Dismissals under the Small Business Fair Dismissal Code

Dismissals under the Small Business Fair Dismissal Code.

I find the provisions of the Small Business Fair Dismissal Code tricky to apply, because in my view they are not well drafted. Here is an example of the issues which can arise.

“Legislative provisions

[63] In unfair dismissal cases where the employer is a small business employer, the Commission must first consider whether the dismissal was consistent with the Code. The Code has two limbs: “summary dismissal” upon the ground of serious misconduct; and “other dismissal” based on the employee’s conduct or capacity to do the job. The Code is not located in the FW Act or the Regulations. Rather it is governed by a Ministerial Declaration pursuant to s.388(1) of the Act. The terms of the Code are as follows:

“Small Business Dismissal Code

Commencement

The Small Business Fair Dismissal Code comes into operation on 1 July 2009.

Summary Dismissal

It is fair for an employer to dismiss an employee without notice or warning when the employer believes on reasonable grounds that the employee’s conduct is sufficiently serious to justify immediate dismissal. Serious misconduct includes theft, fraud, violence and serious breaches of occupational health and safety procedures. For a dismissal to be deemed fair it is sufficient, though not essential, that an allegation of theft, fraud or violence be reported to the police. Of course, the employer must have reasonable grounds for making the report.

Other Dismissal

In other cases, the small business employer must give the employee a reason why he or she is at risk of being dismissed. The reason must be a valid reason based on the employee’s conduct or capacity to do the job.

The employee must be warned verbally or preferably in writing, that he or she risks being dismissed if there is no improvement.

The small business employer must provide the employee with an opportunity to respond to the warning and give the employee a reasonable chance to rectify the problem, having regard to the employee’s response. Rectifying the problem might involve the employer providing additional training and ensuring the employee knows the employer’s job expectations.

Procedural Matters

In discussions with an employee in circumstances where dismissal is possible, the employee can have another person present to assist. However, the other person cannot be a lawyer acting in a professional capacity.

A small business employer will be required to provide evidence of compliance with the Code if the employee makes a claim for unfair dismissal to Fair Work Australia, including evidence that a warning has been given (except in cases of summary dismissal). Evidence may include a completed checklist, copies of written warning(s), a statement of termination or signed witness statements.”

[64] In the terms of the Code dealing with “Other Dismissal” the drafters included a reference to “valid reason”. The first sentence of this part of the Code requires that the employee be “…given a reason why he or she is at risk of dismissal”. The second sentence requires that “[t]he reason must be a valid reason based on the employee’s conduct or capacity to do the job.” Consideration of whether a reason is valid is a separate consideration to the requirement that the employee be given a reason for dismissal although the reference to valid reason is a reference to the reason given to the employee.

[65] In relation to the reason being given to the employee, the language in the first sentence of the Code explicitly requires that this occur before a decision to dismiss has been made. That sentence refers to the employee being given a reason why he or she is “at risk of being dismissed”. These provisions can be contrasted with those which apply when the fairness of a dismissal is being assessed under s.387 of the FW Act. Whether an employee is notified of a reason for dismissal as provided in s.387(b) is a consideration that is weighed in the overall assessment of whether a dismissal was unfair and a finding that this step was not taken will not necessarily be fatal to a finding that the dismissal was fair.

[66] It appears from the terms of the Code dealing with “Other Dismissal” that if the employee is not given a valid reason for dismissal based on the employee’s conduct or capacity to do the job, prior to being dismissed, the dismissal will not be consistent with the Code. It is axiomatic that an employee cannot respond to a reason for dismissal if he or she is not informed of that reason before the dismissal is carried out and given an opportunity to respond. The requirement that the reason be given before a dismissal is carried out is consistent with the later requirements of the Code in relation to warnings and opportunity to respond. The effect is that under the Code the employer is stuck with the reason given to the employee before the dismissal is carried out and cannot rely on another reason including a reason which may not have been known at the time of the dismissal. This can be contrasted with consideration of whether there was a valid reason for dismissal as provided in s.387(a) of the FW Act where, in finding that there was a valid reason for dismissal, the Commission is not limited to the reason relied on by the employer. 5

[67] It is also the case that the requirement in the Code that the reason is a valid reason based on the employee’s conduct or capacity to do a job is not expressed subjectively, based on the view or belief of the employer on reasonable grounds. This can be contrasted with the “Summary Dismissal” provisions of the Code which refer to the belief of the employer on reasonable grounds that the employee engaged in conduct that justified summary dismissal (a subjective consideration) rather than whether the conduct occurred and was of sufficient gravity or seriousness such as to justify dismissal as a sound, defensible or well-founded response (an objective consideration).

[68] The terms “valid reason”, “capacity” and “conduct” have well-established meanings in the context of legislation governing unfair dismissal and have been used in legislation which pre-dates the Code. I can see no basis for giving these terms a different meaning in the application of the Code. The absence of reference in the “Other Dismissals” section of the Code to the reasonable belief of the employer as to the validity of the reason for dismissal is a further indication that the term should be given the same meaning as it has in s.387(a) of the FW Act – a reason that is objectively sound, defensible and well founded and which justifies dismissal. Such a construction is not inconsistent with the legislative intent of the Code as evidenced by the Object of Part 3-2 of the FW Act in which the Code appears, which includes the needs of employers and employees and the intention to afford a “fair go all round”. 6

[69] “Capacity” is the employee’s ability to do the job required by the employer 7 including the work the employee was employed to do.8 Capacity is assessed objectively based on whether the work was performed satisfactorily and not whether the employee is working as well as could be expected or to the employee’s personal best.9

[70] The requirements in the Code that there be a valid reason for dismissal and that the employee is informed of that reason before dismissal also imply that any response provided by the employee is required to be considered by the employer before deciding to dismiss the employee. Where an employer cannot provide evidence that the response was considered, there may be difficulty in establishing the validity of a reason for dismissal particularly where the response provides an explanation for the conduct or capacity which led to the dismissal. This is also consistent with the provisions of the Code in relation to warnings which state that any response to a warning made by the employee should be a matter to which the employer has regard.

[71] I proceed on the basis that the provisions of the Code relating to “Other Dismissal” require that:

  1. Before dismissing an employee for reasons of conduct or capacity (other than those justifying summary dismissal) the employer must give the employee a reason why he or she is at risk of being dismissed.
  2. The reason must be a valid reason (in the sense that it is sound, defensible and well founded and justifies dismissal) based on the employee’s conduct or capacity.
  3. Conduct includes an omission 10and capacity is the employee’s ability to do the job as required by the employer11and includes the employee’s ability to do the work he or she was employed to do.12
  4. The employer must give the employee an opportunity to respond to the reason for dismissal before dismissing the employee.
  5. The requirement that there be a valid reason for dismissal means that some consideration should be given to the response the employee provides. This will generally be required when the Commission is assessing whether the reason for dismissal was valid.
  6. The employee must have been warned that he or she is at risk of being dismissed either for similar conduct or capacity issues or that the issue that is the subject of the warning has generally placed the employee’s employment at risk and that any repetition or further conduct or capacity issues will result in dismissal.
  7. If the employee has previously engaged in conduct that has placed his or her employment at risk and has been warned in relation to it there is no requirement that a further warning be given and it will be sufficient if the employee is notified that the employer believes that the same conduct or further conduct that places the employee’s employment at risk has occurred and gives the employee an opportunity to respond before dismissing the employee.
  8. The employee must have been given a reasonable opportunity to improve his or her performance prior to the dismissal being carried out which may include the employer providing additional training and ensuring that the employee knows the employer’s job expectations.
  9. An employee may request to have another person present to assist in discussions in circumstances where dismissal is possible, provided the person is not a lawyer acting in a professional capacity. The employer is not required to offer a support person.

[72] If a dismissal was consistent with the Code then the dismissal is not unfair and does not fall to be considered against the criteria in s.387 of the FW Act. If the Commission is not satisfied that the dismissal was consistent with the Code, the Commission must then consider whether the dismissal was unfair because it was harsh, unjust or unreasonable on the basis of the criteria in s.387 of the FW Act as follows:

“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.”

[73] Applying those criteria, a dismissal may be:

  • Harsh – because of its consequences for the personal and economic situation of the employee, or because it is disproportionate to the gravity of the misconduct;
  • Unjust – because the employee was not guilty of the misconduct on which the employer acted; and/or
  • Unreasonable – because it was decided on inferences that could not reasonably have been drawn from the material before the employer. 13

Was the Applicant’s dismissal consistent with the Code?

[74] The letter dated 10 November 2021, notifying the Applicant of “the termination of his employment on 8 December 2021”, states two reasons being “Underperformance” and “Refuse to comply with company covid-19 vaccination policy”. Somewhat confusingly, after informing the Applicant that his employment will end on 8 December, the letter states that Mr Long proposes that he and the Applicant “meet again on 15 November 2021 to review your progress” and concludes by inviting the Applicant to respond to the “termination letter” if he wishes to do so. Although the Applicant took personal leave for some of the period between 10 November and 8 December 2021, it is not in dispute that he remained employed and worked for part of that period.

[75] Accordingly, the reason for the Applicant’s dismissal was not conduct of the kind listed in the provisions of the Code as justifying summary dismissal, but rather was for a reason caught by the “Other Dismissal” provisions of the Code. On the face of the letter informing the Applicant of his dismissal, the reason for the dismissal was associated with the Applicant’s conduct and his capacity to do the job because of his vaccination status. The failure of the Respondent to call evidence at the hearing sufficient to establish the validity of the reasons for dismissal, means that I am unable to be satisfied that these matters were a valid reason for dismissal.

[76] Firstly, there was no evidence of any underperformance on the part of the Applicant. Secondly, I am not satisfied that the Respondent had a COVID – 19 vaccination policy, much less that the Applicant’s conduct was a refusal to comply with such a policy.

[77] It is well established that employees have an obligation to follow the lawful and reasonable directions of their employer. Such a term may be specifically provided for in a contract of employment or implied, by law, in the absence of a contrary intention by the parties. 14 Accordingly, a refusal of an employee to comply with a lawful and reasonable direction of an employer is prima facie a valid reason for dismissal.

[78] A policy is a course of action or principle adopted or proposed by an organisation. Implicitly a policy is required to be promulgated in some manner appropriate to the context in which it is to operate. A policy may operate as a direction such that failure to comply may render an employee liable for discipline. If an employee is disciplined or dismissed for failure to comply with a policy that is not promulgated in a manner that properly explains the policy and the implications of failing to comply, it will be difficult to establish that non-compliance constitutes a failure to follow a lawful and reasonable direction. In addition to the subject matter being lawful and reasonable, it is axiomatic that a direction requires a person to do something and the implications for failure to comply must be clear.

[79] In Construction, Forestry, Maritime, Mining and Energy Union, Matthew Howard v Mt Arthur Coal Pty Ltd 15 (Mt Arthur Coal), a Full Bench of the Commission considered whether a direction in the form of a site access requirement that all workers at the mine must be vaccinated against COVID – 19 by a particular date as a condition of site entry was lawful and reasonable. The Full Bench had regard to various matters, including whether consultation requirements in industrial instruments and workplace health and safety legislation had been met. It was held by the Full Bench that the site access requirement was prima facie lawful because it fell within the scope of employment and because there is nothing illegal or unlawful about becoming vaccinated. The Full Bench in Mt Arthur Coal did not express a concluded view about whether a failure to comply with consultation requirements in workplace health and safety legislation was relevant to the lawfulness of a direction, but rather, focused on whether such failure was relevant to its reasonableness. The Full Bench concluded that the site access requirement was not reasonable because the employer had not consulted employees in accordance with its obligations under workplace health and safety legislation. The Full Bench also observed that had the employer conducted a meaningful consultation process, other considerations in the case would have provided a strong basis for a conclusion that the Site Access Requirement was a reasonable direction.

[80] In the present case, the following matters are not in dispute. The respondent is in the business of delivering food products to businesses or facilities including childcare centres, aged care facilities, restaurants, and supermarkets. Some of the deliveries undertaken by the Respondent’s employees required them to cross the border between Queensland and New South Wales. Further, at or around the time the Applicant was dismissed, those businesses and facilities were subject to restrictions in relation to entry to premises by persons who were not vaccinated against COVID – 19. The restrictions were imposed either through Government health directives or policies implemented by the businesses or facilities. There were also vaccination requirements for persons crossing the border from Queensland to New South Wales.

[81] In those circumstances it would have been entirely appropriate for the Respondent to have a vaccination policy and it is probable that if such a policy were properly implemented, it would constitute a lawful and reasonable direction such that a failure to comply could render an employee liable to be dismissed. However, as I have found, the Respondent has failed to establish that it had such a policy, much less that it was properly implemented.

[82] The provenance of the document tendered by Mr Long is unclear. Mr Long’s evidence about why the PDF versions of the document had two different names was not convincing. It was not established when the document came into existence and when it was put up on a wall in Mr Long’s office. The terms of the document are unclear, and it provides no meaningful information to employees and does not direct employees to any source of information about vaccination generally or the rationale for the employer implementing a vaccination policy. Significantly, for the purposes of determining whether the fact that the Applicant was not vaccinated was a valid reason for the termination of his employment based on his conduct or capacity to do the job, it is not clear from the document tendered by Mr Long that this was a requirement. The document states that employees are required to be double vaccinated by 8 November 2021 or have a plan to be vaccinated “to continue the job”. Accordingly, the cut-off date by which employees must be vaccinated is not absolute. Further confusion is created by the fact that the document concludes by stating: “Any solutions that can keep you safe and address your concerns please contact Shaun Long.” This implies that Mr Long is open to alternatives to vaccination.

[83] The document contains no information about the repercussions for employees who are not vaccinated by the stipulated date. There is also no mechanism for employees to inform the Respondent of their vaccination status and no advice about how that information will be collected and held securely. Mr Long could not state that all the Respondent’s employees have been vaccinated, further indicating that there was no policy or that it was not consistently implemented. Further, there is no evidence that Mr Long, or any representative of the Respondent, had a discussion with the Applicant to inform him of the alleged requirement, much less that the Applicant or other employees were consulted. The Applicant’s uncontested evidence, which I accept, is that he was informed about the requirement to be vaccinated by a work colleague and had not seen the document purporting to set out the policy prior to Mr Long tendering it in these proceedings.

[84] Significantly, Mr Long conceded that he gave work that had previously been done by the Applicant to another employee – Mr Arnold – in circumstances where he was unable to state that Mr Arnold had been vaccinated at the time and there was evidence before the Commission in terms of text messages exchanged between the Applicant and Mr Arnold, making it clear that Mr Arnold had not been vaccinated at a point after the cut-off date in the alleged policy. This evidence is a further indication that there was not a policy in relation to vaccination, the breach of which could have been a valid reason for the Applicant’s dismissal based on his conduct and capacity.

[85] Accordingly, failure to comply with a vaccination policy was not a valid reason for dismissal based on the Applicant’s conduct or capacity to do the job. As previously noted, there was no evidence of any performance issue that could have constituted a valid reason for dismissal. I am therefore not satisfied that there was a valid reason for the Applicant’s dismissal based on his conduct or capacity to do the job. I am also not satisfied that the Applicant was given a reason why he was at risk of being dismissed. Even if I accept Mr Long’s version of the conversation he claimed to have with the Applicant on 27 October and 9 November 2021, that conversation is not sufficient to establish that the Applicant was given a reason why he was at risk of being dismissed.

[86] On Mr Long’s evidence, the conversation on 27 October 2021 was to obtain a response from the Applicant about whether he had been vaccinated. Mr Long does not indicate that he made any comment when the Applicant replied and said that he would not comply. Mr Long did not inform the Applicant that his employment would be at risk if he maintained that position. Mr Long’s evidence about the conversation with the Applicant on 9 November, if accepted, may establish that he advised the Applicant that he was at risk of being dismissed if he was not vaccinated, but that is not sufficient for compliance with the Code.

[87] To comply with the Code, it was also necessary for the Applicant to be warned verbally, or preferably in writing, that he risked being dismissed because of his refusal to comply with the vaccination policy. The Respondent did not comply with this requirement and did not warn the Applicant that he was at risk of dismissal for this reason. Taken at its highest, Mr Long’s evidence of the conversation with the Applicant on 8 November 2021 does not constitute a warning. Mr Long states that he asked the Applicant whether he planned to be vaccinated from December as all restaurant and café customers would require persons to be double vaccinated to enter. According to Mr Long, when the Applicant responded by saying “probably not” he told the Applicant that he could not work for the Respondent if he was not vaccinated. The Applicant’s response was: “Ok I gonna go”.

[88] The purpose of the requirement that an employee who is at risk of dismissal is given a warning, is related to the opportunity to respond to the warning, which the Code requires be given to an employee who is at risk of dismissal. I do not accept that the warning Mr Long gave to the Applicant was sufficiently detailed to meet this requirement, particularly in light of the deficiencies in the Respondent’s policy. The Code further requires that an employee who is at risk of dismissal is given a reasonable chance to rectify the problem, having regard to the employee’s response. On Mr Long’s evidence, the Applicant’s response to the question as to whether he intended to be vaccinated was: “probably not”. The Applicant’s evidence is that Mr Long stated, “If you haven’t been vaccinated, you don’t have a job” and that his response was to ask Mr Long to email information to him and he would get back to Mr Long.

[89] On either version of this conversation, the Applicant’s response was not a clear refusal and was given in circumstances where the implications of refusal to be vaccinated had not been explained to the Applicant. It is also relevant that when the Applicant provided this response, he was rushing away from work to attend to his partner who had been taken to hospital by ambulance and admitted. The Applicant states that he also told Mr Long that he needed to go as his partner was in hospital.

[90] The Code further provides that an employee be given a reasonable chance to rectify the problem, which may involve providing additional training and ensuring the employee knows the employer’s job expectations. At that point, the only information the Applicant had was from a colleague and not from Mr Long or any manager of the Respondent. When these matters are considered in the context of the lack of detail in the Respondent’s vaccination policy, and the fact that the Applicant had not been informed by Mr Long of the vaccination requirement or the effect of the policy, it is clear that the Applicant had no chance to rectify the problem. This is also apparent from the fact that the Applicant was notified of his dismissal on 10 November 2021 by letter sent at 1.57 pm that day, after he had forwarded a medical certificate to the Respondent advising that he was absent from work on carer’s leave due to the illness of his partner. Accordingly, regardless of whether the Applicant told Mr Long that his partner was in hospital before he left the workplace, the Respondent knew, or should have known, that this was the case, prior to the dismissal letter being sent to the Applicant.

[91] It is true that the letter notifying the Applicant of his dismissal invited him to attend a meeting to “review his progress”. However, the letter also informed the Applicant that his employment would end on 8 December 2001 and this was not conditional upon the review. The Applicant cannot be criticised for failing to attend a meeting to discuss his progress in circumstances where there was no indication that any discussion would change the fact that his employment would end on 8 December 2021. This is not an opportunity to respond to a warning or rectify a problem. In any event the Applicant responded to this letter and sought further information about the Respondent’s alleged vaccination policy and did not receive a response. This further establishes the lack of opportunity for the Applicant to respond to a warning or rectify the problem.

[92] There were no discussions about the dismissal and it is not necessary to consider whether the Applicant had another person present to assist him in discussions. While the Respondent completed the Checklist, there were two contradictory versions filed and Mr Long’s evidence about why this was the case was not convincing. The Applicant was not provided with a written warning either in relation to the vaccination policy or his alleged underperformance. For these reasons, I am not satisfied that the dismissal complied with the Code and it is necessary to consider whether the dismissal was unfair, having regard to the matters in s.387 of the FW Act.

Was the Applicant’s dismissal unfair?

Was there a valid reason for the Applicant’s dismissal?

[93] The reasons for the Applicant’s dismissal are within the Respondent’s knowledge, and it is required to establish that the reason was a valid reason for the purposes of s.387(a) of the FW Act. A valid reason for dismissal is one that is “sound, defensible or well-founded” and not “capricious, fanciful, spiteful or prejudiced.” 16 The reason for dismissal must also be defensible or justifiable on an objective analysis of the relevant facts.17

[94] For the reasons set out above, I do not accept in the present case that the Respondent has established that there was a valid reason for the Applicant’s dismissal. The Respondent did not have a vaccination policy that was properly promulgated in the workplace. There is insufficient evidence to establish when the document purporting to set out the policy came into existence and when it was posted on the wall of Mr Long’s office, or that it was posted at all. The terms of the document are confusing and contradictory.

[95] There is also evidence that after the Applicant was dismissed, the Respondent did not follow the alleged policy in any event. Under cross-examination, Mr Long was unable to confirm that all employees are vaccinated in accordance with the policy. Mr Long also conceded that Mr Arnold is still employed by the Respondent and took on the work the Applicant was doing when his employment ended. In response to the proposition that Mr Arnold was not vaccinated at the relevant time and that he is not currently vaccinated, Mr Long said that Mr Arnold had received a termination letter but had “come back” and persuaded Mr Long that he could work safely without being vaccinated.

[96] It also appears that the Applicant’s response to the termination letter was different to the response given by Mr Arnold. Mr Long’s evidence about Mr Arnold makes it clear that Mr Long must have known he was not vaccinated and, notwithstanding this, was prepared to accommodate Mr Arnold and to provide him with work, including work previously done by the Applicant, because Mr Long was having issues associated with shortage of labour. This tells against the vaccination policy being a valid reason for the Applicant’s dismissal. It appears that Mr Arnold was either retained in employment or given work as a casual employee, for the arbitrary reason that Mr Arnold responded differently to his dismissal. There is no evidence as to whether Mr Arnold received a letter notifying him that he was to be dismissed in the same form as the letter received by the Applicant. Regardless, for reasons set out above, the letter notifying the Applicant that he was to be dismissed with effect from 8 December 2021 was confusing and contradictory and it was not unreasonable for the Applicant to respond in the manner he did. The way the Respondent treated Mr Arnold weighs against the vaccination policy being a valid reason for the Applicant’s dismissal.

[97] In short compass, failure of the Applicant to comply with the terms of a confusing and ill-conceived document, which bears no resemblance to a policy and was not promulgated or applied as such in the workplace, was not a sound, defensible or well-founded reason for his dismissal. There is no evidence of underperformance as stated in the letter notifying the Applicant of his dismissal. I find that there was no valid reason for the Applicant’s dismissal, and this weighs in favour a finding that his dismissal was unfair.

Was the Applicant notified of the reason for his dismissal?

[98] Section 387(b) requires consideration of whether an employee is notified of “that reason” with reference to the valid reason for dismissal related to the employee’s capacity or conduct referred to in s.387(a). In relation to whether the Applicant was notified of the reason for his dismissal consistent with s.387(b), as a Full Bench of the Commission observed in Crozier v Palazzo Corporation Pty Ltd 18 procedural fairness requires that an employee be notified of a valid reason for dismissal before any decision to dismiss is taken and provided with an opportunity to respond to the reason identified.

[99] The Applicant was notified of the reason for his dismissal in the letter advising him that he was dismissed and that his employment would end on 8 December 2021. In circumstances where the reason for dismissal is provided in a letter notifying the Applicant that the termination of his employment is a fait accompli, and that his employment will end on a prospective date, it can hardly be said that the notification is consistent with the requirements in s. 387(b) of the FW Act. Accordingly, I find that the Applicant was not notified of the reason for his dismissal within the meaning in s.387(b) of the FW Act. This weighs in favour of a finding that the dismissal was unfair.

Was the Applicant given an opportunity to respond to reasons for dismissal?

[100] As the Applicant was not notified of the reasons for his dismissal, he was not given an opportunity to respond to the reasons to the extent those reasons related to his capacity and/or conduct as provided in s.387(c). If there was a policy requiring that the Applicant be vaccinated, the date by which this was required to occur was not until 8 December 2021. The Applicant was required to work out his notice and there is no reason why he could not have been warned about the fact that he was at risk of being dismissed, so that he could have had a proper opportunity over a reasonable period to consider his position. These matters weigh in favour of a finding that the dismissal was unfair.

Was there an unreasonable refusal to allow the Applicant a support person?

[101] There were no discussions with the Applicant relating to the dismissal and no request was made. Section 387(d) is not relevant and is a neutral consideration in determining whether the dismissal was unfair.

Was the Applicant warned about any unsatisfactory performance before dismissal?

[102] If the reasons for the Applicant’s dismissal included “underperformance”, there is no evidence of any warnings, for the purposes of s.387(e). The Applicant states that he had received no warnings during his employment and there was no evidence to the contrary from Mr Long, other than a bare assertion in the letter notifying the Applicant of his dismissal. There is also no evidence of any discussion with the Applicant conducted by a manager of the Respondent, warning him about the repercussions of failure to be vaccinated. I therefore find that the Applicant was not warned about any unsatisfactory performance. This weighs in favour of a finding that the dismissal was unfair.

Did the size of the enterprise impact on procedures followed in dismissing Applicant?

[103] The Respondent’s enterprise is a small business and I accept that this had an adverse impact on the procedures followed in effecting the dismissal. I have had regard to this matter.

Did any absence of dedicated human resource management or expertise impact the procedures followed in dismissing the Applicant?

[104] The Respondent’s enterprise does not have dedicated human resource management specialists or expertise. I accept that this adversely impacted on the procedures followed in effecting the dismissal and this is also a matter to which I have had regard.

Are there any other matters relevant to whether the Applicant’s dismissal was unfair?

[105] The following matters are in my view relevant to the overall consideration of whether the Applicant’s dismissal was unfair. The Applicant was notified that he had been dismissed while he was absent from work caring for his partner who was hospitalised at the time. Mr Long’s text messages questioning the Applicant’s absence from work, at what must have been a difficult time, were not appropriate. The Applicant’s uncontested evidence is that when he attended work on 9 November, he informed his manager that he may need to leave urgently if his partner’s condition deteriorated. Notwithstanding this, Mr Long’s text messages in response to those sent by the Applicant about his absence were hostile and there was no evidence of any attendance issues on the part of the Applicant to justify Mr Long’s attitude.

[106] Further, there was no reasonable basis for the Respondent to treat the Applicant and Mr Arnold differently and to continue to offer work to Mr Arnold while not offering work to the Applicant. I accept that Mr Long has difficulties with English and that this impacted on his communication with the Applicant. However, this is not a factor that outweighs other relevant considerations in the overall assessment of whether the Applicant’s dismissal was unfair.

Conclusion in relation to whether the Applicant was unfairly dismissed

[107] Balancing the considerations in s. 387 of the FW Act, I find that the Applicant was unfairly dismissed. The Applicant’s dismissal was harsh because of its economic consequences for the Applicant. At the time of this dismissal the Applicant had over six years’ service and lost the benefit of that service, particularly with respect to long service leave. The harshness of the dismissal was exacerbated by the fact that the Applicant’s partner was ill and hospitalised at the time he was notified of his dismissal.

[108] The Applicant’s dismissal was unjust because Mr Long decided that the Applicant would not be vaccinated, in circumstances where he had not had a proper discussion about the policy and its repercussions with the Applicant. The Applicant’s dismissal was unreasonable because the Applicant was dismissed in circumstances where he was not given a reasonable opportunity to consider his position with respect to vaccination before he was dismissed.

[109] I turn now to consider whether the Applicant have a remedy for his unfair dismissal?

Remedy

Whether reinstatement is inappropriate

[110] In circumstances where I have found that the Applicant was protected from unfair dismissal at the time he was dismissed and that he has been unfairly dismissed, s.390(1) provides discretion for the Commission to order a remedy of reinstatement or compensation. As required by s.390(2), the Applicant has made an application for an unfair dismissal remedy under s.394 of the FW Act. By virtue of s.390(3), the Commission must not order compensation unless satisfied that reinstatement of the person is inappropriate and the Commission considers an order for compensation is appropriate in all of the circumstances.

[111] The Applicant does not seek reinstatement and contends that it would be inappropriate because of the loss of trust on his part with Mr Long. It is also the case that the Respondent would have been entitled to introduce a vaccination policy had it gone about this process in a fair and reasonable manner. It is not clear that the Applicant is vaccinated and there is a possibility that he would not be able to work for the Respondent if he were reinstated. In these circumstances, I am satisfied that it is not appropriate to order reinstatement (s.390(3)(a)). I must therefore consider whether it is appropriate in all the circumstances to make an order for payment of compensation (s.390(3)(b)).

Whether an order for compensation should be made

[112] In relation to compensation, the Applicant seeks the following:

“Compensation for lost long service leave (pro-rata), underpaid wages/entitlements over the period of my employment, the cost to get retrained (Truck licenses, forklift license, training courses) me to find new work, impacts on my mental health due to the false allegations and breach of confidentiality, privacy and the embarrassing hostile work environment I endured post termination letter created by Shaun Long.

I therefore seek financial compensation, a written apology and for Shaun Long to send a memo to all other employees acknowledging his handling of my termination and addressing ongoing matters like health & safety/covid safe plan/human resources and wage contracts.”

[113] Section 390(3)(b) of the FW Act provides that the Commission may only issue an order for compensation if it is appropriate in all the circumstances. A remedy of compensation is designed to compensate an unfairly dismissed employee in lieu of reinstatement for losses reasonably attributable to the unfair dismissal within the bounds of the statutory cap on compensation that is to be applied. 19

[114] Having regard to all the circumstances of the case, including the fact that the Applicant has suffered financial loss and loss of employment credits because of his unfair dismissal, I consider that an order for payment of compensation to him is appropriate. It is necessary therefore for me to assess the amount of compensation that should be ordered to be paid to the Applicant. In assessing compensation, I am required by s.392(2) of the FW Act to take into account all the circumstances of the case including the specific matters identified in paragraphs (a) to (g) of this subsection.

[115] The established approach to assessing compensation in unfair dismissal cases was set out in Sprigg v Paul Licensed Festival Supermarket 20 and applied and elaborated upon in the context of the current Act by Full Benches of the Commission in a number of cases,21 as follows:

Step 1: Estimate the remuneration the employee would have received, or have been likely to have received, if the employer had not terminated the employment (remuneration lost).

Step 2: Deduct monies earned since termination.

Step 3: Discount the remaining amount for contingencies.

Step 4: Calculate the impact of taxation to ensure that the employee receives the actual amount he or she would have received if they had continued in their employment.

Step 5: Apply the legislative cap on compensation.

[116] I turn now to apply that approach and set out the matters I have taken into account in assessing compensation.

Remuneration the Applicant would have received, or would have been likely to receive, if he had not been dismissed (s 392(2)(c))

[117] Calculations of damages or compensation involve an element of speculation in determining an employee’s anticipated period of employment. This is because the task involves an assessment of what would have been likely to happen in the future had the employee not been dismissed. 22

[118] I am satisfied on the balance of probabilities that if the Applicant had not been dismissed on 8 December 2021, he would have remained employed by the Respondent for a period of only four months. I have concluded that the Applicant’s employment would not have extended past six months based on the following matters. The Applicant nominated this period in his evidence to the Commission stating that he sought compensation up to the date of the hearing. Had the Respondent implemented a policy requiring employees to be vaccinated against COVID – 19 in an appropriate manner including consulting with its employees, it is more probable than not that such a policy would have been lawful and reasonable. There is nothing unlawful about a vaccination policy and the Respondent had a need for vaccinated employees to undertake deliveries to several clients. Accordingly, failure to comply with such a policy would prima facie have been a valid reason for dismissal. There is also a possibility that the Applicant would have maintained his position of not wishing to comply, notwithstanding his evidence to the contrary in these proceedings.

[119] I am also of the view that the Applicant could see the writing on the wall in relation to his ongoing employment, indicated by his evidence that he did not believe his exchange with Mr Long about carer’s leave would end well and he used part of his carer’s leave – albeit the weekends – to undertake additional training to further his career prospects. The Applicant had significant issues with the way he alleges he was treated prior to his employment ending.

[120] Mr Long’s evidence, which was also uncontradicted, is that Mr Arnold was only offered casual work for a few days each week after the 8 December date for the implementation of the Respondent’s vaccination policy had passed. Both the Applicant and Mr Long could have called Mr Arnold to give evidence. The Commission expended time and effort to ensure Mr Arnold made himself available for the hearing. Given the evidence that both the Applicant and Mr Long gave about Mr Arnold was not inconsistent and that both could have called Mr Arnold to give evidence, I accept that Mr Arnold was working less than full time hours after December 2021. It is possible that the Applicant would not have accepted employment on this basis. Finally, I observed the interaction between the Applicant and Mr Long at the hearing and it suffices to say that the relationship was fraught and I doubt that this would have changed.

[121] I am satisfied that the remuneration that the Applicant would have received, or would have been likely to receive, if he had not been dismissed, is 16 weeks’ pay at the weekly rate of $1,096.15, totalling $17,536.25, and an amount of $1,665.95.

Remuneration earned (s 392(2)(e)) and income reasonably likely to be earned (s 392(2)(f))

[122] The Applicant’s evidence which I accept, is that he had earned no income from other sources since the termination of his employment. I also note that the Applicant was required to work his notice period and did not receive payment in lieu, and that amount is not deducted from the anticipated income.

Viability (s 392(2)(a))

[123] There is no evidence from the Respondent about the effect that an order for compensation would have on its viability, notwithstanding that the Directions for the hearing of this matter required submissions in relation to remedy and all relevant legislative provisions were appended.

Length of service (s 392(2)(b))

[124] The Applicant had more than six years’ service, a significant portion of which was as a full-time employee. The termination of his employment deprived the Applicant of accrued credits for various forms of leave which were not paid out on termination, including sick leave and long service leave. Although the Applicant did not have sufficient service to be entitled to be paid out his long service leave, I have had regard to the fact that he had accrued credit towards such leave and will now need to commence accruing from scratch.

Mitigation efforts (s 392(2)(d))

[125] The Applicant gave evidence about attempts he has made to obtain alternative employment which I accept. I am satisfied that such attempts were reasonable and that no deduction should be made for failure to mitigate the loss of the Applicant’s employment.

Any other relevant matter (s 392(2)(g))

[126] It is necessary to consider whether to discount the amount $17,536.25 for “contingencies”. This step is a means of taking into account the possibility that the occurrence of contingencies to which the Applicant was subject might have brought about some change in earning capacity or earnings. 23 Positive considerations which might have resulted in advancement and increased earnings are also taken into account.

[127] The discount for contingencies should only be applied in respect to an “anticipated period of employment” that is not actually known and that is a period prospective to the date of the decision. Given the period I have anticipated that the Applicant would remained employed extended only to the date of hearing, there is no basis to make a deduction for contingencies.

[128] However, the consideration in s.392(2)(g) is not limited to contingencies. In the present case, I consider it appropriate to adjust the amount of compensation to reflect the impact of a reduction in hours of work that could have been implemented if the Applicant was dealt with in the same way as Mr Arnold. In this regard, I consider there is at least a strong possibility that the Applicant may have remained in employment working reduced hours, taking into account that he was not available to perform the full range of deliveries that the Respondent required.

[129] While the Applicant’s evidence was that he had not been required to travel from Queensland to New South Wales in the course of his employment and that he could undertake contactless deliveries, the shortage of labour being faced by the Respondent may have meant that the Applicant was unable to perform the full range of duties the Respondent required, resulting in a reduction of his working hours.

[130] Accordingly, I have deducted an amount of 15% to reflect this possibility, resulting in an amount of $14,905.80 in wages and $1,416.05 in superannuation contributions.

Misconduct (s 392(3))

[131] The Applicant has not engaged in misconduct and there is no basis to reduce any amount of compensation on account of this consideration.

Shock, distress or humiliation, or other analogous hurt (s 392(4))

[132] The Applicant has claimed compensation in relation to matters which are analogous to shock, distress, humiliation or other hurt. I note that any amount of compensation calculated must not include a component for shock, humiliation or distress, and I have disregarded that aspect of the Applicant’s claim for compensation.

Compensation cap (s 392(5)-(6))

[133] The amount of compensation I have calculated will not make it necessary to apply the cap provided for in s.392(5) of the FW Act.

Instalments (s 393)

[134] The Respondent has not sought that any amount of compensation I have awarded be paid in instalments and I make no order allowing the amount to be paid in instalments.

Conclusion

[135] I have determined to award the Applicant an amount of $14,905.80, less taxation according to law, as compensation for lost wages and $1,416.05 in superannuation contributions to be paid into the Applicant’s nominated superannuation fund. An Order will issue with this Decision requiring that those amounts are paid within 21 days of the date of this Decision.”

Doran v SSKK Holdings Pty Ltd ATF SKA (2022) FWC 1799 delivered 11 July 2022 per Asbury DP