Disclosable History | ||||
Source |
Court |
Date |
Offence |
Result |
AFP |
Ringwood Magistrates Court |
21/8/2014 |
CTH – obtaining a financial advantage (2 charges) |
Convicted and fined $3000. Stay to 18 November 2014. Reparation order pursuant to s.21B Crimes Act 1914 $26,862.26 |
[14] After being convicted, in 2015 KB was offered and accepted full-time employment with the Agency as a Job Placement Officer at Branch 4. 13 At or around the same time the company obtained a new Commonwealth Deed, the terms of which are set out in the “jobactive Deed 2015-2020”. On 1 July 2015, the Applicant attended an induction meeting concerning the new Deed. Her recollection of one of the things said at the meeting conducted by VC included that there would be zero tolerance on the part of the company for anyone with a criminal conviction and that if any employees had a criminal conviction, they would no longer have a position with the Respondent.14 The Applicant’s evidence put forth that she believed this policy to be ‘severe as it did not take into account factors including the lapse of time of the criminal convictions or whether the conviction has any impact or was related to the actual work performed’.15
[15] BW’s evidence on this subject is that since she was not present during the meeting that she “cannot comment on what may or may not have been said”. 16 I am uncertain as to whether this means that VC is no longer with the company and is not able to be consulted about what was discussed in the meeting or whether she is still with the company but has not been made available to the Commission to give evidence. In any event, there is no direct evidence that would contradict KB on the subject of her recollection of matters discussed in the meeting.
[16] Relatedly, BW’s evidence is that “the Group’s position in relation to criminal convictions is set out” in a policy referred to within her evidence. 17 The policy to which BW refers is stated by her in her evidence as being implemented in 2014 “as part of its obligations to the Commonwealth”.18 While said to have been implemented in 2014 at some time, the document attached to BW’s witness statement records “Last Amendment: 26 February 2015”, with a version number of 1.2 (the 2015 Policy).19 A later edition of the same policy has a “Last Amendment” date of April 2018 (the 2018 Policy).20 Where the two policies are referred to collectively in this decision, they are referred to as “the Policies”.
[17] On 29 March 2016 a Human Resource Officer wrote to the Applicant and advised that her police check was shortly to expire and that she was required to authorise a further check. 21 KB’s evidence is that she did not acknowledge the request and that she was not made to comply with it as the Agency did not follow up getting the forms from her.22 BW’s evidence is that the failure to obtain the necessary authorisation was due to an administrative oversight.23
[18] Three further endeavours were made by the Agency to obtain compliance with the need for authorisation for a police check:
• on 4 April 2018, when the same Human Resource Officer wrote again to the Applicant requesting that she provide the necessary authorisation, 24 the Applicant again did not respond to the request:
‘Hi [KB removed],
As per my previous email on 22nd March 2018, your National Police Check has now expired.
Due to the nature of your role, it is imperative that this remains current at all times for compliance and auditing purposes.
Please complete the attached copy and return to myself by COB tomorrow Thursday 5th April 2018 as a matter of urgency.
Please ensure that 100 points of original ID has been cited and page 2 signed off to confirm this.
Thanks in advance’ 25
• on 10 April 2018, when the Human Resource Officer followed up with a further request at that time making the point that her request was an outstanding a contractual requirement which needed to be addressed with a sense of urgency:
‘Hi [KB removed],
Following up on your police check as I still have not received this?
This is a contractual requirement that is currently outstanding so can this please be addressed with a sense of urgency?
Many thanks’ 26
• on 16 April 2018, the Human Resource Officer once again followed up on authorisation of the Applicant’s police check requesting that it be completed by the following day:
‘Hi [KB removed],
Following up on your police check as I still have not received this.
This is a contractual requirement that we are currently breaching.
Please have this completed by COB today.
Many thanks’ 27
[19] KB responded only to the last of these requests when she provided the necessary authorisation within a few hours of it being received. The authorisation was then provided to a contractor to the Agency who undertook the necessary checks and obtained the information about her convictions set out above.
[20] After learning of her conviction, the Agency advised KB that in view of her circumstances it needed to consider the situation. In this regard it stated to her the following:
‘Good morning [KB removed]
DISCLOSABLE CRIMINAL CONVICTION
We refer to our recent discussions with you and now, under the various headings below, write to you concerning this matter.
Background
1. 2011 - you were employed with us (initially with [another business within the Group]).
2. 2015 – you were employed by us with [the Agency removed] as a Job Placement Officer at [Branch 4 removed].
3. 2016 - in accordance with our [the Agency removed] Employee Police Check Policy we asked you to complete a Police Check Report. You never returned this to us.
4. April 2018 – we again asked you to complete a Police Check Report. This time you completed this document.
5. May 2018 – the National Police History Check Report has disclosed that on the 21st of August 2014 you were convicted of 2 Commonwealth Offences under the Criminal Code (Crimes Act 1914 ) relating to Obtaining a Financial Advantage (the Convictions). You were fined $3,000 along with a Reparation Order pursuant to S.21B of the Crimes Act 1914 requiring you to repay the Commonwealth $26,862.26.
Our Position
Our employment contracts and policies clearly outline the position of the [the Agency Group removed] regarding convictions and obligations regarding them. The [the Agency Group removed] Employee Police Check Policy relevantly provides:
1. Employees are required to undergo a National and/or International Police Check every two years which is in line with Government regulations and this policy.
2. This [the Agency Group removed] Policy imposes a positive obligation on an employee to disclose criminal convictions and/or charges prior to and during the course of their employment.
3. A Valid National Police Check free from relevant disclosable outcomes is considered to be an inherent requirement of any role working under Government contracts and as required by their contract or [the Agency Group removed] itself.
4. All candidates and existing employees have a positive obligation to disclose criminal convictions and/or charges to their criminal record prior to and during their employment. All candidates and existing employees are given the opportunity to provide any information to the [the Agency Group removed] prior to the check being conducted. Nondisclosure may be considered a breach of the Conditions of Employment. In this instance the [Group] may take disciplinary action, which may result in the termination of employment.
5. In the event of a disclosable outcome, the candidate or employee will be given the opportunity to provide a response to the [the Agency Group removed] as to the nature and circumstances of the disclosable outcome. The [the Agency Group removed] will consider the nature of the conviction in regards to the employee’s role, and any relevant Government body’s requirement for a clear National or International Police Check. After due consideration, disciplinary action may be initiated by the [the Agency Group removed] up to or including termination of employment for the employee concerned. Should the police check not be to the satisfaction of the [the Agency Group removed] or places the business at any undue risk, the employee’s employment will be Summarily Dismissed.
We are involved in Commonwealth Government contracts utilizing taxpayer funds. We have tremendous responsibilities of trust and good faith to discharge these contractual and financial obligations with integrity, honesty and transparency. [the Agency Group removed]’s contractual and policy position was developed precisely because of these fiduciary duties. Further [the Agency Group removed]’s contractual and policy position has also been informed by the view of the Australian Government under our jobactive Deed
with them. Clause 45.3 specifically refers to the suitability of a person for employment if convicted of an offence under the Crimes Act 1914.
Your Position
Despite the positive obligation you had to notify us of the Convictions the following is clear:
1. 21st of August 2014 - you could have advised us of the Convictions. You chose not to do so and have maintained that position every day since the date of the Convictions.
2. 2016 - you avoided signing the Police Check Report. Again at this juncture you chose not to notify us of the Conviction.
3. 2018 - you signed the Police Check Report. But again you chose not to notify us of the Conviction.
The Convictions alone are of extreme concern to us. Our extreme concerns are further exacerbated because you have deliberately avoided informing us of those Convictions. These are clearly breaches of the obligations you owe us.
Your Response
Although we have had discussions with you about this matter, we must abide by the [the Agency Group removed] Employee Police Check Policy referred to in point 5 under the heading Our Position. This is your opportunity to respond as to the nature and circumstances of the disclosable outcome.
We will consider your response accordingly.
We wish to make it clear - this situation is extremely serious such that your employment with [the Agency Group removed] may be terminated.
We consider close of business Thursday 31 May 2018 to be a reasonable amount of time to provide this written response.
Regards’ 28
[21] KB provided a relatively short response to the Agency on 31 May 2018 about what had occurred:
‘Good afternoon [name removed],
I am writing in response to the letter below and acknowledge the seriousness of the situation
It was never my deliberate intention to withhold this information from [the Agency Group removed], there were times when I wanted to discuss with my manager and HR, but I was so overcome with anxiety and embarrassment, that I found this physically and mentally impossible to do so.
I was aware that when the police check was returned , the conviction would be listed and these necessary discussions would be initiated by [the Agency Group removed], discussions that unfortunately I was unable to initiate myself.
You have stated that I deliberately avoided informing you, but as stated above , I was physically and mentally unable to do so. I’m so disappointed for not having the strength or the courage to disclose and discuss this matter with you.
This is in contrast to character references that I can provide to support my integrity, values and honesty in my professional and personal life.
I sincerely apologise for not disclosing.
I have been working in this industry for over 7 years and has been the most rewarding career that I have ever had. I am passionate about helping people and have achieved some amazing results and have assisted so many people to change their lives through employment.
I truly hope to continue my employment with [the Agency Group removed] for many years to come and hope that when making a decision, you will consider favourably my years of service and commitment to our clients, candidates and the organisation.
Most sincerely’ 29
[22] KB’s response did not assuage the Agency of its concerns and it decided to terminate her employment. It informed her of its decision in the course of a short video meeting on Monday, 4 June 2018 with KB and her direct supervisor, DC, in Melbourne and BW elsewhere.
[23] The precursor to the meeting had been discussions between BW and two other managers of the Agency, its Group Legal Counsel, and the Agency Group’s CEO. They collectively formed the view that the Applicant had been obliged to disclose the convictions and had not done so as well as “that [KB removed]’s failure to disclose the convictions for fraud against the Commonwealth put the Group’s contract provision with the Commonwealth in potential jeopardy”. BW’s evidence is that the three also took the view “that [KB removed]’s responses as to why she did not disclose the convictions were not acceptable.” and “that the nature of the convictions, the continuation of [KB removed]’s employment was untenable”. 30
[24] The Applicant gave evidence that in the course of the meeting on 4 June 2018 BW informed her that they had considered her response including references to health issues and good references but that the company had decided her response was unacceptable. The Applicant’s evidence is also that BW did not specify any reasons why her response was unacceptable or explain any links between her conviction and her role. 31
[25] After being dismissed KB was provided with a letter confirming her termination of employment but not particularly specifying the reasons for such 32 and was paid her statutory entitlements as well as a payment of five week’s payment in lieu of notice. The matters set out within the letter, entitled “cessation of your employment” appear more to be directed to protecting the interests of the Agency’s Group than they do to be documenting the end of KB’s employment or explaining the reasons for her dismissal. After confirming that KB’s employment with the Group ceased on 4 June 2018 the letter sets out that she has certain obligations to the company, including confidentiality; the return of property; that she be restricted in her communications with other employees; and that she protect the company’s goodwill.
[26] The Employer Response Form filed by the Agency in response to KB’s unfair dismissal application sets out an extensive rebuttal of KB’s claims in the application form and sets out essentially three reasons for KB’s dismissal:
• KB breached requirements the Respondent may have to the Commonwealth:
“In administering taxpayer funds held in trust on behalf of the Commonwealth and providing employment-related advice and assistance to Vulnerable People under the Deed, the Commonwealth expressly requires such checks and forbids from employment with [the Agency removed] personnel convicted on charges which are relevant to the Services conducted under the Deed”; 33 and
(with reference to a contractual obligation to do certain things established by contractually established Guidelines) “… the Guidelines are emphatic in forbidding the continued employment of persons who have been found guilty of crimes against the Commonwealth, particularly when they directly relate to the person's role in administering taxpayer funds under Commonwealth programs such as the jobactive Deed.” 34
• KB’s continued employment was untenable:
“11. In her role, the Applicant was a Commonwealth public official for the purposes of the Criminal Code Act 1995 (Cth). That is, the Applicant was convicted of an offence of obtaining a financial advantage by deception against the party with whom the Applicant in her role was engaged as a Commonwealth public official. Having regards to the handling of taxpayer funds and working with Vulnerable Person's there can be no question that the criminal conviction, not least the failure to disclose the conviction, related not just to prove the applicants unsuitability for the role but also that the Applicant could no longer fulfill the inherent requirements of her role.
12. Pursuant to the jobactive Deed, [the Agency removed] operates under the strictest of compliance frameworks with the capacity of the Commonwealth to terminate, on notice. The Applicant's non-disclosure in this respect left the Applicant in real and present risk of sanction under the Deed in the event of audit by the Commonwealth as a consequence of this breach. This includes but is not limited to a requirement to the issue of a breach notice which includes both financial and administrative penalties.” 35
• KB failed to disclose her conviction, contrary to an obligation to do so.
LEGISLATION
[27] The legislative provisions which are relevant to this matter are set out in s.387 of the Act, which is 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.
CONSIDERATION
[28] Determination of whether KB’s dismissal was harsh, unjust or unreasonable requires each of the matters specified in s.387 to be taken into account.
[29] The Full Bench has summarised the approach that should be taken by the Commission to the criteria within s.387 in the following way: 36
“[28] The following propositions concerning consideration as to whether there is a valid reason for dismissal for the purpose of s.387 are well established:
• a valid reason is one which is sound, defensible and well-founded, and not capricious, fanciful, spiteful or prejudiced; 37
• a reason would be valid because the conduct occurred and justified termination; conversely the reason might not be valid because the conduct did not occur or it did occur but did not justify termination (because, for example, it involved a trivial misdemeanour); 38
• it is not necessary to demonstrate “serious misconduct” or misconduct sufficiently serious to justify summary dismissal in order to establish a valid reason for dismissal; 39
• the existence of a valid reason to dismiss is not assessed by reference to a legal right to dismiss 40 (so that, for example, where summary dismissal has occurred, it is not necessary to determine whether the right of summary dismissal was legally available); and
• the criterion for a valid reason is not whether serious misconduct as defined in reg.1.07 has occurred, since reg.1.07 has no application to s.387(a) (although a finding that misconduct of the type described might well ground a conclusion that there is a valid reason for dismissal based on the employee’s conduct). 41” (original references)
[30] I will deal with each of the criteria within s.387 in turn.
(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)
[31] Determination of a valid reason involves an examination of whether the reason given is “sound, defensible or well founded”, within the overall context of the employment relationship:
“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 (1995) 60 IR 1, when considering the construction and application of s 170DC.” 42
[32] KB argues that there was not a valid reason for her dismissal for several reasons.
[33] KB puts forth that as a result of the Respondent’s concession that it no longer submits that KB’s continued employment was untenable because of its Deed with the Commonwealth, that there was an invalid basis to the Respondent’s Policies requiring employees to submit to periodic police checks. As such, KB submits that the Respondent neither had a legitimate basis in which to require police checks nor a basis upon which it may be said that KB failed in her duties to her employer.
[34] KB also submits that she was not deliberately untruthful with the Agency but that it was both her distress about the convictions and her apprehension about what would occur if she disclosed the conviction which, explain her failure to disclose it. She also argues that even if it could be said that she withheld important information from her employer, that such did not warrant her dismissal.
[35] The consent given by KB on 27 March 2014 for the conduct of the first police check included her acknowledgement of the following:
“I understand that this information will be used by [the Agency removed] only for the purposes of assessing my eligibility for employment to function within the Job Services Australia Network and will be handled, stored and disposed of as per [the Agency removed] Privacy Policy and Collection Notice.
I agree to allow [name of information broker] to access all information on the Application Form for the purposes of conducting the National Police Certificate. I consent to [the Agency] to maintaining a copy of my national police check results, including any disclosable outcomes outside of a three month period.
I understand and agree that any information collect may be released to the relevant Government Department if so requested by them under the Job Services Australia Contract and/or Disability Employment Services Contract.” 43
[36] The Respondent argues that the 2015 Policy was introduced during 2014, and in the absence of alternative evidence on the subject, I presume it was. So far as is relevant, the 2015 Policy provides the following:
“Purpose
This Policy is designed to cover employees and potential employees in multiple areas of the business. This includes relevant positions where a Government contract mandates a National and or International Police Check, roles that are privy to company sensitive information and roles that have access to employee and company sensitive details.
In discharging its duty of care to employees and stakeholders alike, the [the Agency’s Group removed] will use all reasonable steps to ensure that checks of employees are undertaken prior to or upon commencement of employment. Employees are required to undergo a National and/or International Police Check every two years which is in line with Government regulations and this policy.
This [the Agency’s Group removed] Policy imposes a positive obligation on an employee to disclose criminal convictions and/or charges prior to and during the course of their employment.
Scope
This Policy will apply to all [the Agency’s Group removed] employees excluding those employed by [Branch removed] and [Branch removed]. Only from time to time positions within these two companies will require a National Police Check.
A Valid National Police Check free from relevant disclosable outcomes is considered to be an inherent requirement of any role working under Government contracts and as required by their contract or [the Agency’s Group removed] itself. [the Agency’s Group removed] reserves the right to change the requirements of any role at any time to include the requirement to undergo a National and or International Police Check, as mandated by the [the Agency’s Group removed] or required by any Government contract.” 44
[37] The phrase “disclosable outcome” is further dealt with in the policy, as follows:
“Disclosable Outcomes
All candidates and existing employees have a positive obligation to disclose criminal convictions and/or charges to their criminal record prior to and during their employment. All candidates and existing employees are given the opportunity to provide any information to the [the Agency’s Group removed] prior to the check being conducted. Nondisclosure may be considered a breach of the Conditions of Employment. In this instance the [the Agency’s Group removed] may take disciplinary action, which may result in the termination of employment.
Should a disclosable outcome be returned on a candidate’s or an existing employee’s National or International Police Check, whether it is a general or vulnerable check, the [the Agency’s Group removed] will exercise due diligence in assessing this result.
In the event of a disclosable outcome, the candidate or employee will be given the opportunity to provide a response to the [the Agency’s Group removed] as to the nature and circumstances of the disclosable outcome. The [the Agency’s Group removed] will consider the nature of the conviction in regards to the employee’s role, and any relevant Government body’s requirement for a clear National or International Police Check. After due consideration, disciplinary action may be initiated by the [the Agency’s Group removed] up to or including termination of employment for the employee concerned. Should the police check not be to the satisfaction of the [the Agency’s Group removed] or places the business at any undue risk, the employee’s employment will be Summarily Dismissed.” 45
[38] The 2018 Policy is in identical terms, at least in relation to the matters set out above.
[39] KB impugns the 2015 and 2018 Policies and information obtained under them, in light of the concession given by the Agency that there is no requirement for employees working in Commonwealth funded positions and programs to be without criminal convictions. Her logic on the matter is that since there was an erroneous basis to the stated purpose of the employee authorisation and the 2015 and 2018 Policies, and that neither actually operated for the contractual reasons stated she was under no obligation to comply with the policy. KB submits that it was not reasonable that she be held to account for not complying with a policy that the Respondent acknowledged now was misconceived. 46 That argument extends to there also being no obligation to authorise a periodic request for information, or to self-disclose any conviction held, with KB submitting that there were other means other than by undertaking a police check for the Respondent to obtain information from their employees to ensure they are ‘doing the right thing’ and are ‘trustworthy’ in keeping to its obligations to the Commonwealth. As such, the reasonableness of requiring the police check was low.
[40] KB also puts forth the argument that while she breached the Policies which ‘imposes a positive obligation on an employee to disclose criminal convictions and/or charges prior to and during the course of their employment’ that so too did the Agency. KB submits that under the Policies the Respondent had an obligation that ‘All candidates and existing employees are given the opportunity to provide any information to the [the Agency’s Group removed] prior to the check being conducted. The [the Agency’s Group removed] will consider the nature of the conviction in regards to the employee’s role, and any relevant Government body’s requirement for a clear National or International Police Check’. 47 While the Respondent wrote to KB on 30 May 2018 inviting her to provide a response to the allegation that she breached her obligations to the employer, KB submits that such did not dispose of the Respondent’s obligation either to give her an opportunity to provide information prior to a police check being conducted, or to ‘consider the nature of the conviction in regards to the employee’s role, and any relevant Government body’s requirement for a clear National or International Police Check’. KB considers the requirement for the Agency to consider these latter matters to be heightened given the limited amount of information the Respondent had access to regarding the nature and circumstances surrounding the conviction at the time it dismissed her.
[41] As a result of the Respondent’s case, as amended, being only that KB failed to be open and truthful with it about her conviction, I am unable to find that it held a valid reason for her termination of employment, irrespective of whether or not it may be said that the 2015 or 2018 Polices were operative and binding on KB.
[42] The 2015 and 2018 Policies oblige an employee to firstly periodically submit to a national police check and secondly to “disclose criminal convictions and/or charges (sic) to their criminal record prior to and during their employment”. If the Policies were not formally operative for the reasons advanced by the Applicant, then at the least the Agency would still have been able to ask that an employee submit to a police check when it thought it necessary. Perhaps an employee would, in the absence of a contractual or other requirement have the right to refuse to such a request. However, that is not the evidence in this matter – KB did not refuse to submit to a request; instead she failed to accede.
[43] In the reverse, if the Policies were operative, KB may be found to have failed to respond to the company’s requests, as well as having failed to positively disclose changes in her status.
[44] However, even if the Policies were operative and there were findings that KB had not complied with her obligations, such does not automatically lead to a finding in favour of the Respondent that it had a valid reason for her dismissal.
[45] The case as now argued by the Respondent is that the Policies, being mandatory expectations of the employer must be complied with, and that a failure to do so gives a valid reason for dismissal. That argument is short of where the Respondent’s case started and the presumption upon which the Policies were drafted. The Agency’s starting point with the Policies was that “a Government contract mandates a National and or International Police Check” and that “Employees are required to undergo a National and/or International Police Check every two years which is in line with Government regulations and this policy.” 48
[46] Coupled with the content of the Policies is the original contention put by the Respondent that a positive check was an inherent requirement of her role and that a failure to show a positive clearance doomed her future employment.
[47] Owing to the Respondent’s concession, this case then reduces to a complaint by the Agency that the Applicant was tardy over a period of several years in responding to requests the company made of her. That being the case, the things she did not do were firstly to respond to her employer’s requests knowing that she was expected to, and secondly that she also expected to positively appraise her employer of changes in her legal status. Together, those two matters form the basis of the Respondent’s complaint against the Applicant and why it argues it has a valid reason for her termination.
[48] The first of the company’s requests for a police check after the 2014 check had expired, made in 2016, was not followed up when KB failed to respond. It then took two increasingly firmer reminders for KB to respond to the 2018 request. I have no doubt from the evidence before me that KB was avoiding the situation; that she knew what would be uncovered, and its significance to her employer; and that she avoided responding because of her knowledge of these matters. However, such has to be balanced against what she heard in 2014 – that the company had a zero tolerance for anyone with a criminal conviction. I prefer KB’s evidence on this matter and accept that what was said to her in the 2015 meeting was either those words, or words that led to her belief that such was the company’s expectation. Such, in any event, is consistent with the content of the 2015 Policy since, after all, “A Valid National Police Check free from relevant disclosable outcomes is considered to be an inherent requirement of any role working under Government contracts and as required by their contract or [the Agency’s Group removed] itself”.
[49] Those perspectives however, of “zero tolerance” or “inherent requirement” are wholly inconsistent views both with the actual obligation on the Agency as well as what is permitted or required by the Fair Work Act. There is nothing in the applicable “jobactive Deed 2015-2020” that would reasonably lead to either conclusion.
[50] Relevantly the Full Court has held, in relation to an argument that employment ended when a relevant registration was withdrawn, that such employment does not axiomatically end, in that case, with the cancellation of a legislatively required registration, but with a decision by the employer which amounts to termination at the initiative of the employer. The fact that a legislative registration has been withdrawn is not, of itself, the end of employment. The Full Court in Mahoney v White 49 relying on the decision in Mohazab v Dick Smith Electronics Pty Ltd50 found that:
‘the termination of the employment of the employee concerned was the deliberate, considered, act of the CEO. Even if the CEO were under a statutory obligation of the kind which, on its submission, arose under s 9(1) of the Child Protection Act, compliance with that obligation required it, rather than Mr Mahony or Mr O’Connell, to take the initiative in bringing the relevant employment to an end. It was, in the words of the Full Court in Mohazab, “the act of the employer [which resulted] … in the termination of the employment.”
[51] In this case there is no uncertainty present. The Agency terminated KB at its initiative pursuant to a discretion it had about the situation. It could have chosen other avenues, but did not. While the employer may have perceived an inherent requirement to no longer be fulfilled, it is doubtful first that there was such an inherent requirement and secondly that the Agency ever turned its mind to whether alternatives existed to termination of employment.
[52] The Respondent also argued that the failure by KB to comply either with the Policies or its directions to provide it with information was serious misconduct, being “a breach of the fundamental term of the contract of employment that obliges an employee to comply with the lawful and reasonable directions of the employer” (per B, C and D v Australian Postal Corporation T/A Australia Post ([2013] FWCFB 6191 at [36]). 51 In the circumstances, I am not persuaded that KB’s actions amount to a breach of the standard advocated by the Agency or that her actions were serious misconduct.
[53] KB was correct in apprehending that dire things for her employment would flow from the Respondent’s knowledge of her convictions, given that was precisely what occurred.
[54] Her fears about disclosure must therefore be seen as having been reasonably held.
[55] Balanced against the claims directed against her of untruthfulness or a lack of candour, is the fact that KB cooperated with the Agency with its investigation and requests for a response. In those stages she was truthful and candid.
[56] In the ordinary course KB’s tardiness in responding to the Respondent’s requests for consent for a police check or, if she was obliged to do so, to respond and to positively appraise her employer of changes in her legal status, may be sufficient for her to be warned about the consequences of future transgressions, but they are insufficient to be found to be the basis of a sound, defensible and well-founded decision for dismissal. There is no evidence that her explanation for non-compliance was other than reasonable; that she would have other convictions or blemishes to be found out; or that she would be unlikely to heed the term of a warning.
[57] As a consequence, I find there was not a valid reason for KB’s termination of employment.
(b) whether the person was notified of that reason
[58] While KB was verbally informed she was being dismissed and that such was because of the adverse police check, the termination letter does not even address the reasons held by her employer for her dismissal. Instead, the letter concerns itself with matters of the company’s security and not matters of why she was dismissed.
[59] KB’s evidence on the subject of the termination meeting includes that “[BW removed] failed to specify any reasons as to why my response was unacceptable” or “explain any links between the criminal conviction and my role”. 52 BW’s evidence on the subject of what was discussed in the meeting does not add meaningfully to the record KB puts forward. I accept and prefer KB’s evidence on what she was told about the reasons for her termination of employment.
[60] The letter KB received from BW after her dismissal entitled “Cessation of Your Employment” sets out that she has certain obligations to the company, including confidentiality, the return of property; that she be restricted in her communications with other employees; and that she protect the company’s goodwill. 53 Perhaps it was never intended to be a communication of the company’s reasons.
[61] Balanced against this correspondence is another letter to KB from BW, sent prior to her dismissal, dated 30 May 2018, summarizing the company’s response and its overall position and putting her on notice that she may be dismissed by the Agency. This correspondence might be said to be the Respondent’s reasons for dismissal, for certainly they are the matters relied upon by the Respondent as this case progressed.
[62] Overall, I am satisfied that KB was notified of the fundamental reasons held by the Agency for her dismissal.
(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person
[63] For the Commission to have regard to whether an employee has been given an opportunity to respond to the reason for dismissal there needs to be a finding that there is a valid reason for dismissal. 54 While so, it is also accepted that “an opportunity to respond” amounts to an opportunity to provide reasoning to a decision maker that would, all things being equal, allow a reasoned explanation to cause the decision maker to accept what is proffered and to change from their foreshadowed path.
[64] The evidence about the opportunity given by the Agency for KB to respond to the reason it dismissed her includes that after the Agency received the product of the national police check, BW spoke with KB by telephone on 24 May 2018 for approximately 15 minutes to discuss the report with KB. In the course of that conversation, KB gave an explanation of the circumstances and was apologetic. 55 Additionally, when BW was unable to contact KB by telephone on 29 May 2018 she wrote to her by email the following day on 30 May 2018 inviting her to respond to the Agency’s concerns surrounding her criminal convictions and her failure to disclose such, explaining that ‘this situation is extremely serious such that your employment with [the Agency’s Group removed] may be terminated’, which KB did do.56 While, the Respondent submits that it had a further meeting with KB on 4 June 2018 to communicate KB’s dismissal with her, it does not put forth that KB was provided a further opportunity to respond during this meeting.
[65] In the context of the employer’s then held reasons for dismissal – that the requirement for a “clean” record was an inherent requirement of the job, and that compliance with the Policies was mandatory, the response given by KB was as much reasonable as it was ignored.
(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
[66] BW argued in her evidence that KB had been afforded the assistance of a support person in the discussions held with her relating to her dismissal since KB’s local manager, DC was in attendance. 57 The proposition that, in the absence of a request from the employee concerned, that their manager could be a support person of the nature envisaged by the Fair Work Act is as unworthy as it lacks credibility. An employer who does not offer an employee the opportunity of having their own support person in attendance at discussions relating to the employee’s dismissal would serve their cause better by simply saying the offer was never made, rather than looking somewhat silly by suggesting that the person’s manager – a person superior to them and with altogether different interests to those of the employee being subjected to the disciplinary action – was the support person for the employee in the manner envisaged by s.387(d). Patently they were not. A support person does more than offer pseudo-supportive comments of “there, there” in the face of negative commentary, or to offer tissues when bad news is communicated. They may suggest things to say to the applicant, or even to advocate when the employee is unable to. DC was not KB’s support person. She was KB’s manager.
[67] The Act’s Explanatory Memorandum makes it plain that the consideration in s.387(d) is for those times when an employee asks to have a support person present in a discussion relating to dismissal and the employer unreasonably refuses. There is no positive obligation on an employer an employee the opportunity to have a support person present. 58 The Agency submits that they did not unreasonably refuse to allow KB to have a support person on any occasion.59 This is supported by the KB’s submissions.60
[68] As a result, there was no refusal by the Agency for KB to have a support person in any discussions that were had about the future of his employment, with none being asked for. Accordingly, this factor is a neutral consideration in my decision.
(e) if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal
[69] Since KB was not dismissed for unsatisfactory performance, this criterion is a neutral consideration in my decision.
(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
[70] The Agency is by all accounts a large employer, with 650 employees in the Group; HR Managers and Corporate Counsel. 61 Those features of the business should have, but did not, assist the enterprise to avoid the mistakes made in dismissing KB. Capable human resources and legal advice should have counselled that there was no legal imperative to dismiss KB, since it was not an inherent requirement of her job that she carry a “clean” conviction record, and that, at best, her failure to comply with its requests or Policies, if they actually applied to her, may demand a sanction less than dismissal, but did not amount to a valid reason for her dismissal. This consideration, however, is a neutral factor in my decision.
(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
[71] My consideration of this criterion leads to the same conclusion as in relation to s.387(f), namely that capable human resources and legal advice should have led in a different direction to that employed by the Agency, but did not. There was no absence of human resource management specialists or expertise in the enterprise, or legal expertise for that matter.
(h) any other matters that the FWC considers relevant
[72] The fact that the Agency provides services to the Commonwealth under a Deed, with the Agency being subject to certain strictures about the staff it engages to perform work associated with the Deed may, if the subject of sufficient evidence before me, be relevant to my overall findings. The Deed’s specific requirements in relation to staff engaged upon associated work are set out later in this decision. In summary, a person may not be engaged upon work associated with the Deed if they have certain convictions, unless it has otherwise been agreed by the contracting Department. While that is the case there is no evidence at all before me about the attitude of the contracting Department and as a result no inferences in either direction can be drawn that would be relevant to this part of my decision.
[73] After considering each of the criteria within s.387, I find that KB’s dismissal was harsh, in that the decision to dismiss her was disproportionate to her conduct; that it was unjust, since the Respondent’s decision was predicated upon false or faulty reasoning about its obligations to the Commonwealth; and it was unreasonable, since the Respondent did not sufficiently consider KB’s explanation for her conduct.
[74] As a result, I find that KB was unfairly dismissed.
REMEDY
[75] The sections of the Act dealing with remedy once a finding of unfair dismissal has been made are as follows:
“390 When the FWC may order remedy for unfair dismissal
(1) Subject to subsection (3), the FWC may order a person’s reinstatement, or the payment of compensation to a person, if:
(a) the FWC is satisfied that the person was protected from unfair dismissal (see Division 2) at the time of being dismissed; and
(b) the person has been unfairly dismissed (see Division 3).
(2) The FWC may make the order only if the person has made an application under section 394.
(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.
Note: Division 5 deals with procedural matters such as applications for remedies.
391 Remedy—reinstatement etc.
Reinstatement
(1) An order for a person’s reinstatement must be an order that the person’s employer at the time of the dismissal reinstate the person
by:
(a) reappointing the person to the position in which the person was employed immediately before the dismissal; or
(b) appointing the person to another position on terms and conditions no less favourable than those on which the person was employed immediately before the dismissal.
(1A) If:
(a) the position in which the person was employed immediately before the dismissal is no longer a position with the person’s employer at the time of the dismissal; and
(b) that position, or an equivalent position, is a position with an associated entity of the employer;
the order under subsection (1) may be an order to the associated entity to:
(c) appoint the person to the position in which the person was employed immediately before the dismissal; or
(d) appoint the person to another position on terms and conditions no less favourable than those on which the person was employed immediately before the dismissal.
Order to maintain continuity
(2) If the FWC makes an order under subsection (1) and considers it appropriate to do so, the FWC may also make any order that the FWC considers appropriate to maintain the following:
(a) the continuity of the person’s employment;
(b) the period of the person’s continuous service with the employer, or (if subsection
(1A) applies) the associated entity.
Order to restore lost pay
(3) If the FWC makes an order under subsection (1) and considers it appropriate to do so, the FWC may also make any order that the FWC considers appropriate to cause the employer to pay to the person an amount for the remuneration lost, or likely to have been lost, by the person because of the dismissal.
(4) In determining an amount for the purposes of an order under subsection (3), the FWC must take into account:
(a) 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 reinstatement; and
(b) the amount of any remuneration reasonably likely to be so earned by the person during the period between the making of the order for reinstatement and the actual reinstatement.
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.”
[76] Pursuant to subsection 390(3) of the Act an order for the payment of compensation to a person must not be made unless the Fair Work Commission “is satisfied that reinstatement of a person is inappropriate” and also that the Commission “considers an order for payment of compensation is appropriate in all the circumstances of the case.”
[77] The issue of when reinstatement is inappropriate and the related question of the need for trust and confidence between the parties was considered at length by the Full Bench of the Commission in Nguyen and Le v Vietnamese Community in Australia t/a Vietnamese Community Ethnic School South Australia Chapter. 62 In its decision, the Full Bench held that:
• ‘trust and confidence’ in this context is that which is essential to make an employment relationship workable, which is “not to be confused with an implied term in a contract of employment of mutual trust and confidence, the existence of which was recently eschewed by the High Court in Commonwealth Bank of Australia v Barker”; and
• While “trust and confidence is a necessary ingredient in any employment relationship, it would be wrong to assume that it is the sole criterion or even a necessary one to determine whether or not reinstatement is appropriate”. 63 (references omitted)
[78] The Full Bench summarised the relevant principles to be followed in assessments of trust and confidence as follows:
“[27] The following propositions concerning the impact of a loss of trust and confidence on the question of whether reinstatement is appropriate may be distilled from the decided cases:
• Whether there has been a loss of trust and confidence is a relevant consideration in determining whether reinstatement is appropriate but while it will often be an important consideration it is not the sole criterion or even a necessary one in determining whether or not to order reinstatement.
• Each case must be decided on its own facts, including the nature of the employment concerned. There may be a limited number of circumstances in which any ripple on the surface of the employment relationship will destroy its viability but in most cases the employment relationship is capable of withstanding some friction and doubts.
• An allegation that there has been a loss of trust and confidence must be soundly and rationally based and it is important to carefully scrutinise a claim that reinstatement is inappropriate because of a loss of confidence in the employee. The onus of establishing a loss of trust and confidence rests on the party making the assertion.
• The reluctance of an employer to shift from a view, despite a tribunal’s assessment that the employee was not guilty of serious wrongdoing or misconduct, does not provide a sound basis to conclude that the relationship of trust and confidence is irreparably damaged or destroyed.
• The fact that it may be difficult or embarrassing for an employer to be required to re-employ an employee whom the employer believed to have been guilty of serious wrongdoing or misconduct are not necessarily indicative of a loss of trust and confidence so as to make restoring the employment relationship inappropriate.
[28] Ultimately, the question is whether there can be a sufficient level of trust and confidence restored to make the relationship viable and productive. In making this assessment, it is appropriate to consider the rationality of any attitude taken by a party.” 64 (references omitted)
[79] The Agency argues strongly that in the event the Commission finds KB was unfairly dismissed her reinstatement to employment should not be considered. It argues that the trust relationship between the company and the Applicant has been destroyed 65 because of KB’s lack of integrity through failing to comply with the Policies,66 and that overall it now views its trust in her to have been misplaced.67 The Agency also asks the Commission to disregard KB’s submissions that she would in future comply with the company’s policies and put that forward on the basis that her contention that the breaches of the Policies were minor and technical evidences that she has little insight into the seriousness of the breaches; the consequence of which is that the Agency can have no confidence she will comply with future requirements should reinstatement occur.68
[80] The Respondent also draws attention to what it calls a history on the part of KB of avoiding difficult situations, 69 the implication of which being the likelihood KB would continue avoidance in the future in the event further problems in her personal life arose and if those problems connected with her employment. The Respondent also submits that it was BW’s evidence that the company’s contract with the Commonwealth could be terminated at any time.70 While that submission was put forward in relation to the matter of compensation it is also potentially connected with the question of reinstatement. Its argument in this regard was that KB’s “continued employment would pursuant to the Deed have been subject to approval by the Commonwealth”.71 This proposition appears to be drawn from the provision of the Deed which requires the Agency to not continue in employment any person convicted of an offence under the Crimes Act 1914 (Cth), other than in limited circumstances, and with an absolute discretion on the part of the Commonwealth to waive such obligation.72
[81] Against these matters, KB contends that there should be an order for reinstatement, with that being the primary remedy in this jurisdiction and being the case that the Respondent’s witness BW having confirmed in evidence that the only issue she had with the Applicant was her nondisclosure of the convictions pursuant to the company’s Policies. 73
[82] Factors weighing in favour of KB’s reinstatement include that the company is large, operating across the country. The reality of the employment situation is that KB would be most unlikely to come across BW with any regularity, the only witness for the Respondent and the one who put forward the argument on behalf of the company that its trust and confidence in the Applicant had been broken. It is also the case that there is no evidence before the Commission that there are any further problems in KB’s personal life and in particular that she may be facing other charges or anything of the nature. The inference may be drawn therefore that it is most unlikely that there would be anything further on KB’s part to hide from her employer. It is also likely the case that the scare of having been dismissed and taking her former employer to account in the Fair Work Commission in order to retain employment would have the predictably chilling effect of ensuring further transgressions never occur.
[83] The argument from the Respondent that it was obliged to not continue KB’s employment because of the content of the Deed overlooks that notwithstanding any such contractual constraints, in cases such as this any termination of employment is a termination at the initiative of the employer. 74 That is, it is a matter for the employing entity to determine the future of a person’s employment in accordance with the employment contract. The test in matters such as these is not whether some externality such as a contract for services or Deed or even legislation may demand a change in status of an employee, but rather whether there were valid reasons for doing so; whether the overall decision was unfair; and if so whether reinstatement is appropriate.
[84] The assertions made by the Respondent about its loss of trust and confidence in KB are less likely to be objectively ascertainable as showing irreparable damage or an inability to allow a viable and productive future working relationship than they are to do either with its embarrassment about having to take back someone it has dismissed and then explain that to its contractual party, the Commonwealth of Australia. The Respondent has failed to seriously address the meaning of the provisions of the Deed to which it points as some sort of prohibition on the continuation of KB’s employment or the application of those provisions to her particular circumstances. The provisions in question are set out in the Respondent’s submissions as being the following:
‘Extracts jobactive Deed (the Deed).
6. Provider’s conduct
6.1 The Provider must, at all times, act in good faith towards the Department and Participants, and in a manner that maintains the good reputation of the Services.
6.2 The Provider must:
(a) not engage in, and must ensure that its Personnel, Subcontractors, Third Party IT Providers and agents do not engage in, any practice that manipulates or impacts, as relevant, any aspect of the Services including any:
(i) Record, including any Documentary Evidence;
(ii) Outcome or Work for the Dole Place;
(iii) Payment or Payment-related process;
(iv) Participant or Employer; or
(v) monitoring of the Services by the Department,
(b) with the effect of improperly, as determined by the Department, maximising payments to, or otherwise obtaining a benefit for, the Provider or any other person or persons; and
(i) without limitation to any rights of the Department under this Deed or at law where an improper practice is identified by the Provider, immediately:
take all action necessary to appropriately remedy the practice; and
(ii) Notify the Department of the practice identified and the remedial action taken and provide all information in relation to the situation as required by the Department.
9. Provider’s responsibility
9.1. Subject to the express provisions of this Deed, the Provider is fully responsible for the performance of the Services, for ensuring compliance with the requirements of this Deed, and for all costs of meeting the Provider’s obligations under this Deed, notwithstanding any other matter or arrangement, including any Subcontracting arrangements.
23. Fraud
23.1 The Provider must not engage in, and must ensure that its Personnel, Subcontractors and agents do not engage in, fraudulent activity in relation to this Deed.
23.2 The Provider must take all reasonable steps to prevent fraud upon the Commonwealth, including the implementation of an appropriate fraud control plan, a copy of which must be provided to the Department on request.
45.3 Personnel
Unless otherwise agreed by the Department in writing at its absolute discretion, the Provider must not employ, engage or elect any person who would have a role in its management, financial administration or, if Notified by the Department, the performance of the Services, if:
(a) the person is an undischarged bankrupt;
(b) there is in operation a composition, deed of arrangement or deed of assignment with the person’s creditors under the law relating to bankruptcy;
(c) the person has suffered final judgment for a debt and the judgment has not been satisfied;
(d) subject to Part VIIC of the Crimes Act 1914 (Cth), the person has been ‘convicted’ within the meaning of paragraph 85ZM(1) of that Act of an offence under the Crimes Act 1914 (Cth), or any other offence relating to fraud, unless there is clear evidence that:
(i) the conviction is regarded as spent under paragraph 85ZM(2) (taking into consideration the application of Division 4 of Part VIIC);
(ii) the person was granted a free and absolute pardon because the person was wrongly convicted of the offence; or
(iii) the person’s conviction for the offence has been quashed, in accordance with any relevant law;
(e) the person is or was a Director or a person who occupied an influential position in the management or financial administration of an organisation that had failed to comply with the terms of any agreement with the Commonwealth and where that failure gave the Commonwealth the right to terminate the agreement; or
(f) the person is otherwise prohibited from being a member or Director or employee or responsible officer of the organisation of the Provider. 75
[85] The Respondent has not seriously addressed in its case the meaning of the provision in clause 45.3 which starts “Unless otherwise agreed by the Department in writing at its absolute discretion …” or how it would go about obtaining agreement on the subject from the Commonwealth. There was no evidence from anyone employed by the Commonwealth on the subject.
[86] It is also the case that neither party, including the Applicant, has addressed the matter of whether the only work which may be done by KB within the Respondent’s workplace is that associated with the Deed. I am unclear from the evidence whether such proposition in fact is the case. The parties have also failed to address the proposition, allowed for within ss.391(1)(b) or s.391(1A) to the effect that the Commission may consider reinstatement either to another position or to a position in an associated entity.
[87] Against the possibility of reinstatement being appropriate, it may be said that the evidence would lead to the conclusion KB knew what she was doing when she kept information from her employer. While suffering under some level of embarrassment and personal distress about the fact of the convictions, her employer’s zero tolerance of convicted employees, and the likely outcome of her employer’s knowledge of her circumstances, those matters do not adequately explain why there was a conscious decision on her part not to reveal the information until it became absolutely clear there was no alternative but to do so. Whether or not the Policies had application to her is not necessarily the point when it comes to considering the appropriateness of reinstatement as a remedy in these proceedings. She did not say to the Agency at the time something along the lines of “I choose not to respond because your policy does not apply to me”, rather she simply did not respond to what at the time she likely regarded as a proper enquiry from her employer.
[88] The environment in which she worked was at least heavily involved in the provision of services pursuant to a Commonwealth contract. There is little doubt from the evidence given in these proceedings that KB understood the need for integrity since ultimately she would be dealing with participants in public programs as well as dealing with public money.
[89] The fact that KB chose to hide information from her employer, by actively not disclosing it and that this was on several occasions, leans against reinstatement being appropriate. Her actions amount in retrospect to a signal from her that she did not trust her employer with the information.
[90] In conclusion on the subject of reinstatement, I am persuaded that reinstatement in the circumstances is not appropriate. There is a demonstrated lack of trust in her employer on the part of the Applicant, through her conduct in 2016 and 2017. There is a stated, albeit less than rationally held, loss of trust in KB by the Agency. Notwithstanding my concerns about the rationality of the Respondent’s position on the subject and whether it is properly grounded in the evidence, my concern with reinstatement would be that the sum of the parts would be to likely make future employment highly problematic and likely make a bad situation worse.
[91] As result my finding is that KB’s reinstatement is inappropriate, I find that a payment of compensation is appropriate in all the circumstances of the case.
[92] The criteria which must be considered by the Commission in assessing an order for compensation are those set out within s.392(2) of the Act, which I now consider in detail.
(a) the effect of the order on the viability of the employer’s enterprise
[93] The Respondent makes no submissions on the matter of the effect of an order for compensation on its viability. There is no evidence before me that would cause me to take the view that an order for compensation would affect the viability of the employer’s enterprise.
(b) the length of the person’s service with the employer
[94] The Applicant asserts her employment with the Respondent as having commenced on a casual basis from on 9 May 2011 and that from around June 2015 she was employed on a full-time basis. 76 The Respondent contradicts this proposition asserting in its closing submissions that it is incorrect since “the Applicant was not employed by the Respondent for the period 2011 to 2013”77 and that the length of her service “with the Respondent was 5 years, not 7”.78 The basis of this assertion is not especially well set out in the Respondent’s closing submissions and appears instead be an endeavour to distance the Applicant’s employment with the Agency from that with another entity within the Agency’s Group since the Respondent’s original outline of submissions says that:
‘3. On or about 9 May 2011, the Applicant commenced casual employment as an Industry Trainer and Assessor with [Branch removed].
4. In 2013, the Applicant was employed by the Respondent.’
[95] BW, who is the National Human Resources Manager of the Agency’s Group gave evidence that:
‘3. The Group includes, amongst other entities:
- - [Branch removed].
[Branch removed] – a wholly owned subsidiary of [Branch removed];’
[96] The proposition the Respondent would seem to have the Commission accept is that somehow KB’s employment by its wider Group is somewhat less than she argues. That argument frankly is as self-serving as it is not especially relevant to the consideration that the Commission would give to the length of service in calculating compensation. Clearly KB has been employed by the Group as well as directly by the direct Respondent for some time, but equally she was neither an exceptionally short serving employee or an exceptionally long serving one.
(c) the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed
[97] In matters in which compensation is a consideration, the Commission ordinarily makes an assessment of remuneration the employee lost through dismissal, which in turn requires a finding in relation to “anticipated period of employment”. The Full Bench of the Australian Industrial Relations Commission has observed the following in relation to these matters:
“[33] The first step in this process - the assessment of remuneration lost - is a necessary element in determining an amount to be ordered in lieu of reinstatement. Such an assessment is often difficult, but it must be done. As the Full Bench observed in Sprigg:
“. . . we acknowledge that there is a speculative element involved in all such assessments. We believe it is a necessary step by virtue of the requirement of s.170CH(7)(c). We accept that assessment of relative likelihoods is integral to most assessments of compensation or damages in courts of law.”
[34] Lost remuneration is usually calculated by estimating how long the employee would have remained in the relevant employment but for the termination of their employment. We refer to this period as the “anticipated period of employment”. This amount is then reduced by deducting monies earned since termination. Only monies earned during the period from termination until the end of the “anticipated period of employment” are deducted. ...” 79 (endnotes omitted)
[98] In this case, the Commission is faced with an Applicant who is 51 years of age, who has worked for the direct Respondent for five years and for the wider Group for a further two years. The Applicant enjoyed her work; it enabled her to “do a job that I loved and was making a difference”. 80
[99] KB worked in connection with the delivery of services pursuant to the Respondent’s Deed with the Commonwealth of Australia. While the Deed is couched as continuing until 2020 it is by no means clear when it would expire. The Deed runs for the term of the “service period” together with any “extended service periods”, however the term of the current service period is not currently before the Commission and there is no evidence before the Commission about the matter of extended service periods. The endpoint of the Deed must therefore be, to some extent at least, a matter of speculation. While so, and bearing in mind the vagaries of Commonwealth service delivery arrangements, it would be imprudent to assume that the Deed continues indefinitely or anything like it and that a Deed entitled “jobactive Deed 2015-2020” would be unlikely to finish before 2020, but may well continue beyond that date, but perhaps only for up to a further year or potentially slightly longer.
[100] KB was therefore an employee who, all things being equal, likely had an expectation of continuing employment measured in years and not months. Certainly there is no evidence capable of being accepted that would lead to the conclusion that there were such wrinkles in her employment relationship that it would finish sooner rather than later.
[101] Relevant to the question of the anticipated period of employment could have been cogent evidence about whether or not there would be agreement from the Commonwealth for the continuation of KB’s work in connection with the services provided under the Deed, as would cogent evidence about the extent to which KB undertook work on duties other than those performed under the Deed or the availability or feasibility of redirection of KB to employment in other duties. Such evidence, had it been to the requisite standard, could have established a lesser rather than higher expectation about the endpoint of the anticipated period of employment. In any event such evidence as there is on the subject is basic and far from conclusive. The Commonwealth’s attitude is unknown. The extent to which KB undertook duties on things other than services provided under the Deed or the extent to which she could be redirected to other duties is uncertain. Nonetheless, these matters create some level of uncertainty about the length of the anticipated period of employment; in the circumstances I consider that the correct approach to deal with this uncertainty is to provide for a higher than usual deduction for contingencies (which is a matter dealt with below).
[102] Even had the Respondent taken the opportunity to resolve that since KB had not been candid with it about her conviction status and that such was in breach of its requirements, howsoever termed, and that consequently she should be issued with a warning to the effect that a further transgression in her employment would lead to dismissal, there is nothing within the evidence that I can see that would cause it to be found that KB was likely to be some sort of serial offender who would not heed a warning. There is nothing which would lead to the conclusion that had such a warning being issued there would be a further transgression on KB’s part within a few months with her being dismissed shortly thereafter.
[103] I am satisfied therefore, subject to the contingencies deduction made below, that the anticipated period of employment was likely to be at least to the conclusion of the Respondent’s Deed with the Commonwealth, being at some time in 2020. It follows that the Commission’s finding about the remuneration that KB would have received or would have been likely to receive had she not been dismissed would have been up to two year’s wages or more.
(d) the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal
[104] The Applicant submits that she has made efforts to mitigate her loss and is still looking for a new job however, given her age and the industry it is difficult to find suitable alternative employment. 81 During the course of proceedings the Applicant put forth that she had made a list of approximately 10 jobs that she intended to apply for; that she had updated her resume; that she had spoken to some of the companies on her list via email but had not had any responses.82
[105] The Respondent opposes these submissions putting forth that the Applicant has ‘undertaken little or no efforts to mitigate her loss…’ 83, submitting that during the course of the hearing that the Applicant conceded to only having looked for alternative employment for the past two weeks as well as undertaking ‘some research’ given she was eager to be reinstated to her previous employment.84
[106] Overall, though I consider KB’s efforts to obtain alternative employment and thereby mitigate the losses from her termination of employment to be tepid. While it may be said that her distress about losing her employment and the embarrassment connected with the circumstances in which it was lost impeded her capacity to undertake an active job search, the evidence shows that her efforts in this regard were really started only very close to the hearing, more than three months after the date of her termination of employment.
[107] In the circumstances it is appropriate to make a deduction from the compensation to be ordered for these matters. I consider that it is appropriate to make modest but not high deduction for this reason and will accordingly reduce the overall compensation by 5%.
(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
[108] Consideration of this criterion is a neutral matter in assessment of compensation, since the evidence before the Commission is that the Applicant was not employed at the time of the hearing, and had not been employed since leaving her employment with the Agency on 4 June 2018 and that potential employment between the date of the hearing and when this decision is issued was not likely.
(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
[109] There is no evidence before me in this regard, since at the time of the hearing the Applicant indicated that she was not in employment. Consequently, there is no need to make an adjustment to the compensation to be ordered for this criterion either.
(g) any other matter that the FWC considers relevant.
[110] The likely attitude of the Commonwealth to the continuation of employment of KB on work associated with the Deed is an obvious further relevant factor which may well have cast a future uncertainty over the continued employment of KB, at the time the agency came to consider that matter. There is no reliable evidence before me on this factor other than the contents of the Deed, set out above. It may be both inferred that the Commonwealth has a strict policy in relation to the integrity of people engaged in work associated with the Deed, but also that the Commonwealth being, amongst other things a model litigant, would be reasonable in its decision-making on the subject. In the absence of firm evidence on the subject, the matter is ultimately a matter of speculation on the Commission’s part. While the factor is something to be taken into account, for the reason that it increases the uncertainty of any continued period of employment of KB, the appropriate mechanism to deal with the subject is to provide for a higher than usual contingencies deduction.
[111] Section 392(3) of the Act requires that if the FWC is satisfied that misconduct of a person contributed to the employer’s decision to dismiss the person then the FWC must reduce the amount it would otherwise order by an appropriate amount on account of the misconduct.
[112] Although the Agency characterises the Applicant’s behaviour as serious misconduct, I have not found that it was. The Act however couches the requirement in s.392(3) as “misconduct” and, in the circumstances I am satisfied that there was indeed misconduct on KB’s behalf, with the misconduct being her failure to respond to her employer’s requests for information. It follows that I am required to consider a reduction being made to the compensation that would otherwise be ordered on account of that misconduct.
[113] Demonstrably the Applicant’s conduct has led to harm within the employment relationship. If nothing else, her former employer expressed the view at the time of her termination that it no longer trusted her sufficiently for her to continue to be employed. While I do not find that the conduct was sufficiently serious for her to be dismissed, I am satisfied that the conduct was sufficiently serious for there to have been some form of sanction imposed upon KB by the Respondent. The range of available sanctions within the Respondent’s workplace is not fully before me, however it may be speculated that those sanctions range from the issue of a warning, to potential demotion, or to some other sanction such as the withholding of workplace privileges or rewards, and the like.
[114] The absence of a valid reason for KB’s termination would have the Commission leaning to a lower deduction than may otherwise be the case. Similarly, the fact that harm within the employment relationship has already crystallised in the form of KB’s dismissal and especially the inability, through this decision, for her to continue working in a job she professes to love would lead to the conclusion that, to some extent the deduction for misconduct need not be as great as would otherwise be the case. After considering a range of possibilities for an appropriate deduction I consider it appropriate to reduce the order of compensation by one third.
[115] It is also appropriate that I consider an adjustment for “contingencies”.
[116] The reasoning associated with an adjustment for contingencies was referred to in the matter of Slifka v J W Sanders Pty Ltd. 85 With reference to consideration of the calculation of compensation for the loss of wages and bonus and the loss of long service leave (paragraphs (d), (e) and (g) in the passage below), North J found;
“In relation to the items referred to in pars (d), (e) and (g), some allowance should be made for the contingency that the applicant may not have served the whole of the remaining 2½ years as an employee of the Respondent, for reasons such as ill health, lawful termination by the Respondent, voluntary resignation, or closure of the Respondent’s business. None of these contingencies should attract a high allowance.
Finally, some allowance should be made for the fact that some part of the compensation will be received up to 2½ years earlier than if the applicant had completed his employment with the Respondent.
In all the circumstances, it appears to me that an appropriate reduction for contingencies relating to the future is 25 per cent. As the total of the items referred to in pars (d), (e) and (g) is $30,000, a reduction of 25 per cent brings these items to a total of $22,500.” 86
[117] The application of a factor for “contingencies” was considered by the Full Bench in Ellawala v Australia Post Corporation 87, with particular reference to the above passage from Slifka:
“[41] It is apparent from the above extract that his Honour was not seeking to lay down a discount for contingencies which would be generally appropriate. Rather he adopted a 25 per cent discount factor on the basis of the circumstances of the particular case before him.
[42] It would be open to the Commission to proceed on the basis that a certain percentage discount for contingencies was generally appropriate, subject to adjustment up or down to take account of an applicant's particular circumstances. But we are not necessarily convinced that a 25 per cent discount would be generally appropriate. We note that in Wynn v NSW Insurance Ministerial Council the High Court observed that the practice in New South Wales was to generally adopt a 15 per cent discount for contingencies.
[43] We note that in Slifka North J only applied the deduction for contingencies to prospective loss, that is loss occasioned after the date of the hearing. This approach has also been adopted in a number of first instance arbitrations by members of the Commission. As a matter of logic this approach has some appeal. A discount for contingencies is a means of taking account of the various probabilities that might otherwise affect earning capacity. At the time of hearing any such impact on an applicant's earning capacity between the date of termination and the hearing will be known. It will not be a matter of assessing prospective probabilities but of making a finding on the basis of whether the applicant's earning capacity has in fact been affected during the relevant period. But this matter was not raised before us and we were not directed to any evidence upon which we could make a finding as to whether Ms Ellawala's earning capacity was adversely effected by some event which took place in the period between her termination and the hearing of the matter at first instance.” 88 (original emphasis)
[118] After this analysis the Full Bench in Ellawala reduced its assessment of remuneration lost of 6 months remuneration by the amount of 15%, noting that the uncertainty surrounding ongoing employment, as a result of past performance had already been taken account of in its assessment of lost remuneration. 89
[119] As with any continuing employment relationship there would inevitably be some uncertainty associated with any proposition that KB’s employment with the Respondent would continue indefinitely. Had KB not been dismissed and instead issued with a warning, or had in the same case the Agency failed in bona fide negotiations with the Commonwealth about KB’s ongoing employment there would have been greater rather than lower uncertainty about the future of her employment. As referred to earlier stages of this decision, the uncertainties associated with the Commonwealth’s attitude to the continued employment of KB and the consequential increase in uncertainty about her anticipated period of employment warrant a higher than usual deduction to be made for contingencies. In the circumstances I consider it appropriate to reduce the compensation to be otherwise ordered by 25%.
CONCLUSION AND ORDERS
[120] After consideration of the foregoing issues, I find that the Applicant was dismissed and that it was unfair within the meaning of the Act.
[121] I find that reinstatement is not an appropriate remedy in this case, but that compensation is appropriate.
[122] The approach by the Fair Work Commission in these matters, and which I follow here, is to estimate the remuneration the employee would have received if they had not been dismissed (usually calculated by estimating how long the employee would have remained in the relevant employment but for the termination of their employment); deduct any remuneration earned by the employee since their dismissal until the end of the anticipated period of employment; deduct an amount for contingencies; 90 consider the impact of taxation and adjust the figure accordingly; and assess the figure against the compensation cap set by s.392(5).91
[123] In calculating compensation, Haigh v Bradken Resources makes it plain that any deductions from compensation to be ordered are to be made prior to the application of the compensation cap. 92 With my assessment of the anticipated period of employment being no less than two years and possibly more, any deductions to be made from the compensation order would leave the compensation above the compensation cap. My calculation of these matters is as follows:
|
Anticipated period of employment |
24 months |
|
1/3 deduction for misconduct |
– 8 months |
|
25 % deduction for contingencies |
– 6 months |
|
5% deduction for mitigation |
– 1.2 months |
|
TOTAL REMAINDER |
8.8 MONTHS |
[124] In KB’s circumstances the applicable compensation cap is the total amount of remuneration she received during the 26 weeks immediately before the dismissal (s.392(6)). Since the calculated compensation is above the compensation cap, my order will be for a payment equivalent to the compensation cap.
[125] KB’s wages or salary at the time of her dismissal are referred to in the Respondent’s Employer Response Form as having been $63,653.99 per year. 93 It is unclear whether the amount referred to includes superannuation, or whether such payments are in addition. My order for compensation will be for KB to be paid the total amounts, including superannuation, which she received during the 26 weeks immediately before the dismissal. Such compensation as is required to be paid to KB will be taxed according to law.
[126] The order to be made by the Commission will therefore be for the Respondent to pay to the Applicant within 14 days of the date of this decision, an amount equivalent to the total amount of remuneration she received, including superannuation, during the 26 weeks immediately before her dismissal, with the payment to be taxed according to law.
COMMISSIONER
Appearances:
Mr G. Lake of Counsel, instructed by McDonald Murholme for the Applicant.
Mr B. Cooper, paid agent for the Respondent.
Hearing details:
2018.
Melbourne:
27 September.
Printed by authority of the Commonwealth Government Printer
<PR702240>
1 Exhibit A1, Witness Statement of KB, dated 13 August 2018, [21].
2 Transcript, PN550-PN555.
3 Ibid, PN72
4 Ibid, [8] – [11].
5 Exhibit A1, [8].
6 Ibid, [11].
7 Exhibit R2, Witness Statement of BW, dated 3 September 2018, Attachment MA-2.
8 Transcript, PN63.
9 Exhibit A1 [14].
10 Exhibit R2, [19].
11 Exhibit A1, [15].
12 Exhibit R2, Attachment MA-11.
13 Exhibit A1, [20].
14 Ibid, [22].
15 Ibid.
16 Exhibit R2, [24].
17 Ibid, [25].
18 Ibid, [16].
19 Ibid, Attachment MA-3.
20 Ibid, Attachment MA-4.
21 Ibid, [27], Attachment MA-6.
22 Exhibit A1, [23].
23 Exhibit R2, [30].
24 Ibid, Attachment MA-7.
25 Ibid.
26 Ibid, Attachment MA-8.
27 Ibid, Attachment MA-9.
28 Ibid, Attachment MA-13.
29 Ibid, Attachment MA-18.
30 Ibid, [58] – [61].
31 Exhibit A1, [35].
32 Exhibit R2, Attachment MA-19.
33 Form F3, Employer Response, dated 20 July 2018, pg. 7.
34 Ibid, pg. 8
35 Ibid, pg. 9.
36 Titan Plant Hire Pty Ltd v Shaun Van Malsen [2016] FWCFB 5520.
37 Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371 at 373.
38 Edwards v Giudice [1999] FCA 1836; (1999) 94 FCR 561 at [6]-[7].
39 Sharp v BCS Infrastructure Support Pty Limited [2015] FWCFB 1033 at [32]; Annetta v Ansett Australia (2000) 98 IR 233 at [9]-[10].
40 Sharp v BCS Infrastructure Support Pty Limited [2015] FWCFB 1033 at [32]; He v Lewin [2004] FCAFC 161; (2004) 137 FCR 266 at [15].
41 Sharp v BCS Infrastructure Support Pty Limited [2015] FWCFB 1033 at [33]-[34]; O'Connell v Wesfarmers Kleenheat Gas Pty Ltd [2015] FWCFB 8205 at [22]-[23].
42 Selvachandran v Peteron Plastics (1995) 62 IR 371, pg.373.
43 Exhibit R2, Attachment MA-5.
44 Ibid, Attachment MA-3.
45 Ibid.
46 Transcript, PN584.
47 Exhibit R2, Attachment MA-3 & MA-4.
48 Ibid, Attachment MA-3.
49 [2016] FCAFC 160.
50 (1995) 62 IR 200.
51 Respondent’s Closing Submissions, dated 19 October 2018, [27] – [29].
52 Exhibit A1, [35].
53 Exhibit R2, Attachments MA-19
54 Chubb Security Australia Pty Ltd v Thomas (unreported, AIRCFB, McIntyre VP, Marsh SDP, Larkin C, 2 February 2000) Print S2679 [41].
55 Exhibit R2, [41]-[42]; Transcript PN298.
56 Exhibit R2, [50] – [52].
57 Transcript, PN689-PN693.
58 Explanatory Memorandum to the Fair Work Bill 2008, [1542].
59 Exhibit R1, [60].
60 Applicant Outline of Submissions, dated 13 August 2018, [41].
61 Form F3 Employer Response, dated 20 July 2018, Q1.7.
63 Ibid, at [23] - [24].
64 Ibid, at [27] - [28].
65 Respondent’s Final Written Submissions, dated 19 October 2018, [71].
66 Ibid, [77].
67 Ibid, [78].
68 Ibid, [79].
69 Ibid, [80].
70 Ibid, [86]; Transcript PN 284
71 Ibid, [87](ii)
72 Ibid, Annexure A, cl 45.3.
73 Ibid, [71].
74 Mahoney v White [2016] FCWFC 160.
75 Respondent’s Final Written Submissions, dated 19 October 2018, Attachment A.
76 Applicant Closing Submissions, dated 12 October 2018, [8](b).
77 Respondent’s Closing Submissions, dated 19 October 2018, [58].
78 Ibid, [87](i).
79 Ellawala v Australian Postal Corporation, AIRCFB (2000), Print S5109, at [33] and [34].
80 Transcript, PN73.
81 Exhibit A1, [38]; Applicant’s Closing Submissions, dated 12 October 2018, [77].
82 Transcript PN89 – PN92.
83 Respondent Closing Submissions, dated 19 October 2018, [87].
84 Transcript, PN89 - PN91.
85 (1995) 67 IR 316
86 Ibid, p.328
87 [2000] AIRC 1151, Print S5109,
88 Ibid, at [41] - [43]
89 Ibid, at [71] - [74]
90 See Slifka v J W Sanders Pty Ltd, (1995) 67 IR 316.
91 See Sprigg v Paul’s Licensed Festival Supermarket (1998) 88 IR 21, 32, and Ellawala v Australian Postal Corporation (unreported, AIRCFB, Ross VP, Williams SDP, Gay C, 17 April 2000) Print S5109 [33].
92 Haigh v Bradken Resources Pty Ltd [2014] FWCFB 236, [12].
93 Form F3 Employer Response, dated 20 July 2018, Q1.5.