| [2020] FWCFB 6115 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.604 - Appeal of decisions
The Advice Spot Pty Ltd
v
Rachael Goldberg
(C2020/5187)
VICE PRESIDENT HATCHER |
SYDNEY, 24 NOVEMBER 2020 |
Appeal against decision [2020] FWC 2671 of Deputy President Sams at Sydney on 17 June 2020 in matter number U2020/13275
[1] The Advice Spot Pty Ltd (Advice Spot) has appealed a decision of Deputy President Sams in matter U2020/13275 1 concerning an application made by Rachael Goldberg for an unfair dismissal remedy against Advice Spot. In the decision, the Deputy President found that Ms Goldberg’s dismissal was unfair and ordered that Advice Spot pay Ms Goldberg compensation. The decision was originally issued on 1 June 2020, and ordered the payment of compensation to the amount of $6,500 plus $247 in superannuation contributions within 21 days of the date of the decision. Ms Goldberg then made a submission that there was an error in the calculation of the amount of compensation and, on 17 June 2020, the Deputy President issued a correction to the decision which amended the amount of compensation to $8,782.05 plus $834.29 in superannuation, to be paid by 6 July 2020. Advice Spot’s appeal was lodged on 5 July 2020.
[2] In circumstances where the current COVID-19 pandemic limits the capacity of the Commission from conducting in-person hearings, the Commission inquired of the parties to the appeal as to whether they were prepared to have the appeal determined on the basis of written submissions and without conducting a hearing. Both parties consented to this course. It was considered that the appeal could be adequately determined without the parties making oral submissions for consideration. Accordingly, the appeal has been conducted without holding a hearing pursuant to s 607(1) of the Fair Work Act 2009 (FW Act).
[3] The factual background to the matters is as follows. Advice Spot is a financial and accounting firm which is owned and managed by Mr Adam Hill. There is no dispute that Advice Spot is a small business employer within the meaning of s 23 of the FW Act. Ms Goldberg was employed by Advice Spot as a Tax Accountant/Mortgage Support for a period of four years. Her employment came to an end when she was dismissed on 27 November 2019 when on leave overseas. The email from Mr Hill which informed her of her dismissal relevantly stated that the business was undergoing restructuring, there was insufficient work for Ms Goldberg in her current role and this was likely to decrease further in the future, that her employment was accordingly terminated, and that she would be paid four weeks’ pay in lieu of notice. The email stated that “This is not an easy decision for me and the decision is not a reflection on your performance”, that Mr Hill would give Ms Goldberg a reference and would be happy to assist her in obtaining new employment, and that Mr Hill thanked Ms Goldberg “for your valuable contribution during your employment with us”.
[4] Ms Goldberg filed her unfair dismissal application on 27 November 2019, the same day she was dismissed. In her application, she alleged that her dismissal was because of her second pregnancy. Advice Spot filed a Form F3 response to the application on 18 December 2019. In response to the question in the form as to whether the employer had any jurisdictional or other objections to the application, Advice Spot said “not sure”, but in a lengthy attachment to the form, the basis of Ms Goldberg’s redundancy was explained in detail. It was not suggested that there were any conduct or performance grounds for the dismissal, and Ms Goldberg’s allegation that her dismissal was linked to her pregnancy was firmly denied. On 5 January 2020, Advice Spot filed a Form F4 Objection to unfair dismissal application, in which it stated that it objected to Ms Goldberg’s application on the grounds that her dismissal was a case of genuine redundancy, and also contended that the dismissal was consistent with the Small Business Fair Dismissal Code (Code). The form again attached a detailed explanation of how the business had restructured and lost clients, thus necessitating Ms Goldberg’s dismissal, and a denial of the allegation that the dismissal was linked to Ms Goldberg’s pregnancy. It contained no contention that the dismissal was based on any conduct or performance grounds.
[5] After conciliation failed to resolve the matter, it was allocated to the Deputy President on 20 January 2020 for determination, and the Deputy President issued directions for the filing of evidence and submissions in advance of a hearing listed for 4 March 2020. Pursuant to the directions, Advice Spot filed an affidavit sworn by Mr Hill on 17 February 2020 in which, in addition to matters relevant to Ms Goldberg’s alleged redundancy, it raised a number of new contentions about Ms Goldberg’s conduct and performance in response to Ms Goldberg’s witness statement, including that:
• Ms Goldberg and two other female employees detested Mr Hill;
• Ms Goldberg’s attitude and performance were unacceptable;
• there was a toxic, volatile and hostile environment in the workplace;
• Ms Goldberg and another employee were continually on their phones for an excessive amount of time and were using work resources for personal use;
• the animosity meant that the business was imploding and “something needed to be done”;
• the team was inefficient and unproductive;
• Mr Hill felt “trapped” because Ms Goldberg and another employee had introduced a new IT system which he did not understand;
• Ms Goldberg had access to Advice Spot’s business records and client data through the IT system, and this was a risk to the business;
• the business had moved into investment and insurance services, and Ms Goldberg had no experience or interest in this.
[6] The hearing of the matter proceeded before the Deputy President on 4 March 2020.
The decision
[7] In the decision, the Deputy President summarised the evidence and submissions, and then began his consideration by addressing whether Ms Goldberg’s dismissal was a case of genuine redundancy within the meaning of s 389 of the FW Act. In doing so, the Deputy President assessed the evidence given by the witnesses and made findings that Mr Hill “had a propensity for exaggeration, hyperbole and defences for inexplicable decisions”, 2 was not “a convincing advocate for his own case”,3 that his attempts to discredit Ms Goldberg and her witnesses were “clumsy and ‘smart alecky’”,4 was not a credible witness,5 and that where Mr Hill’s evidence conflicted with that of Ms Goldberg and her witnesses, their evidence was to be preferred.6 The Deputy President determined, despite his “broader misgivings”, that the dismissal fitted that aspect of the genuine redundancy definition in s 389(1)(a).7 However, the Deputy President went on to find that there had been no consultation concerning the redundancy as required by the Banking, Finance and Insurance Award 2010 (Award) and consequently that the s 389(1)(b) element of the genuine redundancy definition was not made out.8 Although it was unnecessary for him to do so, the Deputy President also found that the redeployment element of the genuine redundancy definition in s 389(2) was not made out.9
[8] The Deputy President then turned to the question of whether the dismissal was consistent with the Code. The Deputy President observed that it was difficult to reconcile Advice Spot’s position that the dismissal was a genuine redundancy with the Code, which is predicated on a dismissal for either misconduct or a person’s capacity to do the job and noted the reference in the termination email that Ms Goldberg’s redundancy was not a reflection on her performance. 10 The Deputy President determined that neither of the criteria of misconduct or capacity applied to Ms Goldberg and that Advice Spot’s reliance on the Code as an objection to the application was legally and conceptually misplaced and irrelevant, and was dismissed.11
[9] The Deputy President then considered whether the dismissal was unfair having regard to the matters specified in s 387 of the FW Act. In relation to s 387(a), the Deputy President found that there was no valid reason for the dismissal related to Ms Goldberg’s conduct or capacity, stating:
“[105] On the other hand, Mr Hill seems to have created a post-facto argument not properly articulated, developed or supported, that the working environment was so toxic and that the applicant’s knowledge of, and access to his business records and clients, posed a risk to his business viability and reputation. This view does not sit well with the language and tenor of the 27 November 2019 email, in which he states the applicant’s redundancy was not a reflection of her performance.
[106] In any event, to the extent this was a reason for the applicant’s dismissal, it is not supported by evidence; merely assumptions. It is fanciful, prejudiced and not well founded; see: Selvachandran. In my view, there was no ‘valid’ reason for the applicant’s dismissal.”
[10] In relation to s 387(b), the Deputy President found that Ms Goldberg was notified of the alleged reason for her dismissal at the time it took effect but was not notified of the other matters raised by Mr Hill in the proceedings which might have formed the real reasons for the dismissal, and this weighed in favour of a finding of unfairness. 12 As to s 387(c), the Deputy President found that this criterion did not arise because it related to the conduct or capacity of the applicant but in any event went on to find that, even accepting that the reason of redundancy was a valid one, Ms Goldberg was given no opportunity to respond, and certainly no opportunity to respond to any other unstated reasons, and this told in favour of a finding of unfairness.13 The Deputy President treated s 387(d) and (e) as neutral factors,14 and (f) and (g) as telling in favour of a finding of unfairness because of the manner in which the dismissal was effected and the lack of any fair procedure.15 In relation to s 387(h), the Deputy President took into account Ms Goldberg’s period of service and her current limited prospects for future job opportunities as a consequence of the birth of her second child as weighing in favour of a finding of unfairness based on harshness.16 The Deputy President also commented upon the inappropriateness of effecting the dismissal by email.17 The Deputy President then concluded that the dismissal was harsh, unjust and unreasonable both in substance and procedure.18
[11] The Deputy President then turned to the issue of the remedy to be awarded. The Deputy President determined that reinstatement was not an appropriate remedy, and assessed the amount of compensation to be awarded. 19 The Deputy President determined that a period of two weeks upon Ms Goldberg’s return from leave would have been appropriate to comply with the consultation provisions in the Award, which would justify an amount of compensation to $1,300 (2 x $650).20 The Deputy President took into account that order would not adversely affect the Advice Spot business, Ms Goldberg’s service was four years, and she had not obtained alternative employment and was unlikely to do so before the end of her maternity leave,21 and he made no deduction for contingencies and noted that Ms Goldberg had no entitlement to redundancy pay because Advice Spot was a small business employer.22 The Deputy President then said that the application of the Sprigg formula produced an inappropriate and unjust outcome, and concluded that an order of ten weeks’ pay plus 9.5% superannuation should be made.23
[12] As earlier stated, in the version of the decision published on 1 June 2020, the Deputy President quantified the total compensation at $6,500 plus $247 in superannuation. 24 This was based on Ms Goldberg’s weekly income at the time of dismissal being $650 per week. However, based on advice from Ms Goldberg, the Deputy President altered these amounts to $8,782.05 plus $834.29 based on a weekly income of $878.205.25 The Deputy President noted that there was no objection by Advice Spot to the correction being made.26
Appeal grounds and submissions
[13] The following contentions of appealable error may be derived from Advice Spot’s appeal grounds and submissions:
(1) The Deputy President erred in finding that the dismissal was harsh, unjust and unreasonable both in substance and procedure.
(2) The Deputy President ought to have found that the dismissal was reasonable given the volatile climate in the office at the time and Ms Goldberg’s actions as she was overseas at the time.
(3) The Deputy President erred by not giving sufficient weight to the evidence that Ms Goldberg caused the business to suffer financial harm by using the firm’s resources for her own financial gain.
(4) The Deputy President erred by not giving sufficient consideration to the evidence that Ms Goldberg breached company policy by taking the business’s hard drive home without permission, had the work login codes on her personal mobile phone and was late 50% of the time, in circumstances where “any data breach was not only considered to be devastating to the firm and my personal reputation, it can also carry criminal action”.
(5) The Deputy President erred in relying on the statement in the termination email that Ms Goldberg’s redundancy was “not a reflection on your performance”, and not taking into consideration the termination email in its entirety, as well as the contrary evidence at the hearing concerning the volatile and toxic work environment, the fact that Ms Goldberg had caused the business harm and was arriving late to the office 50% of the time.
(6) The Deputy President did not take fully into account the immense privacy issues, the volatile work climate, Ms Goldberg’s unacceptable attitude and the fact that the business had already once before dealt with sensitive data being compromised.
(7) The Deputy President erred in finding that Ms Goldberg had not obtained alternative employment and was unlikely to do so until her maternity leave ended. When asked if she had obtained alternative employment at the hearing, she answered “yes”.
(8) The Deputy President erred by finding that a further 4-week period would have been appropriate to comply with the consultation provisions in the Award, since it would have made no difference whatsoever and would have made matters worse.
(9) The Deputy President erred in finding that it was rarely appropriate to convey a decision to dismiss an employee other than in person. Given the volatility, hostility and toxicity in the office, a fact to face meeting would not have resulted in any better outcome and was more likely to make matters worse.
(10) The compensation amount in the original decision contained errors concerning Ms Goldberg’s occupation and pay rates, and the correction of these errors resulted in the compensation amount being increased by 42%. There were other errors in the decision, only some of which were corrected.
(11) The decision in Maswan v Escada Textilvertrieb 27 was of significance.
[14] Advice Spot contends that the grant of permission to appeal would be in the public interest because:
• the appeal raises issues concerning privacy and theft of personal and sensitive client information;
• in circumstances where Ms Goldberg worked from home 3 days per week, the business interacted with clients by email or phone virtually 100% of the time, there was a toxic work environment and Ms Goldberg was in the US at the time, a face to face dismissal meeting was not practical or essential and would have made matters worse;
• the Deputy President’s preference for the evidence of Ms Goldberg and her witnesses over that of Mr Hill was indicative of a hostile attitude towards small business owners;
• the adverse credibility comments made against Mr Hill by the Deputy President concerned a public accountant of 25 years’ experience who had never had a disciplinary, professional indemnity or FWC matter before, and reflected the fact that the Deputy President was not happy with Mr Hill because the matter went through to trial and decided to penalise him;
• the Deputy President had not given sufficient weight to the fact that the work environment was hostile and toxic and that Ms Goldberg’s witnesses were her friends and hostile to Mr Hill, and instead placed excessive weight on the reference to Ms Goldberg’s redundancy not being a reflection upon her performance in the termination email;
• Ms Goldberg was untruthful and misled the Commission about the circumstances in which she obtained a loan for her second property; and
• Ms Goldberg’s allegations of bullying in relation to an incident where Mr Hill went to her house to retrieve the hard drive for the IT system were a fabrication, and the Deputy President erred by not making a finding in this respect.
Consideration
[15] There is an initial issue as to whether Advice Spot’s appeal was lodged within 21 days of the decision under appeal, as required by r 56(2) of the Fair Work Commission Rules 2013. As earlier stated, the appeal was lodged on 5 July 2020. The original version of the decision was issued on 1 June 2020, 34 days earlier. However, the final determination of Ms Goldberg’s application was constituted by the compensation amount ordered in the correction decision published on 17 June 2020. The appeal was filed within 21 days of that date, and is accordingly in time.
[16] This appeal is one to which s 400 of the FW Act applies. Section 400 provides:
(1) Despite subsection 604(2), the FWC must not grant permission to appeal from a decision made by the FWC under this Part unless the FWC considers that it is in the public interest to do so.
(2) Despite subsection 604(1), an appeal from a decision made by the FWC in relation to a matter arising under this Part can only, to the extent that it is an appeal on a question of fact, be made on the ground that the decision involved a significant error of fact.
[17] In the Federal Court Full Court decision in Coal & Allied Mining Services Pty Ltd v Lawler and others, 28 Buchanan J (with whom Marshall and Cowdroy JJ agreed) characterised the test under s 400 as “a stringent one”. The task of assessing whether the public interest test is met is a discretionary one involving a broad value judgment.29 A Full Bench of the Commission, in GlaxoSmithKline Australia Pty Ltd v Makin, identified some of the considerations that may attract the public interest:
“… the public interest might be attracted where a matter raises issues of importance and general application, or where there is a diversity of decisions at first instance so that guidance from an appellate court is required, or where the decision at first instance manifests an injustice, or the result is counter intuitive, or that the legal principles applied appear disharmonious when compared with other recent decisions dealing with similar matters.” 30
[18] It will rarely be appropriate to grant permission to appeal unless an arguable case of appealable error is demonstrated. This is so because an appeal cannot succeed in the absence of appealable error.31 However, the fact that the Member at first instance made an error is not necessarily a sufficient basis for the grant of permission to appeal.32
[19] An application for permission to appeal is not a de facto or preliminary hearing of the appeal. In determining whether permission to appeal should be granted, it is unnecessary and inappropriate for the Full Bench to conduct a detailed examination of the grounds of appeal. 33 However it is necessary to engage with those grounds to consider whether they raise an arguable case of appealable error.
[20] In respect of Advice Spot’s appeal, we are not satisfied that the grant of permission would be in the public interest, for the following reasons:
(1) The appeal grounds simply do not address the critical matters in the decision under appeal. The key findings made by the Deputy President were that Ms Goldberg’s dismissal was not a case of genuine redundancy because of non-compliance with the consultation requirements of the Award, that the dismissal was not consistent with the Code, and that there was no valid reason for the dismissal based on Ms Goldberg’s capacity or conduct. The appeal grounds do not, in terms, challenge any of these findings. It is not contended by Advice Spot in its appeal that it did in fact comply with the consultation requirements of the Award or that the dismissal was consistent with the Code. The appeal grounds make various allegations about Ms Goldberg’s conduct and performance, but these do not relate to the reason given for her dismissal (redundancy) nor are they based on information acquired after the dismissal. At no stage did Advice Spot specifically contend before the Deputy President that these allegations constituted valid reasons for Ms Goldberg’s dismissal relating to her conduct or capacity. To the extent that such a contention may be implied from Advice Spot’s appeal grounds and submissions, this represents a new case being advanced on appeal. Permission would not be granted to allow this to occur.
(2) We consider that Advice Spot’s case in defence of the dismissal in this appeal, assessed as a whole, is entirely lacking in credibility. The reason given for Ms Goldberg’s dismissal in the email which communicated this to her was that her position was redundant, and that this was not intended to be a reflection on her work performance. In the absence of any reliance on evidence of misconduct discovered post-dismissal, the Deputy President was entitled to rely upon this as constituting the actual reason for dismissal, and to determine Ms Goldberg’s application on that basis. Advice Spot’s contentions in its appeal that in fact the dismissal was related to Ms Goldberg’s attitude to Mr Hill, her alleged unspecified use of the business’s resources for her own gain, alleged constant lateness and amorphous allegations concerning breaches of data security only serve to suggest that the reason given for the dismissal in the termination email was not the true reason for the dismissal, and that Advice Spot’s case before the Deputy President that Ms Goldberg had been made redundant was ingenuine. This in turn renders the justifications for the dismissal apparently now advanced to be likewise lacking in credibility.
(3) There is no reasonably arguable challenge in the appeal grounds to the Deputy President’s assessment of compensation. The Deputy President assessed that compliance with the Award’s consultation requirements would have taken two weeks, and this is not undermined by Advice Spot’s contention that consultation would have made no difference. Advice Spot’s contention that, at the hearing, Ms Goldberg told the Deputy President that she had found alternative employment is not supported by the transcript of the hearing. There is no contention of appealable error with respect to the Deputy President’s assessment that ten week’s compensation would be necessary to produce a fair and just outcome. Advice Spot did not oppose at first instance the correction to the compensation amount made by the Deputy President, and appears to concede in its notice of appeal and appeal submissions that the correction was necessary to remedy an error properly identified by Ms Goldberg.
(4) Many of the matters raised by Advice Spot in its appeal are extraneous to the ratio decidendi of the decision, such as the circumstances in which Ms Goldberg obtained a property loan during her employment and an episode in which Mr Hill went to Ms Goldberg’s home to retrieve a hard drive.
(5) The single member decision in Maswan v Escada Textilvertrieb 34 does not assist Advice Spot’s case. In that case, it was said that: “…a decision to dismiss on account of redundancy will only be harsh, unjust or unreasonable if the rationale for the decision is seriously undermined or if there is a serious error in procedure such that renders the termination unfair in the circumstances”.35 Here, Advice Spot has for the reasons explained above undermined its own redundancy rationale for the decision and, as the Deputy President found, there were serious procedural issues which served to render the dismissal unfair.
(6) The appeal does not raise any genuine issue of law, principle or wider application. There is nothing in the decision which pertains to the privacy of client information, as contended by Advice Spot. We do not understand the decision to stand for any general proposition that any dismissal not communicated face to face will be unfair. Clearly, there may arise circumstances where a dismissal effected by other means will be necessary or appropriate. Here, however, Ms Goldberg was dismissed by email while she was enjoying an overseas holiday. It was clearly open for the Deputy President to find that this, combined with the lack of any consultation, contributed to a procedurally unfair dismissal.
[21] Because we are not satisfied that the grant of permission to appeal would be in the public interest, permission must be refused in accordance with s 400(1) of the FW Act.
VICE PRESIDENT
Determined on the basis of written submissions.
Printed by authority of the Commonwealth Government Printer
<PR724553>
2 Ibid at [79]
3 Ibid
4 Ibid at [82]
5 Ibid at [83]
6 Ibid
7 Ibid at [91]
8 Ibid at [92]-[96]
9 Ibid at [97]
10 Ibid at [99]
11 Ibid at [100]
12 Ibid at [107]
13 Ibid at [108]
14 Ibid at [109]-[110]
15 Ibid at [111]
16 Ibid at [112]
17 Ibid
18 Ibid at [113]
19 Ibid at [116]
20 Ibid at [122]
21 Ibid at [119]-[121]
22 Ibid at [123]
23 Ibid at [124]-[125]
24 Ibid at [127]
25 PR720275 (Correction to decision [2020] FWC 2671) at [2]
26 Ibid at [1]
28 [2011] FCAFC 54, 192 FCR 78, 207 IR 177 at [43]
29 O’Sullivan v Farrer [1989] HCA 61, 168 CLR 210 per Mason CJ, Brennan, Dawson and Gaudron JJ; applied in Hogan v Hinch [2011] HCA 4, 243 CLR 506 at [69] per Gummow, Hayne, Heydon, Crennan, Kiefel and Bell JJ; Coal & Allied Mining Services Pty Ltd v Lawler and others [2011] FCAFC 54, 192 FCR 78, 207 IR 177 at [44]-[46]
30 [2010] FWAFB 5343, 197 IR 266 at [27]
31 Wan v AIRC [2001] FCA 1803, 116 FCR 481 at [30]
32 Lawrence v Coal & Allied Mining Services Pty Ltd t/as Mt Thorley Operations/Warkworth [2010] FWAFB 10089, 202 IR 388 at [28], affirmed on judicial review in Coal & Allied Mining Services Pty Ltd v Lawler [2011] FCAFC 54, 192 FCR 78, 207 IR 177; NSW Bar Association v Brett McAuliffe; Commonwealth of Australia represented by the Australian Taxation Office [2014] FWCFB 1663, 241 IR 177 at [28]
33 Trustee for The MTGI Trust v Johnston [2016] FCAFC 140 at [82]
35 Ibid at [39]