This portion of a decision in an unfair dismissal case contains an excellent summary of many of the factors which need to be determined in an unfair dismissal case.
“Consideration
[67] 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.
[68] 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.
[69] 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)1 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.”
[70] In analysing Byrne, a Full Bench of the Australian Industrial Relations Commission in
Australian Meat Holdings Pty Ltd v McLauchlan (AMH)2 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”.
[71] Further, a Full Bench of the AIRC in King v Freshmore (Vic) Pty Ltd3 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”.
.
[72] I now turn to the criteria for considering harshness as provided in s.387 of the FW Act.
Section 387(a) – Valid Reason
[73] The meaning of the phrase “valid reason” has been universally drawn from the judgement of Northrop J in Selvachandran v Peteron Plastics Pty Ltd:4
“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…”.
[74] In Rode v Burwood Mitsubishi,5 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.”
[75] In Qantas Airways Ltd v Cornwall (Cornwall)6 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)
[76] The Applicant acknowledged that he did not comply with a legal direction by initially refusing to leave his workplace on 22 April 2024:
“MR DUNNE: You were told when you attended work on 22 April, by Alexa
Gutenberger – you were given an instruction to go home, weren’t you? That’s correct.
You refused to follow that instruction? That’s correct.
…
In any event, you left, did you not, because you say you weren’t feeling well? I wasn’t feeling well and feeling nauseous, correct.
So you didn’t leave work because you were complying with the instruction to leave work, you left work for another reason; is that right? I wouldn’t say entirely. I would have said that I wished to be compliant with my supervisor’s instructions.
Well, why didn’t you leave when you were told to leave? I felt it was right to be at work.”7
I have taken this into account.
[77] I have taken into account that the Applicant had received two warnings in 2020 and 2021 for failing to follow a reasonable direction. I note that the 2021 warning was a written warning.
[78] My long-held view is that warnings have a shelf life of around 12 months. It is obvious that the Applicant took notice of his warnings that he received in 2020 and 2021, improving his performance and attitude. There are no criticisms of the Applicant’s performance or attitude in 2022 or 2023. I have taken this into account.
[79] There is no suggestion that the Applicant was abusive or violent when he refused the direction from Ms Gutenberger. The Respondent did not advise me that they called the police because the Applicant was trespassing or threatening his former colleagues. The Applicant simply returned to his desk to resume work and called his solicitor as advised by Ms Gutenberger. Thankfully, his solicitor was able to convince the Applicant to leave work even though he told the Respondent that he was going home because he was unwell. I have taken this into account.
[80] The Applicant wrote to his solicitor on Friday, 19 April 2024 (refer to paragraph [46] above), to advise him that he was going to withdraw from the settlement of his general protections application and return to work. The Applicant testified that he asked his solicitor to advise the Respondent. In response to a question from me, the Applicant stated that this advice was implied in his email:
“THE COMMISSIONER: Yes. So that – I accept that, but you said – your submission is that you instructed your lawyer Mr Turner to advise the employer that you were going to return to work.
MR O’BRIEN: Yes.
THE COMMISSIONER: And they have asked you a question, where does it say that.
MR O’BRIEN: Thank you, Commissioner. It’s only implied in that letter.”8
I cannot find any such implication in this email, however, I accept that the Applicant could have had an expectation that his solicitor would contact the Respondent on the basis that his solicitor had been involved in the ongoing negotiations in relation to the settlement of his general protections application. I have taken this into account.
[81] The Applicant remains of the view that the direction to go home was a breach of his rights under the FW Act. Under cross-examination, the Applicant testified:
“Well, why didn’t you leave when you were told to leave? I felt it was right to be at work.
Your right to be at work? Yes.
Why is that? I believe that employees have a right to be at work.
And do you believe employees have an obligation to follow a lawful instruction? That is correct.
You were told to leave work and you were told you were going to be paid; correct? I would even say the instruction was potentially unlawful.
Why was it unlawful? Because the employee has the right to be at work.
Where do you have this understanding, Mr O’Brien? Section 340 of the Fair Work Act.
That does not give an employee a right to be at work and to – 340 is a general protections provision, a workplace right? I dispute that.”9
I do not agree with the Applicant’s view but the interpretation of the general protections provisions of the FW Act is a matter for the Court, not the Commission. I have taken this into account.
[82] Throughout this process, the Applicant has struggled to differentiate between his general protections application under s.372 of the FW Act and his unfair dismissal application under s.394 of the FW Act. The Applicant even submitted what he stated was a “statement of claim” for his ongoing Court application. Under cross-examination, the Applicant admitted that it was a draft statement of claim only. Further, despite the Applicant claiming that his general protections claim is ongoing and before the Court, the Applicant did not submit any evidence to support this assertion. I have taken this into account.
[83] For an employer to have a valid reason to dismiss an employee, it must have a reason which is ‘sound, defensible or well founded’ and not one which is ‘capricious, fanciful, spiteful or prejudiced’.10 In this case, the Respondent is relying on the fact that the Applicant refused to leave work when instructed. I accept that the Respondent did not want the Applicant at work. The Respondent submitted that the Applicant had agreed to resign, and in fact had resigned the week before in a conference before the Commission. Further, the Applicant had advised his supervisor, Mr McEvoy, that he was resigning, had removed his personal items from his workstation and had handed in his security fob. In his witness statement, Mr McEvoy stated:
“The events after he told me had had (sic) decided to resign are as follows:
(a) Daniel claimed that although he enjoyed working in infrastructure, resigning from his position was the best decision.
(b) We then discussed what roles he would like to move into in the private sector, mainly in construction was his focus.
(c) I offered Daniel the opportunity to go home early if he preferred.
(d) Daniel then packed his remaining personal items.
(e) Daniel then handed his security pass directly to myself.
(f) I then escorted Daniel from the building.”
However, the Applicant then refused to sign the Deed of Release. As a result, the Applicant was of the view that his resignation was not binding and that he could simply return to work. I have taken this into account.
[84] The Applicant did not attend the disciplinary interview on 7 May 2024. Instead, the Applicant sent an email, 1 minute before the start of the meeting, explaining why he was not in attendance and the reasons why his direction to leave work was illegal. Under crossexamination, the Applicant testified:
“- – – your email was sent at 1.29 saying:
I won’t make it to today’s disciplinary proceeding. I attach the following letter.
Is that correct? Yes.
One minute before? Correct.
Why one minute before? I had missed the bus. I had to get my writing through. I wasn’t feeling great, so I just sent the email.
I’m sorry? So I didn’t have any transport to get to the meeting.
Why didn’t you say that in your email? Well, I felt at the time that I just needed to address the issues. The issues of transport weren’t tangential to the issue at the time.
You were instructed to attend a meeting and you do not give any reason that you missed the bus in that email; is that correct? That’s correct.
Can I suggest to you that in the submissions that you filed and the evidence that you filed in these proceedings, you have not referred to you not attending this meeting because you missed the bus? That is correct.
You said that you clearly understood the invitation to the disciplinary meeting, the instruction – to the instruction. In that letter it’s referred to that your refusal to follow a reasonable and lawful instruction is serious misconduct and you didn’t think it was important to give a reason why you didn’t attend the meeting? No.”11
I am satisfied and find that the Applicant had no intention of ever attending the disciplinary interview. I have taken this into account.
[85] I am not satisfied that the refusal to follow a lawful and reasonable direction provided the Respondent with a valid reason to terminate the Applicant for serious misconduct in this circumstance. I note that there were no safety implications to any of the Respondent’s employees as a result of the Applicant’s actions. I have no doubt that the Respondent was shocked and probably disappointed at the Applicant’s return to work but to summarily dismiss him for this issue, in my view, is unjustifiable.
Section 387(b) – Notified of the Reason
[86] It is not in dispute that the Applicant was notified of the reason for his termination by way of correspondence dated 8 May 2024. I have taken this into account.
Section 387(c) – Opportunity to Respond
[87] The Applicant acknowledged under cross-examination that he regarded the disciplinary meeting, which he did not attend, as his opportunity to respond. The Applicant also indicated that he was not given any allegation in writing. Whilst the process that the Respondent followed was not best practice, it is obvious that the Applicant was aware of the possible outcomes of the disciplinary meeting and made a conscious decision not to attend. I have taken this into account.
Section 387(d) – Any refusal of a support person
[88] It is not in dispute that there was no refusal of a support person by the Respondent. The Applicant did not attend any in-person meetings. I have taken this into account.
Section 387(e) – Unsatisfactory performance
[89] The Applicant was not dismissed for unsatisfactory performance. I have taken this into account.
Section 387(f) – Size of Employer
[90] The Respondent is a large employer with appropriate HR policies and procedures. I have taken this into account.
Section 387(g) – Dedicated HR specialists
[91] The Respondent has a dedicated HR team, who were actively involved in the process leading up to the Applicant’s termination. I have taken this into account.
Section 387(h) – Any other matter
[92] This application is quite unique for a number of reasons. I do not accept the conspiracy theories espoused by the Applicant that his termination was a contrived or sinister plot to remove him from the workplace. Further, I have never witnessed an employer keeping a substantial settlement offer on the table after it had summarily dismissed an employee.
[93] Whilst I have found that the Respondent did not have a valid reason to summarily dismiss the Applicant, it is obvious that the Applicant has a difficulty in following lawful and reasonable directions from his Employer. This behaviour trait is unsatisfactory and cannot be condoned in any workplace. I am of the view that the Respondent had a valid reason to terminate the Applicant, but not summarily. I have taken this into account.
Conclusion
[94] I accept that the Applicant partially complied with the direction from Ms Gutenberger. Ms Gutenberger recommended that the Applicant call his solicitor. The Applicant did this when he returned to his workstation, albeit on loud speaker. It would appear that the Applicant’s lawyer suggested that the Applicant comply with the direction and leave the workplace. The Applicant obviously accepted this advice, however, he then lied to the Respondent by saying that he was going home because he felt ill. Therefore, the compliance with the direction was belated, but it did occur. However, the Applicant telling a deliberate lie highlights the lack of trust in the employment relationship.
[95] I have previously found that the Respondent did not have a valid reason to summarily dismiss the Applicant, and there are no issues in the consideration above (s.387(b)-(h)) that would warrant an alteration to that finding.
[96] As a result of the above, I find that the Respondent’s decision to summarily dismiss the Applicant was harsh.
Remedy
[97] Having found that the Applicant’s termination was harsh, I now turn to the issue of an appropriate remedy.
[98] The relevant provisions of the FW Act in relation to a remedy for an unfair dismissal are:
“390 When the FWC may order remedy for unfair dismissal
(1) Subject to subsection (3), the FWC may order a person’s reinstatement, or the payment of compensation to a person, if:
(a) the FWC is satisfied that the person was protected from unfair dismissal
(see Division 2) at the time of being dismissed; and
(b) the person has been unfairly dismissed (see Division 3).
(2) The FWC may make the order only if the person has made an application under section 394.
(3) The FWC must not order the payment of compensation to the person unless:
(a) the FWC is satisfied that reinstatement of the person is inappropriate; and
(b) 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
(1) 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:
(a) reappointing the person to the position in which the person was employed immediately before the dismissal; or
(b) 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:
(a) 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
(b) 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: (c) appoint the person to the position in which the person was employed immediately before the dismissal; or
(d) 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
(2) 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:
(a) the continuity of the person’s employment;
(b) the period of the person’s continuous service with the employer, or (if subsection (1A) applies) the associated entity.
Order to restore lost pay
(3) 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.
(4) In determining an amount for the purposes of an order under subsection (3), the FWC must take into account:
(a) 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
(b) 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
(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.”
[99] The Applicant seeks reinstatement, compensation for lost wages and continuity of service.
[100] Both parties acknowledge that there needs to be the capacity to re-establish trust and confidence for an employment relationship to be tenable. The Applicant stated:
“…I acknowledge the importance of trust and confidence in any employment relationship. Such trust and confidence really must be mutual but given the raft of unsolved issues I have raised with Catholic NT over the last four years, and their reluctance to competently investigate them, I contend that it’s actually Catholic education who has broken this trust. Nevertheless, I am prepared to return to work if required.”12
I have taken this into account.
[101] The Respondent strongly opposed the Applicant being reinstated on the basis that “it makes it difficult to continue to employ someone who is not going to follow lawful instructions”.13 I have taken this into account.
[102] In relation to the issue of ‘trust’, the Respondent submitted:
“The applicant may well state that but in his submissions he referred to his own broken trust which of course, he said he prepared – he prepared for – to – to fix. But there’s broken trust on both sides. And simply saying at this stage, ‘Oh, no, I can put all that behind me’, is really contrary to the evidence and the submissions which the applicant has filed in these proceedings. In fact, in his – I’m sorry. On page 3, in his outline of submissions, there are reference there about in – the manner of the dismissal has caused irreparable damage to my professional representation – oh, sorry. My professional reputation. That’s just not outside. That’s something that affects how you work for someone within an organisation. He talks about a sense of betrayal in paragraph 10 where he talks about what has happened.
It’s clear that no matter what the representations by the applicant that he can put that all behind him and resume work are difficult to believe. The word betrayal is a significant word. Irreparable is a significant word and that is on the applicant’s side from the – employer’s side. Here is an employee who the employer believed had entered into an agreement, who turned up, who – and more importantly than that, handed in his card, taken his books and belongings and left. And then without any notice, turns up for work unscheduled. Yes, Monday would normally have been a work – a day of work. Not when you have handed in your card. Not when you have taken your belongings and not when you have given no notice, but the settlement has ended or that he intended – or even that he intended coming back to work.
The earliest of which could possibly have occurred at 8 o’clock in the morning to someone who was away and to whom no further representation was made. Then to refuse the instruction to go home. This relationship as an employment relationship cannot be restored with the greatest respect. It is not appropriate to consider reinstatement on any – on any basis.”14
I have taken this into account.
[103] The employment relationship was strained and the Applicant’s attitude in the workplace was poor. By not following a lawful and reasonable direction to leave the workplace, the Applicant blatantly defied his manager. This defiance is of such significance that the employment contract has been breached. Further, the Applicant is prone to misrepresenting the truth to his manager. When leaving work on 22 April 2024 the Applicant claimed that he was going home because he felt sick, not to comply with the direction of Ms Gutenberger. At the Hearing, the Applicant said that it was both. Secondly, the excuse that he missed the bus on 7 May 2024 also only came to light at the Hearing. Knowing the seriousness of the disciplinary meeting, the Applicant should have apologised for not attending and advised Ms Gutenberger that he had missed the bus. I am satisfied and find that the Applicant is loose with the truth. I have taken this into account.
[104] Even though reinstatement is the primary remedy under the FW Act, I am satisfied and find, for the reasons stated above, that the required level of trust and confidence cannot be restored in this circumstance.
Compensation
[105] I now turn to the factors to be considered in relation to any award of compensation.
Section 392(2)(a) – effect of order on employer’s viability
[106] Any order of compensation will not have any effect on the viability of the Employer’s business. I have taken this into account.
Section 392(2)(b) – length of service
[107] The Applicant was employed by the Respondent for a period of over 16 years. This is not an insignificant period of time. I have taken this into account.
Section 392(2)(c) – remuneration received if not dismissed
[108] This matter is not relevant to my conclusion. I have taken this into account.
Section 392(2)(d) – effort to mitigate loss
[109] The Applicant advised that he has unsuccessful in gaining alternative employment since his termination.
Section 392(2)(e) – amount of remuneration received by the Applicant
[110] The Applicant has received no remuneration since the date of his dismissal. I have taken this into account.
Section 392(2)(f) – amount likely to be earned
[111] This matter is not relevant to my conclusion. I have taken this into account.
Section 392(2)(g) – any other matter
[112] I note that the Applicant is over 45 years of age. I have taken this into account.
[113] 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.15 This approach was articulated in the context of the FW Act in Bowden v Ottrey Homes Cobram and District Retirement Villages.16
[114] The approach in Sprigg is 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. Workers’ compensation payments are deducted but not social security payments. The failure of an applicant to mitigate his or her loss may lead to a reduction in the amount of compensation ordered.
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.
[115] In Hanson Construction Materials v Pericich,17 a Full Bench of the Commission held that:
“[39]…Sprigg is a useful servant, but is not to be applied in a rigid determinative manner. In deciding the amount of a compensation order the Act directs that the Commission ‘must take into account all of the circumstances of the case’ including the particular matters set out at s.392(2)(a)to(g).”
I have taken this into account.
Conclusion
[116] If the Respondent had merely dismissed the Applicant, and not summarily dismissed him, the Applicant would have received 5 weeks’ pay in lieu of notice for his termination in accordance with the Clerks – Private Sector Award 2020.
[117] Whilst I cannot order the Respondent to pay notice, I am satisfied, taking into account the provisions of s.392 of the FW Act and the Sprigg formula, that the 5 weeks’ notice that the Applicant was entitled to be paid is an appropriate level of compensation.
[118] I order that the Respondent pay to the Applicant 5 weeks’ pay plus superannuation.
[119] I so Order. “
Byrom v Veris Australia Pty Ltd [2024] FWC 2865 delivered 16 October 2024 per Hunt C