[2012] FWA 10626

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FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.394 - Application for unfair dismissal remedy

Ms Kaye Gooch
v
Proware Pty Ltd T/A TSM (The Service Manager)
(U2012/6928)

COMMISSIONER CARGILL

SYDNEY, 20 DECEMBER 2012

Termination of employment.

[1] This decision arises from an application made by Ms K Gooch (the applicant) pursuant to section 394 of the Fair Work Act 2009 (the Act) for relief in respect of the termination of her employment by Proware Pty Ltd T/A The Service Manager (the respondent). The applicant’s dismissal occurred on 29 March 2012 and her application for relief was lodged with Fair Work Australia (FWA) on 4 April 2012.

[2] The matter was dealt with by an FWA Conciliator but did not settle. The respondent then sought to have the application dismissed on the basis that it was frivolous and vexatious. That issue was dealt with on 20 July 2012 and, as I understand it, the objection was dismissed. The matter was then listed for arbitration which was dealt with by me on 12 November 2012.

[3] The applicant was represented by Mr G Pinchen, agent, who appeared with permission. The respondent was represented by Mr D Younger, its owner and director.

[4] The applicant gave sworn evidence. Her witness statement was marked Exhibit Applicant 1 and her oral testimony is at PN 63 - 391 of Transcript. Mr Younger gave sworn evidence. His witness statement was marked Exhibit Respondent 1, his response to the applicant’s witness statement was marked Exhibit Respondent 2 and his oral testimony is at PN 423 - 685 of Transcript.

FACTS AND EVIDENCE

[5] The respondent provides software management services to its clients. At the time of the applicant’s dismissal it had 21 employees.

[6] The applicant commenced employment with the respondent in June 2008. She was employed on a full time basis as the company bookkeeper. At the applicant’s request she worked a four day week, ten hours per day. This was in order to assist in caring for her grandchild.

[7] During 2010 and 2011 the applicant experienced difficulties with another employee. There is a dispute as to whether this was due to a personality clash between them or whether the applicant had been harassed by her colleague. The applicant says that, despite her complaints, no action was taken against the other employee. Mr Younger’s evidence is that the person was counselled both verbally and in writing and a copy of the written counselling was provided to the applicant.

[8] In November 2011 a security breach occurred in relation to the respondent’s payroll records. There is no suggestion that the applicant was in any way responsible for this. The applicant’s evidence is that, despite this, she believed that she was treated differently after this event, in particular, by being excluded from meetings. Mr Younger says this is completely untrue.

[9] During 2011 the applicant had been training another employee, Ms Liu, to take over her role after she retired. The applicant’s evidence is that, although she had not set a definite date for this event, she planned to move to part time work during 2012 and then possibly retire by the end of 2013. An email from the applicant to Mr Younger dated 21 May 2011, Attachment A to Exhibit Respondent 1, indicates that she would like to fully retire in 2013.

[10] On 9 January 2012 there was a meeting between the applicant and Mr Younger. The applicant’s evidence is that Mr Younger, without explanation, informed her that her duties were being removed from her and given to Ms Liu. The applicant was to be given budgeting and forecasting duties of which she had no experience. She says she believed that these duties would then be removed as well and that she was being set up to fail.

[11] Mr Younger’s evidence is that he needed the applicant to work on budgets and forecasts and estimated that this would involve five to six hours of her time each week. The meeting was held to ascertain which tasks could be given to Ms Liu in order to free the applicant for the required amount of time. Mr Younger denies that the applicant was not told why the change in duties was required or that the majority of the applicant’s duties were to be removed. An email summarising the outcome of the meeting is at Attachment D to Exhibit Respondent 1.

[12] Mr Younger went on pre-planned leave on 10 January 2012. The applicant’s evidence is that she had a discussion with Ms Liu on that same day during which Ms Liu informed her that the respondent was trying to “get rid of” her and give her job to Ms Liu. Mr Younger denies that this occurred. He also denied that he wanted to “get rid of” the applicant. Ms Liu was not called to give evidence. The applicant agreed in cross-examination that Mr Younger had never intimated that he wanted to “get rid of” her.

[13] The applicant attended her general practitioner on 11 January 2012 and was diagnosed with anxiety/depression. She was referred to a psychologist whom she consulted on a weekly basis. The applicant also saw her GP each month. She has been on anti-depressant medication since November 2011.

[14] The applicant was provided with Workcover medical certificates which stated that she was unfit to work for the periods 11 January to 8 February, 9 February to 29 February and 1 March to 23 March 2012. These are at Exhibits A, B and C to Exhibit Applicant 1. The applicant provided each of these certificates to the respondent. She also lodged a workers compensation claim.

[15] The claim was contested and ultimately denied by the insurer. The applicant has disputed this. Statements made in relation to the claim have given rise to accusations by both sides of lies, fraud, slander and defamation. None of this is directly relevant to what has to be decided in this matter, however, it does help to explain the escalating acrimonious nature of the relationship between the parties.

[16] During the period of the applicant’s absence from work she was contacted by the respondent via email on a number of occasions to provide information about the accounting and payroll systems. The applicant’s evidence is that she provided all of the information requested. Mr Younger’s evidence is that not all of it was provided.

[17] On 20 February 2012 Mr Younger sent an email to the applicant concerning the need to meet and discuss her return to work plan. The applicant responded that such a discussion was not an option then or in the immediate future as she had not been medically cleared to return to work and had various arranged medical appointments over the following month. She also required time to find a support person for any meeting with the respondent. The email exchange is at Exhibit E to Exhibit Applicant 1.

[18] On 21 February 2012 the applicant sent an email requesting that she be paid annual leave when her sick leave ran out. This was initially refused by Mr Younger who informed the applicant that she was on leave without pay. Mr Younger’s evidence is that he believed that the applicant was not entitled to access her annual leave whilst she was sick. Following the involvement of the Fair Work Ombudsman (FWO) the annual leave payments were made in early March. The various email exchanges are at Exhibits F, G and H to Exhibit Applicant 1.

[19] As indicated earlier, the applicant’s third medical certificate expired on 23 March 2012. That was a Friday. The applicant’s evidence is that she was unable to arrange to see her doctor until the following Friday. Further, she thought that she didn’t have to provide any more medical certificates to the respondent because she was now on leave without pay rather than sick leave. The applicant’s evidence is that she would have provided a further certificate to Mr Younger if he had indicated that it was required.

[20] Mr Younger’s evidence is that, after not hearing from the applicant for three days following the expiration of the medical certificate, he concluded that she did not intend to return to work. The FWO was contacted for advice. Mr Younger’s evidence is that the advice was that the respondent could dismiss the applicant on the basis of her abandonment of employment.

[21] Mr Younger’s evidence is that, after internal discussions within the business, he decided that the only option was to terminate the applicant’s employment. He did this by sending the following email to her on 29 March:

[22] It is Mr Younger’s evidence that email is a standard method of communication in any IT company and the applicant was aware that it was the preferred method in this company. It is also his evidence that he had no choice about the method as the applicant had clearly indicated that she did not wish to receive any phone communication from him and had threatened to go to the police if he made further direct contact, Exhibit H to Exhibit Applicant 1. Mr Younger also says that the applicant had not provided any forwarding address after her recent move.

[23] The applicant’s evidence is that, during her absence from the workplace, she was contactable on her home and mobile phones as well as by email. The applicant denies that she had any intention of contacting the police and notes that she had merely informed the insurer that she had been advised by Workcover Australia that she could call the police to deal with Mr Younger’s continued harassment of her. She describes her dismissal as devastating especially in light of her age, she is now 67, health and being single.

[24] The applicant obtained a further Workcover medical certificate, dated 30 March 2012, which provides that she was unfit to work from 24 March to 20 April 2012, Exhibit D to Exhibit Applicant 1. Her evidence is that, following her dismissal and with the approval of her psychologist and GP, she began looking for work from 4 April. She has provided details of her efforts in this regard in Exhibit Applicant 1. The applicant has not been successful in obtaining any other employment and is presently in receipt of an Age Pension.

[25] The applicant does not seek reinstatement.

SUBMISSIONS ON BEHALF OF THE APPLICANT

[26] Written submissions on behalf of the applicant were provided prior to the hearing. Mr Pinchen also made oral submissions.

[27] It is submitted that the applicant did not abandon her employment. The cases indicate that, in order for this to be established, the respondent has to show that the applicant had repudiated her contract of employment and demonstrated an intention to leave her job 1.Instead, the applicant had wanted to return to work and was seeking medical assistance to do so.

[28] It is submitted that the respondent appears to suggest that the reasons for the dismissal were the applicant’s mental health issues and the making of a fabricated workers compensation claim. These are not valid reasons for dismissal. It is submitted that the insurer accepted that the applicant suffered a psychological injury in the course of her employment. The length of her absence from the workplace did not provide a valid basis for the termination.

[29] The applicant rejects the suggestion that she made false statements in her workers compensation claim. The applicant also rejects any claim that she engaged in misconduct in respect of her workers compensation claim or that she refused to discuss a return to work plan. She was too disabled to participate in such a discussion at that time. The applicant agrees that she did not contact the respondent for three days after the expiration of her medical certificate, however, says that this was due to a genuine misunderstanding.

[30] Mr Pinchen submitted that the real reason for the dismissal was that Mr Younger was not happy that the applicant went on leave or that she made the workers compensation claim. In addition, the evidence shows that there has been a saving for the respondent as the new occupant of the applicant’s position, Ms Liu, is earning $10,000 less per year.

[31] It is submitted that, in the event that it is found that the applicant had acted improperly, the issue of proportionality is important. The failure to provide a further medical certificate could have been remedied by the respondent requesting one. There was no history of the applicant taking time off, she had received no previous warnings and was suffering from a mental illness. Dismissal was out of all proportion to any failings of the applicant.

[32] Several cases are relied upon in relation to the issue of valid reason 2.

[33] It is submitted that, as there is no valid reason for the dismissal, notification of the reason is not relevant. In any event the applicant was given no prior notice of any reason for her dismissal. This is clearly unfair as is the fact that she was denied any opportunity to respond 3. The failure to have any discussions also amounts to an unreasonable refusal to allow the applicant to have a support person to assist her. Mr Pinchen noted that Mr Younger had conceded that the dismissal process could have been handled better.

[34] It is submitted that the respondent is a medium sized enterprise which should have had well organised and fair procedures in place as well as a dedicated human resources employee. In any event employees are entitled to a fair go regardless of the size of the enterprise 4.

[35] It is submitted that, in addition to the above factors, the dismissal was harsh and unfair because of the following: the respondent’s failure to contact the applicant during the time in which it alleges she abandoned her employment; the applicant’s work record and age; the fact that her illness was caused by the respondent; the respondent’s denigration of the applicant in relation to both the workers compensation claim and in these proceedings; the significant impact of the dismissal on the applicant’s life and job prospects 5. Other alternatives should have been considered6.

[36] It is submitted that the relationship of trust and confidence between the parties has been destroyed by the respondent’s actions and reinstatement would not be appropriate. The applicant has shown significant efforts to mitigate her loss. She should receive compensation.

[37] Mr Pinchen submitted that the applicant had been a truthful and forthright witness and her evidence should be preferred to that of Mr Younger. Mr Pinchen noted that the applicant’s evidence as to her conversation with Ms Liu on 10 January 2012 had been largely unchallenged. He submitted that an adverse inference should be drawn from the respondent’s failure to call evidence from Ms Liu 7. Mr Pinchen noted that the respondent had failed to provide a recording of the advice received from the FWO to verify that the alleged advice had in fact been given.

RESPONDENT’S SUBMISSIONS

[38] The respondent provided a written response to the submissions on behalf of the applicant. Mr Younger also made oral submissions.

[39] It is submitted that the respondent was acting under advice from the FWO in concluding that the applicant had abandoned her employment. If she had no intention to leave her job she should have contacted the respondent after receiving notification of her dismissal rather than a solicitor. The respondent had no obligation to contact the applicant for a further medical certificate, it was her responsibility to provide one. Further, the applicant had written and enforced the policy concerning the requirement to provide medical certificates and could not have misunderstood her obligations in this regard. The respondent had made offers to reinstate the applicant, on leave without pay, but these had been rejected or ignored.

[40] The respondent rejects the submission that the applicant’s mental health or the fact that she made a workers compensation claim played any part in the reasons for dismissal. Nevertheless it submits that the applicant has not been honest in making that claim. The respondent also rejects the suggestion that it should have made direct contact with the applicant as she had threatened to go to the police if they did so.

[41] It is submitted that the applicant’s job prospects had not been adversely affected by the dismissal because, at that time, she was on leave without pay and had an illness that appeared to be ongoing. Further, the applicant had indicated that she intended to move to part time work and then retire in the near future.

[42] The respondent submits that it had a valid reason for the dismissal based on the applicant’s abandonment of employment. The respondent submits that there is no requirement to give prior notice of dismissal when there has been misconduct which includes abandonment of employment. It is submitted that the respondent did not deny the applicant the opportunity to respond. Mr Younger stated that, if the applicant had contacted him, he would have reviewed his decision.

[43] The respondent submits that the method of dismissal is irrelevant. Emails are an accepted means of communication in the industry and within the company itself. There has been no denial of natural justice as it was the applicant who chose not to contact the company. It is noted that the applicant had been the only person within the business who was experienced in employment related matters. The respondent submits that it had attempted to ensure that proper procedures were followed by getting advice from the FWO.

[44] The respondent denies that the dismissal process was flawed or that the dismissal was harsh. In addition to the factors already mentioned, it submits there was no proof that the applicant’s illness was caused by the respondent as borne out by the insurer’s rejection of her workers compensation claim. The respondent rejects any suggestion that it has denigrated the applicant. Pointing out that she had not told the truth in relation to her workers compensation claim was just stating a fact.

[45] The respondent submits that the decision to dismiss the applicant had not been made rashly. Advice was sought from the FWO and there was careful consideration and discussion before informing the applicant of the company’s decision. It had been the applicant who had rejected opportunities for discussions about her return to work. The respondent submits that it had been considerate to the applicant during the period of her employment.

[46] The respondent rejects the applicant’s submission that the dismissal had exacerbated her condition. It notes the applicant’s evidence that her doctor considered her fit to look for work only four days after the dismissal. In any event an employer should not be required to retain an employee who warrants dismissal just because such an action might negatively affect them.

[47] In response to the applicant’s submission that options other than dismissal should have been considered, it is submitted that, although the applicant had been a good employee, her actions in making false statements to the workers compensation insurer as well as refusing to participate in return to work discussions and threatening the company with police action, had eroded her standing in the view of the respondent.

[48] In relation to the question of remedy the respondent notes that it has offered to reinstate the applicant to the same position as before the dismissal. The respondent submits that it is constantly struggling to make ends meet and over the last few years has been operating at a loss. It submits that it has already paid the applicant in respect of what it now believes was unjustified sick leave. The respondent submits that, had the applicant not been dismissed, she would have remained on leave without pay for some time. She has suffered no loss.

[49] The respondent disputes that the applicant has made significant efforts to find another job. She did not seek a reference to assist in her endeavours. The respondent submits that weight should be given to the applicant’s “miraculous recovery” following the dismissal.

[50] In his oral submissions Mr Younger emphasised that advice had been sought from the FWO about the situation. He believes that the respondent had been morally correct to dismiss the applicant and apologises if there has been any technical breach of the unfair dismissal rules. Mr Younger submitted that there had been no plot to get rid of the applicant. The business was in a difficult position with the applicant away for an indefinite period. He tried to have a meeting with her about her return to work but she had refused. Mr Younger submitted that he dismissed the applicant only because he thought she did not intend to return to work.

CONCLUSIONS

[51] Section 396 of the Act sets out four matters which must be decided in applications of this type before the merits of a claim are considered. Those matters are:

[52] The application in this case was lodged within the period required in subsection 394(2). There is no issue that the applicant is a person protected from unfair dismissal within the meaning of section 382. The Small Business Fair Dismissal Code is not relevant to this matter. In the Form F3 - Employer’s Response Mr Younger states that the respondent had 21 employees when the applicant was dismissed. Paragraph (d) of subsection 396 has no relevance in the present matter.

[53] Section 385 provides that a person has been unfairly dismissed if FWA is satisfied that:

[54] Paragraph (a) is clearly met. Paragraphs (c) and (d) have no relevance.

[55] In order to decide whether the dismissal of the applicant was harsh, unjust or unreasonable it is necessary to turn to section 387 which sets out the factors which must be taken into account by FWA. Those factors are as follows:

[56] I shall address each of these factors in turn.

[57] In this case it is the applicant’s alleged abandonment of employment which is relied upon as the reason for her dismissal. I note that it was not the respondent’s obligation to request a further medical certificate from the applicant but for her to provide it or some other explanation for her ongoing absence. Nevertheless, I do not agree that the applicant abandoned her employment or that her conduct otherwise provided a valid reason for her dismissal.

[58] The applicant’s medical certificate had expired and the respondent had not heard from her for three or four days. However, in view of the fact that she had been providing ongoing medical certificates and had no history of unexplained absences from the workplace, it would have been reasonable for the respondent to have made inquiries of her.

[59] I accept Mr Younger’s evidence as to the advice received from the FWO. Although technically correct in one sense, it is unfortunate that the advice didn’t contain some indication that fairness might require the respondent to take some positive steps to ascertain the applicant’s future intentions rather than making assumptions about what they were.

[60] The applicant was notified of the reason for her dismissal however this notification was provided at the same time as the decision was imparted to her. As the Full Bench decision in Crozier makes clear, the words of the Act, or in that case an identically worded predecessor provision, require that an employee receive prior notification of the reason in order to allow them the chance to respond.

[61] The applicant was not provided with any opportunity to respond to the reason for her dismissal. Mr Younger suggested that the applicant should have contacted him after receiving the notification of her dismissal in order to have a discussion about whether she wished to remain in her job. However it was not up to the applicant to facilitate such a discussion after the event, but the obligation of the respondent to have provided the opportunity prior to making the decision to dismiss. Naturally, if the applicant had refused to meet with or meaningfully engage with the respondent to discuss the issue there would be little else it could do.

[62] As there were no discussions with the applicant relating to the dismissal, the issue of the presence of a support person does not arise.

[63] Although the respondent is not a small business employer within the meaning set out in the legislation it is not very large. There was no evidence that the company had any dedicated human resource management specialists or expertise ironically other than perhaps the applicant. In my view these factors had a negative impact on the procedures which were followed in effecting the applicant’s dismissal.

[64] I have noted and taken account of the submissions of both parties on other relevant factors. I consider the fact that the applicant was summarily dismissed to also be of relevance.

[65] In all of the circumstances and having taken account of each of the factors in section 387 and my findings thereon I have determined that the termination of the applicant’s employment was harsh, unjust and unreasonable. It follows from this and other matters addressed in paragraphs 53 and 54 above, that the applicant’s dismissal was unfair.

[66] Sections 390, 391 and 392 of the Act deal with remedies for unfair dismissals. I am satisfied that the provisions of section 390(1) and (2) have been met in this case. Subsection (3) provides that an order for compensation must not be made unless FWA is satisfied that reinstatement is inappropriate.

[67] The applicant does not seek reinstatement. It appears that the respondent may not oppose a form of reinstatement where the applicant returns on leave without pay. However, the poisonous nature of the relationship between the parties and the size of the enterprise cause me to be satisfied that reinstatement is not appropriate in this case.

[68] Pursuant to section 390(3)(b) I consider that, in all of the circumstances of this case, it is appropriate to make an order for the payment of compensation. Section 392(2) requires that, in determining an amount for the purposes of such an order, FWA must take into account all the circumstances of the case including:

[69] Although submissions were made that the respondent is struggling financially there was no evidence to support the submissions. In addition, there was nothing to suggest that the actual viability of the business would be at risk if an order for compensation was made.

[70] The length of the applicant’s service with the respondent was over three and a half years.

[71] There is always a speculative element involved in assessing the remuneration that a person would have received or would have been likely to have received had it not been for a particular dismissal.

[72] In addition, there were some particular uncertainties about the ongoing relationship in this case. First, the increasing level of acrimony between the parties arising out of the applicant’s workers compensation claim. My observations of the parties and consideration of the evidence leads me to conclude that the employment relationship was not likely to have survived much longer. Whether the end would have been caused by dismissal, resignation or some mutual arrangement would be guesswork.

[73] Secondly, although the evidence is that the applicant felt able, and was medically cleared, to look for other work from a few days after the dismissal this is not the same as being cleared to return to work with the respondent. There is nothing before me to suggest that this was likely to have occurred in the near future. It also needs to be remembered that the applicant had no more leave entitlements and would have been on continuing leave without pay. This would have had a direct impact on the amount of remuneration she would have received.

[74] The third factor is that the applicant had intended to move to part time work at some point in 2012.

[75] In the circumstances I consider that the applicant has made satisfactory efforts to mitigate her loss. The evidence is that the applicant had not been in receipt of any remuneration from employment or other work during the period between the dismissal and the hearing. There was nothing to suggest that this situation would change between that time and the making of any order for compensation or, for that matter, up until actual compensation.

[76] There is no other matter which I consider to be relevant under paragraph (g).

[77] Having taken all of these matters into account as well as all of the circumstances of the case I have determined that I should make an order for six weeks compensation. As I understand it the evidence is that the applicant earned $75,000 per annum. That equates to $1,442.31 per week. Consequently the order for compensation will be for an amount of $8,653.86 less appropriate tax. An order to this effect accompanies this decision.

COMMISSIONER

Appearances:

G Pinchen, agent, for the applicant.

D Younger for the respondent

Hearing details:

Sydney

2012

November 12.

 1   Moore v Levelan Pty Ltd PR944224; Sharpe v MCG Group Pty Ltd [2010] FWA 2357.

 2   Jobson v Gerrard Strapping Systems [Print P6151];

Selvalchandran v Peteron Plastics Pty Ltd (1995) 62 IR 371 @ [373];

Byrne and Frew v Australian Airlines (1995) 185 CLR 410 @ [465-466];

Miller v AIRC (2001) 108 FCR 192;

Shorten v Australian Meat Holdings Pty Ltd [Print N6928];

Nettleford v Kym Smoker Pty Ltd, 69 IR 370 @ [372] (Nettleford);

Abdullah v Merino Gold Ltd (unreported, 14 October 1996, Parkinson JR)

WD & HO Wills v Xuereub [Print N7136];

Smith v Moore Parragon [PR915674] at [92].

 3   Crozier v Palazzo Corporation Pty Ltd 98 IR 137 (Crozier);

GH Operations Pty Ltd (t/a The Grand Hyatt Melbourne) v Smith [Print PR904136] @ [18].

 4   Pergaminos v Thian PL t/as Glenhuntly Terrace [PR920123], @ [10], [43];

Rieusset v Pastry Art Design PL [PR922187] @ [36].

 5   Nettleford;

Quinlivan v Norske Skog Paper Mills (Australia) Ltd [2010] FWA 883.

 6   Snow v State of Victoria [PR942008] @ [55].

 7   Jones v Dunkel (1959) 101 CLR 298

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