Dismissal may be unfair even with misconduct; FW Commission

The Fair Work Commission may and sometimes does determine that the termination of the employment of an employee constitutes an unfair dismissal justifying compensation and even on occasion reinstatement even where there is a finding on the evidence that the employee committed serious misconduct justifying dismissal if the procedures followed by the employer are sufficiently unacceptable to the Commission. This is termed “discretion”.

“S. 387 (a) – Valid reason for the dismissal related to capacity or conduct

[35] In this instance, the applicant was summarily dismissed because the employer considered that his conduct on 27 February 2020, represented serious misconduct. The misconduct arose from the applicant parking his utility vehicle in the factory contrary to the instruction given by his immediate supervisor. However, it was clear that this disobedience was not misconduct that was likely to bring the employment to an end. As with previous instances involving the applicant’s disobedience, the employer appeared to tolerate a level of disagreeable behaviour that appeared to be a general reflection of the applicant’s personality.

[36] The misconduct associated with the applicant’s disobedience in respect to the parking of his vehicle was overshadowed by the misconduct that occurred during the two telephone conversations with Mr Russell shortly after 2 pm on 27 February 2020. In workplaces such as factories and construction sites there is generally a robust level of verbal communication between individuals that would not ordinarily be tolerated in other more genteel workplace settings. The language used by the applicant, other workers, and his supervisors would regularly involve some aggressive exchanges including the use of profanity and insult. However, there are circumstances where it becomes clear that despite the generally acceptable level of aggression and insult that might be part of regular robust exchanges, a line has been crossed.

[37] The evidence has confirmed that Mr Russell contributed to the unfortunate level of aggression and insult that was exchanged during his telephone conversations with the applicant on the afternoon of 27 February 2020. A level of tit-for-tat verbal aggression and insult between an employee and their supervisor may, in many workplace settings, be tolerated. However, in even the most robust of workplace environments, conduct whereby an employee told their supervisor that they were a fucking smart arse and twice hung up on them, would likely represent misconduct that strained the employment relationship to breaking point.

[38] In this instance, the applicant compounded his misconduct by verifying that he had hung up on the telephone call with Mr Russell, and then he proceeded to maintain the abusive and aggressive argument and hang up on Mr Russell for a second time. On any objective contemplation, the applicant’s aggressive and abusive verbal attack upon Mr Russell which he maintained and exacerbated during the second telephone call, could not be justified by any level of initial contribution on the part of Mr Russell, and represented serious misconduct that was plainly contrary to any continuation of the employment relationship. In colloquial terms, this conduct amounted to the applicant sacking himself.

[39] In summary therefore, the conduct of the applicant during the telephone calls that he had with Mr Russell shortly after 2 pm on 27 February 2020, constituted serious misconduct and provided valid reason for the dismissal of the applicant.

  1. 387 (b) – Notification of reason for dismissal

[40] The employer provided notification of the reasons for the applicant’s dismissal by email communication. Communication of the advice of dismissal by electronic means such as email or text message, should generally be avoided. Unless there is some compelling reason like extensive distance or genuine safety concern, advice of dismissal from employment is a matter of such significance that it should be conveyed in person.

[41] Regrettably, the applicant was unaware of his dismissal on 27 February as he did not check his email inbox regularly. The applicant arrived at work on 28 February when he discovered that he had been dismissed the previous afternoon.

  1. 387 (c) – Opportunity to respond to any reason related to capacity or conduct

[42] The applicant was not given an opportunity to respond to the circumstances regarding the telephone conversations that he had with Mr Russell on 27 February, before Mr Zarantonello made the decision to dismiss him. The approach that was adopted by Mr Zarantonello was severely flawed and it denied the applicant natural justice.

[43] Although Mr Zarantonello could understandably accept the veracity of what was reported to him by Mr Russell, the applicant was entitled to an opportunity to provide any explanation including any mitigating factors that Mr Zarantonello may have taken into account before he took the decision to dismiss the applicant. The decision to dismiss the applicant before providing him with an opportunity to be heard represents a fundamental injustice.

  1. 387 (d) – Unreasonable refusal to allow a support person to assist

[44] In a technical sense, the employer did not unreasonably refuse to allow the applicant to have a support person present to assist at any discussions relating to dismissal because there were no such discussions. Consequently, the process that the employer adopted avoided any opportunity for the presence of a support person to assist the applicant, and can be construed to represent an unreasonable refusal to allow the assistance of a support person.

  1. 387 (e) – Warning about unsatisfactory performance

[45] This factor is not relevant to the circumstances in this instance as the applicant was not dismissed for unsatisfactory performance but instead, serious misconduct.

  1. 387 (f) – Size of enterprise likely to impact on procedures

[46] The employer is a medium size business operation and therefore allowance has been made for a degree of informality and some imprecision in respect to employment related matters.

  1. 387 (g) – Absence of management specialists or expertise likely to impact on procedures

[47] There was evidence that the employer did not have management specialists or other expertise. Experts should not be required to ensure that fundamental fairness is observed. The employer should have adopted an approach that provided the applicant with natural justice. It is irrelevant that subsequently no mitigating factors have been identified which would have changed Mr Zarantonello’s mind. The applicant was entitled to an opportunity to be heard before Mr Zarantonello made the decision to dismiss.

  1. 387 (h) – Other relevant matters

[48] There was evidence that the applicant has experienced some mental health difficulties. However, there was no evidence provided which linked these mental health issues with the applicant’s misconduct on 27 February 2020. It has also been noted that there appeared to be little complaint made about the applicant’s work performance, as opposed to his demeanour, behaviour and interpersonal interactions in the workplace.

Conclusion

[49] The applicant was summarily dismissed for serious misconduct involving his aggressive and abusive exchanges with his supervisor Mr Russell during two telephone calls on 27 February. This misconduct was considered by the employer in the context of a history of confrontational workplace behaviour. Upon careful analysis, the employer’s findings of serious misconduct have been confirmed.

[50] The misconduct of the applicant which involved his aggressive and abusive telephone calls including hanging up on Mr Russell twice, was misconduct that was plainly inconsistent with the continuation of employment and it established valid reason for the dismissal of the applicant. However, the valid reason for dismissal has been assessed and evaluated against significant procedural errors which were evident in the manner that the employer determined and implemented the dismissal of the applicant.

[51] The procedural errors in this case were matters of significance such that the applicant was denied natural justice. Even argumentative and difficult people are entitled to natural justice. There was no justification for not hearing from the applicant before the decision to dismiss was made. Further, the communication of advice of dismissal via email was entirely inappropriate and unnecessarily harsh.

[52] Therefore, although the applicant was dismissed for valid reason involving his serious misconduct, the significant procedural defects evident in respect of the determination and implementation of the dismissal of the applicant have rendered the summary dismissal to have been harsh and unjust. The applicant’s dismissal has been found to have been unfair and the Commission must logically consider the appropriate remedy that should be provided in this instance.

Remedy

[53] The application document (F2) indicated that a remedy of reinstatement was sought. However, at the Hearing it appeared that the applicant was pursuing compensation as remedy for his unfair dismissal. The applicant suggested that any compensation might involve the difference between his weekly workers compensation payments and his ordinary weekly wages.

[54] In the circumstances, particularly as the employment of the applicant was irreparably damaged by the unfortunate circumstances surrounding the misconduct of the applicant on 27 February 2020, reinstatement would not be an appropriate remedy. Further, in the particular circumstances of this case which involved serious misconduct, the appropriate remedy would logically contemplate potential for reduction of any amount of monetary compensation.

[55] I have decided that compensation would be an appropriate remedy for the applicant’s unfair dismissal, and I turn to the factors which involve the quantification of any amount of compensation.

[56] Section 392 of the Act prescribes certain matters that deal with compensation as a remedy for unfair dismissal. I have approached the question of compensation having regard for the guidelines that have been established in the Full Bench Decisions of, inter alia; Sprigg v Paul’s Licensed Festival Supermarket 1 (Sprigg); Smith and Ors v Moore Paragon Australia Ltd 2 and more recently, the cases of; McCulloch v Calvary Health Care Adelaide3; Balaclava Pastoral Co Pty Ltd v Nurcombe;4 and Hanson Construction Materials v Pericich5 (Pericich).

[57] Firstly, I confirm that an Order for payment of compensation to the applicant will be made against the respondent employer in lieu of reinstatement of the applicant.

[58] Secondly, in determining the amount of compensation that I Order, I have taken into account all of the circumstances of the matter including the factors set out in paragraphs (a) to (g) of subsection 392 (2) of the Act.

[59] There was no specific evidence provided which established that an Order of compensation would impact on the viability of the employer’s enterprise.

[60] The applicant had been employed for a period of about five years and four months. The applicant would have been likely to have received remuneration of approximately $1,515.00 per week if he had not been dismissed.

[61] There was clear evidence upon which to conclude that the employment of the applicant would have finalised in accordance with a proper and just contemplation of his misconduct. Consequently, the employment of the applicant would have concluded within two weeks after his unfair dismissal.

[62] For the purposes of calculation of remuneration that the applicant would have received or would have been likely to receive if he had not been dismissed, I have considered that the employment of the applicant would have continued for a further two weeks. Therefore, the total remuneration that would have been received in the notional period of two weeks following dismissal amounted to a figure of $3,030.00.

[63] The total amount of remuneration received in alternative employment, as identified, and that which may be reasonably likely to be earned between dismissal and the making of the Order for compensation, has been calculated to be $0. There was evidence that the applicant had not sought to obtain alternative employment but had instead been in receipt of weekly workers compensation payments.

[64] Thirdly, in this instance there was established misconduct of the applicant, and consequently I have decided to make a reduction of 50% to the amount of compensation to be provided to the applicant on account of misconduct.

[65] Fourthly, I confirm that any amount Ordered does not include a component by way of compensation for shock, distress or humiliation, or other analogous hurt caused to the applicant by the manner of the dismissal.

[66] Fifthly, the amount Ordered does not exceed the compensation cap as prescribed by s. 392 (5) of the Act.

[67] Consequently, for the reasons outlined above, taking into account all of the circumstances of the case, and having cognisance so as not to apply the approach taken in the Decision in Sprigg in a rigid, determinative manner, as was cautioned in the Decision in Pericich, I have decided that the amount of compensation to be provided to the applicant should be a gross figure of $1,515.00.

[68] Accordingly, separate Orders [PR722942] providing for unfair dismissal remedy in these terms will be issued.”

Jones v Karisma Joinery Pty Ltd (2020) FWC 5051 delivered 25 September 2020 per Cambridge C