must be ‘sound, defensible and well founded’, as set out in the
judgement of Northrop J in Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371, in
which His Honour said:
‘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.’
[37] As I have accepted the applicant’s denial of the allegations as to her conduct and
performance, it follows that I am satisfied that there was no valid reason for dismissal.
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Was the applicant notified of the reason(s) for her dismissal (s 387(b))?
[38] The applicant was notified of the reasons for her dismissal during the dismissal
meeting on 25 November 2016. The dismissal letter was carelessly drafted, incomplete and
utterly unsatisfactory. I accept it had been prepared before the meeting.
Was the applicant given an opportunity to respond to any reason related to her capacity
or conduct (s 387(c))
[39] The applicant was given no opportunity to respond to the allegations against her. This
was manifestly unfair and must weigh in favour of a finding that the dismissal was
procedurally unfair.
Was there an unreasonable refusal by the respondent to have a support person present
(s 387(d))?
[40] While there was no refusal by the respondent to allow the applicant to have a support
person present at the relevant meeting, the applicant did not know the purpose of the meeting
and was given two hours notice. This is a neutral factor in my consideration.
Was the applicant warned about unsatisfactory performance (s 387(c))?
[41] I accept the applicant’s evidence that she was not warned about her performance. The
respondent claimed that she had received four written warnings. None of these warnings were
produced, even at the early stage when the Company had filed it F3.
The degree to which the size of the respondent’s enterprise and its access to dedicated
human resource specialists affected the process leading up to the applicant’s dismissal
(ss387(f),(g))
[42] The respondent employed 66 employees at the time the applicant was dismissed.
While it did not have access to internal human resources specialists or indeed any
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employment advice, the manner of the applicant’s dismissal was a complete denial of natural
justice which would have been obvious, even to the most inexperienced employer.
Other relevant matters (s 387(h))
[43] Given the applicant’s six years of employment, more latterly in a senior quality
assurance role, her dismissal on the eve of the respondent being placed in voluntary
administration does raise suspicions as to the respondent’s motives. However, without further
evidence, I leave my suspicions at that point.
[44] Given the above findings, it is clear that the applicant’s dismissal was both
procedurally and substantively unfair. Having considered the matters outlined above, I find
that the dismissal of the applicant was ‘harsh, unjust and unreasonable’, within the meaning
of s 387 of the Act.
REMEDY
[45] I turn now to the provisions of ss 390-392 of the Act, which are as follows:
390 When the FWC may order remedy for unfair dismissal
(1) Subject to subsection (3), the FWC may order a person’s reinstatement, or the
payment of compensation to a person, if:
(a) the FWC is satisfied that the person was protected from unfair dismissal
(see Division 2) at the time of being dismissed; and
(b) the person has been unfairly dismissed (see Division 3).
(2) The FWC may make the order only if the person has made an application under
section 394.
(3) The FWC must not order the payment of compensation to the person unless:
(a) the FWC is satisfied that reinstatement of the person is inappropriate; and
(b) the FWC considers an order for payment of compensation is appropriate in
all the circumstances of the case.
391 Remedy—reinstatement etc.
[2017] FWC 2954
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Reinstatement
(1) An order for a person’s reinstatement must be an order that the person’s employer
at the time of the dismissal reinstate the person by:
(a) reappointing the person to the position in which the person was employed
immediately before the dismissal; or
(b) appointing the person to another position on terms and conditions no less
favourable than those on which the person was employed immediately before
the dismissal.
(1A) If:
(a) the position in which the person was employed immediately before the
dismissal is no longer a position with the person’s employer at the time of the
dismissal; and
(b) that position, or an equivalent position, is a position with an associated
entity of the employer;
the order under subsection (1) may be an order to the associated entity to:
(c) appoint the person to the position in which the person was employed
immediately before the dismissal; or
(d) appoint the person to another position on terms and conditions no less
favourable than those on which the person was employed immediately before
the dismissal.
Order to maintain continuity
(2) If the FWC makes an order under subsection (1) and considers it appropriate to do
so, the FWC may also make any order that the FWC considers appropriate to maintain
the following:
(a) the continuity of the person’s employment;
(b) the period of the person’s continuous service with the employer, or (if
subsection (1A) applies) the associated entity.
Order to restore lost pay
(3) If the FWC makes an order under subsection (1) and considers it appropriate to do
so, the FWC may also make any order that the FWC considers appropriate to cause the
employer to pay to the person an amount for the remuneration lost, or likely to have
been lost, by the person because of the dismissal.
(4) In determining an amount for the purposes of an order under subsection (3), the
FWC must take into account:
[2017] FWC 2954
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(a) the amount of any remuneration earned by the person from employment or
other work during the period between the dismissal and the making of the
order for reinstatement; and
(b) the amount of any remuneration reasonably likely to be so earned by the
person during the period between the making of the order for reinstatement and
the actual reinstatement.
392 Remedy—compensation
Compensation
(1) An order for the payment of compensation to a person must be an order that the
person’s employer at the time of the dismissal pay compensation to the person in lieu
of reinstatement.
Criteria for deciding amounts
(2) In determining an amount for the purposes of an order under subsection (1), the
FWC must take into account all the circumstances of the case including:
(a) the effect of the order on the viability of the employer’s enterprise; and
(b) the length of the person’s service with the employer; and
(c) the remuneration that the person would have received, or would have been
likely to receive, if the person had not been dismissed; and
(d) the efforts of the person (if any) to mitigate the loss suffered by the person
because of the dismissal; and
(e) the amount of any remuneration earned by the person from employment or
other work during the period between the dismissal and the making of the
order for compensation; and
(f) the amount of any income reasonably likely to be so earned by the person
during the period between the making of the order for compensation and the
actual compensation; and
(g) any other matter that the FWC considers relevant.
Misconduct reduces amount
(3) If the FWC is satisfied that misconduct of a person contributed to the employer’s
decision to dismiss the person, the FWC must reduce the amount it would otherwise
order under subsection (1) by an appropriate amount on account of the misconduct.
Shock, distress etc. disregarded
(4) The amount ordered by the FWC to be paid to a person under subsection (1) must
not include a component by way of compensation for shock, distress or humiliation, or
other analogous hurt, caused to the person by the manner of the person’s dismissal.
[2017] FWC 2954
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Compensation cap
(5) The amount ordered by the FWC to be paid to a person under subsection (1) must
not exceed the lesser of:
(a) the amount worked out under subsection (6); and
(b) half the amount of the high income threshold immediately before the
dismissal.
(6) The amount is the total of the following amounts:
(a) the total amount of remuneration:
(i) received by the person; or
(ii) to which the person was entitled;
(whichever is higher) for any period of employment with the employer during
the 26 weeks immediately before the dismissal; and
(b) if the employee was on leave without pay or without full pay while so
employed during any part of that period—the amount of remuneration taken to
have been received by the employee for the period of leave in accordance with
the regulations.
[46] I have taken each of the matters under s 392 of the Act into account, in particular, I
have taken into account under s 392(2)(g), that had Ms Crowe not been unfairly dismissed,
she would have been entitled to redundancy and notice of 11 weeks pay and 4 weeks pay
respectively upon the closure of the factory. I have decided that the applicant is entitled to an
order of compensation for her unfair dismissal of 16 weeks pay, plus 9.5% superannuation
being:
$953.84 × 16 weeks = $15,261.44 plus
9.5% superannuation ($1,449.84)
[47] I order accordingly. In respect to the applicant’s claim for payment of outstanding long
service leave entitlements, this is a matter which is not able to be ordered by the Commission
and will need to be pursued in a court of competent jurisdiction.
[2017] FWC 2954
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[48] While I make a further order requiring these amounts to be paid within 21 days, it may
be the position that these amounts can be added to the list of preferred creditors with the
applicant being able to advise the Administrators of her formal proof of debt. This is a matter
for the applicant to pursue with the Administrators.
DEPUTY PRESIDENT
Appearances:
Ms J Crowe for herself
Hearing details:
2017
Brisbane
8 May
Printed by authority of the Commonwealth Government Printer
Price code C, PR593327
ORK WORK COMMISSION FAIR THE SEAL OF
