| [2017] FWC 2433 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
John Finnegan
v
Komatsu Forklift Australia Pty Ltd
(U2016/14813)
COMMISSIONER CAMBRIDGE |
SYDNEY, 10 MAY 2017 |
Unfair dismissal - absence from work due to mental health issues - alleged refusal to work and perform inherent requirements of job - no valid reason for dismissal - significant procedural deficiencies - harsh, unjust and unreasonable dismissal - limited 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 lodged at Sydney on 13 December 2016. The application was made by John Frederic Finnegan (the applicant) and the respondent employer is Komatsu Forklift Australia Pty Ltd (ABN: 71080792730) (the employer or Komatsu).
[2] The application indicated that the date that the applicant’s dismissal took effect was 22 November 2016. Consequently, the application was made within the 21 day time limit prescribed by subsection 394 (2) of the Act.
[3] Unfortunately, the matter was not resolved at conciliation, and it has proceeded to arbitration before the Fair Work Commission (the Commission) which has involved a Hearing conducted in Sydney on 29 March 2017.
[4] At the Hearing, the applicant represented himself, and he provided evidence as the only witness called in support of his unfair dismissal claim. The employer was represented by its in-house legal counsel, Mr R Chayna. Mr Chayna called two witnesses who provided evidence on behalf of the employer.
[5] The applicant had worked for the employer for eight years. The applicant was initially engaged in a position described as Field Service Technician (FST), and in 2014 he was promoted to the position of Customer Service Supervisor (CSS). The work that the applicant performed as a CSS was fundamentally different to the work of a FST, as he became directly responsible for achieving certain sales levels and business activity results in line with his “budget Key Performance Indicators” (KPIs).
[6] The employer is part of the business of Komatsu Australia Pty Ltd (KAL). KAL is the national importer and distributor of Komatsu brand mining and earthmoving equipment in Australia, New Zealand and New Caledonia. The employer promotes, sells, hires and services the full range of Komatsu forklifts. The employer has approximately 153 employees.
[7] On 12 August 2015, the applicant was placed on a Performance Improvement Plan (PIP) as he had failed to meet his sales budget KPIs. In December 2015, the applicant’s PIP was suspended in order to allow the applicant to demonstrate his ability to perform under a new manager who commenced in January 2016. During February and March 2016, difficulties emerged with the applicant’s personal relationships particularly involving his new manager, Mr Leontis. Further, it became clear to the employer that the applicant was experiencing some mental health problems.
[8] On 11 March 2016, the employer called the applicant into a meeting and advised him that he was immediately placed on sick leave due to on-going concerns regarding behaviour and work performance. The applicant was provided with a letter which formalised this advice, and the employer required that, inter alia, he complete a fitness for duty assessment with a psychological test. The applicant complied with the employer’s directives, and he attended an independent clinical assessment on 16 March 2016.
[9] The independent medical assessment of the applicant was documented in a report dated 23 March 2016, and in summary, the report concluded that the applicant was temporarily unfit for his usual work with his current supervisor (Mr Leontis). Further, the independent medical report suggested that alternative arrangements involving work under a different supervisor should be pursued, and that the applicant be returned to work as soon as possible.
[10] Subsequently, the employer implemented a return to work plan for the applicant which involved his recommencement from 12 April 2016. At this time the return to work plan involved a different work location, and engagement in duties performed for KAL which were substantially different to the sales performance role of a CSS. Significantly, this work did not involve any KPI requirements or any supervision from Mr Leontis.
[11] The applicant’s return to work progressed well during the first two weeks when he was engaged in performing duties for KAL. At the commencement of the third week of the return to work plan the applicant was transferred to duties for the employer as opposed to KAL, albeit at a different location, and not immediately under any direction from Mr Leontis. The applicant expressed on-going concern about an anticipated return to any work under direct supervision of Mr Leontis. As a result of these concerns, the employer decided to cease the return to work plan, and the applicant was instructed to leave the workplace.
[12] On 5 May 2016, the applicant was directed to attend a meeting during which the employer’s Senior Managers proposed that the applicant agree to a Deed of Release as part of an arrangement to bring his employment to an end. The applicant rejected the Deed of Release, and instead he expressed a desire for there to be some formal mediation undertaken between himself and Mr Leontis. Although there appeared to be some preparedness for the mediation to be undertaken, the employer subsequently decided that it would direct the applicant to return to work in his previous CSS role but reporting to a branch manager rather than Mr Leontis. The employer sent the applicant a letter dated 17 May 2016, which set out its requirement for his return to work from 23 May, on the basis of this alternative managerial arrangement which did not involve Mr Leontis. This letter also specified that the applicant’s on-going performance in line with his KPIs would be an integral part of the return to work under alternative managerial arrangements.
[13] The applicant did not directly respond to the employer’s letter of 17 May, nor did he return to work on 23 May. Instead, the applicant provided a medical certificate indicating that he was unfit to work. The applicant subsequently made a workers compensation claim in respect to his absence. The workers compensation claim was rejected, and he remained absent for an extended period which was covered by further medical certification.
[14] The employer wrote to the applicant on 24 June 2016, seeking, inter alia, advice as to his medical condition and prognosis for return to work in the CSS role. The applicant did not directly respond to the employer’s letter of 24 June, but instead his treating medical practitioner wrote to the employer and advised that the applicant did not have any current capacity for work.
[15] The applicant’s personal sick leave entitlement was exhausted by 11 July 2016. The applicant unsuccessfully contested the rejection of his workers compensation claim. During the period of the applicant’s extended absence from work he retained an employer provided motor vehicle and mobile phone.
[16] After a period of more than three months absence on unpaid leave the employer sent the applicant a letter dated 25 October 2016, which relevantly indicated that the employer was intending to make a determination about the applicant’s on-going employment. The employer advised that it was considering deeming the applicant medically unfit to return to work, and this would result in the employment of the applicant ceasing. The letter of 25 October advised the applicant that he had until 9 November to submit any further material regarding his capacity to return to work.
[17] The applicant did not directly respond to the employer’s letter of 25 October, but lawyers acting on his behalf sent an email to the employer on 9 November requesting that the applicant be provided with a one week extension in order to submit further information regarding the applicant’s employment circumstances. The employer granted the extension of time sought by the applicant’s lawyers, and indicated that it required any further information to be provided by close of business on 16 November 2016. On 17 November 2016, the applicant’s lawyers sent another email to the employer requesting a further extension of time and this request was denied.
[18] On 22 November 2016, the employer sent an email to the applicant which attached a letter of dismissal. The letter of dismissal advised, inter alia, that the employer had formed the view that the applicant had, for an extended period, refused to work and perform a full range of duties, and therefore it was left with no option other than to terminate the employment effective as of that day 22 November.
[19] Following the advice of the termination of his employment, the applicant was required to return all company property in his possession including the motor vehicle and mobile phone. The applicant returned this property and he was then paid one month’s notice and any outstanding statutory leave entitlements. Following the dismissal, the applicant has contemplated attempts to find alternative employment. However, unfortunately, the applicant has remained unfit for work, and he has continued to attend a psychiatrist for further medical treatment.
[20] The applicant made some oral submissions during the Hearing, and he provided documentary material in the form of an outline of submissions together with final written submissions. The applicant submitted that his dismissal was unfair.
[21] The applicant submitted that he had been unfairly dismissed because of the procedural errors and misinformation that the employer had acted upon. The applicant made particular criticism that Komatsu had at no time contacted his psychiatrist in order to obtain accurate information about his medical condition.
[22] The submissions made by the applicant challenged the basis for the applicant being directed to take sick leave on 11 March 2016. The applicant stated that he had repeatedly asked for an explanation as to the reason for the initial directive to take leave, and he had never received a response from Komatsu to this question, other than it was “for your health and well-being.” The applicant stressed that the letter provided to him on 11 March had been prepared prior to his attendance at the meeting, and he was not provided with any opportunity to respond before he was directed to take sick leave.
[23] The applicant also submitted that throughout the whole process Komatsu had been misleading and withheld information. The applicant said that too many different people were involved at different points in time, such that the process became a shemozzle.
[24] The applicant made further submissions in respect of alleged procedural unfairness. The applicant complained that Komatsu did not follow procedures properly or with any consistency. The applicant said that the return to work plan had not been developed with any input from him, and it was not followed by Komatsu in any event. The applicant said that at the meeting held on 5 May, Komatsu offered and agreed to a mediation process but this was subsequently cancelled, and no reason for that cancellation was given. The applicant said that he had been hopeful that he could have returned to his position following the mediation.
[25] The applicant reiterated his criticism of Komatsu because they had not contacted any of his treating medical practitioners before they decided that his employment should be terminated. The applicant said that he believed that Komatsu had been deceptive, deceitful and bullying in the manner in which they handled his circumstances from the outset.
[26] In summary, the applicant submitted that his dismissal was unfair. The applicant said that Komatsu had decided to terminate his employment as a cost cutting exercise which had been devised by his immediate manager. In this regard, the applicant referred to an email dated 25 August 2016, from Mr Leontis to a customer which stated that the applicant was no longer with Komatsu. The applicant submitted that Komatsu did not have regard for his eight years of employment, and as a result of the way that he had been treated he had lost faith and trust in the individuals that were involved. The applicant sought compensation for his unfair dismissal as he was currently living off the proceeds obtained from selling his personal property.
[27] Komatsu was represented by Mr Chayna who submitted that the dismissal of the applicant was not harsh, unjust or unreasonable. Komatsu relied upon a written outline of submissions and further closing written submissions.
[28] Komatsu submitted that it had made an informed and reasoned decision to terminate the applicant’s employment after providing the applicant with a reasonable time period to demonstrate that he was capable of performing his role. According to the submissions made by Komatsu, the applicant had been provided with a proper opportunity to present any additional material which demonstrated that he may have been capable of a return to the workplace, but he had not provided any response.
[29] It was further submitted by Komatsu that it had made reasonable attempts to have the applicant returned to work including reconfiguration of relevant management structures. However, despite these changes, the applicant refused to return to work to perform his duties. In circumstances where the applicant had been placed on notice that Komatsu was reviewing his on-going employment and capacity to work, the applicant had not provided any evidence to the employer to indicate that he was capable of returning to his designated role and working directly with any manager.
[30] The submissions made by Komatsu also asserted that it had permitted the applicant’s lawyers a reasonable extension of time to provide any medical evidence or other material which may have demonstrated a potential for the applicant to return to work without specific limitations. Despite the accommodations of the employer, it was submitted that in the absence of any material it became clear that the applicant refused to return to work and perform the inherent requirements of his designated role. Consequently, Komatsu submitted that the level of deliberations that had been given to the applicant reflected that it had provided the applicant a fair go all round.
[31] Komatsu made further submissions which were configured in respect to the various requirements of s. 387 of the Act. Specifically, Komatsu submitted that there was valid reason for the applicant’s dismissal. The valid reason for dismissal was that the applicant was unable to perform the inherent requirements of the role and he refused to return to work. Komatsu submitted that the applicant was advised of the reasons for his dismissal and these reasons were set out in the show cause letter of 25 October, and the termination letter of 22 November 2016. It was further submitted that the applicant was given ample opportunity to respond to the reasons which related to capacity for work and which were ultimately relied upon in the termination letter of 22 November 2016.
[32] The submissions made by Komatsu also mentioned that the applicant had been warned about his unsatisfactory performance when he was placed on the PIP in August 2015. In addition, the applicant was given a verbal warning in September 2015. According to the submissions made by Komatsu, the applicant was given ample opportunity from the date of his PIP, 12 August 2015, up until the time of his termination letter, 22 November 2016, to provide evidence that he had capacity to return to work, and demonstrate that he could perform the role of CSS in a professional and diligent manner.
[33] Komatsu submitted that it simply could not keep the applicant’s position open indefinitely, and that it had provided the applicant with ample due process in an extended time period, to enable him to demonstrate that he could perform the role of CSS. Komatsu said that the applicant continually refused and resisted work with any management structure, and that the circumstances left the employer in a precarious position whereby it had no alternative other than to terminate his employment.
[34] In summary, Komatsu submitted that the applicant’s failure to demonstrate that he could perform the inherent requirements of the CSS role meant that it was unable to continue the applicant’s employment. Komatsu submitted that the dismissal of the applicant occurred at the end of a thorough and proper management process during which the applicant had been given ample opportunity to demonstrate that he was capable of performing the role for which he was employed. Komatsu submitted that the dismissal of the applicant was not harsh, unjust or unreasonable, and it requested that the Commission dismiss the applicant’s claim for unfair dismissal.
[35] The unfair dismissal provisions of the Act include section 385 which stipulates that the Commission must be satisfied that four 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.
[36] In this case, there was no dispute that the matter was confined to a determination of that element contained in subsection 385 (b) of the Act, specifically, whether the dismissal of the applicant was harsh, unjust or unreasonable. Section 387 of the Act contains criteria that the Commission 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 the FWC considers relevant.
S. 387 (a) - Valid Reason for the Dismissal Related to Capacity or Conduct
[37] The reason for the applicant’s dismissal was expressed to have involved Komatsu forming the view that the applicant refused to work and perform the full range of duties for which he was employed. However, the applicant was absent from work for an extended period during which he provided medical certificates which confirmed that he was unable to work. These circumstances do not represent any established refusal to perform work but instead amount to confirmed incapacity to work.
[38] Consequently, Komatsu has misconstrued the applicant’s incapacity as a refusal to work and perform the full range of duties associated with the CSS role. Thus, the reason stated for the dismissal in the letter of 22 November 2016, cannot be established to be factually correct. The applicant did not refuse to perform work but he was unable to perform work, and this was supported by the medical certificates provided to Komatsu. The reason that Komatsu stated for the dismissal of the applicant cannot be supported as a fact, and therefore was invalid.
[39] Although Komatsu failed to properly establish a correct factual basis for the dismissal of the applicant, it was clear that the extended absence of the applicant was leading to a circumstance where the employment was becoming frustrated. It appeared that the actual reason for dismissal may have involved the frustration of the employment created by an extended period of absence due to illness. The frustration of the employment created by extended absence and/or established incapacity to perform the inherent requirements of the job, can represent a valid reason for dismissal.
[40] Although Komatsu erroneously described the reason for dismissal, there can nevertheless be a valid reason for dismissal, albeit not properly or accurately articulated. However, it has been difficult in this case to obtain evidence which might support the prospect that although erroneously described, there was nevertheless a valid reason upon which Komatsu could rely as sound basis for the dismissal. The difficulty with establishing any proper basis for dismissal has been created by the absence of any evidence from the person that made the decision to dismiss the applicant, a Mr Fukuda.
[41] The absence of any evidence from the person that made the decision to dismiss is typically problematic in one of these matters. Understandably, in large organisations the decision to dismiss may frequently be taken by a senior manager acting upon information provided by more junior managerial staff. However, it is usually necessary to have evidence from the decision maker which enables some testing of the evaluation that was made of the information upon which the decision maker acted. For instance, in this case the absence of evidence from Mr Fukuda meant that he could not be questioned about the basis upon which he had concluded that there was “…no other option other than to terminate your employment…” 1.
[42] Relevantly, in this instance, the decision maker could not be asked about his consideration of matters which he apparently rejected as options other than dismissal. Such matters included: the prospect for the applicant to return to the FST role; the potential arrangement whereby the applicant would return his company provided motor vehicle and mobile phone whilst his unpaid leave might be extended for a further fixed period; the prospect that the applicant’s unpaid leave might be continued for a defined period so as to obtain some clear medical evidence regarding any prognosis for the applicant’s capacity to fulfil the inherent requirements of the CSS role.
[43] In the absence of evidence from Mr Fukuda there can be no sound basis upon which to establish that Komatsu could have properly concluded that the employment was frustrated, and that such frustration represented a valid reason for dismissal.
[44] Consequently, the stated reason for dismissal involving the applicant’s alleged refusal to work and perform a full range of duties, had no basis in fact, and any other reason for dismissal involving the potential frustration of the employment, has not been able to be established. Therefore, there was no valid reason for the applicant’s dismissal, either as stated by Komatsu in the letter of dismissal, or as otherwise discernible.
[45] Komatsu provided written notification of the reason for the applicant's dismissal in the letter of dismissal dated 22 November 2016. The letter of dismissal was sent by email to the applicant. Regrettably, this was an entirely inappropriate means by which to advise any employee of their dismissal.
[46] In circumstances where an employee of some eight years of service who was suffering from mental health issues, and who had previously only communicated via his treating medical practitioner or his lawyer, it was callous, almost beyond belief, for Komatsu to dispatch an email communication as the means to convey the decision to dismiss. For the letter of dismissal to conclude with the words “I wish you all the best for the future” whilst the applicant was being discarded in such a perfunctory and impersonal manner reflects very poorly upon a corporation of the size and statue of Komatsu.
[47] Komatsu sent the applicant what has been described as a show cause letter dated 25 October 2016. This letter provided the applicant with an opportunity to submit any further material regarding his capacity to return to work.
[48] On previous occasions when Komatsu had sent communications to the applicant regarding his fitness for work, he did not respond directly but instead, his treating medical practitioner provided any response communications. Consequently, when lawyers acting on behalf of the applicant responded to the show cause letter of 25 October, the absence of direct response communication from the applicant himself was consistent with a pattern whereby it would have been reasonable to assume that the applicant was using intermediaries such as his doctor or his lawyer to communicate on his behalf.
[49] Komatsu initially granted the lawyers acting for the applicant an extension of time for the provision of information regarding the applicant’s capacity to return to work. This information was obviously important for any determination about the continuation or finalisation of the applicant’s employment. The applicant had been on a period of unpaid leave for over three months. Strangely, there was no explanation provided for why Komatsu refused the second request for an extension of time, and instead it decided to proceed to dismiss the applicant without having obtained what was clearly important information about the applicant’s medical prognosis.
[50] In circumstances where the applicant was suffering from mental illness and he was using intermediaries to communicate with his employer, it would have been reasonable to have communicated with the applicant’s representatives and offered an opportunity for a meeting, at which the applicant and his representatives were to provide information about the applicant’s medical prognosis, and discuss any agreed process for determination of questions regarding the applicant’s on-going employment. In the particular circumstances involving mental illness a meeting of this nature would have represented a proper opportunity for the applicant, and those acting on his behalf, to have responded to issues surrounding the applicant’s capacity to return to work.
[51] Consequently, in the particular circumstances of this case, the applicant was not provided with a proper opportunity to respond to issues surrounding his capacity for continued employment.
[52] Komatsu did not provide for a meeting with the applicant and his representatives prior to making the decision to dismiss. Consequently, the applicant was, in effect, not provided with an opportunity to have a support person present because no relevant meeting was held.
[53] Although it is a matter of acknowledged speculation, had Komatsu provided the applicant with an opportunity to have a support person present at a meeting which should have been held so that he and/or his representatives had an opportunity to put his case, there was considerable prospect that a timely process to resolve all issues surrounding the applicant’s on-going employment could have been agreed upon. Regrettably, such a “show cause” meeting was not held.
[54] The applicant had been placed on a PIP in August 2015, and Komatsu sought to place some reliance upon this as warning of unsatisfactory performance. However, the applicant’s PIP had been either suspended or withdrawn in late 2015.
[55] The stated reason for dismissal did not involve unsatisfactory performance, but rather, the refusal to work and perform a full range of duties. The applicant had not performed any actual work for some considerable period of time, and there could be no direct connection established between the circumstances of his dismissal and his earlier identified unsatisfactory performance.
[56] Komatsu is a large employer that has a dedicated human resources team. Therefore, it was surprising to observe some of the substantive and procedural errors that were made during the process which culminated with the dismissal of the applicant. Komatsu may benefit from a review of its employee management practices generally. In particular, any procedures which may involve dismissal from employment should mandate the opportunity for an employee to be provided with a “show cause” meeting with the relevant decision maker before the determination of any dismissal is made.
[57] Further, the employer may also benefit by reviewing its employee management practices to ensure that communication of any decision to dismiss is conveyed in a manner that is respectful, and maintains basic standards of human dignity. Communication of the notification of dismissal by electronic means should be strenuously avoided.
[58] In this case there was no absence of dedicated human resources (HR) management specialists. As previously mentioned, it was surprising that a number of fundamental elements of due process were seemingly overlooked, particularly in the period following the issuing of the show cause letter on 25 October. It was also surprising that, despite the involvement of “HR specialists,” Komatsu would fundamentally misconstrue the applicant’s extended absence on certified sick leave to represent a refusal to work and perform a full range of duties.
[59] The unfortunate aspects of the approach taken by HR specialists that were revealed in this instance are frequently identified in successful unfair dismissal cases. In fairness to Komatsu, many large employers with dedicated HR specialist teams seem to be unable to avoid errors of the kind identified in this instance. As a personal, general observation, I believe that HR specialists may benefit from a re-naming of their vocation. HR should stand for Human Relations rather than Human Resources. Employees are not like other resources that an employer utilises in the operation of its business. Employees are human beings, they can be easily damaged, and when faulty they should be handled with more care than machines.
[60] Although, in some respects, Komatsu managers attempted to act with a degree of compassion for the applicant’s predicament, particular aspects of the conduct of Komatsu amounted to regrettable failures to provide fundamental support and understanding for an employee experiencing mental health difficulties.
[61] The applicant was justifiably confused by the absence of any stated explanation for the unilateral decision taken by Komatsu to place him on (enforced) personal leave. This confusion was exacerbated when ultimately Komatsu had to rectify the circumstances where it had erroneously forced the applicant to take personal leave. Similarly, the applicant was not provided with any explanation as to why the mediation between himself and Mr Leontis, which had been initially agreed to, was subsequently cancelled by Komatsu.
[62] Further, the applicant’s treating medical practitioner provided Komatsu with written communications about the applicant’s unfortunate state of mental health, and she invited further inquiry. Regrettably, Komatsu did not take up this invitation, nor did it seek to obtain some further independent medical assessment of the applicant’s condition together with some prognosis in respect to his capacity to return to work. In the absence of any substantial medical evidence, Komatsu misconstrued the applicant’s failure to provide such evidence as a refusal to work and perform a full range of duties. This erroneous approach placed an entirely unrealistic obligation upon an individual suffering from mental illness.
[63] Mental health issues are difficult matters which need to be treated with considerable care and compassion. In particular, mental health issues should not be artificially elevated as barriers to continued employment. In this instance, if the applicant’s incapacity for work had involved some other form of illness, perhaps a cancer diagnosis for which a period of extended treatment was required, I anticipate that there would have been a more generous accommodation of arrangements to provide for an extended period of absence on unpaid leave before any termination of the employment was contemplated.
[64] There was no evidence that the relevant Komatsu manager who made the decision to dismiss the applicant had due regard for the applicant’s age, his residential location, and other personal circumstances. Indeed, the failure to properly identify relevant, basic aspects of the applicant’s personal circumstances was reflected by further mistake whereupon Komatsu made payment upon termination of one months’ notice when, because of the applicant’s age, he was entitled to payment of 5 weeks’ notice.
[65] A further matter arose at the commencement of the Hearing which regrettably must be noted. Although not a matter relevant to whether the dismissal of the applicant was or was not unfair, the Commission indicated to Komatsu’s in-house counsel, Mr Chayna, that the absence of any evidence from the person that made the decision to dismiss the applicant was potentially problematic. Further, the Commission noted that the applicant did not seek reinstatement, and there was considerable prospect that any amount of compensation would be very limited. Notwithstanding the Commission’s identified concerns, Mr Chayna rejected any further settlement discussions, and instead said that he wished to “force judgment today.” 2
[66] Particularly in light of the findings made in this Decision, it has become highly regrettable that the invitation for further settlement discussions identified at the commencement of the Hearing was so firmly rejected by Komatsu’s representative.
[67] In this case, the stated reasons for the dismissal of the applicant involved his alleged refusal to work and perform a full range of duties. Upon any reasonable and objective contemplation, an employee who is absent from work on the basis of certified medical incapacity could not be construed to be refusing to work unless the employer could properly establish that the alleged medical incapacity was some kind of falsification. There was no evidence to suggest that the applicant’s medical incapacity arising from mental health issues was false or some contrivance. Consequently, the stated reason for the applicant’s dismissal had no basis in fact and was therefore not valid.
[68] There was insufficient evidence upon which to discern whether some reason for dismissal other than that stated in the letter of dismissal may have represented a valid reason for dismissal. In particular, there was no evidentiary foundation upon which valid reason for dismissal may have been established because of some frustration of the employment caused by an extended period of absence. In addition, the absence of medical evidence regarding the applicant’s prognosis for any return to work annulled any finding that Komatsu could have properly established that the applicant was incapable of performing the inherent requirements of the position that he occupied as a CSS.
[69] There was no valid reason for the dismissal of the applicant. Regrettably, Komatsu erroneously translated the applicant’s incapacity arising from mental health issues as a refusal to work. Further, the applicant’s mental health issues were artificially elevated as a barrier to on-going employment, and thus there was no properly established frustration of the employment that may have represented valid reason for dismissal.
[70] The procedure that Komatsu adopted when it decided to invoke the dismissal of the applicant without providing an opportunity for a meeting with the applicant and his representatives, as a means to obtain important information regarding all relevant aspects of his medical incapacity and employment prognosis amounted to a denial of natural justice. Further, the means by which the decision to dismiss the applicant was communicated was extraordinarily insensitive and highly inappropriate in circumstances which involved recognised mental health issues.
[71] In summary, the dismissal of the applicant was without valid reason involving established misconduct or capacity inadequacy. Further, the dismissal was implemented by way of an unreasonable and unjust process. In addition, the method of communicating the decision to dismiss to the applicant was harsh. Consequently, upon analysis of the various factors that are identified in s. 387 of the Act, an objective and balanced evaluation of all of the relevant circumstances provides compelling basis to establish that the dismissal of the applicant was harsh, unjust and unreasonable.
[72] Therefore, the applicant’s claim for unfair dismissal remedy has been established.
[73] The applicant did not seek reinstatement as a remedy for his unfair dismissal. Unfortunately, the applicant did not clearly articulate the detail of any monetary compensation that he may have sought. Importantly however, the applicant provided evidence that his medical incapacity for work has continued since his dismissal. Consequently, there can be little identified by way of lost remuneration since the dismissal. Despite the absence of identifiable lost remuneration, the unfair dismissal of the applicant occasioned the loss of various non-transferable employment credits associated with eight years of service.
[74] Notwithstanding the difficulties regarding the identification of any lost remuneration since dismissal, I have decided that compensation would be an appropriate remedy for the applicant’s unfair dismissal, and I turn to the factors which involve the quantification of any amount of compensation.
[75] 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 Supermarket 3 and as commented upon in the subsequent Full Bench Decision in Smith and Ors v Moore Paragon Australia Ltd 4.
[76] Firstly, I confirm that an Order for payment of compensation to the applicant will be made against the employer in lieu of reinstatement of the applicant.
[77] Secondly, in determining the amount of compensation that I Order, I have taken into account all of the circumstances of the matter including the factors set out in paragraphs (a) to (g) of subsection 392 (2) of the Act.
[78] There was no evidence that an Order of compensation would impact on the viability of the employer’s enterprise.
[79] The applicant had eight years of service. The applicant would have been likely to have received remuneration of approximately $1,250.00 per week if he had not been dismissed.
[80] There was significant prospect that the employment of the applicant would not have continued for any significant period of time. As previously mentioned, the employment of the applicant could be described as having entered the frustration zone.
[81] Following the dismissal, the applicant has not been able to mitigate the loss suffered because of the dismissal, as he remains unfit for employment.
[82] Thirdly, in this instance there was no established element of past misconduct of the applicant which contributed to the employer's decision to dismiss.
[83] Fourthly, I confirm that any amount Ordered does not include a component by way of compensation for shock, distress or humiliation, or other analogous hurt caused to the applicant by the manner of the dismissal.
[84] The applicant was not paid his full entitlement for notice upon termination. The applicant was paid an amount of one month’s remuneration in lieu of notice, and he was entitled to receive an amount equivalent to five weeks remuneration.
[85] Consequently, for the reasons outlined above I have decided that an amount approximating with one week’s remuneration should be provided as compensation to the applicant. That amount is $1,250.00. Accordingly, separate Orders [PR592610] providing for remedy in these terms will be issued.
COMMISSIONER
Appearances:
Mr J Finnegan appeared unrepresented.
Mr R Chayna appeared for the employer.
Hearing details:
2017.
Sydney:
March, 29.
1 Exhibit 1, Attachment 13 (letter of dismissal).
2 Transcript of proceedings PN75.
3 Sprigg v Paul’s Licensed Festival Supermarket, (Munro J, Duncan DP and Jones C), (1998) 88IR 21.
4 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, PR592609>