Unfair dismissal Perth

The unfair dismissal jurisdiction of the Fair Work Commission operates on the basis that the evaluation of whether a dismissal is relevantly unfair is a matter for the discretion of the person who hears the case in the Commission. This is the primary reason why it is so difficult for practitioners to forecast the outcome of a case in which they may be advising a client. Not only are those persons drawn from disparate elements of the community, but this discretion can and frequently does lead to decisions which could legitimately be decided either way.

In the following extract from a recent decision of the Fair Work Commission in an unfair dismissal case, it can be seen that the  Deputy President of the Commission who heard the case concluded that there was a valid reason for the dismissal due to the applicant employee’s “poor judgement”, “misjudgement” and “cumulative errors of judgement” which “carried avoidable risks to his employer” and thus constituted “misconduct” but that while dismissal on notice or pay in lieu would not have been harsh, unjust and unreasonable, the fact that the dismissal was summary rendered it “disproportionate” and therefore relevantly unfair.

The Deputy President summarized his conclusions this way.

“Whilst the errors of judgment by Mr Petz on Sunday 5 April 2020 were, in cumulative effect, serious, I consider that summary dismissal was not reasonably open. Whilst neglect of safety rules or a lack of safety awareness is serious in any workplace context, some conduct strikes more fundamentally at the employment relationship than others. It is only conduct that is serious misconduct that gives rise to summary dismissal.’

Nevertheless the Deputy President discounted his award of compensation for the unfair dismissal by twenty per cent for the misconduct before the dismissal and a further twenty per cent for “deliberate and vengeful post-dismissal conduct designed to damage (the employer’s) reputation and interests” with the decision containing the following passage “Being post dismissal conduct, I do not apply this discount specifically under section 392(3) of the FW Act. I do so in the exercise of the general discretion to order a sum of compensation that is appropriate in the circumstances.”

Here is the Deputy President’s express reasoning.

[178] I do not consider that Mr Petz’s conduct so fundamentally struck at the heart of the employment relationship such that its continuation for any future period was untenable. He continued working in the following fortnight. He was not suspended with pay pending the investigation being completed even once the apparent facts emerged to Mr Saddler in the days that immediately followed. The private work he was doing that Sunday was not disallowed, he used his own tools and did not complete the work unsafely. Aware of the nearby risks, he required his child to be seated near him. The child apparently obeyed that instruction. For most of the time the child was seated on the forklift Mr Petz had his arm near or around the child. When Mr Petz left the vicinity of his car to clean-up he took his child with him, thus minimising risk.

[179] Considering the circumstances overall, the dismissal was not unfair but summary dismissal was. The dismissal is harsh on that ground, but that ground only. Mr Petz should have been dismissed on notice. In the circumstances, that would have been five weeks’ notice or payment in lieu.

“Valid Reason (section 387(a))

[88] An employer must have a valid reason for the dismissal of an employee. It is the Commission’s task to determine if a valid reason exists. The reason(s) should be “sound, defensible and well founded” 9 and should not be “capricious, fanciful, spiteful or prejudiced.”10

[89] In a conduct-based dismissal 11 the test is not whether the employer believed on reasonable grounds, after sufficient inquiry, that the employee was guilty of the conduct. The Commission must itself make findings as to whether the conduct occurred based on the evidence before it.12

[90] Where an employee is dismissed for misconduct, as in this case, an evidentiary onus rests on an employer to establish that on the balance of probabilities the misconduct occurred. 13

[91] It is also well settled that where, as in this case, an employer dismisses for serious misconduct, the standard of proof requires “a proper level of satisfaction” 14 that the conduct did in fact occur having regard to the seriousness of the allegations (the Briginshaw standard15). This requires more than mere satisfaction of it having been more likely than not that the conduct occurred. Rather, it requires a proper degree of satisfaction that the conduct did in fact occur.

………………………………………………………….Conclusion on valid reason

[130] There was a valid reason for dismissal.

[131] Whilst repairing his private motor vehicle on site on 5 April 2020 was not misconduct, the surrounding conduct that day by Mr Petz exhibited an indifference to his obligation to comply with safety rules and was inconsistent with his employer’s interests and obligations. Whilst some of the failures were more serious than others, the failures of duty (particularly bringing his child on site without permission and then putting him into a forklift) collectively were a valid reason for dismissal.

[132] This conclusion weighs against a finding of unfair dismissal.

………………………………

Conclusion

[159] This matter concerns summary dismissal for serious misconduct.

[160] My role is not to review whether the employer had a reasonable basis for its decision but to consider whether, on the evidence before me, the dismissal was harsh, unjust or unreasonable.

[161] The onus of proof to establish unfairness rests on Mr Petz.

[162] However, in matters of misconduct, the employer carries an evidentiary burden to establish that the misconduct which they allege did in fact occur. I have made findings of fact having regard to the evidentiary onus borne by the employer. Those findings have been based on the requisite standard of proof.

[163] The ambit of the phrase ‘harsh, unjust or unreasonable’ was explained in Byrne v Australian Airlines Ltd  19 as follows:

“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.”

[164] In reaching my conclusion, I adopt the approach set out by a Full Bench of this Commission in B, C and D v Australian Postal Corporation T/A Australia Post: 20

“[58] Reaching an overall determination of whether a given dismissal was “harsh, unjust or unreasonable” notwithstanding the existence of a “valid reason” involves a weighing process. The Commission is required to consider all of the circumstances of the case, having particular regard to the matters specified in s.387, and then weigh:

(i) the gravity of the misconduct and other circumstances weighing in favour of the dismissal not being harsh, unjust or unreasonable;

against

(ii) the mitigating circumstances and other relevant matters that may properly be brought to account as weighing against a finding that dismissal was a fair and proportionate response to the particular misconduct.

[59] It is in that weighing that the Commission gives effect to a ‘fair go all round’.”

[165] I have found there were breaches of duty on 5 April 2020 and those breaches, some more serious than others, taken collectively, constituted a valid reason for dismissal.

[166] I have also found that Mr Petz was not denied procedural fairness before a decision to dismiss was made.

[167] The issue which remains is whether the sanction imposed was disproportionate to the misconduct in the context of the overall circumstances.

[168] I do not consider that dismissal for the failures on 5 April 2020 was disproportionate. Those failures were of Mr Petz’s making, were entirely avoidable and occurred over a period of hours. He decided to bring his child onto the work site without permission hours before he decided to put his child on the forklift and that occurred hours before he then decided to download the photo of his child on the forklift. This was a sequence of interrelated decisions that reflected poor judgment, not a singular moment of a rush of blood to the head.

[169] These decisions were cumulative errors of judgment. The errors did not involve misconduct in the performance of his duties as an employee but they were errors nonetheless that carried avoidable risk to his employer. Mr Petz did not adequately calibrate his private instincts as a father with his responsibilities to his employer. He mixed private and workplace interests and this clouded his judgment. His misjudgement originated from the fact that the purpose of visiting the site that Sunday morning was wholly private.

[170] Nor did Mr Petz consider that what he did was wrong. To his credit, during the investigation he did not dispute the facts, but inexplicably he did not accept wrongdoing on his part. He was not contrite, remorseful or apologetic. It was only in his closing statement at the hearing of this matter, four months later, that Mr Petz acknowledged that what he did on the day was “wrong”. 21 An inability to grasp his mistakes at the time or in the immediate aftermath is indicative of a lack of sensitivity to the duty, especially on safety matters, he owed and of the serious consequences for a business should its employees put themselves or others at risk.

[171] That lack of awareness and the belated nature of the recognition of error expressed only in the shadow of contested litigation also weighs against a finding that dismissal was a disproportionate sanction.

[172] It is not to the point whether the Commission or a different employer may have taken such a course or whether this employer could have taken a lesser course. 22 I have concluded that such a course was reasonably open on an objective assessment of the facts. It is not the Commission’s role to stand in the shoes of an employer to determine which of the reasonably available disciplinary courses it may or should have chosen if the course chosen was not harsh, unjust or unreasonable.23

[173] However, one matter remains.

[174] This was a summary dismissal. It was not a dismissal on notice. Whether conduct warranted summary dismissal is a relevant matter going to harshness under section 387(h) of the FW Act. 24

[175] It does not automatically follow that employee misconduct or failure of duty warrants summary dismissal. The proportionality of the summary nature of Mr Petz’s dismissal must be weighed against the gravity of his misconduct. 25 Summary dismissal is only available to an employer where the misconduct or failure of duty is of such a serious nature that it strikes so fundamentally at the heart of the employment relationship that the continuation of employment for any future period of time, no matter how brief, would be incompatible with the contract including the duties of trust and confidence.26

[176] Moreover, where an employer dismisses an employee on notice but not summarily the employer has one of two options; either it can require the employee to work out their notice or (alternatively) pay the employee and amount of notice in lieu.

[177] Whilst the errors of judgment by Mr Petz on Sunday 5 April 2020 were, in cumulative effect, serious, I consider that summary dismissal was not reasonably open. Whilst neglect of safety rules or a lack of safety awareness is serious in any workplace context, some conduct strikes more fundamentally at the employment relationship than others. It is only conduct that is serious misconduct that gives rise to summary dismissal.

[178] I do not consider that Mr Petz’s conduct so fundamentally struck at the heart of the employment relationship such that its continuation for any future period was untenable. He continued working in the following fortnight. He was not suspended with pay pending the investigation being completed even once the apparent facts emerged to Mr Saddler in the days that immediately followed. The private work he was doing that Sunday was not disallowed, he used his own tools and did not complete the work unsafely. Aware of the nearby risks, he required his child to be seated near him. The child apparently obeyed that instruction. For most of the time the child was seated on the forklift Mr Petz had his arm near or around the child. When Mr Petz left the vicinity of his car to clean-up he took his child with him, thus minimising risk.

[179] Considering the circumstances overall, the dismissal was not unfair but summary dismissal was. The dismissal is harsh on that ground, but that ground only. Mr Petz should have been dismissed on notice. In the circumstances, that would have been five weeks’ notice or payment in lieu.

Remedy

[180] I now turn to the question of remedy.

[181] Remedies available to the Commission under section 390 of the FW Act are reinstatement (in the same or other position) or (but only if reinstatement is inappropriate) compensation (within statutory limits).

[182] Whether to order a remedy is a discretionary matter.

[183] I consider it appropriate to order a remedy but only on the terms outlined below.

[184] I conclude that reinstatement is inappropriate. I have concluded that dismissal was not unfair; simply one of the terms under which dismissal occurred (its summary nature) made it harsh. In any event the post-dismissal conduct by Mr Petz has so fundamentally damaged the relationship that reinstatement, even were the dismissal unfair on broader grounds, would be inappropriate.

[185] The post dismissal conduct involved Mr Petz deliberately and in a calculated manner seeking to damage Jamieson’s interests as retribution for his dismissal. The conduct involved:

  • threatening managers and the company in the hours that followed dismissal. Even after having slept on the matter overnight, he repeated his warning of retribution the following day in even more uncouth terms;
  • posting on Jamieson’s facebook page opinions about Jamieson’ products and services that were intended to warn off existing and new customers from doing business with the company; and
  • transposing to his facebook page Jamieson’s logo and continuing to repeat his opinions about the company and its products.

[186] Such conduct went beyond an expression of angry disappointment in the heat of the moment. It occurred over weeks and was calculated. Having an external customer-facing element, it demonstrated a continuing lack of judgment on Mr Petz’s part. It was provocative and carried the risk of potential damage to the very business he is now seeking compensation from.

[187] I turn to the issue of compensation. Section 392 of the FW Act provides:

“392 Remedy—compensation

Compensation

(1) 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 reinstatement.

Criteria for deciding amounts

(2) 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:

(a) the effect of the order on the viability of the employer’s enterprise; and

(b) the length of the person’s service with the employer; and

(c) the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed; and

(d) the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal; and

(e) 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

(f) 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

(g) any other matter that the FWC considers relevant.

Misconduct reduces amount

(3) 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

(4) 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 dismissal.

Compensation cap

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

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

(b) half the amount of the high income threshold immediately before the dismissal.

(6) The amount is the total of the following amounts:

(a) the total amount of remuneration:

(i) received by the person; or

(ii) 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

(b) 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.”

[188] I now consider each of the criteria in section 392 of the FW Act.

Viability: section 392(2)(a)

[189] There is no evidence before me to suggest that a compensation order will adversely affect the viability of Jamieson.

Length of service: section (section 392(2)(b))

[190] Had Mr Petz been dismissed on notice and not dismissed summarily he would have still fallen short (but only by the narrowest of margins of one week) of the pro rata anniversary date. He would have worked for six years and fifty-one weeks.

Remuneration that would have been received: section 392(2)(c)

[191] Having regard to Mr Petz’s age and years of service, dismissal on notice would have required Jamieson to provide five weeks’ notice or make a payment of five weeks in lieu. 27

Mitigating efforts: section 392(2)(d)

[192] Mr Petz moved swiftly to find alternate work. In the week that followed dismissal, he secured five day’s work as a welder. However, after five days, and due to the economic impact of COVID-19 this work dried up.

[193] Mr Petz remained unemployed for the next six weeks until mid-June 2020 (but was apparently ineligible for unemployment benefits). He then secured full time work as a tradesman with a local employer. He has remained continuously employed in that job since, though it is less remunerative than his work at Jamieson.

Remuneration earned: section 392(2)(e)

[194] I will discount the compensation order by the one week of earnings during what would have otherwise been a week of the notice period.

Income likely to be earned: section 392(2)(f)

[195] The period for which I will order compensation (the notice period) does not extend to a period of projected future work. I will make no deduction on this account.

Other matters: section 392(2)(g)

[196] There are no other matters or contingencies that need to be provided for.

Misconduct: section 392(3)

[197] I have found that Mr Petz materially contributed to the dismissal by serious errors of judgement including on safety issues that gave rise to dismissal for a valid reason, but which fell just short of conduct warranting summary dismissal.

[198] I consider a 20% reduction (one week) appropriate on account of this misconduct. I do not consider such a discount to be a double punishment (having found that the misconduct formed a valid reason for dismissal). A compensation order is not an order for payment of a sum of due under the FW Act or an award. Whilst the order I make bears a direct relationship to my conclusion that the absence of notice rendered the dismissal harsh, section 392(3) of the FW Act provides that the Commission “must” reduce the amount of compensation by an appropriate amount on account of contributory misconduct.

[199] I also consider it appropriate to apply a discount to the compensation order on account of Mr Petz’s deliberate and vengeful post-dismissal conduct designed to damage Jamieson’s reputation and interests. Being post dismissal conduct, I do not apply this discount specifically under section 392(3) of the FW Act. I do so in the exercise of the general discretion to order a sum of compensation that is appropriate in the circumstances.

[200] I consider a further 20% reduction (one week) on account of this conduct.

[201] In total, I will discount the compensation order by two weeks on account of pre and post dismissal misconduct.

Shock, Distress: section 392(4)

[202] Mr Petz was angry at having been reported by other contractors or employees for what they observed on Sunday morning 5 April 2020 and for what others observed on his facebook page late that day. He was not shocked by his dismissal but was angry about it and disagreed with it.

[203] Compensation allowable by the FW Act does not include a component for hurt feelings. The compensation order will make no provision for such matters.

Compensation cap: section 392(5)

[204] The amount of compensation I will order does not exceed the six-month compensation cap.

Conclusion on compensation

[205] The compensation order will be for an amount equivalent to five weeks in lieu of notice discounted by two weeks on account of pre and post dismissal misconduct and one week on account of the earnings in alternate work during this period.

[206] The amount of compensation payable by Jamieson that I consider appropriate will be two weeks’ pay.

Conclusion

[145] I find that Mr Nick Petz, a person protected from unfair dismissal, was dismissed by Jamieson Sales and Service Pty Ltd on 22 April 2020 and that his dismissal was harsh on the ground that he was dismissed summarily (without notice).

[207] The amount of compensation payable by Jamieson under section 392 of the FW Act will be two weeks’ pay (plus superannuation) at the ordinary gross weekly rate of pay applicable to Mr Petz at the date of dismissal.

[208] On the materials before me 28 this equates to $2,356.00 (gross) plus 9.5% superannuation. Jamieson is directed to recheck this calculation in light of this decision and within seven days of this decision advise the Commission and Mr Petz of the sum it calculates which equates to two weeks’ pay (gross) should its calculation differ from the above.

[209] Subject to any revised order consequential on the above, in conjunction with the publication of this decision I order 29 this amount be paid within fourteen (14) days of the date of this decision (by close of business 9 September 2020).”

Petz v Jamieson Sales and Service Pty Ltd (2020) FWC 4451 delivered 26 August 2020 per Anderson DP