DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Jennifer Diaz
v
The Trustee for Sol Degendorfer Family Trust T/A Solene Paris
(U2017/3689)

Application for an unfair dismissal remedy –dismissal not consistent with Small Business Fair Dismissal Code - dismissal harsh and unjust – remedy – compensation ordered.

[1] Ms Jennifer Diaz has made an application to the Fair Work Commission (Commission) pursuant to s.394 of the Fair Work Act 2009 (FW Act) in which she seeks relief from unfair dismissal. Ms Diaz was employed by The Trustee for Sol Degendorfer Family Trust T/A Solene Paris (Solene Paris). She commenced employment on 27 July 2015. Ms Diaz says her employment was terminated on 22 March 2017 by email received that day with an attached letter dated 16 March 2017.

[2] Solene Paris, in filing its Form F3 on 28 February 2018 (about 10 months late), did file some limited documents. It said that Mr Diaz was not dismissed but that she resigned her employment. I have taken the material filed into account in determining this application.

[3] At the commencement of the hearing on 28 March 2018, Ms Diaz sought permission to be represented by Mr Nick Wareham, a paid agent. Being satisfied that the provisions of s.596(2)(b) had been met I granted permission.

[4] At the hearing of the application Ms Diaz gave evidence on her own behalf.

Failure of employer to appear

[5] On 22 December 2017 Deputy President Clancy issued an Order 1 in which he amended the name of the respondent to the application from Solene Investments (Aus) Pty Ltd T/A Solene Paris (Solene Investments) to The Trustee for Sol Degendorfer Family Trust T/A Solene Paris. The application to change the name of Solene Investments was made by Ms Diaz on 14 July 2017 following advice that Solene Investments was in liquidation and a more thorough perusal of her pay slips. Ms Sol Degendorfer was provided with a copy of the application and asked for a response by 3 August 2017.

[6] No response was received from Ms Degendorfer and on 20 December 2017 a further request was made with notification that if no submissions were received by 21 December 2017 a decision as to the proper name of the respondent would be made on the basis of the material filed by Ms Diaz.

[7] On 20 December 2017 the Commission received an email from Mr Henri Dupont, Dupont Group, who advised that he “represents” Sol Degendorfer. In that email he said:

I advise Ms Degendofer (sic) is away until 22 January. I note you require a response by 4.00pm 21 December tomorrow. Subsequently, I or Ms Degendofer (sic) am unable to access any files relating to this matter until the 23 January 2018 as advised above. Furthermore, Ms Degendorfer’s Manager is currently hospitalised and we are unable to request any further clarification from the Manager within the 1 day time frame you seek.

However, consent is not granted to have the Respondent substituted as without any contradictory full documentation and a copy of Ms Diaz’s employment contract any amendment would be unreasonable and without substance. As previously advised it is understood Jennifer Diaz was at all times employed by way of duly executed employment agreement by Solene Investments (AUS) Pty Ltd (in Liquidation).

Any determination for substitution without provision to seek information relating to the Applicants claim within a reasonable time would be inappropriate. We note Ms Diaz has not provided a copy of her employment agreement.

[8] On 21 December 2017 the Commission wrote to Mr Dupont advising that the request for a response to the application had been sent on 26 July 2017 and the Deputy President intended to proceed with consideration to change the name of Solene Investments on the basis of any material received by 4.00 p.m. on 21 December 2017.

[9] Mr Dupont further replied and sought a deferral of the application pending the return from holidays of Ms Degendorfer.

[10] On 22 December 2017 Deputy President Clancy issued a Decision 2 and Order3 amending the name of the respondent to the application of Ms Diaz. Amended directions for the filing of material were sent with the decision. The amended directions required Solene Paris to file its materials with respect to its jurisdiction objection (that Ms Diaz had resigned) by 5 February 2018 and with respect to the merits of the application by 19 February 2018. No appeal was made against the Decision or Order to change the name of the respondent.

[11] On 20 February 2018 an email was sent to Mr Dupont noting that the respondent had not filed any material and advising him that he should file materials in support of the respondent’s positon. The email also noted that Solene Paris had failed to file a Form F3–Employer Response Form (Form F3) to the application for relief from unfair dismissal. By email that day Mr Dupont sought an extension of time within which to file materials. On 21 February 2018 the Commission advised Mr Dupont that the request for an extension of time had not been granted and that the respondent should file its material as soon as possible. In response, Mr Dupont again requested an extension of time.

[12] On 22 February 2018 my chambers emailed Mr Dupont and requested that Solene Paris file any materials on which it sought to rely by 1 March 2018 and advising that the matter would proceed to hearing as scheduled on 13 March 2018.

[13] On 28 February 2018 Mr Dupont filed a Form F3 “duly executed” with supporting documents attached. The Form F3 indicated that the name of the respondent was Sol Degendorfer Family Trust and that the trading name of the business was Solene Investments Pty Ltd. No further material was received from the respondent.

[14] At the initial hearing of the matter on 13 March 2018, Solene Paris was not represented but in an email received in chambers shortly before the proceedings were due to commence Mr Rod Le Grand, General Manager of Solene Paris, indicated that Mr Dupont had confused the date of hearing. In a subsequent phone conference with Mr Dupont and Ms Diaz and her representative it was agreed to re-list the matter for 28 March 2018.

[15] At the hearing on 28 March 2018 Mr Wareham represented Ms Diaz.

[16] Mr Dupont attended (with Mr Le Grand) and advised the Commission that he did not know who he represented. He said, in submissions from the bar table and with no supporting documentation, that Solene Investments and Sol Degendorfer Family Trust were “one and the same” and “it” was in liquidation. He said he was not authorised to act on behalf of the liquidator.

[17] Mr Dupont said that these circumstances had been conveyed to the Commission in December 2017. An examination of the file did not disclose any such correspondence from Mr Dupont. He was subsequently asked to produce a copy of the correspondence he had sent to the Commission that addressed this issue. When asked if he had forwarded the notice of listing to the liquidator he indicated that he had not and suggested that such action was not his responsibility.

[18] Mr Dupont (and Mr Le Grand) then left the hearing.

[19] Mr Dupont responded later on 28 March 2018 to the question as to the advice to the Commission that Solene Investments and Sol Degendorfer Family Trust were one and the same. He relied on an email sent to the Commission on 29 June 2017 in which Mr Le Grand advised that “Solene Investments (Aust) Pty Ltd is in liquidation” and that he had “no authority... to speak on behalf of the liquidator”. Mr Dupont also relied on a further email not sent to the Commission in which he advised Ms Diaz’s representative that he did not represent “Solene Investments (AUS) Pty Ltd (In liquidation)” and that Ms Diaz was employed by “Solene Investments (AUS) Pty Ltd (In liquidation) and not the Trust”. That email suggested Ms Diaz seek legal advice as to her claim. Neither of these emails (and certainly not the latter which was not sent to the Commission) provided any advice that Solene Investments and Sol Degendorfer Family Trust are one and the same.

[20] I determined to hear the application in the absence of the respondent. I did so for a number of reasons but, in particular:

•  Mr Dupont and/or the business(es) he represents had five months prior to 22 December 2017 to provide information to the Commission as to the correct identity of the employer and its status (whether in liquidation or otherwise) but failed to do so;

•  Neither Mr Dupont nor any other representative of Solene Paris provided information to support that Solene Investments and Sol Degendorfer Family Trust were “one and the same”;

•  No representative of Solene Paris sought to appeal the Decision or Order of 22 December 2017 changing the name of the respondent;

•  Solene Paris had been given multiple opportunities to make submissions and file evidence in relation to the application of Ms Diaz but had failed to do so;

•  In correspondence with the Commission since 22 December 2017 Mr Dupont at no stage indicated that Solene Investments and Sol Degendorfer Family Trust were “one and the same” and/or that both were in liquidation;

•  The correspondence subsequently forwarded to the Commission by Mr Dupont did not address the question of whether Solene Investments and Sol Degendorfer Family Trust are one and the same;

•  Mr Dupont was well aware of the statement he intended to make to the Commission on 28 March 2018 and could well have produced documents to support his assertion. He did not; and

•  Ms Diaz’s employment was terminated (or she resigned) on 22 March 2017. Her application for an unfair dismissal remedy was made on 5 April 2017, over 12 months ago, and she was entitled to have her application determined, there being no evidence before the Commission as to why this could not occur.

Background

[21] Ms Diaz resigned from her position with Solene Paris at 12.35 p.m. on 22 March 2017. She provided a letter of resignation in which she gave two weeks’ notice. 4 Mr Le Grand acknowledged receipt of that letter and the return by Ms Diaz of uniforms and a key.

[22] On 22 March 2017 at 2.13 p.m. Ms Diaz received an email from Mr Dupont “[f]or and on behalf of Solene Paris”. Attached to that email was a letter to Ms Diaz. 5 It is set out in full:

16-Mar-17

Attention: Jenny Diaz

[address]

Dear Jenny,

I refer to your employment with Solene Paris at our Knox Salon and you have been employed on permanent part time basis since 9 November 2015.

I advise that this letter was prepared on the date as detailed above, however, due to your situation on the 17 March last it was not handed to you. Following advice from the Regulator and notwithstanding your current position we feel we need to give same to you without any more delay.

You are aware that you provided a Doctors Certificate for the dates 4^th to 7^th March last being Saturday, Sunday and Monday inclusive.

You called the Manager of Solene Paris Rod Le Grand on Monday 6 advising you attended the Doctors on Monday 6^th March and received a Certificate back dated to the 4^th March.

You were spoken to by Rod Le Grand at the Salon on your return about two facebook posts whereby you were at a function on Saturday 4^th and Sunday 5^th March whereby you asked how could you expect to rely on a Doctor’s Certificate if you were well enough to socialize. Notwithstanding not being accused of any impropriety you denied any dishonesty or “cheating” and were advised that you would be paid for the sick leave covered in the certificate and that you were not to do this again. Subsequently you were paid for the sick leave.

At a Salon meeting some 3 weeks ago you and all staff were informed that all staff had to work 1 weekend in every 3, your weekend roster commenced 18 and 19 March last.

At 4.56pm on Friday 17 March last you had a situation at the Salon whereby the Ambulance was called as you had a moment and after they checked your situation they advised the only issue they could find was low blood sugar level. Your husband was called and Management offered to take you to the Medical Centre in the Shopping Centre which your husband declined. The Ambulance Officers asked both you and your husband if you wished to go to hospital, you declined.

You have been spoken to several times about your indifferent performance and productivity over the duration of your employment.

You are also aware that you are the only full time employee at our Knox Salon and with that employment comes added responsibility to oversee work in the nail area of the salon and deal with any issues in the absence of Management.

Your file suggests you have received more than 3 written warnings.

It has become abundantly apparent to us that your interest, moral and ethics in working at Solene Paris is questionable and has waned considerably over the past 6 months being climaxed by the back dating of your certificate aforesaid. We believe the back dating or the request to back date a Doctors Certificate could be a fraudulent act and or at least an attempt to obtain a financial advantage and in these events would be an illegal act that could result in charges being laid against you and or you’re Doctor or both in a criminal nature.

Regrettably we advise that you employment with Solene Paris Knox is terminated immediately. Please return you uniforms, keys and all assets belong to Solene Paris.

Upon return of all items detailed above you will be paid your full entitlements.

We wish you and your family all the best in the future.

Yours faithfully

[signed]

H DUPONT

For and on behalf of Solene Paris

[23] Ms Diaz was not given or paid any notice by Solene Paris.

Evidence

[24] Ms Diaz gave uncontested evidence that she commenced employment with Solene Paris on 27 July 2015 and became a permanent employee on 18 November 2015. She said that in January 2016 she discovered her superannuation was not being paid and in February 2016 she discovered that she was being paid below the award rate of pay. Ms Diaz said she is owed over $7,000 in superannuation (which she has taken up with the Australian Taxation Office (ATO)) and over $17,000 in back pay (which she has taken up with the Fair Work Ombudsman (FWO)). She said she raised these issues with Solene Paris who said they would be fixed.

[25] Ms Diaz said that on 22 March 2017 at 12.35 p.m. she handed Mr Le Grand a letter of resignation. 6 Ms Diaz said she resigned because she was being threatened and bullied by Solene Paris. She said the bullying and threats arose after she raised the under payment and non-payment of superannuation with Solene Paris. It consisted of complaints that she was not productive enough and not working enough hours. She said the threats came in the form of telling her she would be made a casual employee. The treatment caused her distress and she was stressed by it. She considered the best thing to do for her health was to submit her resignation and this is what she did on 22 March 2017 at 12.35 p.m.

[26] On 22 March 2017 at 2.13 p.m. Ms Diaz received an email which attached a letter dated 16 March 2017 terminating her employment. One of the reasons given for the termination of her employment set out in that letter appeared to be that she provided a back-dated medical certificate to Mr Le Grand and that requesting a doctor to back-date a medical certificate “could be a fraudulent act”. 7

[27] Whilst Solene Paris, in the letter of dismissal, said the medical certificate was for the period 4 to 7 March 2017 Ms Diaz said she was actually ill from 25 to 28 February 2017. Ms Diaz provided a copy of the medical certificate for the February dates. 8 She said her doctor was not available on Saturday 25 February 2017 when she was ill so she attended the doctor’s surgery on Monday 27 February 2017. Ms Diaz’s doctor certified her unfit for work from 25 February 2017 until 28 February 2017 inclusive. Ms Diaz said she did not hide the fact that the doctor issued the certificate on 27 February 2017 and she did not tamper with or alter the certificate in any way.

[28] Further, Ms Diaz denied that she had received any written warnings with respect to her conduct or performance.

[29] Ms Diaz said she gained further employment on 17 November 2017. She said that she had difficulty finding employment after her dismissal as she spent some time dealing with the ATO and FWO with respect to her superannuation and underpayment. Ms Diaz also said she does not drive so was limited in where she could seek work.

[30] Ms Diaz was not subject to cross-examination and no contrary evidence was put to the Commission by anyone for Solene Paris. I have therefore accepted the evidence of Ms Diaz as a true and honest reflection of events.

Was Ms Diaz unfairly dismissed?

[31] Section 385 of the FW Act states that:

385 What is an unfair dismissal

A person has been unfairly dismissed if the 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.

[32] In order to determine if Ms Diaz has been unfairly dismissed it is necessary to first determine if she was dismissed.

Was Ms Diaz dismissed or did she resign?

[33] Section 386 of the FW Act relevantly states:

386  Meaning of dismissed

(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...

[34] It remains unclear to me why Solene Paris sent a letter dismissing Ms Diaz after she had resigned her employment. There is nothing to suggest it discovered some misconduct between 12.35 p.m. on 22 March 2017 when she handed her resignation to Mr Le Grand and 2.13 p.m. that day when the letter terminating her employment was sent to her.

[35] Further, the letter suggests it was written on 16 March 2017 and that the reasons for her termination related to her performance but “climaxed by the back dating” of the certificate in late February which it considered to be “fraudulent”. That letter terminated Ms Diaz’s employment “immediately”.

[36] Ultimately, there can be no question that Solene Paris dismissed Ms Diaz. On 22 March 2017 Ms Diaz was employed by Solene Paris. Mr Wareham for Ms Diaz submitted that, by giving her the letter of termination, Solene Paris had not accepted her letter of resignation and had, instead, dismissed her. I accept this characterisation of what occurred.

[37] If I am wrong on this I accept that Ms Diaz was dismissed within the meaning of s.386(1)(b) in that she was forced to do so by the course of conduct engaged in by Solene Paris. I accept Ms Diaz’s uncontested evidence that she was bullied and harassed, told that she would be made a casual employee, and that she was systematically underpaid and her superannuation not paid.

[38] Solene Paris cannot logically maintain its defence that Ms Diaz resigned. If Ms Diaz did resign the purpose in sending the letter dated 16 March 2017 but emailed on 22 March 2017 can only have been to do some reputational damage to Ms Diaz (as it could serve no other purpose). This suggests a level of vindictiveness not attractive in any of the management team of Solene Paris or its representatives (although I make no finding). Further, if Ms Diaz had resigned and was not dismissed she was entitled to, but was not paid, two weeks’ notice or pay in lieu of that notice. If Solene Paris did dismiss Ms Diaz, as the letter of 22 March 2017 at 2.13 p.m. said it did, then it should be open to having those reasons tested in the Commission and its purpose in now saying she resigned is lost on me. Solene Paris cannot send the letter dismissing Ms Diaz whilst she remained employed by it but then claim it did not dismiss her. Ultimately the dismissal letter speaks for itself.

[39] Given Ms Diaz was still employed by Solene Paris at the time she received the letter dismissing her from her employment, I am satisfied that her employment was terminated at the initiative of the employer.

Was the dismissal consistent with the Small Business Fair Dismissal Code?

[40] The Form F3 submitted by Solene Paris stated that it had 15 employees. This would not make it a small business as defined in the FW Act. This being the case the Small Business Fair Dismissal Code (Small Business Code) would not apply.

[41] However, Mr Wareham suggested that Solene Paris was a small business and made submissions as to why the dismissal was not consistent with the Small Business Code. I have decided to consider the matter out of an abundance of caution.

[42] Ms Diaz was dismissed “immediately” without notice and she was not paid in lieu of notice.

[43] In relation to summary dismissal the Small Business Code states:

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.

[44] Mr Wareham submits that if Solene Paris relied on its claim of fraud in relation to the medical certificate there is no evidence that such fraud occurred. Ms Diaz’s evidence is that she did not attempt to tamper with the medical certificate in any way. Further, he submits that if the fraud did occur Solene Paris was aware of this and had the medical certificate from late February 2017 but took no action in relation to it until 22 March 2017 when it decided to send the letter of termination to Ms Diaz. He said that, in any event, it was up to Solene Paris to decide if they accepted the medical certificate or not and they did.

[45] Mr Wareham said that whilst the letter of termination raised the issue of fraud it does not say that this is the reason for Ms Diaz’s dismissal. He further submitted that there are no other clear reasons given for the dismissal.

[46] In this case, I am not satisfied that Ms Diaz sought to commit a fraud on Solene Paris. Even if the conduct was fraudulent I am not convinced, in the absence of any evidence from Solene Paris, that it was of such a serious nature that it justified summary dismissal.

[47] I am therefore not satisfied that the dismissal was consistent with the Small Business Code.

Findings of fact

[48] Prior to deciding if the dismissal was harsh, unjust or unreasonable it is necessary to set out the relevant factual findings.

[49] Solene Paris filed minimal material in response to the amended directions issued by the Commission and neither appeared nor gave evidence in proceedings. It filed a Form F3 on 28 February 2018, some 10 months after Ms Diaz made her application for an unfair dismissal remedy to the Commission. It attached to this some response to matters raised in Ms Diaz’s initial application. Solene Paris failed totally to file any further submissions or evidence.

[50] In the material filed with the Form F3 and in the letter of dismissal, Solene Paris appears to give three main reasons for the dismissal of Ms Diaz:

1. That Ms Diaz fraudulently obtained and/or altered a medical certificate, that she was socialising when she was supposedly unwell and that she had previously been told she could not produce medical certificates that were issued after the date of illness;

2. That her performance and productivity were “indifferent” and she had received three written warnings;

3. That her “interest, moral and ethics” in working at Solene Paris was “questionable and has waned considerably”.

[51] I have considered the evidence and submissions of Ms Diaz and have had regard to the rather limited material filed by Solene Paris on each of these matters. As set out above, I accept Ms Diaz as a witness of credit. Whilst not subject to cross-examination (although some questioning by me) Ms Diaz gave her evidence and answered questions clearly and openly. She did not exaggerate (when she easily could have) and did not seek to overstate her position or claims.

Medical certificate

[52] Solene Paris attached to its Form F3 a medical certificate presented by Ms Diaz which stated that Ms Diaz was not fit for work from 19 March 2017 to 24 March 2017 inclusive. Its relevance to these proceedings is unclear. No medical certificate was provided for the period 4 to 7 March 2017 (which is the period the letter of termination suggests was subject to a fraudulent medical certificate). For these reasons and based on the uncontested evidence of Ms Diaz, I accept that the medical certificate to which Solene Paris intended to refer is that of 25 to 28 February 2017. 9

[53] I accept that Ms Diaz could not see her doctor on 25 or 26 February 2017 so she made an appointment to see her on 27 February 2017. I do not find this unusual as 25 to 26 February 2017 was a weekend and it would not be unusual for a medical practice to be closed. Ms Diaz said she was paid for the period of this absence.

[54] Nothing was put to me in the material of Solene Paris as to why a person presenting to the doctor on a particular day with symptoms they say have persisted for the previous day or so and receiving a medical certificate for the full period of illness is fraud. A doctor may not have been available because it was the weekend, the illness not so critical as requiring immediate care and attention such that trying to find a medical service open was necessary, or the person may have felt too unwell to leave the house for a day or so to visit the doctor. Upon presenting, a doctor is either satisfied the person was unwell for the previous day or two or is not. In this case and without any evidence to the contrary, Ms Diaz was unwell on the certificated days and there is no basis to find otherwise. Further, I accept her evidence that she did not attempt to hide the date of the medical certificate and she did not tamper with it. It is difficult to understand how such openness could amount to fraudulent behaviour.

[55] Ms Diaz said, in her application for relief from unfair dismissal, that her doctor had said she could attend the social functions that were claimed to have been seen on Facebook (although no evidence or documents support this) and allegedly raised by Mr Le Grand in February 2017. She said that she was not rostered to work at the time of the social functions and her doctor had no problem with her attending the function. In any event, it is not clear if this is related to the fraudulent conduct claimed by Solene Paris of Ms Diaz.

[56] Despite the assertions of Solene Paris to the contrary in the letter of termination, I do not intend to make any decision as to what may or may not have been in the mind of Ms Diaz’s doctor when she saw Ms Diaz. It is no more than uninformed speculation.

[57] I am not satisfied on the evidence presented by Solene Paris that Ms Diaz fraudulently back-dated a medical certificate

Indifferent performance and productivity

[58] Solene Paris provided nothing that would enable the Commission to conclude “indifferent” performance or productivity by Ms Diaz.

[59] No copies of warnings given by Solene Paris to Ms Diaz were produced and no evidence was given of such. No evidence was given of the performance standards of Ms Diaz being set out for her, training offered to her or a clear indication of the standards expected and a timeframe within which she was require to meet such standards.

[60] I therefore am not satisfied that Ms Diaz’s performance or productivity was “indifferent”.

Interest, moral and ethics

[61] It is unclear what Solene Paris means by this except that it appears to link this to the fraudulent conduct it sees with the claimed back-dating of the medical certificate.

[62] I do not find that Ms Diaz’s “interest, moral or ethics” had waned.

What Ms Diaz says is the reason for her dismissal

[63] Ms Diaz claims that she was dismissed because she sought her legal entitlements with respect to superannuation and wages. As to the letter of termination, Ms Diaz disputes all matters contained therein. In the absence of any evidence to the contrary, I accept what Ms Diaz has put to the Commission.

Was the dismissal harsh, unjust or unreasonable?

[64] To determine if Ms Diaz was unfairly dismissed it is necessary to determine if her dismissal was harsh, unjust or unreasonable as set out in s.387 of the FW Act: Section 387 sets out as follows:

387 Criteria for considering harshness etc.

In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the FWC must take into account:

(a) whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees); and

(b) whether the person was notified of that reason; and

(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and

(d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and

(e) if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal; and

(f) the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(h) any other matters that the FWC considers relevant.

Section 387(a) - a valid reason

[65] In Selvachandran v Peteron Plastics Pty Ltd 10 it was held that:

the adjective "valid" should be given the meaning of sound, defensible or well founded. A reason which is capricious, fanciful, spiteful or prejudiced could never be a valid reason 11.

[66] In deciding if there was a valid reason for dismissal the Commission is obliged to consider the reason relied on by the employer for the dismissal.

[67] In this case I am not satisfied, on the evidence before me, that there was a valid reason for the dismissal of Ms Diaz. It is not enough that Solene Paris thought it had a reason to dismiss her. There is no evidence on which it could reach such a conclusion. It undertook no inquiry and, in any event, failed to articulate any clear reason for dismissal. It is reasonable to conclude that the reasons for dismissal advanced by Solene Paris in these circumstances can only be described as capricious and fanciful. There is absolutely no basis for any of the claimed reasons for dismissal of Solene Paris.

[68] In the absence of any evidence to support the apparent reasons for dismissal as set out the letter of termination, I am not satisfied that there was a valid reason for Ms Diaz’s dismissal.

Section 387(b) - whether the person was notified of that reason

[69] The use of the phrase “that reason” suggests that the notification relates to the “valid reason” referred to in s.3878(a). There was no valid reason for the dismissal of Ms Diaz so she could not have been notified of it.

[70] To the extent it might be that “that reason” refers more generally to the reason (valid or otherwise) for dismissal I am not satisfied that Ms Diaz was notified of “that reason” until she received, by email, a back-dated letter of termination. By this stage it was too late for her to do much about the matter.

Section 387(c) - whether the employee was given an opportunity to respond

[71] Given that Ms Diaz did not receive any reason for her dismissal until receipt of the letter of termination she was not given any opportunity to respond.

[72] The opportunity to respond must be a real opportunity for the employee to fairly put his or her point of view, explain the circumstances surrounding the reason for dismissal from their own point of view and seek to influence the decision-maker prior to the final decision being made.

Section 387(d) - support person

[73] Ms Diaz was not given any opportunity to discuss the matter with her employer. Ms Diaz had been in the workplace for three weeks after the provision of the medical certificate which appears to be the central complaint in the letter of termination. There is no reason the reason for dismissal could not have been raised with her and she be given an opportunity to discuss this with her employer. The failure of Solene Paris to provide even a scintilla of procedural fairness suggests it did, by its actions, unreasonably refuse Ms Diaz a support person.

Section 387(e) - performance issues

[74] To the extent that Solene Paris says that Ms Diaz’s performance was “indifferent” there is no evidence that it raised performance issues with her or set standards she was to achieve or warned her that if her performance did not improve her employment may be terminated.

Section 387(f) & (g) - the size of the employer’s business and access to human resource expertise

[75] I accept that Solene Paris is not a large organisation and that it, therefore, is unlikely to directly employ any human resources professionals. It does appear, however, to have engaged the services of Mr Dupont to effect the dismissal of Ms Diaz although it is not clear his or his company’s expertise in this area.

[76] Whilst I am sympathetic to Solene Paris’ lack of expertise in human resources matters this is not an excuse for its abysmal conduct in this matter. As noted above, it decided to “immediately” dismiss Ms Diaz after she had resigned – the only benefit it derived from that action was to save two weeks salary for the notice period Ms Diaz had provided.

[77] Being a small business is no excuse for a lack of basic civility or procedural fairness.

Section 387(h) - other matters

[78] Mr Wareham did not raise any other matters.

Conclusion

[79] There was no valid reason for the dismissal of Ms Diaz and no procedural fairness afforded to her. I am therefore satisfied that the dismissal of Ms Diaz was harsh, unjust and unreasonable.

Conclusion on unfair dismissal

[80] I am satisfied that Ms Diaz was dismissed; her dismissal was not consistent with the Small Business Code; it was not a case of genuine redundancy; the dismissal was harsh, unjust or unreasonable; and the application was made within the time limits required by the FW Act.

[81] In these circumstances, and given my findings above, I am satisfied that Ms Diaz was unfairly dismissed.

Remedy

[82] Ms Diaz does not seek reinstatement and, in the circumstances, I do not consider reinstatement appropriate. Ms Diaz does seek compensation.

[83] Section 392 of the FW Act states:

392 Remedy—compensation

Compensation

(1) An order for the payment of compensation to a person must be an order that the person’s employer at the time of the dismissal pay compensation to the person in lieu of reinstatement.

Criteria for deciding amounts

(2) In determining an amount for the purposes of an order under subsection (1), the FWC must take into account all the circumstances of the case including:

(a) the effect of the order on the viability of the employer’s enterprise; and

(b) the length of the person’s service with the employer; and

(c) the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed; and

(d) the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal; and

(e) the amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for compensation; and

(f) the amount of any income reasonably likely to be so earned by the person during the period between the making of the order for compensation and the actual compensation; and

(g) any other matter that the FWC considers relevant.

Misconduct reduces amount

(3) If the FWC is satisfied that misconduct of a person contributed to the employer’s decision to dismiss the person, the FWC must reduce the amount it would otherwise order under subsection (1) by an appropriate amount on account of the misconduct.

Shock, distress etc. disregarded

(4) The amount ordered by the FWC to be paid to a person under subsection (1) must not include a component by way of compensation for shock, distress or humiliation, or other analogous hurt, caused to the person by the manner of the person’s dismissal.

Compensation cap

(5) The amount ordered by the FWC to be paid to a person under subsection (1) must not exceed the lesser of:

(a) the amount worked out under subsection (6); and

(b) half the amount of the high income threshold immediately before the dismissal.

(6) The amount is the total of the following amounts:

(a) the total amount of remuneration:

(i) received by the person; or

(ii) to which the person was entitled;

(whichever is higher) for any period of employment with the employer during the 26 weeks immediately before the dismissal; and

(b) if the employee was on leave without pay or without full pay while so employed during any part of that period—the amount of remuneration taken to have been received by the employee for the period of leave in accordance with the regulations.

[84] In determining the amount of compensation I will again note that there are no submissions from Solene Paris to contradict the evidence and submissions of Ms Diaz. For this reason, I accept the evidence and submissions made by Ms Diaz.

(a) compensation amount

[85] I have no submissions as to the effect of any award I might make on the viability of the employer’s enterprise. Despite the assertions of Mr Dupont, there is no evidence before the Commission that the respondent to these proceedings is in liquidation (s.392(2)(a)).

[86] Ms Diaz commenced working for Solene Paris on 27 July 2015. She therefore had 20 months employment at the time her employment was terminated (s.392(2)(b)).

[87] I am satisfied that Ms Diaz would have remained employed with Solene Paris for a further 12 months had she not been dismissed. She had worked there for two years without incident and there was no reason for her to leave. If it was that Ms Diaz was forced to resign because of the course of conduct of Solene Paris I am satisfied that, had Solene Paris not engaged in that course of conduct, Ms Diaz would have remained employed for a further 12 months. Ms Diaz had, for over a year, sought to patiently work through matters associated with her rate of pay and her superannuation with her employer. It was not until she was threatened and bullied that Ms Diaz resigned. There is no reason to think that, absent such conduct, she would not have continued to attempt to resolve these matters with her employer.

[88] Ms Diaz said that her correct rate of pay is $738.72 per week. The remuneration she would have earned had she not been dismissed would have been $738.72 per week until 30 June 2017 but would have increased to $763.20 from 1 July 2017 when minimum wages were increased. Her lost remuneration is therefore $738.72 per week for 15 weeks + $763.20 per week for 37 weeks. I would observe that Ms Diaz was being paid at Level 1 under the Hair and Beauty Industry Award 2010 12 (the Award) which is a receptionist or salon assistant level even though she indicated that she worked as a nail technician and her letter of termination suggests she was responsible for overseeing the work in the nail area of the salon. Whether Level 1 is the correct classification is, however, not a matter for me to determine.

[89] I am satisfied that, had she not been dismissed Ms Diaz would have received $39,319.20, that is, 12 month’s salary at the correct award rate of pay (s.392(2)(c)).

[90] I have taken into account that Ms Diaz found employment in November 2017 such that she has earned and would have earned (4 months’ pay). I have deducted this from her lost remuneration (s.392(2)(e)&(f)).

[91] Ms Diaz sought to mitigate her loss in a number of ways. She has attempted to have the underpayment due to her resolved and her superannuation paid. To this extent she has liaised with the ATO and FWO. Ms Diaz has also applied for some positions but has been hampered by the limitation of not having a drivers’ licence and therefore the areas where she could reasonably work are limited. Ms Diaz found work commencing on 17 November 2017 and is satisfied and happy with her employment. Ms Diaz is being paid $20.15 per hour in her new employment. For the period 17 November 2017 to 22 March 2018 (when I suggest her employment would otherwise have ended with Solene Paris) Ms Diaz earned $13,667.75.

[92] I have, however, taken into account that Ms Diaz has perhaps not put the effort into seeking employment as might be expected. In all of the circumstances however, I have decided to reduce any amount of compensation by 10% for this reason. I have not applied any reduction for contingencies. There is no evidence that Ms Diaz may not have been able to work for any of the period she was without employment.

[93] I have taken into account that Ms Diaz has been underpaid for the period of her employment and that she has not had superannuation paid on her behalf. I have also taken into account the bullying and threats made to her in respect of her employment. Further, I have considered the delays to the finalisation of this matter caused in no small part by Solene Paris. It failed to engage with the Commission (i.e. failure to file a Form F3, failure to make submissions with respect to the change of name of the employer) and, when it did, it sought further delays (to make submissions on the name change, even though it had five months in which to do so) and failed to provide the Commission with any material to support its contention that it is in liquidation.

[94] I am satisfied that Ms Diaz’s lost remuneration is $39,319.20 (plus 9.5% superannuation). The amount is reduced by 10% for a failure to mitigate her loss and by $13,667.75, (the amount earned in her new employment from 17 November 2017 until 22 March 2018) resulting in an amount of $21,719.53.

(b) reduction for misconduct

[95] I have not found any misconduct on Ms Diaz’s behalf. I have not reduced the amount for this reason.

(c) shock, humiliation and distress

[96] I have not included any amount for shock, humiliation and distress caused to Ms Diaz.

(d) compensation cap

[97] Ms Diaz was being paid as a Level 1 under the Hair and Beauty Industry Award 2010 13. In the 26 week period prior to her dismissal she would have been entitled to receive $738.72 per week plus penalties for working on Saturdays and Sundays. In the absence of detail of these penalty amounts the compensation cap is $19,206.72. This is therefore the limit of what I can order be paid to Ms Diaz.

[98] I am satisfied that the amount I intend to award does not exceed this cap. An order 14 will be issued with this decision requiring Solene Paris pay to Ms Diaz an amount of $19,206.72 plus 9.5% superannuation (paid into Ms Diaz’s superannuation fund) in compensation. The amount is to be paid within 14 days of the making of the order.

COMMISSIONER

Appearances:

N. Wareham for Ms Jennifer Diaz.

Hearing details:

2018.
Melbourne:

March 28.

Printed by authority of the Commonwealth Government Printer

<PR601709>

 1   PR599099.

 2   [2017] FWC 7022.

 3   PR599099.

 4   Exhibit A2.

 5   Exhibit A3.

 6   Exhibit A2.

 7   Ibid.

 8   Exhibit A4.

 9   Exhibit A4.

 10   (1995) 62 IR 371.

 11   Ibid, 373.

 12   MA000005.

 13   Ibid.

 14   PR601865.