Resolving disputes about facts in unfair dismissal cases

These passages from an unfair dismissal decision of the Fair Work commission contain an excellent summary of the legal issues which are at play in many such cases which involve a need for the Commssion to sort our the disputed facts

.”Consideration”

I have taken into account all of the submissions that have been provided by the parties and I have attached the appropriate weight to the evidence of the witnesses.

 

It is not in dispute, and I find, that the Applicant is protected from unfair dismissal, submitted his application within the statutory timeframe, was not made genuinely redundant and did not work for a Small Business.

 

When considering whether a termination of an employee was harsh, unjust or unreasonable, the oft-quoted joint judgement of McHugh and Gummow JJ in Byrne v Australian Airlines (Byrne)13 is of significance:

 

It may be that the termination is harsh but not unjust or unreasonable, unjust but not harsh or unreasonable, or unreasonable but not harsh or unjust. In many cases the concepts will overlap. Thus, the one termination of employment may be unjust because the employee was not guilty of the misconduct on which the employer acted, may be unreasonable because it was decided upon inferences which could not reasonably have been drawn from the material before the employer, and may be harsh in its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct in respect of which the employer acted.”

 

(My emphasis)

 

In analysing Byrne, a Full Bench of the Australian Industrial Relations Commission in

Australian Meat Holdings Pty Ltd v McLauchlan (AMH)14 held:

 

The above extract is authority for the proposition that a termination of employment may be:

 

  • unjust, because the employee was not guilty of the misconduct on which the employer acted;
  • unreasonable, because it was decided on inferences which could not reasonably have been drawn from the material before the employer; and/or

·                      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”.

 

(My emphasis)

 

Further, a Full Bench of the AIRC in King v Freshmore (Vic) Pty Ltd15 said:

 

[24] The question of whether the alleged conduct took place and what it involved is to be determined by the Commission on the basis of the evidence in the proceedings before it. The test is not whether the employer believed, on reasonable grounds after sufficient enquiry, that the employee was guilty of the conduct which resulted in termination”.

I now turn to the criteria for considering harshness as provided in s.387 of the Act.

 

Section 387(a) – Valid Reason

 

The meaning of the phrase “valid reason” has been universally drawn from the judgement of Northrop J in Selvachandran v Peteron Plastics Pty Ltd:16

 

In broad terms, the right is limited to cases where the employer is able to satisfy the Court of a valid reason or valid reasons for terminating the employment connected with the employee’s capacity or performance or based on the operational requirements of the employer. …

 

In its context in s 170DE(1), the adjective “valid” should be given the meaning of sound, defensible or well founded. A reason which is capricious, fanciful, spiteful or

prejudiced could never be a valid reason for the purposes of s 170DE(1). At the same time the reason must be valid in the context of the employee’s capacity or conduct or based upon the operational requirements of the employer’s business. Further, in considering whether a reason is valid, it must be remembered that the requirement applies in the practical sphere of the relationship between an employer and an employee where each has rights and privileges and duties and obligations conferred and imposed on them. The provisions must “be applied in a practical, commonsense way to ensure that” the employer and employee are each treated fairly…”.

 

(My emphasis)

 

In Rode v Burwood Mitsubishi,17 a Full Bench of the Australian Industrial Relations Commission held:

 

“… the meaning of s.170CG(3)(a) the reason for termination must be defensible or justifiable on an objective analysis of the relevant facts. It is not sufficient for an employer to simply show that he or she acted in the belief that the termination was for a valid reason.”

 

In Qantas Airways Ltd v Cornwall (Cornwall)18 the Full Court of the Federal Court of Australia said:

 

The question is whether there was a valid reason. In general, conduct of that kind would plainly provide a valid reason. However, conduct is not committed in a vacuum, but in the course of the interaction of persons and circumstances, and the events which lead up to an action and those which accompany it may qualify or characterize the nature of the conduct involved.

 

(My emphasis)

 

I am satisfied that no criticism can be levelled at the Applicant in relation to the removal of any of the existing electrical installation.

 

I was previously employed as an electrical fitter/mechanic in the electricity distribution network. The photographic evidence provided by the Applicant showed electrical equipment in a very poor state of disrepair, which was not operable or likely to fail if put back into service. Further, based on the evidence of the Applicant, the Respondent is extremely lucky that a serious injury or death has not occurred on the site. To have exposed and live electrical busbars and wiring in an open switchroom is very dangerous. I have taken this into account.

 

Further, the report on the electrical installation tabled by the Respondent is of little probative value. The electrical engineer who wrote the report was not called by the Respondent to support his report. I certainly had questions to ask in relation to his conclusions. I’m confident the Applicant did as well. I have taken this into account.

 

I am confused and perplexed by the statement and evidence of Mr Waldie. There is absolutely no accusation or evidence of the Applicant ordering equipment that was not installed on the Resort, yet Mr Waldie refers to the statement of Mr Wood and then makes a generalised

and scurrilous accusation which has no relevance to Mr Wood’s statement. Mr Waldie then denied any knowledge or understanding of what the paragraph meant. Obviously, Mr Waldie did not prepare his own statement even though he testified that the contents of his statement were true and correct. I find that Mr Waldie is not a witness of credit. I have taken this into account.

 

The Applicant is accused of providing preferential treatment to one electrical supplier over another two, in breach of the PAF. I am not convinced that this accusation has been proven. I accept that the verbiage used in an email by one of the suppliers is unusual, but I do not read into it the level of conspiracy suggested by the Respondent. The fact that one of the electrical wholesale companies is an associated entity of another wholesaler is not unusual or uncommon in the construction industry. Indeed, the new builder undertaking the renovations at the Resort, is an associated entity of the former builder and the Resort itself. I have taken this into account.

 

I am satisfied that the Respondent’s Tanda system did not function in the manner hoped by the Respondent. I do not regard the records of attendance to be accurately recorded by that system. Further, the Applicant also worked off site at other properties owned by Mr Palmer. The Applicant’s unchallenged evidence is that his time sheets were filled in accurately. This notion is supported by the Applicant’s removal of his signature at the Pre Start or toolbox meetings that he did not attend. These forms had been electronically signed by the Applicant prior to the attendance sheet being produced. I have taken this into account.

 

The Applicant admitted that he was running his own electrical contracting company, as a sole trader, performing electrical work either after hours or on his day off. I am satisfied and find that this secondary employment was not in conflict with his principal role with the Respondent. However, the Applicant accepted under cross-examination that, on occasions, he was sending quotes and invoices to his customers using his company computer during work time. I have taken this into account.

 

The Respondent submitted that the Applicant has breached his implied duty in his contract of employment to act in good faith. The comments of Mr Wood’s that all employees must be focussed on their job 100% of their workday are irrational and impractical. Every employee converses with their colleagues or thinks about other issues going on in their lives during their workday. However, running a secondary business using company time and equipment, without the knowledge of the employer, is different to talking to your colleague about the footy whilst having a breather. As the head electrician on site, the Applicant had a responsibility to set the appropriate ethos for his department. This did not occur. As a result, I am satisfied that the Respondent had a valid reason to terminate the Applicant.

 

Section 387(b) – Notified of the Reason

 

The Applicant was notified by email that he was terminated for refusing to carry out his duties as directed. The Respondent provided further reasons in their second Form F3 submitted by the Respondent on 3 October 2023. I have taken this into account.

 

It is settled law that the Respondent can rely on information that is gained after a dismissal in justifying its decision to dismiss. In this case, the Applicant was dismissed for refusing to work the new site hours being introduced by the Respondent. This claim wasfactually incorrect. The Applicant was never consulted as to his views on the new site hours, nor did he attend the site meeting on 8 August 2023. On 25 August 2023, the allegation changed to termination for serious misconduct, based on the Tanda system records. This allegation then changed from 63 days off site to 103 days off site. Further, that the Applicant allowed for the destruction and removal of perfectly operational electrical equipment. These accusations were also incorrect. Finally, even though the Applicant started his own electrical contracting company whilst employed by the Respondent and undertook activities for that company during work hours, the Applicant was never given an opportunity to respond to any allegations prior to being terminated. I have taken this into account.

 

Section 387(c) – Opportunity to Respond

 

The Applicant was not given an opportunity to respond to the allegations. The Respondent’s submission that the Applicant had an opportunity to respond during the meeting with Mr Waldie is simply fanciful. An employee is entitled to be given the allegations of concern in writing and given an opportunity to in writing. This process may take up to a week or two if the applicant seeks their own legal advice. The Applicant was not given this opportunity. Relevantly, a Full Bench of the former Australian Industrial Relations Commission held in Crozier v Palazzo Corporation Pty Limited19 (when considering a termination under the former Workplace Relations Act 1996):-

 

[75] Section 170CG(3)(c) provides that the Commission must have regard to “whether the employee was given an opportunity to respond to any reason related to the capacity or conduct of the employee”. For the reasons we have set out in relation to s.70CG(3)(b) we think that the “opportunity to respond” referred to in s.170CG(3)(c) is a reference to any such opportunity which is provided before a decision is taken to terminate the employee’s employment.”

 

Section 387(d) – Any refusal of a support person

 

The Respondent did not conduct any meetings with the Applicant, so this matter is not relevant.

 

Section 387(e) – Unsatisfactory performance

The Applicant was not dismissed for unsatisfactory performance.

 

Section 387(f) – Size of Employer

 

It is not in dispute that the Respondent and its related entities are a large and well- resourced organisation. I have taken this into account.

 

Section 387(g) – Dedicated HR specialists

 

The Respondent terminated its ‘on-site’ HR specialist with its other employees. The Respondent’s in-house lawyer conducted the Commission proceedings. I have taken this into account.

 

Section 387(h) – Any other matter

 

From the quotes and invoices submitted by the Respondent, it would appear that the Applicant’s secondary business was basically nothing more than an avenue to stop doing “love jobs” for friends or acquaintances for nothing. The majority of the jobs were quite small and only a few hours’ work, but others were quite extensive, including one quote on 12 January 2023 for almost $10,000 and 30 hours of work. No invoice exists for this quote so I assume that the Applicant did not perform this work. I accept that the sending of quotes or invoices on the work computer would take no more than a few minutes here or there. From 13 October 2022 to 26 April 2023, the Applicant sent a total of 10 emails, made up of either quotes or invoices. Based on the information in these emails, including quotation numbers, invoice numbers and dates, the Applicant may have averaged 1 or 2 small jobs every few weeks. This amount of outside work is not surprising for an electrician with a young family who only works 4.5 days every week in their principal employment. I have taken this into account.

 

I have taken into account that the Applicant was personally asked to come back to work a few days after being terminated on the basis that he was needed. Such behaviour by the Respondent indicates that the Applicant’s termination was an error. The fact that the Applicant did not accept the invitation of re-employment is unsurprising. I have taken this into account.

 

In conducting his own business, the Applicant made no attempt to hide that he was employed by the Respondent. The quotes and invoices that he sent to clients contained a separate covering email which identified his employer and his role. If the Applicant wanted to act in a clandestine manner, he would have removed his identification from these emails. I have taken this into account.

 

The Applicant has sent 10 emails over a 6-month period. Whilst I accept that the Applicant should have sought permission for this activity, the question remains whether the Applicant’s conduct constituted serious misconduct. I do not accept that the Applicant’s conduct in sending 10 emails over a 6-month period satisfies the definition of serious misconduct contained in the FW Act. I have taken this into account.

 

I accept that double insulated electrical cable is durable, safe and has a long life of functionality when installed correctly and appropriately, away from hazards and dangerous situations. The same can be said for electrical switchgear and switchboards. However, haphazard installation or the presence of corrosive materials such as water and chemicals dramatically affects this scenario and makes the electrical installation a life threatening hazard. The Applicant has 20 years’ experience as an electrician. Based on the Applicant’s verbal and photographic evidence, I am prepared to accept the Applicant’s views on the integrity of the identified components of the electrical installation. I have taken this into account.

 

I accept the unchallenged evidence of the Applicant that he was not responsible for the malicious damage of some of the electrical equipment complained about by the Respondent. These decisions were taken before the Applicant was the electrical supervisor. It would be unfair for the Applicant to be held accountable for the decisions of others. I have taken this into account.

 

Regarding the unchallenged evidence of the Applicant, I note that in the Full Bench decision of INPEX Australia Pty Ltd v The Australian Workers’ Union,20 it was stated that:-

 

[29] The Commission is not a court. It is not bound by the rules of evidence.6 It is required to perform its functions and exercise its powers in a manner that is quick, informal and avoids unnecessary technicalities.7 But when the Commission makes a finding of fact, it must proceed by reference to rationally probative material. 8 That material may include, inter alia, evidence or, in an appropriate case, submissions. For example, it may be appropriate for a finding of fact to be made on the basis of an unchallenged submission made by one party, particularly when the other party is legally represented.”

 

(My emphasis)

Further, a Full Court of the Federal Court of Australia stated in Ashby v Slipper21 that:-

 

The second aspect, critical to this appeal, relates to the weight or cogency of the evidence: that is, as a general proposition, evidence, which is not inherently incredible and which is unchallenged, ought to be accepted: Precision Plastics Pty Limited v Demir [1975] HCA 27; (1975) 132 CLR 362 at 370-371 (per Gibbs J, Stephen J agreeing, Murphy J generally agreeing). The evidence may of course be rejected if it is contradicted by facts otherwise established by the evidence or the particular circumstances point to its rejection.”

 

(My emphasis)

 

I accept the unchallenged evidence of the Applicant that he raised his concerns about a colleague using his name to order an electronic sign with Mr McDonald, the General Manager.

 

Conclusion

 

  • The Applicant appears to be an intelligent and skilful His actions as the head electrician in relation to the ordering of goods appears normal based on my experience in the electrical contracting industry. It is not unusual for contractors to have preferred wholesalers or for wholesalers to offer additional discounts to loyal customers. It is also not unusual for wholesalers to take themselves off tender lists if they are not winning enough work or having trouble being paid by the customer. It is obvious that this practice was condoned by the Applicant’s superiors who signed off on his PAFs, even though it may have been a breach of the Respondent’s policy.

 

Having studied the photos submitted at the Hearing and contained in the Engineers Report, I accept the evidence of the Applicant that the state of the identified electrical equipment was obsolete and inoperable. In my opinion, it was also very dangerous.

 

However, it is not in dispute that the Applicant was running his own electrical contracting business whilst at work. I accept that this business was not in conflict with the Applicant’s role with the Respondent, but the evidence shows that he spent some of the Respondent’s time in conducting this business by sending quotes and invoices during workhours and utilising the Respondent’s computer and email server. This practice cannot be condoned.

 

However, the actions of the Respondent in terminating the Applicant are disproportionate to the gravity of the Applicant’s misconduct. Of all of the allegations that have been submitted by the Respondent to justify the Applicant’s termination, I find that the only one that can be sustained is in relation to his private business. I do not accept that the Applicant’s business is in competition with that of the Respondent. As far as I know, the Respondent does not have an electrical contractors license. I accept the evidence of the Applicant that he would not have involved himself in this activity if he thought that it would jeopardize his employment with the Respondent. The Applicant has lost a job worth $135,000 per year, by running a side business with a miniscule profit margin which involved a few hours of work per week.

 

As a result, despite my earlier finding that the Respondent had a valid reason to terminate the Applicant, based on the fact that the Applicant was denied any semblance of procedural fairness and that the level of misconduct was minor compared to the consequence of his termination, adopting the obiter from the High Court in Byrne and a Full Bench of the Commission in AMH, I find that the termination of the Applicant was harsh.

 

I am satisfied and find that the Applicant was unfairly dismissed.

 

Remedy

 

Having found that the Applicant has been unfairly dismissed, I now turn to the issue of an appropriate remedy.

 

The relevant provisions of the Act in relation to a remedy for an unfair dismissal are: “390                 When the FWC may order remedy for unfair dismissal

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

 

  • the FWC is satisfied that the person was protected from unfair dismissal (see Division 2) at the time of being dismissed; and
  • the person has been unfairly dismissed (see Division 3).

 

  • The FWC may make the order only if the person has made an application under section 394.

 

  • The FWC must not order the payment of compensation to the person unless:

 

  • the FWC is satisfied that reinstatement of the person is inappropriate; and

 

  • the FWC considers an order for payment of compensation is appropriate in all the circumstances of the case.

 

 

Note: Division 5 deals with procedural matters such as applications for remedies.” “391     Remedy—reinstatement etc.

Reinstatement

 

  • An order for a person’s reinstatement must be an order that the person’s employer at the time of the dismissal reinstate the person by:

 

  • reappointing the person to the position in which the person was employed immediately before the dismissal; or

 

  • appointing the person to another position on terms and conditions no less favourable than those on which the person was employed immediately before the dismissal.

 

(1A)    If:

 

  • the position in which the person was employed immediately before the dismissal is no longer a position with the person’s employer at the time of the dismissal; and

 

  • that position, or an equivalent position, is a position with an associated entity of the employer;

the order under subsection (1) may be an order to the associated entity to:

 

  • appoint the person to the position in which the person was employed immediately before the dismissal; or

 

  • appoint the person to another position on terms and conditions no less favourable than those on which the person was employed immediately before the dismissal.

 

Order to maintain continuity

  • If the FWC makes an order under subsection (1) and considers it appropriate to do so, the FWC may also make any order that the FWC considers appropriate to maintain the following:

 

  • the continuity of the person’s employment;

 

  • the period of the person’s continuous service with the employer, or (if subsection (1A) applies) the associated entity.

 

Order to restore lost pay

 

  • If the FWC makes an order under subsection (1) and considers it appropriate to do so, the FWC may also make any order that the FWC considers appropriate to cause the employer to pay to the person an amount for the remuneration lost, or likely to have been lost, by the person because of the dismissal.

 

  • In determining an amount for the purposes of an order under subsection (3), the FWC must take into account:

 

  • the amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for reinstatement; and

 

  • the amount of any remuneration reasonably likely to be so earned by the person during the period between the making of the order for reinstatement and the actual reinstatement.”

 

“392     Remedy—compensation

 

Compensation

 

  • An order for the payment of compensation to a person must be an order that the person’s employer at the time of the dismissal pay compensation to the person in lieu of

 

Criteria for deciding amounts

 

  • In determining an amount for the purposes of an order under subsection (1), the FWC must take into account all the circumstances of the case including:

 

  • the effect of the order on the viability of the employer’s enterprise; and

 

  • the length of the person’s service with the employer; and

 

  • the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed; and
  • the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal; and

 

  • the amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for compensation; and

 

  • the amount of any income reasonably likely to be so earned by the person during the period between the making of the order for compensation and the actual compensation; and

 

  • any other matter that the FWC considers

 

Misconduct reduces amount

 

  • If the FWC is satisfied that misconduct of a person contributed to the employer’s decision to dismiss the person, the FWC must reduce the amount it would otherwise order under subsection (1) by an appropriate amount on account of the misconduct.

 

Shock, distress etc. disregarded

 

  • The amount ordered by the FWC to be paid to a person under subsection (1) must not include a component by way of compensation for shock, distress or humiliation, or other analogous hurt, caused to the person by the manner of the person’s

 

Compensation cap

 

  • The amount ordered by the FWC to be paid to a person under subsection (1) must not exceed the lesser of:

 

  • the amount worked out under subsection (6); and

 

  • half the amount of the high income threshold immediately before the

 

  • The amount is the total of the following amounts:

 

  • the total amount of remuneration:

 

  • received by the person; or

 

  • to which the person was entitled;

 

(whichever is higher) for any period of employment with the employer during the 26 weeks immediately before the dismissal; and

  • if the employee was on leave without pay or without full pay while so employed during any part of that period—the amount of remuneration taken to have been received by the employee for the period of leave in accordance with the regulations.”

 

The Applicant seeks compensation for his termination. I am satisfied that, whilst reinstatement is the primary remedy under the Act, it would be very difficult to re-establish the necessary trust and confidence to re-create an employment relationship. I am satisfied and find that the payment of compensation is the appropriate remedy in this circumstance.

 

Section 392(2) of the Act identifies criteria that the Commission must taken into account in determining the appropriate level of compensation to be awarded to the Applicant.

 

 

Section 392(2)(a) – effect of order on employer’s viability

 

  • I am satisfied that my order will not have an adverse effect on the viability of the Respondent. I have taken this into account.

 

Section 392(2)(b) – length of service

 

It is not in dispute that the Applicant was employed from 6 April 2021 – 7 August 2023, being almost 2 and a half years. I have taken this into account.

 

Section 392(2)(c) – remuneration received if not dismissed

 

The Applicant would have continued to be paid his regular fortnightly pay of $5,192 had he not been dismissed. I have taken this into account.

 

Section 392(2)(d) – effort to mitigate loss

 

The Applicant stated that following his termination, he has continued operating his contracting business but did not perform any work for a 4-week period and has not matched his pervious salary in any week since that time. I have taken this into account.

 

Section 392(2)(e) – amount of remuneration received by the Applicant

 

The Applicant stated that from his contracting business, he was earning approximately

$850 per week some 4 weeks after his termination. I have taken this into account.

 

Section 392(2)(f) – amount likely to be earned

 

The Applicant testified that he was earning approximately $850 per week.

 

Section 392(2)(g) – any other matter

 

I am also required to have regard for the criteria known as the ‘Sprigg formula’ which emanates from the Full Bench decision in Sprigg v Paul’s Licensed Festival Supermarket.22 This approach was articulated in the context of the FW Act in Bowden v Ottrey Homes Cobram and District Retirement Villages.23

 

Consideration

 

I have taken into account all of the parties’ submissions in relation to remedy.

 

I have found in associated matters that the renovation project would have continued for a further 12 months. However, I am satisfied that the Applicant would not have remained employed for the duration of the Project. The Applicant has sought 16 weeks’ pay. The Respondent has suggested that 8-12 weeks should be the maximum amount ordered. I am satisfied that the Applicant would have only remained employed for a further 10 weeks under the new building manager.

 

 

 

I have taken into account that the Applicant was earning approximately $850 per week from his contracting business some 4 weeks after his termination.

 

I have applied a deduction of 40% on the amount I am going to order based on the misconduct of the Applicant in conducting his own business during his normal working hours for the Respondent.

 

I have taken into account the terms of the Applicant’s contract.

 

I have taken into account the Applicant has attempted to mitigate his loss by applying for at least 10 jobs as an electrician on the Sunshine Coast.

 

I have not applied any contingencies in this matter.

Based on the above considerations, I am satisfied and find that the Applicant is entitled to 10 weeks’ pay (minus deductions) plus superannuation.

 

Calculation
10 weeks pay (10 x $2,596) = $25,960
– 6 weeks x $850 (amount earned each week) $5,100
– 40% for misconduct $8,344
Total $12,516
Conclusion

 

I order that the Respondent pay to the Applicant $12,516 (less tax) plus superannuation.

 

I so Order.”

 

 

 

 

Fitzpatrick v Drewmaster Pty. Ltd. (2024) FWC 351 delivered 8 February 2024 per Riordan C