| [2016] FWC 4726 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Magdalina Kim
v
Embassy of the People’s Democratic Republic of Algeria
(U2015/6438)
DEPUTY PRESIDENT KOVACIC |
SYDNEY, 15 JULY 2016 |
Application for relief from unfair dismissal – dismissal found to be harsh, unjust and unreasonable – compensation in lieu of reinstatement ordered.
[1] On 10 July 2015 Mrs Magdalina Kim (the Applicant) lodged an application under s.394 of the Fair Work Act 2009 (the Act) alleging that the termination of her employment by the Embassy of the People’s Democratic Republic of Algeria (the Respondent) on 30 June 2015 was unfair.
[2] The application was heard on 14 June 2016. At the hearing, Mr James Macken of Counsel appeared with permission for Mrs Kim. The Respondent did not attend the hearing. By way of background the application was previously listed for hearing on 27 May 2016 but did not proceed as the Respondent did not attend. The Fair Work Commission (the Commission) contacted the Respondent at the time and was advised that it was awaiting instructions from the Algerian Ministry of Foreign Affairs. The Commission also wrote to the Respondent on 27 May 2016 advising that the matter had been relisted for 14 June 2016 and that should it again fail to attend the hearing would proceed with the matter determined based on the material before the Commission.
[3] For the reasons set out below, I have found that Mrs Kim was dismissed by the Respondent and that her termination was harsh, unjust and unreasonable, that reinstatement is not appropriate and that compensation of $15,506.46 less applicable tax should be paid to Mrs Kim by the Respondent within 21 days of this decision.
Background
[4] Mrs Kim commenced employment with the Respondent as a Housekeeper on 26 January 2005. Mrs Kim was employed on a contract which specified that the employment was for a period of one year. However, Mrs Kim’s employment continued until she was dismissed on 30 June 2015.
[5] In the period leading up to her dismissal Mrs Kim had been on limited duties as a result of an injury to her left arm. From 16 June 2015 Mrs Kim was on personal leave which was supported by medical certificates that had been provided to the Respondent and which deemed Mrs Kim unfit for work until 13 July 2015. Mrs Kim was required to attend a meeting with the Respondent on 30 June 2015 at which her employment was terminated. In her application Mrs Kim stated that on 7 July 2015 the Respondent wrote to her advising that her employment had ceased as of 30 June 2015. However, at the hearing Mrs Kim submitted that the letter was given to her at the meeting of 30 June 2015. The letter reads as follows:
“This is a note to advice [sic], that your employment contract of one year since 2005, within the Embassy of Algeria has ceased as of 30th of June 2015. Please be advised that your contract will not be renewed.” 1 (Emphasis as per original)
[6] Mrs Kim contended in her application that she had been verbally advised by the Respondent that it would not pay worker’s compensation for the temporary absence and that she was too old to return to work (Mrs Kim is 77 years of age).
The Applicant’s case
[7] Mrs Kim submitted that she was not employed under a contract of employment for any specified period or any specified task, contending that, while her contract of employment specified that the period of employment was for one year, her employment continued notwithstanding the effluxion of this period. Mrs Kim relied on the decision in Minister for Health v Ferry 2 in support of her submission that where employment for a fixed term continues after the expiry of the fixed term, the employment continues for an indefinite period subject to subsequent termination by the employer. Beyond this, Mrs Kim submitted among other things that there was no valid reason for her dismissal and that in all the circumstances her dismissal was harsh, unjust and unreasonable.
[8] At the hearing, Mrs Kim largely reiterated her written submissions. In addition, Mrs Kim submitted that the Commission had the jurisdiction to deal with her application as she had been employed in the Australian Capital Territory and no issue had been raised regarding the identity of her employer. Mrs Kim also highlighted that even if one assumed that she had been employed on a series of one year fixed term employment contracts her dismissal took effect midway through her current fixed term contract. Mrs Kim also disputed the respondent’s contention in its letter of 11 November 2015 to the Commission that her absence on sick leave constituted notice of resignation. Finally, Mrs Kim relied on the Full Federal Court decision in Zoeller v Federal Republic of Germany and Others 3 to contend that in circumstances where a party seeks to rely on a document not written in English, the document must be translated in order for it to be admitted as evidence.
[9] In her two witness statements 4 Mrs Kim deposed among other things that:
[10] In her oral evidence, Mrs Kim attested that she did not read the contract of employment at the time she signed as it written in French and she did not speak French. Mrs Kim further attested that the contract was not explained to her, despite her requesting an explanation, and that she was not asked to sign any further contracts by the Respondent.
[11] As to remedy, Mrs Kim did not seek reinstatement. Mrs Kim submitted that while she continued to look for work she had been unsuccessful to date, adding that she would have remained in employment until late January 2016 which would have been the anniversary of her commencement with the Respondent. More specifically, Mrs Kim sought compensation in lieu of reinstatement equivalent to six months wages, i.e. $15,506.46 (based on a monthly salary of $2,584.41).
The Respondent’s case
[12] In a response to the application dated 11 November 2015 the Respondent stated, inter alia, as follows:
“1. Mrs Magdalina Kim has not been dismissed by the Embassy, but her employment contract, herewith a copy, signed on 21st February 2005 and tacitly renewed each year as it is mentioned, has expired on June 2015 and has not been renewed, due to the fact that she has indicated she is unable to resume her duties, evoking that she had an accident many years ago, which prevents her actually to continue to assume her duties, after an absence of one month from 6 June to 6 July 2015, justified with medical certificates and which is considered by the employer, even at its expense, as the advice notice of one month from the employee before quitting definitively.
2. She has requested from the Embassy a document attesting that her injury was caused by a workplace accident in order to claim an eventual and unfair financial compensation from the concerned Australian organism. Therefore, the attestation requested has not been delivered due to the fact that her accident had not occurred at the workplace.
3. The cessation of employment could not be notified to Mrs Magdalina Kim prior to the 6 July because she was absent during the period above mentioned …”
[13] Beyond the above letter, the Respondent provided no further material to the Commission.
The statutory framework
[14] The Commission exercises its discretion in relation to an application for an unfair dismissal remedy pursuant to Part 3-2 of the Act. In this case there is no contest that Mrs Kim is a person who is protected from unfair dismissal pursuant to s.382 of the Act. In the context of this matter, the relevant provisions of the Act are ss. 385, 386 and 387 which provide as follows:
“385 What is an unfair dismissal
A person has been unfairly dismissed if FWC is satisfied that:
(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.
Note: For the definition of consistent with the Small Business Fair Dismissal Code: see section 388.
(1) A person has been dismissed if:
(a) the person’s employment with his or her employer has been terminated on the employer’s initiative; or
(b) the person has resigned from his or her employment, but was forced to do so because of conduct, or a course of conduct, engaged in by his or her employer.
(2) However, a person has not been dismissed if:
(a) the person was employed under a contract of employment for a specified period of time, for a specified task, or for the duration of a specified season, and the employment has terminated at the end of the period, on completion of the task, or at the end of the season; or
(b) the person was an employee:
(i) to whom a training arrangement applied; and
(ii) whose employment was for a specified period of time or was, for any reason, limited to the duration of the training arrangement;
and the employment has terminated at the end of the training arrangement; or
(c) the person was demoted in employment but:
(i) the demotion does not involve a significant reduction in his or her remuneration or duties; and
(ii) he or she remains employed with the employer that effected the demotion.
(3) Subsection (2) does not apply to a person employed under a contract of a kind referred to in paragraph (2)(a) if a substantial purpose of the employment of the person under a contract of that kind is, or was at the time of the person’s employment, to avoid the employer’s obligations under this Part.
387 Criteria for considering harshness etc.
In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, 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) 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 FWC considers relevant.”
[15] As noted above, the Respondent contended that Mrs Kim’s contract of employment had expired on 30 June 2015 or in the alternative that Mrs Kim effectively resigned by taking sick leave, whereas Mrs Kim contended that she was dismissed. As such, s.385(a) of the Act is relevant. Mrs Kim contended that her termination was harsh, unjust and unreasonable, so s.385(b) is relevant. The Respondent did not contend that it is a small business employer as defined in the Act. Accordingly, s.385(c) is not relevant. The termination was not a case of redundancy, so s.385(d) does not apply. Therefore, in determining whether Mrs Kim was unfairly dismissed, I must first consider whether she was dismissed as per s.385(a) and, if so, determine whether the dismissal was harsh, unjust or unreasonable as per s.385(b).
Was the Applicant dismissed?
[16] Based on the material before the Commission it is apparent that Mrs Kim signed a one year contract of employment in early 2005 and that her employment continued for a further period of almost 10 years after the expiration of that contract. While Mrs Kim provided a translation of her contract of employment, the translation was not provided by an accredited translator/translation agency. Accordingly, little weight can be attached to the translation, though I note the translation suggests that the contract provides that it was “renewable by tacit consent.” This is consistent with the Respondent’s letter of 11 November 2015 to the Commission which states that the contract was “tacitly renewed each year”.
[17] In circumstances where Mrs Kim continued to work for an extended period beyond the expiry of her contract of employment and where her employment ceased on 30 June 2015 as opposed to the anniversary date of her contract of employment taking effect, the Respondent’s contention that Mrs Kim’s contract of employment expired on 30 June 2015 is just not sustainable on any basis. Further, the Respondent’s letter of 11 November 2015 does not explain how it formed the view that the contract expired on 30 June 2015 when the letter states that it was signed on 21 February 2005.
[18] As to the Respondent’s contention that Mrs Kim effectively resigned by taking sick leave, this is disputed by Mrs Kim. Further, the Respondent provided no material to support its contention in this regard. In other words, there is nothing before the Commission to support such a finding.
[19] Accordingly, I find that Mrs Kim’s employment ceased at the initiative of the Respondent as per s.386(1)(a) of the Act. Accordingly, I now need to consider whether Mrs Kim’s dismissal was harsh, unjust or unreasonable.
Was the dismissal harsh, unjust or unreasonable?
[20] In considering whether a dismissal was harsh, unjust or unreasonable, the Act requires the Commission to have regard to the criteria set out in s.387. I will now address these criteria.
(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)
[21] In Rode v Burwood Mitsubishi (Rode’s Case) 5 a Full Bench of the then Australian Industrial Relations Commission (AIRC) canvassed the meaning of valid reason in the context of the relevant provisions of the Workplace Relations Act 1996 citing Selvachandran v Peteron Plastics Pty Ltd.6 The following is an extract from the Full Bench’s decision in Rode’s Case.
“[17] In relation to the meaning of “valid reason” the following remarks of Northrop J in Selvachandran v Peteron Plastics Pty Ltd are relevant:
“Section 170DE(1) refers to a ‘valid reason, or valid reasons’, but the Act does not give a meaning to those phrases or the adjective ‘valid’. A reference to dictionaries shows that the word ‘valid’ has a number of different meanings depending on the context in which it is used. In The Shorter Oxford Dictionary, the relevant meaning given is: ‘2. Of an argument, assertion, objection, etc; well founded and applicable, sound, defensible: Effective, having some force, pertinency, or value.’ In The Macquarie Dictionary the relevant meaning is ‘sound, just or wellfounded; a valid reason’.
In its context in s 170DE(1), the adjective ‘valid’ should be given the meaning of sound, defensible or wellfounded. 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 reason 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 each treated fairly, see what was said by Wilcox CJ in Gibson v Bosmac Pty Ltd, when considering the construction and application of a s 170DC.”
[18] While Selvachandran was decided under the former statutory scheme the above observations remain relevant in the context of s.170CG(3)(a). A valid reason is one which is sound, defensible or well founded. A reason for termination which is capricious, fanciful, spiteful or prejudiced is not a valid reason for the purpose of s.170CG(3)(a).
[19] We agree with the appellant’s submission that in order to constitute a valid reason within the meaning of s.170CG(3)(a) the reason for termination must be defensible or justifiable on an objective analysis of the relevant facts. It is not sufficient for an employer to simply show that he or she acted in the belief that the termination was for a valid reason.”
[22] The Respondent contended in its letter to the Commission of 11 November 2015 that it did not dismiss Mrs Kim but that her contract of employment expired on 30 June 2015 and that Mrs Kim effectively resigned by taking sick leave. Mrs Kim disputed those contentions. For the reasons outlined above, those contentions are unsustainable based on the material before the Commission.
[23] Mrs Kim also submitted that to the extent the Respondent dismissed her because it considered her too old or because she had been and continued to be on personal leave, neither of these factors constituted a valid reason for her dismissal. I note that the Respondent did not rely on these as reasons for the cessation of Mrs Kim’s employment.
[24] Drawing on the above, there is no material before the Commission which supports a finding that there was a valid reason for Mrs Kim’s dismissal. This factor weighs very heavily against the Respondent.
(b) Whether the person was notified of that reason
[25] A Full Bench of the then Australian Industrial Relations Commission in Crozier v Palazzo Corporation Pty Ltd 7 when considering this factor in the context of appeal against an unfair dismissal decision made under the Workplace Relations Act 1996 stated:
“As a matter of logic procedural fairness would require that an employee be notified of a valid reason for their termination before any decision is taken to terminate their employment in order to provide them with an opportunity to respond to the reason identified. Section 170CG(3)(b) and (c) would have very little (if any) practical effect if it was sufficient to notify employees and give them an opportunity to respond after a decision had been taken to terminate their employment. Much like shutting the stable door after the horse has bolted.”
[26] As mentioned above, Mrs Kim submitted at the hearing that she was given the letter at her meeting on 30 June 2015 with the Respondent advising that her employment contract had expired on that day and would not be renewed. This supports a finding that Mrs Kim was notified of the reason for the cessation of her employment at that meeting.
(c) Whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person
[27] While it does not appear that Mrs Kim’s dismissal was related to either her capacity or conduct, there is nothing before the Commission which points to Mrs Kim being given an opportunity to respond to the reason cited by the Respondent for the cessation of her employment at the meeting of 30 June 2015. This factor weighs against the Respondent.
(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
[28] Mrs Kim deposed in her witness statement 8 that her husband also attended the 30 June 2015 meeting with the Respondent. I therefore consider this factor to be a neutral consideration.
(e) If the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal
[29] Based on the termination letter Mrs Kim was not dismissed as a result of unsatisfactory performance. Accordingly, this factor is not a relevant consideration.
(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
(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
[30] Neither party made any submissions regarding these factors. As such, I consider these factors to be neutral considerations.
(h) Any other matters that FWC considers relevant
[31] Mrs Kim submitted that her dismissal was harsh having regard to her age, consequent likely difficulty in obtaining alternative employment and length of service. In the absence of a valid reason for her dismissal, I consider all of these factors to be relevant matters, particularly Mrs Kim’s 11 years of unblemished service with the Respondent.
Conclusion regarding whether the Applicant’s dismissal was harsh, unjust or unreasonable
[32] Drawing on the above analysis, I find that the factors that favour a finding that Mrs Kim’s dismissal was harsh, unjust and unreasonable are that there was not a valid reason for her dismissal, that Mrs Kim was not given an opportunity to respond to the reason relied upon by the Respondent and that Mrs Kim’s unblemished length of service and the consequences of her dismissal are both relevant considerations. The only factor which supports a finding that Mrs Kim’s dismissal was not harsh, unjust and unreasonable was that Mrs Kim was notified of the reason for the cessation of her employment by the Respondent at the meeting of 30 June 2015. Beyond that, the remaining factors in s.387 are either neutral considerations or not relevant in this case.
[33] Against that background, and for all these reasons outlined above, I consider that Mrs Kim’s dismissal was harsh, unjust and unreasonable. I turn now to consider the issue of remedy.
Remedy
[34] Section 318 of the Act sets out the object of Part 3-2 of the Act, providing at s.318(1)(c) that an object of Part 3-2 is “to provide remedies if a dismissal is found to be unfair, with an emphasis on reinstatement.”
[35] As previously noted, Mrs Kim did not seek reinstatement. The Respondent made no submissions in this regard. Having regard to the circumstances in this matter, I do not consider reinstatement appropriate in this case as I consider it highly unlikely that Mrs Kim’s trust and confidence in the Respondent could be restored, particularly given some of the things Mrs Kim attested were said to her at the 30 June 2015 meeting with the Respondent.
[36] Section 390 of the Act deals with when the Commission may order a remedy for unfair dismissal and provides at s.390(3):
“(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.”
[37] The criteria relevant to the deciding of the amount of compensation are set out in s.392(2) of the Act.
Remuneration that would have been received (s.392(2)(c))
[38] Mrs Kim deposed that had she been able to continue working with the Respondent that she would have worked until late May 2016, a period of 11 months, and would have earned $28,428.51 over that period (based on a monthly salary of $2,584.41). The Respondent made no submissions on this point.
[39] In the circumstances, I consider it likely that Mrs Kim would only have continued in her employment until 21 February 2016 which would have been the anniversary of the date on which she signed her contract of employment, i.e. a further eight months. Based on her monthly salary, Mrs Kim would have received $20,675.28 less applicable tax for this period.
Remuneration earned (s.392(2)(e))
[40] Other than aged pension payments which Mrs Kim commenced receiving in September 2015, Mrs Kim submitted that she had not received any remuneration since her dismissal. Consistent with the decision in Sprigg v Paul’s Licensed Supermarket 9 social security payments are not deducted. Accordingly, no deduction on this ground is warranted.
Income reasonably likely to be earned (s.392(2)(f))
[41] I consider that no deduction on this ground is warranted.
Other matters (s.392(2)(g))
[42] There are no other matters that I consider relevant to take into account in the determination of an amount of compensation in lieu of reinstatement for Mrs Kim, apart from those in ss.392(2)(a), (b) and (d), s.392(3) and s.392(5) of the Act to which I now turn.
Viability (s.392(2)(a))
[43] In the absence of any submissions from the Respondent regarding this factor, I consider it to be a neutral consideration. Accordingly, no deduction from the proposed amount of compensation is warranted on this ground.
Length of service (s.392(2)(b))
[44] I do not consider that Mrs Kim’s lengthy period of service provides a basis for reducing the proposed amount of compensation.
Mitigation efforts (s.392(2)(d))
[45] Mrs Kim deposed that she had and continued to seek work without success. I therefore consider that no deduction on this ground is warranted.
Misconduct (s.392(3))
[46] Misconduct was not a factor in Mrs Kim’s termination. As a result, there is no basis to reduce the proposed compensation amount on account of misconduct.
Compensation cap (s.392(5))
[47] The proposed amount of compensation of $20,675.28 less applicable tax is above the compensation cap of $15,506.46 less applicable tax for Mrs Kim as per s.392(5) of the Act. Accordingly, the amount of compensation is reduced to $15,506.46 less applicable tax.
Conclusion
[48] For the reasons outlined above, I consider Mrs Kim was dismissed and that her termination was both unjust and unreasonable. As to remedy, I do not consider reinstatement appropriate and propose an amount of compensation of $15,506.46 less applicable tax to be paid within 21 days of this decision. An order to that effect will be issued in conjunction with this decision.
Appearances:
J. Macken of Counsel on behalf of the Applicant.
Hearing details:
2016.
Canberra:
June 14.
1 Attachment to Form F2 – Unfair Dismissal Application
2 (1996) 65 IR 374
3 (1989) 91 ALR 341
4 Exhibits 1 and 2
5 Print R4471
6 (1995) 62 IR 371
7 (2000) 98 IR 137 at paragraph 73
8 Exhibit 1
9 (1998) 88 IR 21 at 26
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