DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Vallery Jean-Louis
v
Mt Eliza Home Services Pty Ltd T/A My Home Residential Cleaning
(U2020/775)

Application for relief from unfair dismissal Matters in s.387 considered. Satisfied that the dismissal was unjust and unreasonable. Compensation ordered as remedy.

Background

[1] This matter involves an application made pursuant to section 394 of the Fair Work Act 2009 (the Act) for unfair dismissal remedy. Ms Vallery Jean-Louis (the Applicant) claims that she was unfairly dismissed from her employment with Mt Eliza Home Services Pty. Ltd. T/A My Home Residential Cleaning (the Respondent). 

[2] The application was lodged on 23 January 2020. The matter was allocated to me on 1 May 2020. The Respondent lodged a jurisdictional objection that the Respondent was a small business at the time of the dismissal and that therefore the Applicant had not completed the minimum employment period.

[3] I conducted a hearing on 13 May 2020 to deal with the jurisdictional objection. Subsequently, I dismissed the jurisdictional objection of the Respondent concluding the Respondent was not a small business at the time of dismissal and I was satisfied the Applicant had completed a period of continuous service of more than six months immediately prior to the date the dismissal took effect. 1

[4] The matter was then set down for merits hearing before me on 22 June 2020.

[5] At the merits hearing, the firm Rogers Reidy, the Administrator of the Respondent, stated that the dismissal of the Applicant occurred prior to their appointment; that the books and records of the company are insufficient and that they had reported the Director’s breach under s. 286 of the Corporations Act 2001 to ASIC. The Administrator for the Respondent stated they don’t have any knowledge of the matters in order that they could make any further comments on the termination and elected to depart the hearing at that point. 2

Law to be applied

[6] Section 394 of the Act provides that a person who has been dismissed may apply to the Commission for an order under the Act granting a remedy. The Act provides that an application must be made within 21 days after the dismissal took effect, or within such further period as the Commission allows.

[7] It is apparent from the evidence 3 that the Applicant was notified of her termination on 8 January 2020. The Applicant was dismissed summarily on that date. The application was made on 23 January and is therefore made within the statutory time period.

[8] A person is protected from unfair dismissal if:

“Division 2—Protection from unfair dismissal

382 When a person is protected from unfair dismissal

A person is protected from unfair dismissal at a time if, at that time:

(a) the person is an employee who has completed a period of employment with his or her employer of at least the minimum employment period; and

(b) one or more of the following apply:

(i) a modern award covers the person;

(ii) an enterprise agreement applies to the person in relation to the employment;

(iii) the sum of the person’s annual rate of earnings, and such other amounts (if any) worked out in relation to the person in accordance with the regulations, is less than the high income threshold.

Note: High income threshold indexed to $148,700.00,000 from 1 July 2019

383 Meaning of minimum employment period

The minimum employment period is:

(a) if the employer is not a small business employer—6 months ending at the earlier of the following times:

(i) the time when the person is given notice of the dismissal;

(ii) immediately before the dismissal; or

(b) if the employer is a small business employer—one year ending at that time”.

[9] With regard to s.382(a) of the Act, I determined in my decision of 26 May 2020 that the Applicant had completed the minimum employment period. 4

[10] With regard to s.382(b) of the Act, the Applicant asserts that she is covered by the Cleaning Services Award 2010 (the Award). The Respondent in their Form F3 - Employer response to unfair dismissal application (Form F3) stated that the Award applied to the Applicant. I am satisfied that the Applicant is covered by the Award.

[11] Further, I am satisfied that the sum of the Applicants annual rate of earnings, and such other amounts (if any) worked out in relation to the person in accordance with the regulations, is significantly less than the high income threshold. The Applicant’s annual salary at the time of dismissal was $19.00 per hour, which equates to $37,544.00 annually for working full time hours. I note that the Applicant contends that she should have been classified and paid as a Level 2 under the Award. I am not in a position to determine if that is the correct classification. However, the Applicant should have at least been paid as a Level 1. That rate is $20.82 per hour. It is apparent that the Respondent was paying the Applicant below the lowest rate in the Award.

[12] Section 385 of the Act sets out what constitutes an unfair dismissal;

“Division 3—What is an unfair dismissal

385 What is an unfair dismissal

A person has been unfairly dismissed if the FWC is satisfied that:

(a) the person has been dismissed; and

(b) the dismissal was harsh, unjust or unreasonable; and

(c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and

(d) the dismissal was not a case of genuine redundancy.

Note: For the definition of consistent with the Small Business Fair Dismissal Code: see section 388.

386 Meaning of dismissed

(1) A person has been dismissed if:

(a) the person’s employment with his or her employer has been terminated on the employer’s initiative; or

(b) the person has resigned from his or her employment, but was forced to do so because of conduct, or a course of conduct, engaged in by his or her employer.

[13] Sections 385(a), and 386 of the Act set out the meaning of dismissed. It is apparent on the evidence that the Applicant was terminated on the Employer’s initiative. 5

[14] With regard to s.385(c) of the Act, the Respondent asserts that it is a small business in accordance with s.23 of the Act. However, I have determined in the decision PR719398 that it was not.

[15] With regard to s.385(d) of the Act, there was no suggestion in the Respondent’s Form F3 that the Applicant’s dismissal was a case of genuine redundancy.

[16] I must consider whether the dismissal was harsh, unjust or unreasonable. Section 387 of the Act states:

“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”.

Summary of matters to be determined

Was the dismissal unfair?

[17] There is now the matter of considering if the dismissal is unfair having regard to the criteria in s.387 of the Act. It is those matters that I now turn to having regard to the evidence.

A. Valid reason

[18] The Applicant had been off work from 16 December 2020 with a knee injury and had been in regular contact with the Respondent during this period of leave regarding her status as a permanent or casual employee and her entitlement to sick leave.  6

[19] The Form F3 set out the following claims by Mr Marlon Scheucher of the Respondent that go to valid reason:  7

•  The employee had arrived to my office unannounced on 24 December 2019, firstly on her own then with her boyfriend, after being off work from 16 December 2019 due to some personal injury.

•  The employee made demands for me to provide payslips there and then but I could not help her as I was preparing to come in so that I could dispatch them and get started with my day.

•  The pair returned after 9.00am, once again demanding for documents I could not produce there and then. When I said I could not help them after that they started to become more agitated and aggressive, then started making accusations and becoming more threatening. I asked them to leave as I did not feel safe for them to be hanging around in front of my office.

•  The employee was not dismissed for behaviour in a customer’s house.

•  She was dismissed due to her and her boyfriend’s threatening display towards myself on business premises. After this incident I do not feel trusted in sending her out to customer’s private houses as I worry about how the employee would conduct themselves out in the field after this display of behaviour.

•  I also believe it would be impossible to continue a respectable working relationship between management and the employee after what has occurred. I would believe that the employee would undermine my management and will not comply with instructions effectively.

•  As a small business operator this is could be very dangerous to the business.

[20] The Applicant was asked about these various claims at the hearing. She stated:

“Okay, the first one I told him that I was going to be there that morning on the 24th. He was aware that I was going to be at the office at that time.” 8

“The reason why I was going into the office was because I had to turn in my medical certificate and because I was going to have a talk to him about the underpayment.” 9

“He knew about my injury. That’s why I came in to turn in my medical certificate. I also have text messages inside the documents that show that I did make him aware that I was going to be in the office that morning.” 10

“The second part - yes, I did ask him for the payslips and he told me to come back at 9 am. So I returned at 9 am and he still said that he wouldn’t. I told him I would have to tell the Ombudsman that he’s not giving me my payslips. Then the third part, yes, he told me to come back at 9 o’clock. We weren’t agitated and aggressive. He didn’t tell us to leave the office. We left because we asked him, can we speak with him and he said, “No”, and so we left.” 11

[21] The Applicant said that Mr. Scheucher never said he felt unsafe 12 and that her boyfriend and her were not threatening at all.13

[22] The Applicant also said:

“The thing is the whole underpayment issue that was between Marlon and I still would have been respectful to him and I would not conduct myself - positively in the customer’s home. I would still continue to do business as usual and continue to give satisfactory or outstanding work. No, I would not undermine his management at all and I would comply with his instructions effectively. That’s all I have to say about his statement.” 14

[23] The Applicant’s partner, Mr Ashley Doyle gave evidence that:

“She [Vallery] had sent him a text message and I’m fairly certain we’ve actually sent through those messages as evidence. So he knew that she was coming. She needed to come in to hand in her medical certificate but it also came to her attention after speaking with him about her injury that she wasn’t being paid correctly. So that was at the moment when she decided to ask for the payslips. It was a spur of the moment thing, as we didn’t want them to be doctored. It took more than three weeks after the fact before she actually got any of her payslips but he proved that morning that it would only take him minutes to actually produce them. Again, we have evidence of that.” 15

“Essentially the last things that were said between Marlon and ourselves were, like, “This is the case if we’re not able to get the payslips now, we are going to have to leave the premises and call the Fair Work ombudsman immediately.” I asked him one last time if we could come into the office to have a chat because I don’t think he quite understood the gravity of the situation. Then he refused, so we left. 16

[24] I asked Mr. Doyle if he believes he was agitated and aggressive or if he denied that. Mr. Doyle was clear that he denied that allegation. His evidence was:

“Yes, absolutely not; we weren’t threatening. He was standing behind the threshold of his door the entire time. We were out on the street simply having words. No gestures were made, no threats were made other than, “We are going to call the Fair Work ombudsman if this doesn’t go smoothly.” 17

“If that can be considered a threat then yes, we threatened him but I wouldn’t call that aggressive or agitated. 18”

[25] I only have the sworn evidence of the Applicant and Mr Doyle as Mr Scheucher has not appeared. I prefer the Applicant and Mr Doyle’s sworn evidence. Their evidence was consistent and I have no reason to doubt it. Moreover, it is apparent that Mr Scheucher had been underpaying the Applicant for a long period. She was entitled to ask for payslips. Indeed, she should not have had to ask for them as Mr Scheucher was obligated to provide them.

[26] I am not satisfied that on the balance of probabilities that the alleged misconduct occurred. There does not appear to be any other reason relied on for the dismissal other than the claim of aggressive behaviour on 24 December 2019. There was no valid reason for the dismissal. The lack of a valid reason weighs in favour of finding that the dismissal was unfair.

B. Notification of the reason.

[27] Notification of the valid reason to terminate must be given to the employee before the decision to terminate is made. 19

[28] The Applicant’s evidence was that she did not know she was dismissed until she got the letter of termination on 8 January 2020. 20 I accept the Applicant’s evidence. It is apparent that the email sent on 3 January 2020 was received by the Applicant on 8 January 2020. It is apparent she was not notified of the reason for the termination before the decision to terminate was made. Further, notification of the “reason” relates to the “valid reason” for dismissal.21 I am not satisfied that there is a valid reason for the dismissal in this case.

[29] Consideration of this criteria weighs in favour of a finding that the dismissal was unfair.

C. Opportunity to respond

[30] 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. 22 It is apparent that there is no valid reason for the dismissal and so this is not a matter which is relevant. In any case, there was no opportunity given to respond to the Applicant before the decision to terminate was made. Given the absence of a valid reason, this is a neutral consideration in this matter.

D. Unreasonable refusal to allow a support person.

[31] There was no request for a support person by the Applicant. This is a neutral consideration.

E. Warnings – Unsatisfactory performance

[32] There is no suggestion that the Applicant’s performance was unsatisfactory. In any case, it is clear on the evidence that the Applicant was not warned about any alleged performance issues. This is a neutral consideration.

F. Size of employer’s enterprise and human resources specialists

[33] The Respondent does not appear to have had the benefit of any in-house human resources specialist advice. While it is not a small business as defined in the Act, it is clearly not a business of any significant scale. While there is an acknowledgement that smaller businesses are genuinely different in nature both organisationally and operationally, the procedures followed in dismissing a person cannot be ‘devoid of any fairness.’ 23 In this matter, the process of dismissal was almost completely lacking in fairness. Consideration of this criteria weighs in favour of a finding the dismissal was unfair.

G. Other relevant matters

[34] The Applicant has had some difficulty obtaining secure work since the time of the dismissal. The Applicant stated she has had trouble finding work because she is currently on a bridging visa and then it became even more difficult due to COVID-19. 24 The Applicant provided multiple examples of her attempt to obtain secure work, including evidence of social media messages sent to potential employers and online applications.25 The difficulty the Applicant faces in securing work weighs in favour of a finding of unfairness.

Conclusion

[35] Taking into account all of the factors above, the factors all either weigh towards a finding that the dismissal was unfair, or are neutral considerations. There are no considerations weighing towards a finding that the dismissal was fair. Taking into account all of the matters set out above, I am satisfied that the dismissal was unjust as the employee was not guilty of the alleged conduct. It was also harsh on the employee due to the economic and personal consequences of being dismissed. For these reasons, I am satisfied that the dismissal was unfair.

Remedy

[36] The relevant provisions of the Act pertaining to remedy are contained in s.390 of the Act:

“390 When FWA may order remedy for unfair dismissal

(1) Subject to subsection (3), FWA may order a person’s reinstatement, or the payment of compensation to a person, if:

(a) FWA 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) FWA may make the order only if the person has made an application under section 394.

(3) FWA must not order the payment of compensation to the person unless:

(a) FWA is satisfied that reinstatement of the person is inappropriate; and

(b) FWA 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.

[37] It also necessary to consider the Objects of Part 3-2 of the Act especially s.381(c) of the Act which provides that an object of that Part of the Act is to provide remedies if a dismissal is found to be unfair, with an emphasis on reinstatement.

[38] The presumption in the legislation is that should a dismissal be found to be unfair, that reinstatement is the primary remedy and that compensation is a secondary consideration if reinstatement is not appropriate. In this matter, the Applicant does not seek reinstatement. In any case, the Respondent is no longer trading and in the circumstances, reinstatement is not practical. Having taken that into account I agree that reinstatement in the circumstances of this case is not an appropriate remedy.

[39] Having determined that reinstatement is not appropriate I must consider what compensation, if any, is payable, in lieu of reinstatement.

[40] The Act provides for compensation as a remedy for unfair dismissal.

“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), FWA 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 FWA considers relevant.

Misconduct reduces amount

(3) If FWA is satisfied that misconduct of a person contributed to the employer’s decision to dismiss the person, FWA 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 FWA 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 FWA 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.

393 Monetary orders may be in instalments

To avoid doubt, an order by FWA under subsection 391(3) or 392(1) may permit the employer concerned to pay the amount required in instalments specified in the order.”

[41] In all of the circumstances, I consider that the award of some amount of compensation is appropriate in this matter.

[42] In determining the amount of compensation, I must have regard to “all the circumstances of the case” including each of the paragraphs in s.392(2) of the Act as set out above. No one matter is paramount, but regard must still be had to each of them. 26

[43] The general approach to the calculation of compensation was well set out by the Full Bench in Tabro Meat Pty Ltd v Kevin Heffernan 27 and I will follow that approach in determining this matter.

Section 392(2)(c) - the remuneration that the person would have received or would have been likely to receive, if the person had not been dismissed.

[44] The Applicant’s annual salary at the time of the dismissal was $37,544.00 but should have been $41,137.20 gross per annum. I note that this is the Level 1 rate under the Award that I will apply as the amount that the Applicant would have been likely to receive for the purposes of calculating the amount of compensation with superannuation of 9.5%. 28 She would have been likely to receive this amount as it is the minimum amount payable under the relevant Award. The amount of $ $41,137.20 per annum will be used as the basis for the calculation.

[45] I have no submissions from the Respondent as to how long it was expected the employment relationship would have continued were it not for the dismissal taking place.

[46] The Applicant gave evidence that she planned to work for the Respondent as long as possible, even through her return to university. 29 I accept the Applicant’s evidence on this point. However, it also has to be borne in mind that the Respondent has been placed in Administration on or around 16 March 2020.

[47] I think it is reasonable to assume that, but for the dismissal, that in all of the circumstances the employment relationship would have continued for a further period of 10 weeks.

[48] Accordingly, I calculate the remuneration that the Applicant would have received or would have been likely to receive, if her employment had not been terminated, at $7,911.60 plus 9.5% superannuation.

Section 392(2)(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 section 392(2)(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

[49] In the circumstances of this matter, ss.392(2)(e) and 392(2)(f) of the Act can be dealt with together. The Applicant has not been able to obtain employment at all since her dismissal.

[50] In Ellawalla v Australian Postal Corporation 30, with respect to a precursor provision, the Full Bench stated that “[o]nly monies earned during the period from termination until the end of the anticipated period of employment are deducted”.

[51] In the circumstance, no deduction is appropriate results in an amount of $7,911.60 plus 9.5% superannuation.

Section 392(2)(g) - any other matter that FWA considers relevant

[52] Ordinarily a deduction for contingencies is appropriate. 31 However, a deduction is not appropriate in this case as the anticipated period of employment has passed. No deduction for contingencies is appropriate in this case.

[53] This results in a provisional amount of compensation of $7,911.60 plus 9.5% superannuation.

[54] There are no other matters that are relevant to the determination of compensation other than ss.392(2)(a), (b) and (d), 392(3) and 392(5) of the Act. I will turn to those factors now.

Section 392(2)(a) - the effect of the order on the viability of the employer’s enterprise

[55] It is apparent that the Respondent is in Administration. In the circumstances, an order will have no impact on the viability of the enterprise as it has already ceased trading.

Section 392(2)(b) - the length of the persons service with the employer

[56] The Applicant was employed by the Respondent for six months on a continuous basis but more than two years on an intermittent basis. In the circumstances. I will not deduct an amount for the length of service. This results in a provisional amount of compensation of $7,911.60 plus 9.5% superannuation.

Section 392(2)(d) - the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal

[57] I required the Applicant to provide evidence as to the efforts she went to in the period after the dismissal to secure alternative employment. On 29 June 2020 the Applicant provided emails to my Chambers including screenshots indicating she had applied for a multitude of jobs since her dismissal. These screenshots showed the Applicant had mainly applied for positions as an au pair but also included evidence of applications to work as a tutor, picker, and in call centres. 32

[58] The Applicant’s mitigation efforts are considerable and sufficient to exclude any further deduction from the quantum of $7911.60 plus 9.5% superannuation.

Section 392(3) - misconduct

[59] I have found that the Applicant was not dismissed for a valid reason and that no misconduct was in evidence. Therefore, there is no basis to make a further deduction for misconduct.

Section 392(5) - compensation cap

[60] As the amount of $7,911.60 plus 9.5% superannuation is less than the legislative compensation cap, a further deduction for that reason is not required.

Conclusion and order as to remedy

[61] I find that reinstatement is not an appropriate remedy in this case.

[62] I find that compensation is appropriate.

[63] I am satisfied that an order for payment of compensation by the Respondent of $7,911.60 gross plus 9.5% superannuation less tax as required by law, to the Applicant in lieu of reinstatement is appropriate in all the circumstances of the case. It accords a fair go all round to both the Respondent and the Applicant.

[64] The compensation payment, less any required deduction in taxation, is to be made within 14 days of this decision. An order to that effect will be issued concurrently with this decision.

COMMISSIONER

Appearances:

Ms V. Jean-Louis on her own behalf
Mr A. Doyle for the Applicant
Ms V. Caslake and Ms C. Risteska for the Administrator of the Respondent

Hearing details:

2020
Melbourne
22 June

Printed by authority of the Commonwealth Government Printer

<PR720803>

 1   Jean-Louis v Mt Eliza Home Services Pty Ltd T/A My Home Residential Cleaning [2020] FWC 2554 (Lee C, 26 May 2020) at para 40-43.

 2   PN10- PN17.

 3   Court book, page 34.

 4   Jean-Louis v Mt Eliza Home Services Pty Ltd T/A My Home Residential Cleaning [2020] FWC 2554 (Lee C, 26 May 2020) at para 41.

 5   Court book, page 42. The submissions of the Applicant in the court book at page 40 do not include the entirety of the email from the Respondent informing the Applicant of her termination.

 6   Court book, page 34 – 40.

 7   Court book, page 11.

 8   PN90.

 9   PN92.

 10   PN94.

 11   PN96.

 12   PN98.

 13   PN114.

 14   PN116.

 15   PN100

 16   PN101 – PN103.

 17   PN118.

 18   PN120.

 19   Crozier v Palazzo Corporation Pty Limited t/as Noble Park Storage and Transport Print S5897 (AIRCFB, Ross VP, Acton SDP, Cribb C, 11 May 2000) at paras 70–73, [(2000) 98 IR 137]

 20   PN133-135.

 21   Chubb Security Australia Pty Ltd v Thomas Print S2679 (AIRCFB, McIntyre VP, Marsh SDP, Larkin C, 2 February 2000) at para. 41.

 22   Chubb Security Australia Pty Ltd v Thomas Print S2679 (AIRCFB, McIntyre VP, Marsh SDP, Larkin C, 2 February 2000) at para. 41.

 23   Williams v The Chuang Family Trust t/a Top Hair Design [2012] FWA 9517 (Cloghan C, 12 November 2012) at para. 40.

 24   PN196.

 25   Applicant Submissions dated 29 June 2020.

 26   Tempo Services Limited v Klooger and Others, PR953337, [22]

 27   [2011] FWAFB 1080.

 28   Court book, page 30.

 29   PN184.

 30   Print S5109

 31   See Slifka v JW Sanders Pty Limited (1995) 67 IR 316 at 328

 32   Applicant Submissions dated 29 June 2020.