1
Fair Work Act 2009
s.394—Unfair dismissal
Lidia Lucisano
v
Fictiv Pty Ltd
(U2020/11407)
DEPUTY PRESIDENT COLMAN MELBOURNE, 11 NOVEMBER 2020
Application for an unfair dismissal remedy – series of disparaging remarks made to client
about director – duty of fidelity – misconduct – application dismissed
[1] This decision concerns an application by Ms Lidia Lucisano for an unfair dismissal
remedy under s 394 of the Fair Work Act 2009 (Cth) (Act). Ms Lucisano was summarily
dismissed from her employment with Fictiv Pty Ltd (company) because of a series of
messages she sent to a client of the company in which she made disparaging remarks about its
director, Mr Andy Singh. Ms Lucisano contends that she was telling the client the truth, and
that her dismissal was unfair. The company submits that the dismissal was consistent with the
Small Business Fair Dismissal Code (Code), and that the dismissal was in any event not
unfair.
[2] Section 396 requires the Commission to decide four matters before considering the
merits of an unfair dismissal application. I record my determination of those matters. First,
Ms Lucisano’s application was made within the 21-day period required by s 394(2).
Secondly, Ms Lucisano was a person protected from unfair dismissal, as she earned less than
the high-income threshold and had served the minimum period of employment (s 382).
Thirdly, the dismissal was not a case of genuine redundancy. Finally, as I explain below, I
consider that the dismissal was consistent with the Code and that the application must
therefore be dismissed.
Background
[3] The company develops websites for clients. In March 2019, it employed Ms Lucisano
as its ‘studio manager’, reporting to Mr Singh. In May 2019, Whittlesea Council became a
client of the company. This occurred as a result of Ms Lucisano’s friendship with an
employee of the council, Ms Jennifer Pearson. The council engaged the company to develop a
tourism website. The arrangements were discussed at a meeting in mid-May 2019 attended by
Mr Singh, Ms Lucisano, Ms Pearson, and the council’s tourism officer, Ms Tanaya Preece.
[4] On 18 June 2020, Ms Preece sent Ms Lucisano an email asking for an update on the
work. On 23 June 2020, Ms Lucisano replied via Facebook messenger, stating: ‘I’m so angry
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and embarrassed that you haven’t received your website yet. Andy [Mr Singh] is on his way
in from meetings this morning but I will be at him to handover (sic) today’.
[5] On 29 June 2020, Ms Pearson met Ms Lucisano for a coffee and told her, ‘as a friend’,
that she was concerned that the project was taking too long, and that the council’s manager
was unhappy. Ms Lucisano replied that she would follow up on the matter. Back at the office,
Ms Lucisano asked Mr Singh how the project was going. He said that it was all but complete
and that he was waiting for the council’s feedback. Later that day, Ms Preece sent Mr Singh
an email, copied to Ms Lucisano, asking about the status of the work. Mr Singh replied,
stating that he would finish it that day. Ms Lucisano then sent Ms Preece a message via
Facebook messenger (Facebook message), suggesting that she tell Mr Singh that the council
needed the work for a meeting the next day, and that Ms Preece should ‘get angry now’. On
30 June 2020, Ms Lucisano sent Ms Preece a further Facebook message, asking if she had
received the work. Ms Preece said that she had not. Ms Lucisano replied that Mr Singh was
not in the office and that he was avoiding her.
[6] On 2 July 2020, Ms Lucisano sent another Facebook message to Ms Preece, stating:
‘Hello have you got what you need from Andy or is he still spinning me b.s. that it’s all done
on our part?’ Ms Preece said that she had not received the work. Ms Lucisano replied: ‘He
said he spoke with you yesterday and gave you everything, I just hate being lied to that’s all.’
Ms Preece said that Mr Singh had not spoken to her the previous day. Ms Lucisano said: ‘I’m
just so sorry about the lies’, and then asked Ms Preece whether she should ‘call his bluff when
he comes into the office.’ Ms Preece replied that she had sent Mr Singh a message, and that
she did not want Ms Lucisano to ‘push him’ on the matter.
[7] On 6 July 2020, Ms Preece sent Mr Singh an email inquiring about the outstanding
work and stating that council management was asking her about it. Mr Singh replied, copying
Ms Lucisano, stating that he would send the final link that day. Shortly afterwards, Ms Preece
sent Ms Lucisano a Facebook message, stating that in all the circumstances she could not
recommend the company to her colleagues. Ms Lucisano replied that she was ‘seriously
embarrassed’ and that Mr Singh was ‘full of it’, because no-one was working on the project.
[8] From 27 to 31 July 2020, Ms Lucisano took sick leave. On 28 July 2020, Ms Preece
sent an email to Mr Singh, copied to Ms Lucisano, asking for an update on the work. Mr
Singh replied, copying Ms Lucisano, saying that he would send ‘the review’ that day. Ms
Lucisano then sent a Facebook message to Ms Preece, stating that Ms Preece needed ‘to get
really tough’ with Mr Singh, and that Mr Singh had told her that the delay was on the
council’s side, ‘when in reality he takes the web designer off your project to work on new
clients’. She said that the council should ‘call his bluff’, and ‘look at whether this is a breach
of contract’. She said that it was a ‘disgrace’. In a further Facebook message to Ms Preece on
29 July 2020, Ms Lucisano said that Mr Singh was ‘such a liar’ and that she was ‘over the
lies’.
[9] While Ms Lucisano was on sick leave, Mr Singh logged on to her work computer, to
ensure clients were being properly serviced in her absence. The Facebook messenger
conversations between Ms Lucisano and Ms Preece were displayed. Mr Singh read them.
[10] When Ms Lucisano returned from sick leave on 3 August 2020, Mr Singh called her
into a meeting room. He showed her a print out of her Facebook messages to Ms Preece and
asked: ‘Is this what you really think of me?’ Ms Lucisano said ‘yes’. Mr Singh said that it was
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her duty to help him fix any problems that might exist and that her conduct was unacceptable.
He gave Ms Lucisano a termination letter, which stated that she had engaged in conversations
with a client that had disclosed confidential information and that she had tarnished the
reputation of the director and other employees. It said that her conduct was wilful and
deliberate and inconsistent with the continuation of her contract of employment. It said that
she had caused a serious risk to the reputation of the business, that her actions constituted
serious misconduct, and that her employment was terminated immediately.
[11] The facts in this matter are largely uncontested. In particular, the content of the
messages sent by Ms Lucisano to Ms Preece is not disputed. There are however several
factual conflicts. First, Ms Lucisano maintained that she was only telling Ms Preece the truth
about Mr Singh’s dishonesty whereas Mr Singh denied lying to Ms Preece or Ms Lucisano. I
find Ms Lucisano’s claim that Mr Singh was lying to be unsubstantiated. I accept that Ms
Lucisano believed that there were inconsistencies in what Mr Singh had said, and that she
thought that he had been dishonest. But it has simply not been demonstrated that any
inconsistencies arose from untruthfulness on the part of Mr Singh, rather than some other
cause, such as a misunderstanding or a mistake. I also find unsubstantiated Ms Lucisano’s
claim that Mr Singh was avoiding her. I find it implausible that Mr Singh would feel the need
to avoid Ms Lucisano. He denied it and I believe him.
[12] Secondly, Mr Singh disputed that the council had been unhappy with him. In my view
Ms Pearson and Ms Preece were clearly concerned about the slow pace of the project. But it is
also clear that the council was happy with the final product. On completion, the council’s
manager sent Mr Singh an email stating that the website was ‘wonderful’ and thanking him
‘very much for all [your] efforts’.
[13] Thirdly, Ms Lucisano gave evidence that she told Mr Singh of the council’s concerns
about the work being late, whereas Mr Singh said that she did not. I prefer and accept
Mr Singh’s evidence. It was clear and convincing. In her witness statement, Ms Lucisano
recounts in some detail her discussion with Ms Pearson on 29 June 2020 about the council’s
concerns, and her subsequent discussion with Mr Singh at the office. She makes no mention
of telling Mr Singh about the council’s concerns. This would have been an obvious
opportunity for Ms Lucisano to tell Mr Singh about this. I find that Ms Lucisano did not tell
Mr Singh about the council’s concerns.
Submissions
[14] Ms Lucisano contended that there was no valid reason for her dismissal, and that
Mr Singh’s decision to dismiss her was capricious and spiteful. She said that the termination
letter had alleged that she had committed misconduct by disclosing confidential information
and by tarnishing the company’s reputation, but that neither of these things had been
established. She said that there was no disclosure of confidential information, that any damage
to reputation was caused by the company’s own actions in not delivering the project on time,
and that reputational damage concerned only one client, which she had brought to the
company through her connections.
[15] Ms Lucisano submitted that her candid appraisal of Mr Singh to Ms Preece did not
breach her employment contract. She said that no duty of trust and confidence is implied into
contracts of employment, as the High Court confirmed in Commonwealth Bank of Australia v
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Barker1 (Barker). She also contended that the duty of good faith ‘should no longer be applied
to employment contracts’, and that she therefore owed no such duty to the company.
[16] While arguing primarily that she did nothing wrong, Ms Lucisano said that, at worst,
her efforts to mollify an already disgruntled client were merely negligent, clumsy and
inappropriate, and that they occurred partly at a time when she was home on sick leave and
taking medication. She said that such behaviour might merit a warning but not summary
dismissal.
[17] Ms Lucisano further contended that her dismissal was procedurally unfair because she
had had no prior warnings; received no notice of the termination meeting on 3 August 2020;
was not told that her employment was at risk; was not given a chance to bring a support
person to the meeting; and was not afforded an opportunity to respond to the allegations. Ms
Lucisano also said that her dismissal was disproportionate to her conduct, and unfair because
of the adverse personal and economic consequences it caused, including loss of income.
[18] The company contended that it complied with the Code in relation to Ms Lucisano’s
dismissal. It is not disputed that the company was a small business employer at the relevant
time, as it employed only five employees and had no associated entities. The company
submitted that it believed on reasonable grounds that Ms Lucisano’s conduct was sufficiently
serious to justify immediate dismissal and that the dismissal was therefore consistent with the
first limb of the Code. It contended that Ms Lucisano’s messages to Ms Preece constituted
serious misconduct, as they wrongly conveyed to the company’s client that Mr Singh was
lying both to Ms Lucisano and to Ms Preece and encouraged Ms Preece to think poorly of Mr
Singh. Ms Lucisano had compromised the company’s relationship with its client and failed to
act in the interests of her employer.
[19] The company submitted alternatively that Ms Lucisano’s messages to Ms Preece
amounted to a valid reason for dismissal for the purpose of s 387(a). It said that it was clear
from Ms Preece’s messages that she did not want Ms Lucisano to get involved in following
up on the work, but that she continued to do so, in a way that undermined the company. The
company said that it notified Ms Lucisano of the valid reason for dismissal and gave her an
opportunity to respond, and that its decision to dismiss her was proportionate to her
misconduct and fair in all the circumstances.
Consideration
[20] The first limb of the Code states that ‘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’. In my opinion, that
is what occurred in this case. The company believed that Ms Lucisano’s conduct was very
serious, because, among other things, it was inconsistent with the continuation of her contract
of employment, and that this warranted immediate dismissal. The company plainly had
reasonable grounds to hold this belief, given the contents of the messages sent from Ms
Lucisano to Ms Preece, in which she repeatedly called Mr Singh a liar and thereby
undermined the company.
1 (2014) 253 CLR 169
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[21] There is Full Bench authority that the summary dismissal section of the Code applies
to dismissals that occur without notice on the ground of serious misconduct as defined in
Regulation 1.07 of the Fair Work Regulations 2009 (Cth).2 There is also Full Bench authority
that the regulation does not apply to the Code.3 I prefer the latter view, because the expression
‘serious misconduct’ is not used in Part 3-2 of the Act. The Code itself is a legislative
instrument. However, on either view, Ms Lucisano’s conduct constituted serious misconduct.
If the Regulation does apply, I consider that Ms Lucisano’s behaviour was wilful and
deliberate and inconsistent with the continuation of the contract of employment (see
Regulation 1.07(2)(a)). It should be noted that the definition of serious misconduct in
Regulation 1.07 is inclusive, not exclusive, and in my view Ms Lucisano’s conduct fell
comfortably within it. If Regulation 1.07 is not relevant to the meaning of serious misconduct
in the first limb of the Code, I consider that the misconduct was sufficiently grave to
constitute serious misconduct under the general law. An employee impugning the honesty of
her own employer without proper cause is fundamentally inconsistent with the duty of fidelity
(see further below).
[22] I agree with Ms Lucisano that it is not clear what confidential information she is said
by the company to have revealed. I do not consider that she did disclose confidential
information. But it is not necessary, for the purposes of the first limb of the Code, that all of
the company’s grounds for believing immediate dismissal is warranted be reasonable. So long
as there are reasonable grounds for the belief, the employer complies with the first limb of the
Code, even if there are other reasons that are not reasonable.
[23] Because the dismissal was consistent with the first limb of the Code, it cannot have
been not unfair (s 385(c)), and the application must be dismissed. However, even if I had
concluded that the dismissal was not consistent with the Code, I would nevertheless have
considered that the dismissal was not unfair, having regard to s 387.
[24] First, there was plainly a valid reason for the dismissal (s 387(a)). Ms Lucisano’s
contention that she owed no duty of good faith to the company is wrong. The supporting
footnote for this proposition in Ms Lucisano’s written submissions is a reference to a passage
in Walker v Citigroup Global Markets Pty Ltd4, where Kenny J stated that ‘no duty of good
faith is implied into employment contracts’. However, as the context makes clear, her Honour
was referring to, and rejecting, a proposition that the general law imposed a ‘duty of
procedural regularity or fairness’ on an employer’s right to terminate a contract.
[25] In Barker, the High Court rejected the proposition that under the common law of
Australia there was a term of ‘mutual trust and confidence’ to be implied by law into all
employment contracts, which prevented an employer from doing anything likely to seriously
damage the relationship of trust and confidence without proper cause. However, the Court
endorsed the long-established principle that employees are subject to a duty of good faith to
their employer. French CJ, Bell and Keane JJ noted that an employee ‘has an implied duty of
fidelity to the employer not to engage in conduct which “impedes the faithful performance of
his obligations or is destructive of the necessary confidence between employer and
employee.”’5
2 Ryman v Thrash Pty Ltd t/a Wisharts Automotive Services [2015] FWCFB 5264 at [38]
3 Sharp v BCS Infrastructure Support Pty Limited [2015] FWCFB 1033 at [33]
4 [2005] FCA 1678 at [203] – [204]
5 At 190, citing Dixon and McTiernan JJ in Blyth Chemicals Ltd v Bushnell (1933) 49 CLR 66 at 81. See also Kiefel J at 201.
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[26] Ms Lucisano owed the company a duty of good faith. She breached that duty by
disparaging Mr Singh and his work to a client. Ms Lucisano’s various imputations were not
substantiated. It does not matter that Ms Lucisano may have believed that the imputations
were true. On any view of the matter, she did not make reasonable inquiries to establish
whether this was the case. If she thought there were inconsistencies in what Mr Singh had
said, she should have asked him about this. Instead, she assumed that he was not telling the
truth. She told the client that he was a liar and was ‘spinning b.s.’, and that he was not making
proper efforts to complete the project. It was wrong of Ms Lucisano to do these things. It
constituted serious misconduct and justified summary dismissal. Ms Lucisano also breached
her duty of fidelity by not alerting Mr Singh to the council’s concerns about the delay, and by
encouraging the council to tell the company that it was in breach of contract. This was in
direct opposition to her duty of fidelity to the company.
[27] Ms Lucisano had a personal relationship with Ms Pearson, and later with Ms Preece. I
accept that she was genuinely concerned that the work was delayed. But that does not justify
her behaviour. I also reject Ms Lucisano’s contention that her correspondence with Ms Preece
was private. These were work-related messages. Unbeknown to the company, Ms Lucisano
was casting Mr Singh in a very bad light without justification. Ms Lucisano said that she was
dismissed for not lying to clients. That is not what occurred. The present matter is not a case
of a whistle-blower calling out wrongdoing, or of an employee making reasonable criticism of
her employer. It is simply a case of an employee acting contrary to the interests of her
employer.
[28] I reject the alternative contention of Ms Lucisano that her conduct was clumsy or
negligent. These words simply do not describe what Ms Lucisano did. Her conduct and choice
of words (‘liar’, ‘b.s.’, ‘disgrace’) were deliberate and clear. Nor do I accept that her conduct
was affected by medication: she also referred to Mr Singh as a liar before she was unwell.
[29] As to the other matters in s 387, I note that Ms Lucisano was notified of the reason
that I consider to be a valid reason for dismissal (s 387(b)), namely that her Facebook
conversations with Ms Preece was in breach of her duty of fidelity. Different words were used
in the dismissal letter, but to the same effect: the letter stated that her conduct was inconsistent
with the continuation of her contract.
[30] Ms Lucisano contended that she was not afforded a reasonable opportunity to respond
to the allegations at the meeting on 3 August 2020 (s 387(c)), because she was taken by
surprise and overwhelmed, and that if she had had an opportunity to discuss her comments
and their broader context with Mr Singh, she could have apologised to him and worked things
out. However, in my opinion, she did have such an opportunity. If she was overwhelmed, she
should have asked Mr Singh for more time. Ms Lucisano contended that Mr Singh had made
up his mind to dismiss her before the meeting, which is why he had collected her possessions
in a bag. But this does not suggest that there was no opportunity to respond. It is consistent
with Mr Singh having reasonably expected that, given the seriousness of Ms Lucisano’s
comments, there was unlikely to be an acceptable explanation. He was right. In any event, any
procedural deficiency on this score would not affect my overall assessment of this matter.
[31] Section 387(d) requires the Commission to consider whether there was ‘any
unreasonable refusal by the employer to allow the person to have a support person present to
assist at any discussions relating to dismissal’. There was no such refusal. Section 387(e)
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requires the Commission to take into account whether the employee was warned about
unsatisfactory performance. However, the present matter relates to conduct, not performance.
Sections 387(f) and (g) concern whether the size of the employer’s enterprise, and the
presence or otherwise of human resources expertise, would likely have affected the
procedures followed in effecting the dismissal. Although the company is a small business, I
do not consider that these matters carry any particular weight in the present case.
[32] This leaves s 387(h), ‘any other matters that the FWC considers relevant’. I have
taken into account the submissions and evidence of Ms Lucisano about the adverse impact of
the dismissal on her, in financial and other respects, including that she loved her job and has
now lost it. I note her contention that it was her good work that brought the council to the
company as a client in the first place, which resulted in the website project as well as other
work. Ms Lucisano said that she had in fact been seeking to placate the client and work in the
company’s best interests. I do not accept this. I fail to see how Ms Lucisano could reasonably
have expected to placate the client by telling its representatives that Mr Singh was lying to
them and was ignoring their work.
[33] Ms Lucisano had a duty of good faith to the company. She repeatedly told the
company’s client that Mr Singh was lying and not properly attending to its work. This was a
fundamental breach of her contract. I consider that Ms Lucisano’s conduct was grave, that it
constituted serious misconduct, and that summary dismissal was a proportionate response.
Had the dismissal not been consistent with the Code, I would have concluded that the
dismissal was not harsh, unjust or unreasonable, and therefore not unfair.
Conclusion
[34] The dismissal of Ms Lucisano was consistent with the first limb of the Code. The
application must therefore be dismissed.
DEPUTY PRESIDENT
Appearances:
R. Veith for Ms Lucisano
C. Broadbent for Fictiv Pty Ltd
Hearing details:
2020
Melbourne
9 November
THE SEAL OF THE F NOISSI
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