| [2019] FWC 6999 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Mitchell Standen
v
NCH Software Pty Ltd
(U2019/6878)
DEPUTY PRESIDENT SAUNDERS |
NEWCASTLE, 10 OCTOBER 2019 |
Application for an unfair dismissal remedy – dismissal harsh, unjust and unreasonable – compensation ordered.
Introduction
[1] Mr Mitchell Standen was initially employed by NCH Software Pty Ltd (NCH) from February 2011 until late December 2013, at which time he left of his own initiative. In January 2015, Mr Standen made contact with Mr Peter Lupton, the CEO of NCH, and enquired about returning to work for NCH. Mr Lupton responded in a positive way to Mr Standen’s enquiry, which led to Mr Standen commencing a second period of employment with NCH on 16 February 2015. Mr Standen remained employed by NCH as a Software Developer until his dismissal on 31 May 2019.
[2] On 21 June 2019, Mr Standen filed an unfair dismissal application against NCH (Application) in the Fair Work Commission (Commission). Mr Standen contends that his dismissal was harsh, unjust and unreasonable. NCH denies those allegations and says it was justified in dismissing Mr Standen for gross poor performance.
[3] I decided that it was appropriate to hold a determinative conference rather than a hearing in this matter. In making that decision, I had regard to the views of the parties, together with the fact that a determinative conference would be the most effective and efficient way to resolve this matter. The determinative conference was conducted in Newcastle on 24 September 2019. Mr Standen represented himself. NCH was represented by its Office Manager, Ms Karen Edmunds.
[4] Mr Standen gave evidence at the determinative conference. He also tendered a significant amount of documentary material in support of his case. NCH adduced evidence from Ms Edmunds and Mr Tony Nulsen, NCH Development Coordinator, who was Mr Standen’s supervisor. NCH also tendered documents in support of its case.
Relevant facts
[5] NCH is a software development company; it sells the software it develops. NCH is based in Canberra, but also has offices in other countries. NCH engages a number of Software Developers, some of whom are based in Canberra, but others work remotely from different locations around the world.
[6] Mr Standen was based in Canberra when he worked for NCH up until October 2015. In September 2015, Mr Standen informed Mr Lupton by email that he intended to move to Newcastle, primarily because he missed his family. At that time, Mr Standen believed he would need to resign from NCH in order to move back to Newcastle. Mr Lupton responded to Mr Standen’s email, expressing a desire to ignore Mr Standen’s email and hoping Mr Standen had changed his mind. In the week commencing 21 September 2015, after it had become apparent that Mr Standen had not changed his mind about moving back to Newcastle, Mr Lupton called Mr Standen into his office and proposed that Mr Standen should continue working for NCH, but do so remotely from home in Newcastle. After sleeping on the offer, Mr Standen accepted it the next day. I accept Mr Standen’s evidence that Mr Lupton said to him words to the effect, “We’ll try it out for a few months and see how it goes”.
[7] Mr Standen used several days of his accrued annual leave to transition back to Newcastle and commenced work remotely from Newcastle on 6 October 2015. Mr Standen continued working remotely from Newcastle until his dismissal on 31 May 2019. Given that Mr Standen worked remotely for NCH for a little more than 3.5 years prior to his dismissal, there can be no doubt that the trial period for working remotely had well and truly concluded a significant period of time before Mr Standen’s dismissal in May 2019.
[8] Mr Standen had regular Skype discussions with Mr Nulsen in relation to the work he was undertaking, and planned to undertake, from his remote location. Mr Standen also sent detailed descriptions of the work he was doing to Mr Nulsen. 1
[9] In November 2016, Mr Nulsen verbally counselled Mr Standen about the appropriate process to follow in the event of him being absent from work. Mr Standen was also counselled in 2017 and 2018 in relation to missing hours from his time recording.
[10] In February 2018, NCH began sending Mr Standen regular metric reports so that he could see various measures of his performance in comparison to other Software Developers engaged by NCH.
[11] On 4 June 2018, Mr Lupton sent an email to Mr Standen:
“Hi Mitchell
We have had a few meetings about what next tasks to assign you. You know from your discussions with Tony we are concerned about the lack of productivity over the last 6 months or so.
We really can’t give you junior easy to fix UI bugs forever and have to push you to take on more. You need to do something at a more expert level by now.
We feel the best area is in video and image effects. So I am going to ask Sam to assign you those sorts of tasks.
But it is very important you take them on with enthusiasm and are willing to push yourself a bit outside your comfort zone. I mentioned to Sam, one of the excitements of being a developer is being able to push yourself to understand new areas of tech and we want you to take it on with that sort of thinking.
Regardless of the tasks, it’s essential we find a way where with you working from home you are adding a lot of value to VideoPad every single day.
Please cc me on daily reports going forward.
Thanks.
Peter Lupton NCH Software”
[12] Mr Standen denies that he was only being given “easy to fix UI bugs” at the time he received this email from Mr Lupton. Mr Standen identified in his evidence a number of tasks and assignments he was working on, which he says did not fall into this category. I accept Mr Standen’s evidence in this regard. It was supported by Mr Nulsen’s acceptance, at the conclusion of his oral evidence, that a number of the tasks Mr Standen was working on at the time he received the 4 June 2018 email were not “easy to fix UI bugs”.
[13] Mr Nulsen sent an email to Mr Standen on 27 August 2018 with the subject heading “Active hours ratio to paid hours for pay period 9 to 24 August 2018”:
“Hi Mitchell
Your active hours to paid hours ratio is low at 85%. Developers are expected to keep their active ratio above 90%.
Why is it low and what can be done to improve?
Thanks
Tony”
[14] The active hours percentage used by NCH is the percentage of time an employee has been actively working on their computer compared to their paid hours. The measure excludes days off, so that it is a measure of an employee’s active time during the period they are expected to be working. Because Software Developers work almost exclusively on a computer, NCH expects the active hours percentage for a Software Developer to be high.
[15] Mr Standen gave evidence, which I accept, that the 27 August 2018 email was the first time he recalls being asked about his active hours percentage, and in a subsequent Skype conversation with Mr Nulsen on about 29 August 2018, Mr Standen informed Mr Nulsen that he was not sure what would be causing the 85% active hours result.
[16] Mr Nulsen had a discussion with Mr Standen over Skype on 12 September 2018. I accept that Mr Nulsen discussed with Mr Standen his low active hours percentage, which Mr Nulsen believed was due to a high idle time on the part of Mr Standen. Mr Nulsen also discussed with Mr Standen ways he could improve his focus and informed him that without improvement his job was on the line. Much of Mr Nulsen’s evidence in relation to this discussion is supported by an email he sent to Ms Alysha Hart, NCH Product Manager, on 13 September 2018:
“Hi Alysha
His low % activity is due to a high Idle time. So, we discussed ways he could improve his focus such as shut his office door to the rest of the house, divide his day into blocks of time, etc. We also covered his slide back into working short hours after he had been improving well.
Will this change his work habits; I do not really know. I did tell him that without improvement his job is on the line.
Tony”
[17] On 5 November 2018, Ms Edmunds counselled Mr Standen about being absent from work on sick leave without informing anyone in the NCH office.
[18] On 13 November 2018, Mr Nulsen sent an email to Mr Standen:
“Hi Mitchell
The same old story. Please take a look at what you are doing to get such a high Idle hours. We will be discussing in tomorrow’s Skype meeting. Please be prepared to tell me how you will start resolving this problem.
Regards
Tony”
[19] On 28 November 2018, Mr Nulsen had a discussion with Mr Standen over Skype in relation to Mr Standen’s work performance. Later that day, Mr Nulsen sent an email to Mr Standen with the subject “To continue working from home”:
“Hi Mitchell
We have discussed many times, as we did again today, your lack of productivity compared with the metrics of other developers. To continue to be allowed to work from home, your computer activity metrics need to meet or exceed the normal metrics we see for someone working in the office. The average for the Canberra office over the last 5 months is 93% on computer active hours per paid for hours. If you cannot achieve this while working from home you will need to return to working from the Canberra office.
As we have also discussed many times, your unusually high Idle time is the main cause of your low active hours per paid hours. If you halved your Idle time and worked a full week, you would be well on your way to achieving, if not exceeding, the average Canberra active hours per paid hours.
Regards
Tony”
[20] Mr Standen contends that his active hours percentages were within reasonable limits. In support of this contention, he points to documents which show that:
• for the month of July 2018, there were six NCH Software Developers with active hours percentages lower than Mr Standen;
• in November 2018, being the next developer metrics document Mr Standen received after the July 2018 metrics were sent to him, there were four to five NCH Software Developers either matching Mr Standen’s active hours percentage or within one to two percentage points of his; and
• there were sometimes dozens of NCH Software Developers with active hours percentages lower than 93%.
[21] In any event, Mr Standen responded to the 28 November 2018 email by stating that he had “received the email and will be working on this issue”. Mr Standen then took immediate steps to rectify the issue. In particular, at Mr Nulsen’s suggestion, Mr Standen undertook voluntary overtime to improve his active hours percentage, so as to meet or exceed the 93% target set for him. Mr Standen’s active hours percentages for the months of December 2018, January 2019, February 2019, and March 2019 were 95%, 95%, 93% and 100% respectively.
[22] On 2 January 2019, Mr Nulsen reminded Mr Standen to enter the leave he had taken over the Christmas break into the NCH Flexistation timesheet recording system.
[23] In the period from the commencement of 2019 until late April 2019, Mr Standen continued to send regular email reports to Mr Nulsen (cc Mr Lupton, Ms Hart and Mr Sam Zhang, who was responsible for assigning tasks to Mr Nulsen) detailing the work he had completed and the work he planned to undertake. 2 There is no evidence of any occasion during 2019 when Mr Nulsen, or any other person from NCH, responded to an email report from Mr Standen with an email or other written communication suggesting Mr Standen had taken too long to complete a particular task or was not working in a productive manner.
[24] During 2019, Mr Standen also continued to have his weekly Skype meetings with Mr Nulsen. During those meetings, Mr Standen discussed with Mr Nulsen the work he had undertaken in the previous week and the work he was planning to undertake in the following week. They also discussed tasks which Mr Standen had planned to complete but not had not been able to do so in the prior week. In respect of those tasks, Mr Standen gave Mr Nulsen detailed technical explanations as to why he had not been able to complete particular work. They also discussed Mr Standen contacting other NCH Software Developers to obtain advice and guidance from them in relation to the tasks he was having difficulty with. I accept Mr Standen’s evidence that he did seek advice and guidance from other NCH Software Developers from time to time, and on several occasions they did not have the knowledge or expertise to solve the tasks assigned to Mr Standen. 3
[25] During 2019, NCH continued to send Mr Standen the Software Developer Performance metrics each month. 4 Those metrics showed that Mr Standen was meeting or exceeding the 93% active hours percentage target each month.
[26] Mr Standen did not understand a number of the metrics in the Software Developer Performance metrics sent to him each month. That is not surprising given that NCH did not take any steps to explain the metrics to Mr Standen.
[27] I accept Mr Standen’s evidence that the metrics do not, of themselves, provide a good indication of how much work a Software Developer is undertaking or how productively a particular Software Developer is working. That is because the metrics do not reflect in a reliable way the differences between work being undertaken by one Software Developer compared to another. The complexity of such work varies, as do the problems encountered when undertaking particular tasks. I accept the evidence given by Mr Standen and Mr Nulsen that some tasks assigned to Software Developers were vague and/or extremely large and should have been broken down into many smaller items. Further, NCH uses a task prioritise system known as Programtrack which sorts the tasks assigned to a Software Developer into a particular order, with the quicker tasks assigned to the top of the list and longer, more difficult tasks assigned to the bottom of the list. In the result, when a series of tasks are first assigned to a Software Developer, they are often able to complete a number of the tasks at the top of the list quickly, but then take much more time to complete the more difficult task towards the bottom of the list. Mr Standen says this is precisely what happened to him in 2018 and 2019. In particular, before the change was made in June 2018 to assign new tasks to Mr Standen on a different project, he was working on more difficult tasks, with the result that the number of items he completed each month in the first half of 2018 was low. However, once the new tasks were assigned to Mr Standen in June 2018, the number of items he completed in the months of July, August and September 2018 (21, 40 and 20 respectively) was high because he was working on the quicker tasks at the top of his list. After he completed those tasks, Mr Standen tackled the more difficult tasks and the number of items completed by him each month reduced to 5 for October 2018, 14 for November 2018, 0 for January 2019, 4 for February 2019 and 1 for March 2019.
[28] I accept Mr Standen’s evidence that Mr Nulsen did not discuss with Mr Standen in 2019 any of the Software Developer Performance metrics, other than active hours. I make that finding for the following reasons.
[29] First, given the email communications sent to Mr Standen in late 2018 in relation to his active hours percentages and the requirement for him to meet the target of 93%, if there had been any discussion between Mr Nulsen and Mr Standen about Mr Standen not meeting NCH’s expectations in relation to other performance metrics, it is reasonable to expect that specific targets would have been set for Mr Standen to meet in relation to those metrics and they would have been communicated to Mr Standen in writing. There is no evidence that such specific targets were set or communicated in writing to Mr Standen.
[30] Secondly, in light of the speed with which Mr Standen acted from late November 2018 to meet the active hours percentage target set for him, it is reasonable to expect that Mr Standen would have reacted in a similar fashion if targets for other metrics had been set for him. That Mr Standen did not focus on any particular metric, save for active hours, is consistent with no such targets being set for him.
[31] Thirdly, the absence of any evidence of any response to Mr Standen’s regular email reports in 2019 supports Mr Standen’s contention that he did not discuss with Mr Nulsen in 2019 any of the Software Developer Performance metrics, other than active hours.
[32] Fourthly, the only evidence given by Mr Nulsen in his witness statement in relation to his weekly Skype meetings with Mr Standen in 2019 was as follows:
“The applicant and I continued the weekly Skype meetings as mentioned in paragraph 2 and referred to elsewhere in this statement, with the applicant’s lack of productivity, the need to improve and possible ways to improve being the main topic. As simple issues, such as lack of hours, were eliminated as possible low productivity causes the emphasis in our weekly meetings shifted to his competence and the level of support he needed from senior developers.”
[33] Although I accept that in 2019 Mr Nulsen discussed with Mr Standen tasks which Mr Standen had not been able to complete in the period of time he had planned or hoped, I do not accept Mr Nulsen’s written or oral evidence that in 2019 he spoke to Mr Standen about, or challenged, his competency or productivity as a Software Developer. Mr Standen denied that Mr Nulsen discussed his productivity or competence with him in 2019. I prefer Mr Standen’s evidence over that given by Mr Nulsen in relation to this issue for the following reasons.
[34] First, no evidence was given by Mr Nulsen of any particular discussion he had with Mr Standen in which Mr Nulsen spoke about a particular task or activity which he contended Mr Standen should have been able to complete in a shorter period of time or was not able to complete. In addition, given the detailed nature of Mr Standen’s evidence, his obvious pride in his abilities as a Software Developer, and the steps he had taken to improve his active hours percentages, I expect that Mr Standen would have provided detailed evidence of his response to Mr Nulsen if such a matter had been raised with him. The absence of such evidence supports Mr Standen’s denial of such matters being raised with him.
[35] Secondly, no evidence was adduced of any written communication to Mr Standen in 2019 concerning his productivity or competence. Having regard to the emails sent to Mr Standen in 2018 in relation to those topics, it is reasonable to expect there would have been written communications sent to Mr Standen in 2019 about those matters if they had been raised with him in discussions with Mr Nulsen.
[36] Thirdly, the absence of any evidence of any response to Mr Standen’s regular email reports of the work he was doing in 2019 supports Mr Standen’s denial that Mr Nulsen discussed his competence or productivity with him in 2019.
[37] On 28 April 2019, Mr Nulsen had an informal meeting with Mr Lupton about Mr Standen’s alleged “low productivity and what was left for us to try and improve it”. 5 Mr Nulsen and Mr Lupton concluded that Mr Standen “needed a level of support not amenable to working remotely from the office”.6 Later that day, Mr Nulsen sent an email to Mr Standen:
“Hi Mitchell
As we have discussed previously, this trial with you working from home is not working out. Consequently, to continue with NCH Software, we require you to return to work in the Canberra office in 4 weeks.
We look forward to you re-joining us here.
Regards
Tony”
[38] The reference in Mr Nulsen’s email of 28 April 2019 to Mr Standen working from home on a “trial” basis was, in my assessment, disingenuous. At the time that email was sent, Mr Standen had been working remotely from his home for just in excess of three and a half years. I accept Mr Standen’s unchallenged evidence that, other than in the initial period of him working remotely, the concept of a trial period was never raised again. 7 In those circumstances, no reasonable person would accept that Mr Standen was continuing to work remotely on a trial basis three and a half years later.
[39] I also accept Mr Standen’s unchallenged evidence that, at the time Mr Nulsen’s email of 28 April 2019 was sent to Mr Standen, the Software Developer performance metrics for April 2019 were not available, with the result that the decision to require Mr Standen to return to Canberra was made at a time when Mr Standen’s active hours percentage for the most recent month (March 2019) was 100%.
[40] The only information communicated to Mr Standen about the reason for the requirement that he return to work in the Canberra office was that his working from home was “not working out”.
[41] In early May 2019, Mr Standen made enquiries about moving to Canberra and the cost of doing so. Mr Standen informed Mr Nulsen that he was looking into accommodation in Canberra.
[42] On 17 May 2019, Mr Nulsen sent an email to Mr Standen:
“Hi Mitchell
Peter asked me to remind you that your working remotely is really not working and we are definite about requiring you to return to the office to continue working with NCH Software. This is the end of week 3, so what is your plan? Have you tried any of those things we talked about last Wednesday.
Regards
Tony”
[43] On 20 May 2019, Mr Standen responded to Mr Nulsen’s email:
“Heya Tony,
At the end of the day, I would like to continue working for NCH.
It is not possible for me to agree to this requirement of moving to Canberra.
I have been working remotely now for a very long time, and in addition to having ongoing financial obligations, this would entail a whole lot of other ongoing unavoidable costs of living that I’m sure you’re more than aware of.
It’s just a fact that unless I was earning considerably more, it would be extremely irresponsible and harmful to put myself in such a position.”
[44] Later on 20 May 2019, Mr Nulsen sent a further email to Mr Standen:
“Hi Mitchell
As was noted on 28 April 2019, you’re working from home has not be [sic] working for the company at all. We offered you the opportunity to continue with NCH in the Canberra office. It is your choice whether to return to the Canberra office or not but if you do not return then we would appreciate your resignation.
Regards
Tony”
[45] After receiving the email dated 20 May 2019, Mr Standen made it clear to Mr Nulsen that he would not be resigning from his employment with NCH.
[46] On 22 May 2019, Ms Edmunds sent an email to Mr Standen:
“Hi Mitchell,
In accordance with the notice we provided you on 28th April 2019 concerning your return to the Canberra office and your subsequent decision not to return to the Canberra office, your employment with NCH where will be terminated. We would like you to continue to work until Friday 31st May 2019.
You will be paid your accrued entitlements and any outstanding pay up to and including your last day of employment and superannuation on the 15th June 2019.
Please reply to this email to advise you understand or contact me if you have any queries.
Regards,
Karen Edmunds
Office Manager”
[47] On 23 May 2019, Mr Standen responded to Ms Edmunds’ email:
“Heya Karen,
While I am not particularly fond of this decision, I have received your email, and I believe I understand your stated intentions…”
[48] In late May 2019, Mr Standen had his final weekly Skype discussion with Mr Nulsen. Mr Standen discussed a number of items that he had been working on. Mr Standen gave unchallenged evidence, which I accept, that during this discussion Mr Nulsen informed him that: 8
(a) everything Mr Standen was working on was a “To Do” item;
(b) Mr Nulsen had not realised how many terrible “To Do” items Mr Standen had been given, and expressed sympathy when discovering the problems surrounding their exceptionally vague and overambitious descriptions;
(c) Mr Nulsen was aware that there were many items on Mr Standen’s “track list” which, apart from being old or out of date, were extremely large, and should have been broken down into many smaller items; and
(d) Mr Nulsen understood that most of the items Mr Standen had been assigned were like that.
[49] “To Do” items are a specific category of tasks which are assigned to NCH Software Developers, such as features that need to be added to, or things that need to be changed in, particular software. “To Do” items often take much longer to complete than, for example, another type of task known as “Bugs”, which NCH uses to describe bugs in software that need to be fixed by Software Developers.
[50] During his oral evidence, Mr Nulsen said that he did not particularly remember his last Skype meeting with Mr Standen. In addition, when Mr Nulsen was asked whether during his final Skype meeting with Mr Standen:
(a) he discussed with Mr Standen a number of the items in Mr Standen’s “track list”, Mr Nulsen said “that would be common, yes”;
(b) he noted that every other item in Mr Standen’s “track list” was a “To Do” item, Mr Nulsen said “quite possible, yes”;
(c) he commented on a couple of things that had been problems for a very long time such as testers adding items which are just repeats of existing items and items staying in the list and not being worked on for literally years due to their extremely low priority, Mr Nulsen said “quite possibly, yes”;
(d) he noted that he was aware that the description and complexity of a number of items themselves were incredibly inconsistent to the point that some items consisted of what should have been spread out into dozens of smaller items, Mr Nulsen said “some big items probably would have been better off broken down, yes”; and
(e) he generally acknowledged that all of the items that Mr Standen had been assigned were like this, Mr Nulsen said “I do not recall that at all. It is possible”.
[51] I accept Mr Standen’s unchallenged evidence that, in the period after he was given notice of termination but before his dismissal took effect, Mr Nulsen offered to Mr Standen to be a referee for any job applications he made in the future.
[52] Mr Standen continued working for NCH remotely until his dismissal took effect at the end of business on 31 May 2019. NCH paid Mr Standen his accrued entitlements to annual leave but did not make a payment in lieu of notice to him.
[53] NCH provided Mr Standen with an Employment Separation Certificate dated 12 June 2019 and signed by Ms Edmunds. The reason for separation stated on the Employment Separation Certificate was “employee ceasing work voluntarily” and “employee was asked to be [sic] back to Canberra office but decided not to return”. Mr Standen did not cease work with NCH voluntarily. He was dismissed, as is plainly evident from Ms Edmunds’ email dated 22 May 2019.
[54] I accept Mr Standen’s evidence that his access to Centrelink payments was adversely impacted as a result of NCH stating that he had ceased work voluntarily on his Employment Separation Certificate. Ms Edmunds gave evidence, which I accept, that she did not act maliciously in causing the Employment Separation Certificate to be completed with an incorrect reason for separation; she thought it would be mean to state “gross poor performance” as the reason for separation on the Employment Separation Certificate.
[55] Section 396 of the Fair Work Act 2009 (Cth) (Act) sets out four matters which I am required to decide before I consider the merits of the Application.
[56] There is no dispute between the parties and I am satisfied on the evidence that:
(a) the Application was made within the period required in s 394(2) of the Act;
(b) Mr Standen was a person protected from unfair dismissal;
(c) the Small Business Fair Dismissal Code did not apply to Mr Standen’s dismissal; and
(d) Mr Standen’s dismissal was not a genuine redundancy.
Was the dismissal harsh, unjust or unreasonable?
[57] Section 387 of the Act requires that I take into account the matters specified in paragraphs (a) to (h) of the section in considering whether Mr Standen’s dismissal was harsh, unjust and/or unreasonable. I will address each of these matters in turn below.
[58] It is necessary to consider whether the employer had a valid reason for the dismissal of the employee, although it need not be the reason given to the employee at the time of the dismissal. 9 In order to be “valid”, the reason for the dismissal should be “sound, defensible and well founded”10 and should not be “capricious, fanciful, spiteful or prejudiced.”11
[59] The Commission will not stand in the shoes of the employer and determine what the Commission would do if it was in the position of the employer. 12 The question the Commission must address is whether there was a valid reason for the dismissal related to the employee’s capacity or conduct (including its effect on the safety and welfare of other employees).13 Capacity is the employee’s ability to do the job as required by the employer.14 Capacity also includes the employee’s ability to do the work they were employed to do.15
[60] The appropriate test for capacity is not whether the employee was working to their personal best, but whether the work was performed satisfactorily when looked at objectively. 16
[61] It is not enough for an employer to establish that it had a reasonable belief that the termination was for a valid reason. 17 The Commission must make a finding, on the evidence provided, whether, on the balance of probabilities, the conduct occurred or the performance was satisfactory.18
[62] NCH contends that it had a valid reason for the termination of Mr Standen’s employment due to his gross poor performance. In final oral submissions, NCH clarified that the gross poor performance on which it was relying to substantiate a valid reason for termination was the fact that Mr Standen took too long to perform the tasks assigned to him. NCH did not dismiss Mr Standen for his delays in providing reports of his work to NCH. In addition, NCH did not dismiss Mr Standen simply because he refused to return to work in Canberra. NCH submits that “the offer to return to working in our [Canberra] office was as a genuine attempt to find an alternative to an otherwise inevitable termination due to gross poor performance working at home”. 19
[63] On the basis of the evidence adduced in these proceedings, I am not satisfied that Mr Standen took too long to perform the tasks assigned to him or otherwise failed to perform satisfactorily in his role as a Software Developer for NCH. I make those findings for the following reasons.
[64] First, as soon as Mr Nulsen set an active hours percentage target for Mr Standen to achieve, Mr Standen took immediate steps to work unpaid overtime, so as to ensure he would meet or exceed that target and kept up his performance on that score for the next four months.
[65] Secondly, once the active hours percentage issue is put to one side, as it must be on the basis that Mr Standen acted swiftly to address the matter, focus then turns to whether I am satisfied, on the balance of probabilities, by the evidence adduced in these proceedings that Mr Standen took too long to perform the tasks assigned to him. NCH did not seek to make good that contention by adducing evidence from a suitably qualified person who had actually reviewed a number of tasks assigned to Mr Standen and could give reasoned and considered evidence as to the amount of time it would take a reasonably competent Software Developer to undertake those tasks. Nor did NCH identify or adduce evidence of particular tasks assigned to Mr Standen which it says he took too long to complete or could not complete and explain, in relation to each such task, what a reasonable period of time would have been to undertake the task. Instead, NCH relied primarily on a comparison of performance metrics (the number of “To Do” items and “Bugs” completed each month) between Mr Standen and other NCH Software Developers, particularly the three “example” employees referred to in NCH’s written submissions. 20 However, for the reasons given above, those performance metrics do not, of themselves, provide a sound or fair basis on which to assess how much work a NCH Software Developer is undertaking or how productively such work is being performed. More information is required to undertake such a comparison, such as the nature and complexity of the work, which bears upon how long it would take a reasonably competent Software Developer to undertake the work. It is clear that Mr Nulsen and Mr Lupton believed that Mr Standen was not working productively, but there is no proper basis for a finding on the evidence adduced in these proceedings that Mr Standen took too long to perform the tasks assigned to him.
[66] Thirdly, the fact that many of the “To Do” items in Mr Standen’s list of tasks in 2019 were vague and should have been broken down into smaller items likely contributed to the perception on the part of Mr Nulsen and Mr Lupton that Mr Standen was not working productively. Those matters were within the control of NCH.
[67] Fourthly, Mr Standen provided his supervisor, Mr Nulsen, and other relevant NCH managers, Mr Lupton, Mr Zhang and Ms Hart, with detailed email reports on a regular basis about the work he was undertaking. There is no evidence of any written response challenging or criticising Mr Standen’s work, or rate of work, as described in those reports. Nor was any such criticism raised with Mr Standen orally by Mr Nulsen in 2019.
[68] Fifthly, there can be no real challenge to Mr Standen’s ability to undertake the work required of him as a Software Developer. If NCH had any serious concerns on that front, they would not, in my assessment, have (a) re-employed him in 2015, (b) retained him as an employee in September 2015 when he informed NCH that he needed to move back to Newcastle, (c) allowed him to work remotely from October 2015, or (d) asked him in April 2019 to move back to Canberra and work from NCH’s offices. Similarly, Mr Nulsen’s offer to act as a referee for Mr Standen provides some support for his competence as Software Developer.
[69] Sixthly, it was not unreasonable in all the circumstances for Mr Standen not to agree to relocate back to Canberra, particularly having regard to his personal and economic circumstances and the fact that he had been working remotely from Newcastle for a little more than 3.5 years at the time the request was made.
[70] For the reasons given, I am not satisfied on the evidence adduced that there was any sound, defensible or well-founded reason for Mr Standen’s dismissal related to his capacity or conduct. Accordingly, there was no valid reason for Mr Standen’s dismissal within the meaning of s 387(a) of the Act.
[71] It is necessary to consider and take into account whether Mr Standen was notified of any valid reason(s) for his dismissal and whether he was given an opportunity to respond to any reason(s) related to his capacity or conduct.
[72] In Crozier v Palazzo Corporation Pty Ltd, 21 a Full Bench of the Australian Industrial Relations Commission dealing with a similar provision of the Workplace Relations Act 1996 (Cth) stated the following:22
“As a matter of logic procedural fairness would require that an employee be notified of a valid reason for the termination before any decision is taken to terminate their employment in order to provide them with an opportunity to respond to the reason identified. Section 170(3)(b) and (c) would have very little (if any) practical effect if it was sufficient to notify employees and give them an opportunity to respond after a decision had been taken to terminate their employment. Much like shutting the stable door after the horse has bolted.”
[73] The criterion concerning whether an employee was provided with an opportunity to respond to any reason for their dismissal relating to their conduct or capacity should be applied in a common sense way to ensure the employee is treated fairly and should not be burdened with formality. 23
[74] In April and May 2019, NCH informed Mr Standen that his working from home was not “working out”, but he was not given any explanation as to why NCH believed that to be the case. The only communications to Mr Standen about his productivity took place in 2018, when he was told that he needed to meet the 93% active hours percentage, which he did. Mr Standen was not told during 2019 that he was taking too long to complete tasks or was otherwise being unproductive.
[75] The decision to terminate Mr Standen’s employment was communicated to him in an email from Ms Edmunds dated 22 May 2019. That email referred to the email sent to Mr Standen on 28 April 2019 in which he was informed that “this trial with you working from home is not working out” and Mr Standen’s decision not to return to the Canberra office. The 22 May 2019 email did not provide any other information about the reason for Mr Standen’s dismissal. Nor was there any other communication to Mr Standen prior to his dismissal in which the reasons for his dismissal were explained. Moreover, following his dismissal, NCH provided Mr Standen with an Employment Separation Certificate which stated a reason for separation which Ms Edmunds knew to be incorrect.
[76] For the reasons given above, I find that Mr Standen was not:
• notified of the reason which NCH contends was a valid reason for his dismissal, namely, gross poor performance - taking too long to complete tasks; and
• given an opportunity to respond to any reason related to his capacity or conduct.
[77] Where an employee protected from unfair dismissal has requested a support person be present to assist in discussions relating to the dismissal, it is relevant to consider and take into account whether the employer unreasonably refused the support person being present.
[78] There is no positive obligation on an employer to offer an employee the opportunity to have a support person:
“This factor will only be a relevant consideration when an employee asks to have a support person present in a discussion relating to dismissal and the employer unreasonably refuses. It does not impose a positive obligation on employers to offer an employee the opportunity to have a support person present when they are considering dismissing them.”24
[79] Mr Standen did not request that a support person be present during any discussion relating to his dismissal. In those circumstances, I find there was no unreasonable refusal by NCH to allow Mr Standen to have a support person present to assist at any discussions relating to dismissal.
[80] Where an employee protected from unfair dismissal is dismissed for the reason of unsatisfactory performance, it is relevant to consider whether the employer warned the employee about the unsatisfactory performance before the dismissal.
[81] A warning for the purposes of s 387(e) should clearly identify:
• the areas of deficiency in the employee’s performance;
• any assistance or training that might be provided;
• the standards required. A mere exhortation to improve is not sufficient; and
• a reasonable timeframe within which the employee is required to meet such standards.25
[82] In addition, the warning should “make it clear that the employee’s employment is at risk unless the performance issue identified is addressed.”26
[83] NCH warned Mr Standen appropriately in 2018 in relation to his active hours percentage and gave him a reasonable opportunity, which he took, to meet the standards required. However, the approach taken by NCH in 2019 to its concern in relation to how long Mr Standen was taking to complete work was quite different. NCH did not inform Mr Standen in 2019 that he was taking too long to complete tasks, nor did it establish clear targets or goals for Mr Standen to meet on that score. Further, NCH did not make it clear to Mr Standen in 2019 that his employment was at risk unless the time he was taking to complete tasks improved. NCH cannot rely on the general references to “productivity” in its warnings to Mr Standen in 2018, because the outcome of those warnings was a requirement that Mr Standen improve his active hours percentage, which he did.
[84] For the reasons given, I find on the evidence that Mr Standen was not warned before his dismissal about the alleged unsatisfactory performance on which NCH relied to terminate his employment.
[85] Although it is not a small business within the meaning of s 23 of the Act, NCH is relatively small in size. NCH stated in its Form F3 – Employer Response that it had 22 employees at the time of Mr Standen’s dismissal.
[86] In the circumstances, I am satisfied that the size of NCH’s enterprise had an impact on the procedures followed in effecting the dismissal of Mr Standen. Notwithstanding allowances being made for the relatively small size of NCH’s enterprise, the procedure followed in effecting Mr Standen’s dismissal was unfair. In particular, it was unfair not to clearly identify concerns NCH had about how quickly Mr Standen was undertaking work, set clear targets for him, give him an opportunity to meet those targets, and if a decision was ultimately made to dismiss him on that basis, inform Mr Standen in clear terms of the reason for his dismissal.
[87] There is no evidence to suggest that NCH has any dedicated human resource management specialists or expertise. I will proceed (in NCH’s favour) on the basis that they do not. The absence of such specialists or expertise had an impact upon the procedures followed in effecting the dismissal, but it did not excuse NCH from failing to afford Mr Standen any procedural fairness in connection with the termination of his employment.
[88] Section 387(h) of the Act provides the Commission with a broad scope to consider any other matters it considers relevant.
[89] Mr Standen contends that one of the reasons his dismissal was unfair is because he was not provided with the amount of notice of termination, or payment in lieu of notice, to which he was entitled. NCH contends that its email to Mr Standen dated 28 April 2019 constituted notice to Mr Standen of the termination of his employment. That contention is without merit. The 28 April 2019 email asserts that the “trial with you working from home is not working out. Consequently, to continue with NCH Software, we require you to return to work in the Canberra office in 4 weeks.” At the time that email was sent, the question of whether or not Mr Standen’s employment would come to an end was contingent on his decision concerning a potential relocation back to Canberra. Unless and until that issue was determined, the question of termination could not be decided. It was only when Mr Standen made it clear to Mr Nulsen on about 22 May 2019 that he would not be resigning and would not be returning to Canberra that NCH had a decision to make. Its decision, communicated to Mr Standen for the first time by email at 1:27pm on 22 May 2019, was to terminate Mr Standen’s employment. It is the email from Ms Edmunds to Mr Standen on 22 May 2019 which constituted notice of termination to him. In that email, Mr Standen was informed that he would continue to be employed by NCH until 31 May 2019. That is, Mr Standen was given nine days’ notice of the termination of his employment. NCH did not make any payment in lieu of notice to Mr Standen.
[90] Mr Standen was employed by NCH for about 4.25 years (16 February 2015 to 31 May 2019). Under the National Employment Standards, 27 Mr Standen’s minimum entitlement to notice was three weeks. Under his contract Mr Standen was entitled to four weeks’ notice. Under the Professional Employees Award 2010, which NCH accepts applied to Mr Standen, he was entitled to one month’s notice. I accept Mr Standen’s argument that NCH’s failure to provide him with the notice of termination to which he was entitled weighs in favour of a finding that his dismissal was unfair.
[91] After considering and taking into account each of the matters specified in s 387 of the Act, my value judgment is that NCH’s dismissal of Mr Standen was harsh, unjust and unreasonable. NCH did not have a valid reason for Mr Standen’s dismissal; it did not afford him procedural fairness; it did not even give Mr Standen the notice of termination to which he was entitled.
Compensation
[92] Having found that Mr Standen was protected from unfair dismissal, and that his dismissal was harsh, unjust and unreasonable, it is necessary to consider what, if any, remedy should be granted to him. Mr Standen did not seek the remedy of reinstatement and I accept that it would be inappropriate to reinstate Mr Standen in all the circumstances. Instead Mr Standen seeks the remedy of compensation. As a result, I need to consider whether compensation is appropriate.
[93] Section 390(3)(b) of the Act provides the Commission may only issue an order for compensation if it is appropriate in all the circumstances. A compensation remedy is designed to compensate an unfairly dismissed employee in lieu of reinstatement for losses reasonably attributable to the unfair dismissal within the bounds of the statutory cap on compensation that is to be applied. 28
[94] Having regard to all the circumstances of the case, including the fact that Mr Standen has suffered financial loss as a result of his unfair dismissal, I consider that an order for payment of compensation to him is appropriate.
[95] It is necessary therefore for me to assess the amount of compensation that should be ordered to be paid to Mr Standen. In assessing compensation, I am required by s 392(2) of the Act to take into account all the circumstances of the case including the specific matters identified in paragraphs (a) to (g) of this subsection.
[96] In undertaking this task, I shall use the established methodology for assessing compensation in unfair dismissal cases which was set out in Sprigg v Paul Licensed Festival Supermarket 29 and applied and elaborated upon in the context of the current Act by Full Benches of the Commission in a number of cases.30 The approach to calculating compensation in accordance with these authorities is as follows:
Step 1: Estimate the remuneration the employee would have received, or have been likely to have received, if the employer had not terminated the employment (remuneration lost).
Step 2: Deduct monies earned since termination.
Step 3: Discount the remaining amount for contingencies.
Step 4: Calculate the impact of taxation to ensure that the employee receives the actual amount he or she would have received if they had continued in their employment.
Step 5: Apply the legislative cap on compensation.
Remuneration Mr Standen would have received, or would have been likely to receive, if he had not been dismissed (s 392(2)(c))
[97] Like all calculations of damages or compensation, there is an element of speculation in determining an employee’s anticipated period of employment because the task involves an assessment of what would have been likely to happen in the future had the employee not been dismissed. 31
[98] There is a dispute between the parties as to how long Mr Standen would have remained employed with NCH but for the termination of his employment. Mr Standen contends that he would have remained in employment with NCH for at least a further six months. NCH contends that the period would have been much shorter and refers to the period from the termination of Mr Standen’s employment on 31 May 2019 and what would have been the conclusion of a one month notice period, if it had been given on 22 May 2019.
[99] As I have stated above, I accept that Mr Nulsen and Mr Lupton believed Mr Standen was not working productively and held that belief from at least the beginning of 2018, but the evidence adduced in these proceedings did not support a finding that Mr Standen took too long to perform the tasks assigned to him. In light of that long held belief, it is likely that NCH would have taken some other action had it not unfairly dismissed Mr Standen on 31 May 2019. One possibility is that NCH would have adopted a procedurally fair approach, as it did in 2018, and identified and communicated to Mr Standen clear targets for him to meet for the completion of particular pieces of work and given him a chance to meet those targets. Another possibility is that NCH may have formed the view that they no longer needed a Software Developer working remotely on the types of tasks Mr Standen was being given, with the result that his position may have been made redundant. It is clear from what transpired in May 2019 that Mr Standen would not have accepted an alternative position with NCH in its Canberra office, had such an offer been made to him. It is also possible that Mr Standen may have satisfied NCH’s concerns about his productivity and remained employed by NCH for the medium to long term. In all the circumstances and weighing up the likelihood of the various possibilities, I find that Mr Standen would have remained employed by NCH for a period of three additional months if he had not been dismissed on 31 May 2019.
[100] Mr Standen’s gross remuneration with NCH was $54,865 per annum. It follows that in three months he would have received $13,716.25 gross.
Remuneration earned (s 392(2)(e)) and income reasonably likely to be earned (s 392(2)(f))
[101] At the time of the determinative conference on 24 September 2019, Mr Standen had only just obtained alternative employment. On 23 September 2019, Mr Standen commenced employment as a full-time Software Developer in the Newcastle region, earning more than he did when he was employed by NCH.
[102] Mr Standen did not earn any remuneration from any source between his dismissal on 31 May 2019 and the commencement of his alternative employment on 23 September 2019. The only funds Mr Standen received during that time was a small amount of interest and one Centrelink payment, neither of which constitute remuneration for the purpose of s 392 of the Act. 32
[103] Thus, the sum of $13,716.25 gross is the amount of remuneration Mr Standen would likely have earned had he not been dismissed by NCH and instead continued to be employed by NCH until 31 August 2019. This calculation is intended to put Mr Standen in the position he would have been in but for the termination of his employment. 33
Viability (s 392(2)(a))
[104] NCH is a relatively small business. However, no evidence was adduced on behalf of NCH that any particular amount of compensation would affect the viability of NCH’s business.
[105] No adjustment will be made on this account.
Length of service (s 392(2)(b))
[106] Mr Standen’s period of service with NCH (4.25 years) does not justify any adjustment to the amount of compensation.
Mitigation efforts (s 392(2)(d))
[107] The evidence establishes that Mr Standen made considerable efforts to obtain alternative employment following his dismissal on 31 May 2019. In particular, he sought out and applied for a number of jobs in a range of roles.
[108] In all the circumstances, I am satisfied that Mr Standen acted reasonably to mitigate the loss suffered by him because of the dismissal and do not consider it appropriate to reduce the compensation on this account.
Any other relevant matter (s 392(2)(g))
[109] It is necessary to consider whether to discount the remaining amount ($13,716.25) for “contingencies”. This step is a means of taking into account the possibility that the occurrence of contingencies to which Mr Standen was subject might have brought about some change in earning capacity or earnings. 34 Positive considerations which might have resulted in advancement and increased earnings are also taken into account.
[110] The discount for contingencies should only be applied in respect to an “anticipated period of employment” that is not actually known, that is a period that is prospective to the date of the decision. 35
[111] Because I am looking in this matter at an anticipated period of employment which has already passed (1 June 2019 to 31 August 2019), there is no uncertainty about Mr Standen’s earnings, capacity or any other matters during that period of time.
[112] In all the circumstances I have decided that it is not appropriate to discount or increase the figure of $13,716.25 for contingencies.
[113] Save for the matters referred to in this decision, there are no other matters which I consider relevant to the task of determining an amount for the purposes of an order under s 392(1) of the Act.
[114] I have considered the impact of taxation, but I prefer to determine compensation as a gross amount and leave taxation for determination.
Misconduct (s 392(3))
[115] Mr Standen did not commit any misconduct, so this has no relevance to the assessment of compensation.
Shock, distress or humiliation, or other analogous hurt (s 392(4))
[116] I note that in accordance with s 392(4) of the Act, the amount of compensation calculated does not include a component for shock, humiliation or distress.
Compensation cap (s 392(5)-(6))
[117] The amount of $13,716.25 is less than half the amount of the high income threshold immediately before the dismissal. It is also less than the total amount of remuneration to which Mr Standen was entitled in his employment with NCH during the 26 weeks immediately before his dismissal. In those circumstances, I am satisfied that there is no basis to reduce the amount of $13,716.25 by reason of s 392(5) of the Act.
Instalments (s 393)
[118] No application was made by NCH for any amount of compensation awarded to be paid in the form of instalments.
[119] In my view, the application of the Sprigg formula does not, in this case, yield an amount that is clearly excessive or clearly inadequate. Accordingly, there is no basis for me to reassess the assumptions made in reaching the amount of $13,716.25. 36
[120] For the reasons I have given, I am satisfied that a remedy of compensation in the sum of $13,716.25 (less taxation as required by law) in favour of Mr Standen is appropriate in the circumstances of this case. I will issue an order PR713190 to that effect.
DEPUTY PRESIDENT
Appearances:
Mr Mitchell Standen, on behalf of himself.
Ms Karen Edmunds, on behalf of the Respondent.
Hearing details:
2019.
Newcastle:
24 September.
Printed by authority of the Commonwealth Government Printer
<PR713189>
1 Ex A20
2 Ex A20
3 Ex A5 at [10)(2)(III)]
4 Ex A7
5 Ex R5 at [12]
6 Ibid
7 Ex A3 at [2(4)]
8 Ex A2 at [37]; Ex A5 at [10(2)(I)(b)]
9 Shepherd v Felt & Textiles of Australia Ltd (1931) 45 CLR 359 at 373, 377-8
10 Selvachandran v Peterson Plastics Pty Ltd (1995) 62 IR 371 at 373
11 Ibid
12 Walton v Mermaid Dry Cleaners Pty Ltd (1996) 142 ALR 681 at 685
13 Ibid
14 Ibid at 684
15 Webb v RMIT University [2011] FWAFB 8336 (Drake SDP, Hamilton DP, Jones C, 8 December 2011) at [6]
16 Crozier v Palazzo Corporation Pty Limited t/as Noble Park Storage and Transport (2000) 98 IR 137 at [62]
17 Ibid
18 King v Freshmore (Vic) Pty Ltd (unreported, AIRCFB, Ross VP, Williams SDP, Hingley C, 17 March 2000) Print S4213 [24]
19 Ex R1 at [22]
20 Ex R1 at [10]-[11]
21 (2000) 98 IR 137
22 Ibid at [73]
23 RMIT v Asher (2010) 194 IR 1 at 14-15
24 Explanatory Memorandum, Fair Work Bill 2008 (Cth) [1542]
25 McCarron v Commercial Facilities Management Pty Ltd t/a CFM Air Conditioning Pty Ltd [2013] FWC 3034, [32]
26 n Print S9280 (AIRCFB, Ross VP, Williams SDP, Blair C, 21 August 2000), [43]-[44]
27 Section 117 of the Act
28 Kable v Bozelle, Michael Keith T/A Matilda Greenbank [2015] FWCFB 3512 at [17]
29 (1998) 88 IR 21
30 Tabro Meat Pty Ltd v Heffernan [2011] FWAFB 1080; Read v Golden Square Child Care Centre [2013] FWCFB 762; Bowden v Ottrey Homes Cobram [2013] FWCFB 431
31 Double N Equipment Hire Pty Ltd v Humphries [2016] FWCFB 7206 at [16]-[17]
32 Sprigg v Paul’s Licensed Festival Supermarket (1998) 88 IR 21 at 29
33 Bowden at [24], citing Ellawala v Australian Postal Corporation Print S5109 at [35]
34 Ellawala v Australian Postal Corporation Print S5109 at [36]
35 Enhance Systems Pty Ltd v Cox PR910779 at [39]
36 Smith v Moore Paragon Australia Ltd (2004) 130 IR 446 at [32]