Note: An appeal pursuant to s.604 (C2011/4642) was lodged against this decision.
[2011] FWA 3063 |
|
DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Sedina Sokolovic
v
Modestie Fashion Australia Pty Ltd (ABN: 671444920838)
(U2011/4117)
COMMISSIONER CAMBRIDGE |
SYDNEY, 18 MAY 2011 |
Unfair dismissal - ss.382, 383, 384 of Fair Work Act 2009 - minimum employment period - period of employment - s.384 (2) (b) - transferring employee - s.311- when does a transfer of business occur - small business fair dismissal code - dismissal conveyed by text message - harsh, unreasonable and unjust dismissal – compensation Ordered.
[1] This matter involves an application for unfair dismissal remedy made pursuant to section 394 of the Fair Work Act 2009, (the Act). The application was made by Sedina Sokolovic (the applicant) and named the respondent employer as Sophia Sarkis trading as Modestie Boutique. The correct name of the respondent employer has subsequently been established to be Modestie Fashion Australia Pty Ltd (ABN: 671444920838) (the employer).
[2] The application was lodged at Sydney on 7 January 2011. The application indicated that the date of the applicant’s dismissal was 26 December 2010. Consequently the application was made within the 14 day time limit prescribed by subsection 394 (2) of the Act. Conciliation of the claim was unsuccessful and the matter proceeded to arbitration before Fair Work Australia (FWA) in a Hearing conducted in Sydney on 3 May 2011.
[3] At the Hearing the applicant was represented by Mr A Barwick a solicitor from the firm Barwick Legal. Mr Barwick called the applicant and Mr Adam Fatrouni, as witnesses to provide evidence in support of the claim. The employer was unrepresented. The Directors of the employer Mr Robert Sarkis and Ms Sophia Sarkis presented the case for the employer, each gave evidence as a witness and two further witnesses, Ms Ivanna Ghisso and Ms Metosh Onur were called as witnesses and gave evidence on behalf of the employer.
Factual Background
[4] In about December 2008 the applicant commenced regular and systematic employment as a casual retail salesperson/shop assistant. The applicant worked predominantly at one of two retail outlets which traded under the name “Modestie Boutique”. These boutiques operated from locations in Bankstown and at the Westfield shopping centre at Liverpool, Sydney. The applicant mainly worked at the Westfield Liverpool location. The two retail boutiques were operated by Modestie Australia Pty Ltd (Modestie Australia). Apparently Modestie Australia was or is owned by Ms Feda Arifaki and the applicant was employed by Modestie Australia up until 31 October 2010.
[5] On 1 November 2010 the employer purchased the business operation of Modestie Australia in respect to the retail operation that traded at the Westfield shopping centre at Liverpool. The applicant’s employment with Modestie Australia was terminated with the sale of the business. Although there was no obligation arising as part of the purchase for the employer to employ the applicant, it did so on and from 1 November 2010. Another former employee of Modestie Australia, Ivanna Ghisso, was also engaged by the employer on and from 1 November 2010. The applicant and Ms Ghisso signed tax file number declaration forms relevant to the “new” employment with the employer (Exhibit 6 - Attachments marked “T” and “T1”).
[6] The employer has at all relevant times, a total of approximately 3 employees. The overall responsibility for the day to day operation of the retail store at Westfield Liverpool was undertaken by Ms Sophia Sarkis. The applicant had some managerial responsibilities and was more senior to Ms Ghisso, the other employee who was also regularly engaged at the store.
[7] Initially the applicant’s employment was harmonious. The day to day operation of the business involved regular interaction between the applicant and Ms Sarkis a Director of the employer. This interaction involved, inter alia, regular communication via text messaging.
[8] In late November some disagreement developed between the applicant and Ms Sarkis. The deterioration in the employment relationship involved allegations of customer complaints being made against the applicant and the applicant was aggrieved by a reduction in the hours of work that were provided to her. These matters were the subject of a meeting between the applicant and Ms Sarkis held on the afternoon of 2 December 2010.
[9] The meeting between the applicant and Ms Sarkis on 2 December provided both individuals with an opportunity to ventilate their respective concerns about aspects of the employment relationship. The concerns expressed by Ms Sarkis can, for practical purposes in the context of a small business, represent warning to the applicant about employment conduct and behaviour issues relating to customer complaints. The meeting successfully re-established a harmonious relationship between the two women and shortly thereafter the applicant’s working hours were increased significantly.
[10] On 23 December 2010, the applicant commenced work at 9 am and worked an extended shift until 12 midnight. Towards the end of the shift the applicant was feeling tired and unwell. The applicant was rostered to commence work at 9 am on the following day, 24 December. The applicant asked Ms Ghisso, with whom she was working at the time, if she would be prepared to swap shifts for the following day. This shift swap would mean that Ms Ghisso would commence at 9 am and the applicant would commence later at 11 am which was the time that Ms Ghisso was rostered to commence. Ms Ghisso agreed with the request to swap shifts and she started at the earlier commencement time.
[11] The next day the applicant made telephone contact with Ms Ghisso at approximately 10 am and checked that the shop was open and operating satisfactorily. The applicant advised Ms Ghisso that she was delayed and anticipated that she would not arrive at the shop until about 11:30 am. Shortly after the applicant arrived at the shop (sometime between 11:30 am and midday), she discovered that unbeknown to Ms Ghisso, approximately 25 items of clothing worth in excess of $5000 had been stolen from the shop earlier that morning.
[12] The applicant telephoned the shopping centre security service and the police. The centre security and the police attended at the shop and reviewed the closed circuit television recording which confirmed that an unknown woman in conjunction with an accomplice had committed the larceny of the various items of clothing. The employer was contacted by Ms Ghisso and advised of the theft. Ms Sarkis arrived at the shop a short time later and was understandably upset when she observed the television recording which confirmed the larceny.
[13] Ms Sarkis telephoned the television program called “A Current Affair” and invited representatives from that program to attend the shop and obtain the television recording of the larceny. Ms Sarkis also questioned both the applicant and Ms Ghisso about the circumstances involving the swapping of shifts which meant that Ms Ghisso was working in the shop alone at the time of the larceny. The applicant and Ms Ghisso worked for the remainder of the day and assisted Ms Sarkis with various matters relating to the larceny including helping with the provision of some replacement stock.
[14] On the next day, Christmas Day, the applicant sent Ms Sarkis a text message which wished her Merry Christmas and suggested that at some convenient time she would like to talk to her about Ms Ghisso. The obvious implication from this message involved matters relating to the larceny and any apparent inadequacy on the part of Ms Ghisso who did not notice the theft nor properly react to the security device that was activated when the items were removed from the shop. Ms Sarkis responded to the applicant's text message with the following reply text message: “Thanks. We will talk after Monday evening. I really need to rest now.”
[15] At 4:05 pm on the next day, Sunday 26 December, the applicant was dismissed via text message from Ms Sarkis. The text message from the employer stated as follows:
“Sedina, I have let you go for two reasons. Firstly you shouldn't swap the shift without letting me know. Secondly you even swap the shift you start one hour late knowing it will be busy and leaving Ivanna alone. That shows me you not taking me serious or the work. Which hurts me enough and you can pick up your pay tomorrow and drop the key. You don't need to call me and I don't see that we can work together. This decision is made by Robert and I. Thank you for everything.”
The Applicant’s Case
[16] Mr Barwick, who appeared for the applicant, commenced his submissions by rejecting what he considered to be two jurisdictional objections that had been raised by the employer.
[17] Firstly, Mr Barwick acknowledged that the applicant had only been employed by the employer for a period of about nine weeks. However he said that the provisions of subsection 384 (2) of the Act were relevant to the applicant's circumstances. Therefore it was incumbent upon the employer to inform the employee in writing before the new employment started that any period of service with the old employer would not be recognised. Mr Barwick said that as there was no written information provided to the applicant that the period of employment with Modestie Australia would not be recognised, that period must count for the purposes of any minimum period of employment.
[18] Secondly, Mr Barwick rejected any suggestion that the dismissal of the applicant complied with the Small Business Fair Dismissal Code (the Code). Mr Barwick submitted that the employer had departed from the Code at a number of points and that these departures were significant. In particular Mr Barwick said that the employer's failure to give the applicant any opportunity to respond prior to the dismissal represented clear non-compliance with the Code.
[19] Mr Barwick then turned to an assessment as to whether the dismissal of the applicant could be held to be unfair. Mr Barwick referred to the statutory criteria established under section 387 of the Act.
[20] Mr Barwick submitted that there was no basis upon which to establish valid reason for the termination of the applicant's employment. Mr Barwick said that the evidence was completely unclear as to exactly what the reason or reasons for dismissal were. Mr Barwick mentioned that the issue of swapping shifts was something that involved both the applicant and Ms Ghisso. According to the submissions made by Mr Barwick, both the applicant and Ms Ghisso were equally culpable if there was any wrongdoing in respect to swapping of shifts.
[21] Further, Mr Barwick stated that the relevant Modern Award established that there was a 12 hour minimum rest period between the completion of one shift and the commencement of another. According to the submissions made by Mr Barwick, the evidence established that the employer did not strictly prohibit the swapping of shifts but rather required that the employer be advised of any shift swap. In the circumstances where there was very limited opportunity to provide advice to the employer, the failure by both the applicant and Ms Ghisso to advise the employer of the shift swap for commencement on 24 December 2010 could not, according to Mr Barwick, represent a valid reason for dismissal of the applicant.
[22] Mr Barwick submitted that the suggestion that the reason for dismissal was also related to the matter of customer complaints was completely unsatisfactory. Mr Barwick said that the evidence regarding customer complaints was nothing more than a “grab bag” of unspecified assertions. Mr Barwick also mentioned that during cross examination Ms Ghisso conceded that there were always “two sides to the story” in respect to customer complaints in retail trade. Therefore, according to Mr Barwick, unspecified customer complaints could not provide valid reason for dismissal and in any event, customer complaints were not mentioned in the dismissal text message.
[23] Mr Barwick made further submissions regarding the applicant being dismissed by way of text message. Mr Barwick submitted that dismissal by way of text message was “pretty appalling” and possibly in breach of section 117 of the Act. Further, Mr Barwick submitted that the applicant had undeniably been deprived of an opportunity to respond to the alleged reasons for dismissal.
[24] In summary, Mr Barwick stated that the applicant was entitled to make a claim for unfair dismissal and that the termination of her employment was unfair. Mr Barwick said that the unfairness related to the absence of both valid reason and proper process including the notification of dismissal by way of text message. Therefore according to Mr Barwick, the dismissal of the applicant was harsh, unreasonable and unjust. Mr Barwick stated that the applicant did not seek reinstatement but instead monetary compensation and he urged that such compensation should provide full restitution for the losses suffered by the applicant as a result of a dismissal that was, particularly by way of its implementation, “clearly pretty poor form”.
The Respondent Employer’s Case
[25] Mr Sarkis, a Director of the employer, advocated the case on behalf of the employer. Mr Sarkis commenced his submissions by stating that the applicant had been terminated during her probationary period and prior to the employment period of 12 months and therefore she was not entitled to make a claim for unfair dismissal. Mr Sarkis said that the employer was a small business for the purposes of the Act. Therefore as the applicant had only been employed for a period of approximately 9 weeks she did not meet the minimum qualifying period under the Act.
[26] Mr Sarkis said that it was clear that the applicant's employment with the previous employer should not count as service as there had been no transfer of employment and there was no intention to continue her service. Mr Sarkis said that he relied upon a document from Allstate Conveyancing to prove that there was no transfer of employees at the time of the sale of the business.
[27] In relation to the alleged unfairness of the applicant's dismissal Mr Sarkis said that “In addition, we ask in this case - we believe that we don't see that she's been unfair dismissed and unreasonable, ...”
Consideration
[28] The determination of this claim for unfair dismissal remedy has firstly involved the question of whether the applicant was a person protected from unfair dismissal. The applicant had been employed by the employer for only about eight weeks. Somewhat understandably, the employer asserted that the applicant's period of employment was less than the minimum employment period as stipulated by section 383 of the Act. Therefore the employer contended that the provisions of subsection 382 (a) of the Act would operate to exclude the applicant from any protection from unfair dismissal. Relevantly subsection 382 (a) of the Act is in the following terms:
[29] It is clear from section 383 of the Act that for a small business employer the minimum employment period is one year. Therefore, ordinarily, an employee working for a small business must complete a period of at least one year of employment after which they become protected from unfair dismissal. However section 384 of the Act provides for a more detailed prescription of what does and what does not constitute a period of employment for the purposes of the minimum employment period. Section 384 of the Act is in the following terms:
(1) An employee’s period of employment with an employer at a particular time is the period of continuous service the employee has completed with the employer at that time as an employee.
(2) However:
(a) a period of service as a casual employee does not count towards the employee’s period of employment unless:
(i) the employment as a casual employee was on a regular and systematic basis; and
(ii) during the period of service as a casual employee, the employee had a reasonable expectation of continuing employment by the employer on a regular and systematic basis; and
(b) if:
(i) the employee is a transferring employee in relation to a transfer of business from an old employer to a new employer; and
(ii) the old employer and the new employer are not associated entities when the employee becomes employed by the new employer; and
(iii) the new employer informed the employee in writing before the new employment started that a period of service with the old employer would not be recognised;
the period of service with the old employer does not count towards the employee’s period of employment with the new employer.”
[30] The evidence in this matter has established that the applicant was a casual employee engaged on a regular and systematic basis and she had a reasonable expectation of continuing employment. That regular and systematic employment commenced in about December 2008 with the company Modestie Australia and continued until 31 October 2010. On 1 November 2010, Modestie Australia sold the business operation at which the applicant had been working to the employer. On and from 1 November 2010, until the applicant's dismissal on 26 December 2010, the applicant was a casual employee engaged on a regular and systematic basis with the employer and she had a reasonable expectation of continuing employment with the employer.
[31] Consequently the evidence has established that the nature of the applicant's employment with both Modestie Australia and then subsequently with the employer, satisfied the provisions of subsection 384 (2) (a) of the Act.
[32] In this case, the sale of the business operation at which the applicant had been working and the concomitant finalisation of her employment with Modestie Australia together with the subsequent commencement of employment with the employer enlivens the provisions of subsection 384 (2) (b) of the Act.
[33] The consideration of subsection 384 (2) (b) of the Act has been assisted by reference to the following four decisions of FWA which are cited in chronological order: Osmond v NBS Transport (SA), Raffaelli C. (Osmond)1; Ahmed and Ors v Serco Australia, Watson VP. (Serco)2; Szybkowski v Monjon Australia, Roe C. (Monjon)3; and Farrugia v Building Technology Integrators, Hamberger SDP. (Farrugia)4.
[34] The first aspect of subsection 384(2) (b) of the Act that requires examination is the notion of a “transferring employee” as contained in paragraph (i) of that subsection. Section 12, The Dictionary of the Act, provides for definitions of both a transferring employee and a transfer of business as follows:
“transferring employee, in relation to a transfer of business: see subsection 311(2).”
“transfer of business: see subsection 311(1).”
[35] Consequently section 311 of the Act establishes the meaning of the terminology “transfer of business” and “transferring employee” as contained in subsection 384 (2) (b) of the Act. Section 311 of the Act is in the following terms:
“311 When does a transfer of business occur
Meanings of transfer of business, old employer, new employer and transferring work
(1) There is a transfer of business from an employer (the old employer) to another employer (the new employer) if the following requirements are satisfied:
(a) the employment of an employee of the old employer has terminated;
(b) within 3 months after the termination, the employee becomes employed by the new employer;
(c) the work (the transferring work) the employee performs for the new employer is the same, or substantially the same, as the work the employee performed for the old employer;
(d) there is a connection between the old employer and the new employer as described in any of subsections (3) to (6).
Meaning of transferring employee
(2) An employee in relation to whom the requirements in paragraphs (1)(a), (b) and (c) are satisfied is a transferring employee in relation to the transfer of business.
Transfer of assets from old employer to new employer
(3) There is a connection between the old employer and the new employer if, in accordance with an arrangement between:
(a) the old employer or an associated entity of the old employer; and
(b) the new employer or an associated entity of the new employer;
the new employer, or the associated entity of the new employer, owns or has the beneficial use of some or all of the assets (whether tangible or intangible):
(c) that the old employer, or the associated entity of the old employer, owned or had the beneficial use of; and
(d) that relate to, or are used in connection with, the transferring work.
Old employer outsources work to new employer
(4) There is a connection between the old employer and the new employer if the transferring work is performed by one or more transferring employees, as employees of the new employer, because the old employer, or an associated entity of the old employer, has outsourced the transferring work to the new employer or an associated entity of the new employer.
New employer ceases to outsource work to old employer
(5) There is a connection between the old employer and the new employer if:
(a) the transferring work had been performed by one or more transferring employees, as employees of the old employer, because the new employer, or an associated entity of the new employer, had outsourced the transferring work to the old employer or an associated entity of the old employer; and
(b) the transferring work is performed by those transferring employees, as employees of the new employer, because the new employer, or the associated entity of the new employer, has ceased to outsource the work to the old employer or the associated entity of the old employer.
New employer is associated entity of old employer
(6) There is a connection between the old employer and the new employer if the new employer is an associated entity of the old employer when the transferring employee becomes employed by the new employer.”
[36] In addressing the requirements of subsection 311 (1) of the Act the matters contained in paragraphs (a) to (d) therein must be satisfied in order to establish that there was a transfer of business. The facts in this case involved, (a) the termination of the applicant’s employment with Modestie Australia and, (b) the commencement of employment with the employer within three months of the termination, and (c) the work the applicant performed for the employer was the same or substantially the same as that performed for Modestie Australia.
[37] In respect to paragraph (d) of subsection 311 (1) of the Act, the evidence has established that there was a sale by Modestie Australia to the employer (Modestie Fashion Australia Pty Ltd) of the business operating as Modestie Boutique, Suite 226, Westfield Liverpool. The sale involved consideration of $20,000.00 and included a transfer of assets from the old employer to the new employer and thus satisfied the provisions of subsection 311 (3) of the Act. As an example, the assignment of the lease of premises located at Suite 226, Westfield shopping centre Liverpool, established that the new employer owned and obtained the beneficial use of some of the assets (tangible and intangible) that the old employer owned or had the beneficial use of, and these assets relate to and were used in connection with the transferring work. These circumstances can be clearly distinguished from the factual position identified by Roe C. in the Monjon case. Consequently, in this case, the provisions of paragraph (d) of subsection 311 (1) of the Act have been satisfied.
[38] Therefore, for the purposes of the Act, there was a transfer of business from Modestie Australia, (the old employer), to Modestie Fashion Australia Pty Ltd, (the new employer) and the applicant was a transferring employee as contemplated by subsection 311 (2) of the Act.
[39] Having established that the applicant was a transferring employee for the proposes of the Act, importantly then, the evidence confirmed that the employer did not inform the applicant in writing before the new employment started that the period of service with the old employer (Modestie Australia) would not be recognised. These circumstances can be contrasted with the factual position identified by Watson VP in the Serco case.
[40] Consequently by virtue of the operation of subsection 384 (2) (b) (iii) of the Act, the applicant’s period of employment with the old employer must be recognised as a period of employment relevant to the minimum employment period that must be completed after which an employee is protected from unfair dismissal. Therefore the applicant's period of employment for the purposes of subsection 382 (a) of the Act included the period of employment with the old employer which commenced from about December 2008. At the time of her dismissal the applicant's period of employment was about two years and clearly exceeded the minimum employment period relevant to a small business employer as prescribed by subsection 383 (b) of the Act.
[41] There was no suggestion that the applicant was not covered by a Modern Award. The applicant had completed a period of employment of at least the minimum employment period as contemplated by subsection 382 (a) of the Act. Therefore the applicant was a person who was protected from unfair dismissal.
[42] As I have determined that the applicant was a person who was protected from unfair dismissal, consideration must logically advance to whether there was a dismissal and if so, was it unfair. Section 385 of the Act stipulates that FWA must be satisfied that 4 cumulative elements are met in order to establish an unfair dismissal. These elements are:
(a) the person has been dismissed; and
(b) the dismissal was harsh, unjust or unreasonable; and
(c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and
(d) the dismissal was not a case of genuine redundancy.
[43] In this case there was challenge relating to only those elements contained in subsections 385 (b), and (c), of the Act. There was no suggestion that the applicant had not been dismissed nor was the issue of redundancy introduced. Specifically, the employer asserted that the dismissal of the applicant was consistent with the Code and that the dismissal was not harsh, unjust or unreasonable.
[44] The employer was a small business and pursuant to s.388 of the Act the provisions of the Small Business Fair Dismissal Code (the Code) must be considered. The Code is in the following terms:
“Commencement
The Small Business Fair Dismissal Code comes into operation on 1 July 2009.
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.
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.”
[45] The applicant was summarily dismissed by way of text message. The reasons for dismissal that were contained in the text message did not mention any serious misconduct that would ordinarily provide sufficient basis to justify immediate dismissal. At the Hearing the employer did not adduce any evidence of serious misconduct on the part of the applicant which would be sufficient to justify the immediate dismissal.
[46] The employer sought to rely upon a copy of the Small Business Fair Dismissal Code Checklist (the Checklist) which Mr Sarkis had completed and signed on 7 February 2011. Question 5 of the Checklist asked: “Did you dismiss the employee for some other form of serious misconduct?” In answer the employer ticked the box “Yes” and included the following hand written responses to the further question “If yes, what was the reason?”
“1- Did not Fullfill[sic] the task given to her
2- Most of the time arrive[sic] late
3- Very Bad[sic] behaviour toward the staff & customers
4- She does not take her duty seriously”
[47] Strangely there was no mention in the Checklist of the issue regarding the applicant swapping shifts with Ms Ghisso which appeared to be the primary reason mentioned in the dismissal text message. The matters mentioned in the Checklist do not particularise any form of serious misconduct which would provide justification for immediate dismissal. In addition, during the Hearing the employer was unable to provide any evidence of serious misconduct on the part of the applicant which might provide even a tenuous basis for justification of immediate dismissal.
[48] The applicant was employed as a casual who was engaged on a regular and systematic basis and therefore termination of employment would not ordinarily attract a notice period or payment in lieu of notice. However, the extraordinarily abrupt dismissal implemented by way of text message, together with the assertion made by the employer in the Checklist that the applicant had been dismissed for some other form of serious misconduct, would mean that the dismissal of the applicant would properly be characterised as being summary for the purposes of the Code. The complete absence of evidence to support any basis upon which the employer could have reasonable grounds to believe that the applicant committed serious misconduct renders the dismissal of the applicant to have been blatantly contrary to the Code.
[49] The final relevant element of section 385 of the Act has involved consideration as to whether the dismissal of the applicant was harsh, unjust or unreasonable. Section 387 of the Act contains criteria which FWA must take into account in any determination of whether a dismissal is harsh, unjust or unreasonable. These criteria are:
(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 FWA considers relevant.
Valid reason for the dismissal related to capacity or conduct
[50] The reason or reasons for the dismissal of the applicant can be described as something of a moving feast. The dismissal text message stated two reasons that related solely to the events of 24 December 2010. Specifically, the employer took issue with the applicant for swapping shifts without informing the employer and then arriving late for the swapped shift. The Checklist contained vague suggestions of performance and behaviour issues, poor time keeping and “attitude” questions. During the Hearing the employer also sought to advance what it claimed to be numerous customer complaints.
[51] In respect to the shift swapping and late arrival of the applicant on 24 December, the employer may have had some legitimate basis for complaint if there had been evidence that the practice of shift swapping was prohibited and that the applicant, (and Ms Ghisso), had consciously disobeyed the direction of the employer. However, the evidence established that shift swaps occurred frequently albeit not necessarily with the knowledge of the employer on each occasion. Although the applicant should have informed the employer about the swap for 24 December, there was limited practical opportunity to do so because of the extended hours that both the applicant and Ms Ghisso were working at the time.
[52] The shift swap and late arrival of the applicant on 24 December must also be considered in the context of the larceny. An examination of the totality of the evidence leads to an inescapable conclusion that if the shift swap and late arrival of the applicant had not coincided with the larceny the applicant’s conduct would have resulted in no more than some form of reprimand. The absence of even a reprimand to Ms Ghisso for her role in the swap or for that matter, the events of 24 December more generally, is a reflection of the employer’s inappropriate and imbalanced approach which was driven more by reaction to the larceny rather than careful and reasoned assessment.
[53] Further, the shift swap and late arrival of the applicant could not represent valid reason for dismissal because the relevant Modern Award5 provides that the applicant, having worked until midnight, could not be required to work before midday on the following day.
[54] The various other behaviour and conduct issues that the employer sought to introduce as reasons for dismissal were not sufficiently specified nor supported by evidence so as to enable any factual findings to be made. At best the evidence established that there were some customer complaints that had been raised with the applicant particularly during the meeting held on 2 December. However these were issues under review and there was no suggestion that there were customer complaints arising between 2 and 24 December.
[55] The behavioural, performance and attitude issues that the employer has attempted to rely upon as reasons for dismissal are a collection of unspecified, unsubstantiated allegations which were belatedly used in an attempt to bolster the basis for an ill-considered and hasty decision which in reality, was a reaction motivated by a consuming desire to find blame for the larceny. Consequently there was not a valid reason for dismissal relating to the applicant’s capacity or conduct.
Notification of reason for dismissal
[56] In this instance the notification of the reasons for dismissal was made by text message. I believe that this is an inappropriate means for notification of dismissal or reason(s) for dismissal. The employer suggested that text messaging was the most commonly used form of communication between the applicant and Ms Sarkis. There is of course no comparison that can be made between day to day communication about a variety of work and non-work-related matters, and advice of termination of employment.
[57] Mr Barwick said that it was “pretty appalling for an employee to be terminated by SMS”. In the absence of any compelling reason why dismissal would need to be communicated by any means other than direct face-to-face conversation, I am inclined to concur with the sentiments of Mr Barwick.
Opportunity to respond to any reason related to capacity or conduct
[58] The implementation of dismissal by way of text message clearly deprived the applicant of any opportunity to respond, offer explanation or defence about any of the issues that may have contributed to the decision to dismiss.
[59] It is difficult to accept that it could be reasonable or just for any employee to be dismissed without a fundamental process involving an opportunity to put a case, face-to-face, to the decision maker. The requirement for such a process is primarily derived from the notions of natural justice. The absence of such a process can also infer a lack of courage to face the employee.
[60] If the decision maker is not prepared to deliver the message themselves, face-to-face, he or she risks creating the appearance that they do not have the courage of their convictions. The basis for the decision is immediately opened to challenge upon the inference that the decision maker did not have, in all good conscience, sufficient confidence in the decision to act with any conviction. Consequently if dismissal is implemented by any means other than face-to-face communication both the legal and ethical basis for the decision to dismiss is likely to face strong and successful challenge.
[61] It must be recognised that there are some circumstances where a decision to dismiss might be justifiably implemented without the need to provide the employee with a face-to-face opportunity to be heard. Such circumstances would usually be confined to instances where an employee committed gross and wilful misconduct that was admitted or undeniably existent and no possible explanation or mitigation could alter the decision. Other circumstances could be contemplated where face-to-face contact may involve some genuine prospect of aggression or violence. These would be limited, unusual situations and clearly not apposite in this case.
Unreasonable refusal to allow a support person to assist
[62] In the circumstances where dismissal was implemented by text message there is simply no opportunity to allow a support person to assist. The position that is therefore created when dismissal is conducted via text message is tantamount to an unreasonable refusal to allow a support person to assist.
Warning about unsatisfactory performance
[63] As mentioned earlier in this decision there was evidence of warning to the applicant about unsatisfactory performance during the meeting held on 2 December 2010. The unsatisfactory performance that was the subject of this warning related to customer complaints which had at best, very limited relevance to the dismissal of the applicant.
Size of enterprise likely to impact on procedures
[64] The Code has application in this instance. Notwithstanding the accommodation ordinarily provided to small size enterprises like the employer, the evidence in this case revealed disturbingly substandard employment practices that could not be condoned irrespective of the size of the enterprise.
Absence of management specialists or expertise likely to impact on procedures
[65] Although the employer had no dedicated employee relations staff there was evidence that it engaged Conveyancers and Lawyers in respect to various aspects of its business operations. There was also evidence provided by Mr Sarkis that he had consulted Lawyers both before and after the dismissal of the applicant in connection with employment matters.
Other relevant matters
[66] There were no further matters that I consider to be relevant to the consideration of the alleged unfairness of the dismissal of the applicant.
Conclusion
[67] This unfair dismissal claim has included examination and determination of an important preliminary issue about whether or not the applicant was a person protected from unfair dismissal. The applicant had been employed by the employer for a period of only about eight weeks and such short employment would ordinarily establish that the applicant would not have been a person protected from unfair dismissal. However in this instance prior employment with another employer in circumstances that involved a transfer of business has, upon analysis, established that the applicant was a transferring employee and the period of prior employment must be counted for the purposes of the minimum employment period. Consequently the applicant was a person protected from unfair dismissal.
[68] The second aspect of determination of this matter has involved whether the employer had complied with the Small Business Fair Dismissal Code. In this regard, upon analysis, I have concluded that the dismissal of the applicant was not consistent with the Code.
[69] The final component of the primary determination has involved whether the dismissal of the applicant was harsh, unjust or unreasonable. Following an examination of the criteria set out in section 387 of the Act, I have concluded that the dismissal of the applicant was harsh, unjust and unreasonable.
Remedy
[70] The applicant has not sought reinstatement but rather compensation as remedy for her unfair dismissal. In the circumstances I am satisfied that reinstatement of the applicant would be inappropriate and that payment of compensation would represent an appropriate remedy.
[71] Section 392 of the Act prescribes certain matters that deal with compensation as a remedy for unfair dismissal. I have approached the question of compensation having regard for the guidelines that were established in the Full Bench Decision in Sprigg v Paul’s Licensed Festival Supermarket6 and as commented upon in the subsequent Full Bench Decision in Smith and Ors v Moore Paragon Australia Ltd 7.
[72] Firstly, I confirm that an Order of payment of compensation to the applicant will be made against the employer in lieu of reinstatement of the applicant.
[73] Secondly, in determining the amount of compensation that I Order I have taken into account all of the circumstances of the case including the criteria set out in paragraphs (a) to (g) of subsection 392 (2) of the Act.
[74] Specifically I note that there was no suggestion that any Order of compensation would have any particular impact on the viability of the employer's enterprise. The applicant had been employed for a period of about 2 years albeit for a period of about 8 weeks with the employer. The applicant would have been likely to have continued to receive remuneration for a period of at least the equivalent of her employment prior to dismissal. The applicant has made efforts to mitigate her loss and she obtained alternative employment approximately 5 weeks after the dismissal. The alternative employment initially involved lower rates of remuneration. I accept the applicant's evidence about the amount of remuneration received in the alternative employment.
[75] Thirdly, the question of any misconduct that may have contributed to the employer's decision to dismiss the applicant must be considered. To the extent that the applicant committed misconduct by swapping shifts without advising the employer and then arriving late for work on 24 December 2010, such misconduct must be assessed having cognisance of the relevant Modern Award provisions which negate any requirement for the applicant to have been required to work at all on that morning. Therefore, on balance, any misconduct of the applicant should not impact upon the amount of any compensation Ordered.
[76] Fourthly, the amount Ordered does not include any component by way of compensation for shock, distress or humiliation, or other analogous hurt, caused to the applicant by the manner of the dismissal.
[77] Fifthly, the amount of compensation Ordered does not exceed the lesser of the total remuneration of the applicant for the period of his employment during the 26 weeks immediately before the dismissal, and half the amount of the high income threshold immediately before the dismissal.
[78] Consequently for the reasons outlined above, I have decided that an amount approximating with 8 weeks remuneration at the weekly rate immediately before dismissal should be Ordered as compensation to the applicant. That amount is $9,992.00. Accordingly separate Orders [PR509628] providing for remedy in these terms will be issued.
COMMISSIONER
Appearances:
Mr A. Barwick, from Barwick Legal, for the applicant;
Mr R. Sarkis, together with Ms S. Sarkis, for the employer.
Hearing details:
Sydney, 3 May 2011.
1 Michael Osmond v NBS Transport (SA) Pty Ltd T/A NBS Transport, Raffaelli C. 9 July 2010, [2010] FWA 5076, PR999109.
2 Iftekhar Ahmed and Ors v Serco Australia Pty Ltd, Watson VP. 12 July 2010, [2010] FWA 5121, PR999168.
3 Mr Joe Szybkowski v Monjon Australia Pty Ltd T/A Monjon Australia Pty Ltd, Roe C. 17 Sept 2010, [2010] FWA 7321, PR501876.
4 Mr Laurence Farrugia v Building Technology Integrators Pty Ltd, Hamberger SDP. 14 March 2011, [2011] FWA 1285, PR507135.
5 See clause 31.2 of the General Retail Industry Award 2010 [MA000004].
6 Sprigg v Paul’s Licensed Festival Supermarket, (Munro J, Duncan DP and Jones C), (1998) 88IR 21.
7 Smith and Ors v Moore Paragon Australia Ltd, (Lawler VP, Kaufman SDP and Mansfield C), (2004) PR942856.
Printed by authority of the Commonwealth Government Printer
<Price code C, PR509627>