Mr Ruben Galea v Billabong Custom Caravans Pty Ltd T/A Billabong Custom Caravans [2017] FWC 562 (31 March 2017) Last Updated: 2 June 2017 [2017] FWC 562 FAIR WORK COMMISSION DECISION Fair Work Act 2009 s.394 - Application for unfair dismissal remedy Mr Ruben Galea v Billabong Custom Caravans Pty Ltd T/A Billabong Custom Caravans (U2016/10194) DEPUTY PRESIDENT GOSTENCNIK SYDNEY, 31 MARCH 2017 Application for relief from unfair dismissal; whether valid reason; whether conduct related to reasons established; dismissal was unfair; remedy appropriate; reinstatement inappropriate; compensation ordered. [1] Mr Ruben Galea (Applicant) commenced employment with Billabong Custom Caravans Pty Ltd (Respondent), on or about 11 July 2010. He was employed in the position of a Caravan Finisher. The Applicant has applied for an unfair dismissal remedy under s.394 of the Fair Work Act 2009 (Act). That application was lodged on 11 August 2016. [2] A jurisdictional hearing was listed before me on 30 November 2016 as the application was lodged outside of the time prescribed in s.394(2) of the Act. The question whether a further period should be allowed had not been determined prior to the matter being allocated to me. It was necessary therefore to determine whether a further period within which this application may be made should be allowed. In my decision of 5 December 2016 [1] dealing with the question whether the Applicant should be allowed a further period within which to lodge an unfair dismissal remedy application I determined to allow a further period. In doing so, I also determined that the date on which the Applicant was dismissed from his employment was 6 July 2016. [2] [3] This decision deals with the merits of the Applicant’s unfair dismissal remedy application. I have decided that the Applicant’s dismissal was unfair. I have also determined that reinstatement is not appropriate and that an order for compensation in lieu of reinstatement is appropriate. I have determined that the amount of compensation to be paid to the Applicant by the Respondent is $15,051 plus 9.5% superannuation. The amount of compensation will be subject to taxation according to law. These are my reasons for that decision. Background and factual findings [4] The Applicant was employed as a caravan finisher by the Respondent on a full time basis from 11 July 2010 until 6 July 2016. For the reasons given in my earlier decision, I am satisfied that the Applicant was dismissed during a telephone discussion with Mr Fortunato Salce, the Director of the Respondent, while the Applicant was on leave in Malta on 6 July 2016. [5] The Applicant’s evidence was that he first became aware that he may no longer be employed by the Respondent whilst overseas on 17 June 2016 from a former work colleague, Mr Sam Shadid. Mr Shadid sent a text message to the Applicant in which Mr Shadid advised the Applicant that Mr Shadid had been dismissed and that “apparently u [the Applicant] might go...”. In light of this information, on 6 July 2016, the Applicant contacted Mr Salce to verify the information he had received. [6] During the course of the merits hearing the Respondent sought to maintain that the Applicant was advised of his termination during the meeting of 7 May 2016. Mr Salce’s evidence about this was unconvincing. Moreover, despite my observations about the absence of written confirmation at [6] of my earlier decision, no evidence was led from “the girls in the office”. There was ample opportunity for the Respondent to do so. No satisfactory explanation was given for the failure to do so and I draw an inference that such evidence as might have been elicited from the “girls in the office” would have not assisted the Respondent. Amongst other telling factors as discussed in my earlier decision, the explanation given by the Applicant for the circumstances in which he made the telephone call to Mr Salce on 6 July 2016 is supported by the extract of text messages in mid- June 2016 between the Applicant and Mr Shadid about the possible termination of the Applicant’s employment. The text message itself suggests the Applicant was, at that time, employed by the Respondent. It seems at odds with the Respondent’s version of events, that a colleague of the Applicant was unaware of the Applicant’s dismissal. There is therefore no reason to alter my initial view about the date of the termination of the Applicant’s employment or about the circumstances in which the dismissal was communicated. [7] As set out in my earlier decision the reasons given by the Respondent for its decision to terminate the Applicant’s employment were: [3] that the Applicant was required to train other staff to cover his role whilst on leave and that the Applicant’s refusal to do so resulted in production slowing down; that the Applicant convinced other employees to slow the production down and was taking unauthorised breaks; [4] and that over the last few months prior to his dismissal, the Applicant “just grated me” and “he was going back to that sort of position again and I decided to terminate”. [5] [8] In addition, the Respondent now argues that the Applicant’s employment was terminated because he took unauthorised leave. [6] [9] It is not in dispute that the Applicant did not receive any written notice of termination or a separation certificate. [10] The events leading up to the Applicant’s dismissal mainly revolve around the Applicant’s annual leave. [11] The Applicant had planned to take leave for six and a half weeks in order to have his daughter baptised in Malta on 25 May 2016. The date on which and how the Applicant sought approval of his leave from the Respondent is in dispute. The Applicant says that he first informed Mr Salce of his leave during the Christmas break of 2015/2016 when the Applicant came into the factory to undertake some private work. [7] The Applicant says that he also requested that 2 weeks of his pay be withheld so that he could obtain centrelink benefits for the birth of his child. Mr Salce’s evidence about the conversation he had with the Applicant over that period was vague and is unreliable. During cross-examination, Mr Salce said that “I remember delaying the two weeks. I can't remember - I can't remember him telling me - he may have - because I was very busy. I had other people doing maintenance work and he was doing personal work, so I just left him on his own...” [8] As is clear from the above, Mr Salce was not in a position to deny being told by the Applicant about the proposed leave. At best his evidence is that he did not remember but he may have been told. I accept the Applicant’s evidence in this regard. [12] The Applicant says that he also informed Mr Roger Rognrust, the Applicant’s direct supervisor, in early February 2016 of his upcoming leave. The conversation itself does not appear to be in dispute. [9] However, there seems to be some confusion about whether the Applicant told Mr Rognrust that he informed Mr Salce or whether the Applicant said that he just wrote it on the whiteboard. [10] The Applicant maintains that he wrote his annual leave on the whiteboard in or around March 2016. [11] [13] The Respondent says that it first became aware of the Applicant’s annual leave when another employee, Spiro, advised Mr Salce that he was going overseas and that he would be on the same flight as the Applicant. [12] This employee was not called by the Respondent to give evidence. [14] The Respondent maintains that the Applicant took annual leave without seeking approval from management. [13] It says that the usual procedure for seeking approval for leave is to ask management rather than a supervisor as supervisors are not authorised to approve leave and that in circumstances where an employee has sought authorisation from a supervisor, they have been directed to speak to Mr Salce in order to obtain approval. [14] There is no apparent written record of the “usual procedure”. Nor was any evidence led by the Respondent about when the “usual procedure” was introduced or about the means by which the “usual procedure” was communicated to employees and in particular to the Applicant. Mr Salce says that “Ruben at no stage ever came to me and said “I’m going away for seven weeks. I think you’d better get someone to do my job.” [15] But this evidence needs to be viewed in light of the equivocation noted earlier above. The Respondent also maintains that the whiteboard is used as a reminder mechanism and not as a tool to apply for annual leave. [16] The process by which an employee may apply for leave within the Respondent’s business is in my view unclear. Mr Rognrust evidence is that: “Can you tell us more about that conversation to clarify what's happening here?---Let me see if I can recall. Well, it was mainly that I actually approached Forge, you know, to have time off in February and that's the right way about doing things. You know, you have actually got to speak to the - go to Forge, approach him and work out your leave time, not just write it on the board basically. That's what that was all about. It should have been - Forge should have been properly informed by himself. He should have went in the office, spoke to him and asked for the time off. In terms of that, has anyone ever come to you first and tell you that they're going to take an annual leave day? They've got a wedding or they've got a christening or something like that?---No, no, they don't come to me first. No-one ever comes to you?---No. What about six days, same principle?---Same. Same?---They've actually got to ring the office and notify the office and then they'll notify me. That's the way I go about things. That's the way you go about things?---Mm. What about the employees you supervise? Do they always follow the exact protocol that is put in place?---Pretty much. Some of them do, you know, some don't ring up when they're - when they're having a day off, some don't. It's just, sort of, each to their own kind of thing?---No, it's not each to their own. It's just each person” [17] [15] However, Mr Nazario Russo, Foreman Supervisor (Aluminium section) indicates that “it goes through the foreman first and then I have to put it to Forge and Forge ultimately has to agree to it and then it goes on the board so we know the dates when we are going to replace the people when they're coming back.” [18] [16] Mr Shadid said that “the standard procedure at the Respondent for requesting, personal, annual paid or unpaid leave is by placing your name on the whiteboard with the relevant dates”. [19] [17] It seems clear from the above that if a “standard procedure” existed for applying for annual leave, each witness had a different understanding of precisely what that procedure involved. [18] During the period before the Applicant’s leave, the Respondent employed a number of employees to fill the Applicant’s position whilst he was overseas. The initial employees hired to fill in the Applicant’s position were either dismissed or moved to another department as they were not suitable for the role. This is hardly conduct that is consistent with an allegation that the Applicant proceeded on leave without authorisation. It is also inconsistent with Mr Salce’s evidence that he was unaware of the Applicant’s impending leave. In my view the conduct of employing a replacement shows that the Respondent was aware of the impending leave, took steps to hire cover for the period of leave, and at the very least, acquiesced to the Applicant’s leave, if not directly approving it. [19] As indicated above I prefer the evidence of the Applicant about when he informed Mr Salce of his proposed annual leave. The Applicant’s version of events is inherently more likely and I am satisfied that the Applicant told Mr Salce about his annual leave during the Christmas break. In any event, it is not in dispute that Mr Rognrust was aware of the Applicant’s intended holiday in early February 2016, three months prior to the Applicant’s annual leave and that Mr Rognrust had informed Mr Salce of the Applicant’s intended leave. [20] Further, the Respondent hired staff to replace the Applicant while he was on leave. At no point, did the Respondent approach the Applicant or question him about the annual leave request. The Respondent did not inform the Applicant that his leave request had not been approved nor did the Respondent schedule a meeting with the Applicant and explain that he had not followed the correct process when requesting leave. The conduct of the Respondent is consistent with the informality of the procedure by which an employee is to apply for leave, and as already indicated is consistent with Mr Salce approving or at the very least acquiescing to the leave sought by the Applicant. Relying on the taking of unauthorised leave as a reason for the dismissal bears all the hallmark of a recent invention and is not supported by the evidence. [20] The Respondent maintains that the Applicant was reluctant to train one of the new employees engaged to cover during the leave period and his refusal to do so resulted in production slowing down. It maintains that the Applicant convinced other employees to slow the production down and that the Applicant was taking unauthorised breaks. [21] The Applicant conceded that he refused to train a replacement employee identified as “Ben” for a couple of days because he was “upset” that Mr Salce refused to pay him bonus money, but maintains that he ultimately did assist Ben with training. [21] [22] The Applicant says that in 2011 he was given a pay rise so that he would not leave the Respondent and perform work for a competitor. [22] In 2012, the Applicant had a discussion with Mr Salce and says that he was under the impression that he would receive an ongoing annual bonus of $4000.00. [23] The Applicant received a bonus for the year ending 2013 and maintains that he did not receive a bonus after that. [24] The issue of pay appears to have been the reason for the discussion between the Applicant and Mr Salce on 7 May 2016. In my earlier decision, I preferred and accepted the evidence given by the Applicant and concluded that the Applicant’s version of events about the 7 May 2016 meeting was inherently more likely. [25] It was accepted that the Applicant had a discussion on 7 May 2016 with Mr Salce which was initiated by the Applicant at which the Applicant requested a pay rise. The Applicant’s request for a pay rise was refused. [23] The Respondent submits that Mr Salce informed the Applicant on 7 May 2016, prior to the Applicant’s leave that the Applicant would need to re-apply for his position when he returned from his overseas trip and that this was when the Applicant was informed of the termination of his employment. [26] Mr Salce says that the international call on 6 July 2016 was initiated by the Applicant to confirm the discussion held on 7 May 2016. As indicated in my earlier decision, I do not accept that there was a dismissal or a discussion about the Applicant’s dismissal on 7 May 2016. The Applicant’s version of events is inherently more likely. I reiterate that the Applicant’s version of events is more likely because: it would seem odd that the 7 May 2016 meeting, which was initiated by the Applicant, would be the vehicle through which notice of employment would be given, there is nothing from the Respondent by way of written confirmation of the notice of termination of employment having been given on 7 May 2016, or of the employment ending on 25 May 2016; the absence of evidence from the “girls in the office”; • the extract of text messages in mid-June 2016 supports the Applicant’s version of events [27] ; and it seems unlikely that an employee would be asked to reapply for his or her position if the business believed that that employee was slowing down production, refusing to train replacement staff or proceeding on leave without authorisation. [24] No additional probative evidence which was led supports Mr Salce’s version of events about the 7 May 2016 meeting and there is therefore no reason to alter my initial view about the date of the termination of the Applicant’s employment or about the circumstances in which the dismissal was communicated. I am satisfied that the Applicant was not dismissed nor told that he would be dismissed during the 7 May 2016 meeting. I am satisfied on the evidence that the Applicant was not told on 7 May 2016 that he would need to re-apply for his position on return from leave. [25] The Respondent failed to produce any probative evidence to support its contention that the Applicant was slowing down production and convincing other employees to do the same. The Respondent relies on the evidence given by Mr Rognrust: “How would you describe him in terms of an employee who was under basically your direct supervision for, I can imagine, I don't know, the whole of that time or some of that time?---Yes, yes. Yes, I rate - always rated Ruben a really good worker actually, you know, but it's sort of come to a point where, I suppose, things got a bit sour, you know, where we didn't want to really work the production in the way that I needed him to work the production and it was slowing it down. Is there any reason for that in terms of what was happening in the context of the factory?---Well, it might have had something - I'm not exactly sure why, but just I know it was slowing down production, wanting to work on caravans separately to the normal production like we would normally. In the external area, you'd have external workers working all together on one van. He chose - he wanted to work on the van and do all the external work on his own on that van, so he wasn't playing as a team. For about, say, six years up until the start of the year, he was an excellent employee and then all of a sudden it's dropped off or - - -?---Yes, I think it even dropped off while I was - it was pretty bad apparently when I wasn't there. I was off work, yes, and to come back, our normal production would be one van a day and at that time they were only manufacturing maybe, you know, three, two or three a day. Not a day, sorry, one a day, and they were only - which is five a week, and they were only manufacturing around three, I think, in the same week - three a week. Were you there for this period when the applicant was allegedly slowing the production or you were away with your injury?---When I started - when I started back, yes, I found the production - all the production was very slow, you know, and - - - Could you attribute to that one particular thing or was that across the board, everyone was getting a bit slack or was it - how did you - - -?---No, well, there was a lot of things going on. It sort of snowballed and people were, sort of, edging each other on, you know, sort of, like put the hand brake on, so to speak. A lot of that was going on. What normally happens when someone, sort of, breaks the protocol or is, sort of, found to be taking longer breaks or slowing things down or smoking in the factory for an example, do you send them to Forge or are you able to give warnings or- - -?---I hadn't. No, I hadn't been giving any warnings. I'll actually talk to them and try and get them around to, you know, get into production and doing the right thing. You sort of counsel them sort of like?---Yes, a little bit to try and - - - Did you have any of these discussions with the applicant about why he was maybe down in the dumps and not working as hard as he was or anything like that? Did you sit him down and have a coffee, anything like that?---You know - no - we spoke about it and, you know, it's very hard sometimes when some people are pretty stubborn and it doesn't really matter what you say and do, they want to do this this way, so we left Ruben go about it the way that he can get the production done only so that we can get something out at least, you know. There is no hard and fast rule like that at work. We all try, you know, try and get the job done and try and communicate with people the best way that we can. Would you say you gave him any warnings?---I didn't personally give him any warnings. Do you know if he was given any warnings?---There were discussions with Forge and Ruben alone. I'm not sure if that happened; it could have. You weren't giving it. Obviously you weren't present?---I didn't hand out any warnings to Ruben.” [28] [26] This evidence is vague, indirect and wholly unreliable. No other employee was called to support the allegation. The Applicant has denied the allegation. I am not persuaded on the evidence that the Respondent has made good the allegation. [27] The Respondent through Mr Salce contends that the Applicant “was going on leave and then other things were happening such as non-training of personnel to take his job over while he was gone because there’s no one to do it, just the slowing down attitude of the work, that sort of thing. Just kept grating on me basically.” [29] Mr Salce also says “he was a good worker. I mean, he was reliable, he always turned up, hardly any sick days but then this last few months just grated me to the point where he went back probably a year when they were slowing the production down at the old factory and we stopped all the afternoon smokos and things like that because it was dragging out and he was going back to that sort of position again and I just decided to terminate” [30] [28] I accept the Applicant’s explanation as to his reluctance to initially train Ben. Although I do not condone this behaviour, I am satisfied that the refusal was of short duration, and that the Applicant was otherwise a diligent, reliable and hardworking employee. [31] The Applicant’s admission in this regard is akin to an admission against interest and in that respect serves to bolster his credibility as a witness overall. I accept the Applicant’s evidence that he ultimately did train Ben, and I note that Ben was not called by the Respondent to give evidence. Further, the Applicant did not receive any warnings [32] in respect of slowing down production and as earlier indicated no employee was called to give evidence in support of those allegations. [29] The Respondent says that the Applicant took unauthorised lunch/smoke breaks. It says that the Applicant took extended breaks for approximately 30 to 40 minutes instead of the normal 5-10 minutes. [33] Further, it says that the Applicant received two oral warnings at the Respondent’s former factory by Mr Joe Pollino (former business partner) and Mr Salce and that the issue was not rectified. [34] As a result of the unauthorised breaks, the Respondent maintains that it “did not help with production” and says that there are now no afternoon breaks in the new factory. [35] Mr Pollino was not called give evidence. In any event, there is no evidence to suggest that the Applicant has repeated this behaviour in the new factory, and it is not in dispute that the Applicant has not received any warnings in respect of unauthorised breaks since the move. Consideration and application of the statutory framework Protection from Unfair Dismissal [30] An order for reinstatement or compensation may only be made if I am satisfied the Applicant was, at the date of the dismissal, protected from unfair dismissal under the Act. [31] Section 382 of the Act sets out the circumstances that must exist for the Applicant to be protected from unfair dismissal as follows: “382 When a person is protected from unfair dismissal A person is protected from unfair dismissal at a time if, at that time: (a) the person is an employee who has completed a period of employment with his or her employer of at least the minimum employment period; and (b) one or more of the following apply: (i) a modern award covers the person; (ii) an enterprise agreement applies to the person in relation to the employment; (iii) the sum of the person’s annual rate of earnings, and such other amounts (if any) worked out in relation to the person in accordance with the regulations, is less than the high income threshold.” [32] There is no dispute, and I am satisfied, that the Applicant was, on 6 July 2016, protected from unfair dismissal within the meaning of s.382. Was the dismissal unfair? [33] The Applicant’s dismissal will have been unfair if I am satisfied, on the evidence, that all of the circumstances set out in s.385 of the Act existed. Section 385 provides: “385 What is an unfair dismissal A person has been unfairly dismissed if the FWC is satisfied that: (a) the person has been dismissed; and (b) the dismissal was harsh, unjust or unreasonable; and (c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and (d) the dismissal was not a case of genuine redundancy. Note: For the definition of consistent with the Small Business Fair Dismissal Code: see section 388.” [34] There is no dispute that the Applicant was dismissed at the Respondent’s initiative within the meaning of s.386 of the Act. [35] The Respondent argues that its decision to terminate the Applicant’s employment was not harsh, in accordance with the Small Business Fair Dismissal Code in that 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. [36] The Respondent did not raise this jurisdictional objection in its form F3 – Employer Response nor did it raise this objection in the hearing. Pursuant to its response filed on 17 August 2016, the Respondent notes that it employs 52 employees. Section 23 of the Act defines a “small business employer” as a national system employer which employs fewer than 15 employees at that time, being the time of the dismissal. The Respondent is not a small business employer so the issue of compliance with the Small Business Fair Dismissal Code does not arise. The Respondent’s submission is misconceived. I am also satisfied and it was not in dispute that the dismissal of the Applicant was not a case of genuine redundancy within the meaning of s.389 of the Act. Harsh, unjust or unreasonable [36] It remains therefore, for me to consider whether the Applicant’s dismissal was harsh, unjust or unreasonable. The matters that must be taken into account in assessing whether the dismissal was harsh, unjust or unreasonable are set out in s.387 of the Act: “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.” [37] I am obliged to consider each of these matters in reaching my conclusion [37] and I do so below, having regard to the factual findings earlier made and taking into account the submissions filed by the parties. [38] [38] The ambit of the words “harsh, unjust or unreasonable” in the context of a dismissal was explained in Byrne & Frew v Australian Airlines Ltd [39] by McHugh and Gummow JJ 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.” [40] [39] Ultimately, however, it is the matters set out in s.387 of the Act to which regard must be had. Valid reason – s.387(a) [40] There must have been a valid reason for the dismissal related to the Applicant’s capacity or conduct, although it need not be the reason given to the Applicant at the time of the dismissal. [41] The reason should be “sound, defensible or well-founded ” [42] and should not be “capricious, fanciful, spiteful or prejudiced”. [43] Where conduct of the Applicant is relied upon to justify the decision to terminate employment, I would need to be satisfied that the conduct as alleged, occurred. [44] A mere suspicion of conduct does not amount to a valid reason. [45] [41] The reason for the Applicant’s dismissal related to his conduct. The reasons for the Applicant’s dismissal as follows: that the Applicant was required to train other staff to cover his role whilst on leave and that the Applicant’s refusal to do so resulted in production slowing down; that the Applicant convinced other employees to slow the production down and was taking unauthorised breaks; [46] that over the last few months prior to his dismissal, the Applicant “just grated me” and “he was going back to that sort of position again and I decided to terminate”; [47] and • that the Applicant took unauthorised leave. [48] [42] For the reasons given earlier in this decision I do not consider any of the reasons relied upon by the Respondent as a reason or reasons for dismissal to be a valid reason. To the extent that there was a short period of refusal to train an employee, that refusal quickly dissipated. This alone would not found a valid reason. The other reasons have simply not been made out on the evidence and the third reason advanced would appear on its face to be capricious. [43] Therefore, in the circumstances I am satisfied that there was not a valid reason for the Applicant’s dismissal relating to his conduct. [44] The absence of a valid reason therefore weighs in the Applicant’s favour. Notification of the valid reason – s.387(b) [45] Notification of a valid reason for termination should be given to an employee protected from unfair dismissal before the decision is made, [49] in explicit terms , [50] and in plain and clear terms. [51] In Crozier v Palazzo Corporation Pty Ltd (t/as Noble Park Storage and Transport) , [52] a Full Bench of the Australian Industrial Relations Commission dealing with a similar provision of the Workplace Relations Act 1996 observed: “As a matter of logic procedural fairness would require that an employee be notified of a valid reason for their termination before any decision is taken to terminate their employment in order to provide them with an opportunity to respond to the reason identified. Section 170CG(3)(b) and (c) would have very little (if any) practical effect if it was sufficient to notify employees and give them an opportunity to respond after a decision had been taken to terminate their employment. Much like shutting the stable door after the horse has bolted.” [53] [46] I am not satisfied that the Applicant was notified of the Respondent’s reasons for dismissing him. There were no reasons given by the Applicant during the dismissal discussion on 6 July 2016. Even if I were to accept (which I do not) Mr Salce’s evidence that he told the Applicant of the dismissal on 7 May 2016 on his own evidence [54] , there was no mention of a reason for dismissal, and according to Mr Salce he had decided before that [he] was going to terminate him. [55] [47] The failure to notify the Applicant of the reasons for his dismissal therefore weighs in the Applicant’s favour. Opportunity to respond – s.387(c) [48] An employee protected from unfair dismissal should be given an opportunity to respond to any reason for dismissal relating to the conduct or capacity of the employee. It seems to me clear on the evidence to which earlier reference has been made, that the Applicant was not given any opportunity to respond to the reasons for his dismissal. It is self-evident that an opportunity to respond to reasons for a dismissal cannot be given when the reasons themselves are not given to an employee, as is the case in respect of this application. The absence of an opportunity to respond to the reasons for the dismissal therefore weighs in the Applicant’s favour. Unreasonable refusal by the employer to allow a support person – s.387(d) [49] If an employee protected from unfair dismissal has requested that a support person be present to assist in discussions relating to the dismissal, the employer should not unreasonably refuse to allow that person to be present. It is clear from the plain language of s.387(d) of the Act that this consideration is directed to an employer’s unreasonable refusal to allow a support person to be present. It is not concerned with whether an employer offered the employee such an opportunity. In most cases, the section will be engaged if the employee asks for a support person to be present and the employer refuses the request. [56] It may well be appropriate in some cases to consider the overall circumstances in which meetings to discuss an employee’s performance, capacity and conduct or dismissal occurred to properly determine whether there was an unreasonable refusal by the employer to allow the employee to have a support person present. [50] It is no dispute that the Applicant did not have a support person with him during the telephone call with Mr Salce on 6 July 2016. However, there was no refusal because there was no request. In the circumstances I consider this matter to be neutral. Warnings regarding unsatisfactory performance – s.387(e) [51] If an employee protected from unfair dismissal is dismissed for the reason of unsatisfactory performance, the employer should warn the employee about the unsatisfactory performance before the dismissal. Unsatisfactory performance is more likely to relate to an employee’s capacity than their conduct. [57] For present purposes, the Applicant was dismissed primarily on conduct grounds. The Applicant received two oral warnings as earlier discussed, which on their face relate to conduct not performance. The warnings were given at the Respondent’s former factory and the Applicant submits that these “historical warnings should not be given any weight in the current proceeding, and the Respondent cannot rely on warnings for extended breaks at the former factory as warnings in relation to the alleged slowing down of production at the new factory”. [58] I agree. Impact of the size of the Respondent on procedures followed – s.387(f) [52] The Respondent is a medium sized employer. There is no evidence that the Respondent’s size, in and of itself, affected the procedure adopted in effecting the dismissal. However, the process undertaken by the Respondent to dismiss the Applicant well and truly falls short of best practice. Absence of dedicated human resources management specialist/expertise on procedures followed – s.387(g) [53] There is an absence of a dedicated human resources function. It is apparent that no dedicated human resources management were involved in the dismissal of the Applicant. Such an absence is likely to have contributed to the procedure (or lack thereof) adopted by the Respondent in dismissing the Applicant. Other relevant matters – s.387(h) [54] Section 387(h) provides the Commission with broad scope to take into account any other matters it considers relevant. I have also taken into account the following matters: The Applicant’s disciplinary history. It is not in dispute that the Applicant received two oral warnings for extended lunch breaks. There is no suggestion that the Applicant has received any other warnings or that the conduct has been repeated; The Applicant’s period of service. The period was six years and is not insignificant; and The Applicant’s work record. There is no suggestion that the Applicant was anything other than good at his job and was a diligent employee. [55] Taking all of these matters into account and for the reasons given in this decision, I have come to the conclusion that the Applicant’s dismissal was harsh, unjust and unreasonable. It was unjust because the Applicant did not engage in any of the conduct alleged as the reasons for his dismissal. It was unreasonable because of the manner in which the dismissal was effected and one of the reasons relied upon appears on its face to be capricious. It was harsh because of the consequence to the Applicant in losing his employment for spurious reasons. There was a complete absence of a valid reason and a failure to adopt the most basic of fair procedures in effecting the dismissal. Therefore, the Applicant’s dismissal by the Respondent was unfair. Remedy [56] I turn next to consider the question of remedy. The statutory provision [57] Section 390 of the Act sets out the circumstances in which I may make an order for reinstatement or compensation: “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.” [58] Given my earlier conclusions, the matters set out in ss.390(1) and (2) are satisfied. Therefore the jurisdictional preconditions to the order of an appropriate remedy are satisfied. [59] The question whether to order a remedy in a case where a dismissal has been found to be unfair remains a discretionary one. Neither party suggested that I exercise my discretion not to order a remedy at all if the dismissal was found to be unfair. I consider that a remedy is appropriate in all the circumstance of this case. Reinstatement as the primary remedy for an unfair dismissal [60] Subsection 390(3) underscores the primacy of reinstatement as a remedy for an unfair dismissal. The discretion to order a remedy of compensation may only be exercised if the Commission is satisfied that reinstatement is inappropriate. The Applicant does not seek reinstatement due to the circumstances arising out of the dismissal. [59] I consider that an order for reinstatement is inappropriate given that the circumstances have created irreparable tension between the parties and in any event, the Applicant has secured new employment, [60] and does not seek reinstatement. Compensation as a remedy [61] Section 390(3)(b) provides that I must not make an order for compensation unless I am satisfied that reinstatement is inappropriate and I consider that an order for the payment of compensation is appropriate in all the circumstances. [62] Taking into account the findings I have earlier made, I consider that an order for compensation is appropriate. [63] Section 392 of the Act sets out the circumstances that must be taken into account when determining an amount of compensation, the effect of any findings of misconduct on that compensation amount and the upper limit of compensation that may be ordered: “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. Note: subsection 392(5) indexed to $69,450 from 1 July 2016 (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.’ [64] The method for calculating compensation under s.392 of the Act was dealt with by a Full Bench of the Commission in Bowden v Ottrey Homes Cobram and District Retirement Villages Inc. T/A Ottrey Lodge [61] . In that decision, the Full Bench set out the order in which the criteria and other factors should be applied, taking into account authority under the Workplace Relations Act 1996 in Sprigg v Paul’s Licensed Festival Supermarket [62] and Ellawala v Australian Postal Corporation . [63] I have adopted the methodology in Bowden in determining the amount of a payment of compensation. Remuneration that would have been received (s.392(2)(c)) [65] Although one cannot, with precision, determine over how long a period, the Applicant would have continued in employment but for the dismissal I consider the period nominated by the Applicant of likely ongoing employment of one year is appropriate. All of the evidence suggests that the Applicant was a diligent and hardworking employee who was good at his job. There is no probative evidence that suggesting that employment would not have continued for at least a further 12 months but for the dismissal. However it is possible that employment may not have continued for the entire period. The Applicant was unhappy with his wages and Mr Salce appears to have been frustrated with the Applicant. Other factors such as illness or incapacity might also have brought the employment to an end before the end of the 12 month period, although given the passage of time, the significance of that contingency is low. In the circumstances, I propose to factor in a contingency of a 15% likelihood that the employment would not have continued for the entire 12 month period. The Applicant was earning $1,140 gross per week at the time of his dismissal. [64] [66] Accordingly, I am of the view that the remuneration the Applicant would have received, or would have been likely to receive, if he had not been dismissed would have been another $59,280 prior to tax less a 15% contingency, leaving an amount of $50,388. I accept the Applicant’s further submission [65] that remuneration by way of overtime need not be taken into account in as much as the overtime remuneration likely to have been earned with the Respondent is negated by the overtime remuneration likely to be earned by the Applicant with his new employer over this period. Remuneration earned (s.392(2)(e)) [67] As indicated above, the Applicant has secured employment at a lower rate of pay. The Applicant is now employed at an hourly rate of $24.00 as opposed to his previous employment of $30.00 an hour. [66] The Applicant has been earning approximately $920.00 per week prior to tax for the period between since 15 August 2016 and 17 February 2017. [67] This is a period of 27 weeks during which he was paid $24,840 gross. For the period between 18 February 2017 and the date of this decision he was earning $1026, and so for that six week period, the Applicant earned $6,156. Therefore the total earnings since his dismissal and the date of this decision are $30,996. This amount it to be deducted from the sum of $50,388 in [66]. Income reasonably likely to be earned (s.392(2)(f)) [68] I am inclined to require the Respondent to pay the amount of compensation to the Applicant within 4 weeks of the order I propose to make. In that time the Applicant will reasonably likely earn a further $4104. This amount is to be deducted from the sum of $50,388 in [66]. Other matters (s.392(2)(g)) [69] I also consider it relevant that I take into account the remuneration likely to be earned by the Applicant from employment with the Applicant’s new employer for the period commencing on the date by which payment of the sum ordered is to be made and the expiration of the period estimated in [66] above. That is a period of 5.4 weeks and the amount is $5643. I take into account that the new employment may not continue for that period and so I reduce that amount by 15% to take into account of that contingency. The estimate is therefore $4797 [68] . This amount will be deducted from the sum of $50,388 in [66]. [70] The Applicant submitted that I should also take into account the loss of a long service leave entitlement. I do not propose to make allowance for such loss, principally because on the Applicant’s submission which I accept, employment with the Respondent would have continued for a further 12 months. The Applicant commenced employment on 11 July 2010. Twelve months from the date of the dismissal would be 6 July 2017. On that basis, if employment had ended on that day there would be no entitlement under the Long Service Leave (Vic) 1992 as the period of service at the date of termination would be less than 7 years. [71] I do propose to take into account the fact that the Applicant did not receive notice of the termination of his employment nor pay in lieu of notice. I propose to add the sum of $4560 (representing 4 weeks’ pay in lieu of notice) to the sum of $50,388 in [66]. Viability (s.392(2)(a)) [72] Mr Salce’s evidence is that moving into one factory meant that the Respondent could produce more as the new factory allowed for a straight production line and as a result the business is currently trading profitably. [69] However, Mr Salce’s evidence is that if a monetary compensation order were to be made it would affect the business’ cash flow especially if it were to be made early in the year as the business is closed for a period of 4 weeks during the Christmas break. [70] Mr Salce’s evidence is that the business usually gets back on track during April/May. [71] Mr Salce’s evidence is that the business’ margins have dropped in order to remain competitive and says that an order of compensation would cause financial hardship. [72] I am not persuaded that the order I propose to make will cause financial hardship to the Respondent as asserted, nor am I persuaded that the order I make will have any negative impact on the viability of the Respondent’s business. In any event, the compensation amount that I will order be paid to the Applicant will be due at a time when, according to Mr Salce, “the business usually gets back on track”. [73] Length of service (s.392(2)(b)) [73] The Applicant was employed by the Respondent for a period of 6 years. As indicated above the period of six years is not insignificant. There is no reason, on account of length of service, that compensation should be reduced. Mitigation efforts (s.392(2)(d)) [74] I accept that the Applicant was able to mitigate his losses by looking for and obtaining alternative employment. Consequently, there is no need to reduce the compensation amount on account of any failure to take steps to mitigate. Misconduct (s.392(3)) [75] As is clear from the evidence and my findings, misconduct played no part in the Respondent’s decision to dismiss the Applicant and so no reduction in compensation on that account is necessary. Compensation cap (s.392(5)) [76] The compensation cap in s.392(5) of the Act in relation to the Applicant is $34, 460 (which is the Applicant’s remuneration in the six months before the dismissal including overtime). The amount of the cap would be $29,640 without factoring for overtime. The amount of compensation I propose to order worked out in accordance with [66] – [75] above is less than the compensation cap and so it need not be reduced. Total Compensation [77] In the circumstances it is therefore appropriate that an order be made that the Respondent pay to the Applicant, compensation in the amount of $15,051 gross plus 9.5% superannuation. From this amount may be deducted any taxation required by law. [78] The following summarises the calculation of the compensation amount: $50,388 as per [66] + $4,560 as per [71] = $54,948 $54,948 - $30, 996 as per [67] = $23,952 $23,952 - $4,104 as per [68] = $19,848 $19,848 - $4797 as per [69] = $15,051 Conclusion [79] For the reasons earlier given, I am satisfied that dismissal of the Applicant by the Respondent was harsh, unjust and unreasonable and therefore unfair. I am also satisfied in the circumstances that a remedy is appropriate, but that reinstatement is inappropriate. I am satisfied that compensation is appropriate in the circumstances of this case and I will order compensation in the amount of $15,051 gross plus 9.5% superannuation with deduction of any taxation required by law, to be paid by the Respondent to the Applicant within 28 days after the date of this decision. [80] An order giving effect to this decision is separately issued in PR591346 . DEPUTY PRESIDENT Appearances : Mr P Raniga , Solicitor for the Applicant. Mr F Salce for Billabong Custom Caravans Pty Ltd. Hearing details: Melbourne 19 December 2016. Final written submissions: Applicant’s Final Submissions 17 January 2017 and Applicant’s Final Submissions in reply dated 23 February 2017. Respondent’s Final Submissions dated 21 February 2017. [1] Galea v Billabong Custom Caravans Pty Ltd [2016] FWC 8611 . [2] Ibid at [6] – [7]. [3] Ibid at [8]. [4] Form F3 – Employer Response to Unfair Dismissal Application. [5] Transcript PN274. [6] PN1133- PN1134. [7] Exhibit 1 at [9]. [8] PN1160. [9] PN290, PN1124, PN1126. [10] PN985 – PN986. [11] PN646. [12] Exhibit 2 at [1]. [13] Respondent’s Outline of Submissions dated 3 November 2016 at [2]. [14] Ibid at [4]. [15] PN279. [16] PN1158. [17] PN974 – PN981. [18] PN903. [19] Exhibit 3 at [13]. [20] Respondent’s Final Submissions dated 21 February 2017 at [5] and Exhibit 6 at [3] and PN290. [21] PN655 – PN657. [22] Exhibit 1 at [23]. [23] Ibid at [24]. [24] Ibid at [26]. [25] [2016] FWC 8611 at [6] . [26] PN255 – PN257. [27] Exhibit 1, Annexure B. [28] PN991 – PN1001. [29] PN273. [30] PN274. [31] PN1156. [32] PN996, PN998 – PN1001. [33] Exhibit 2 at [6]. [34] PN1115. [35] PN1112. [36] Respondent’s Final Submissions dated 21 February 2017 at [16]. [37] Sayer v Melsteel Pty Ltd [2011] FWAFB 7498 at [14] . [38] Applicant’s Outline of Submissions, 17 October 2016, 25 November 2016 and 16 December 2016, Applicant’s Final Submissions, 17 January 2017, Applicant’s Final Submissions in reply, 23 February 2017, Respondent’s Outline of Submissions, 29 January 2016 and Respondent’s Final Submissions, 21 February 2017. [39] (1995) 185 CLR 410. [40] Ibid at 465. [41] Shepherd v Felt & Textiles of Australia Ltd [1931] HCA 21 ; (1931) 45 CLR 359 at 373, 377–378. [42] Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371 at 373. [43] Ibid. [44] King v Freshmore (Vic) Pty Ltd, Full Bench AIRC, 17 March 2000, (Print S4213) at [23]–[26]. [45] Australian Meat Holdings Pty Ltd v McLauchlan (1998) 84 IR 1. [46] Form F3 – Employer Response to Unfair Dismissal Application. [47] PN274. [48] PN1133 – PN1135. [49] Chubb Security Australia Pty Ltd v Thomas Print S2679 at [41]. [50] Crozier v Palazzo Corporation Pty Ltd (t/as Noble Park Storage and Transport) (2000) 98 IR 137 at 150–151. [51] Previsic v Australian Quarantine Inspection Services Print Q3730. [52] (2000) 98 IR 137. [53] Ibid at 151. [54] PN252 - PN267. [55] PN258. [56] See also Fair Work Bill 2008 – Explanatory Memorandum at [1542]. [57] Annetta v Ansett Australia (2000) 98 IR 233 at 237. [58] Applicant’s Final Submissions dated 17 January 2017 at [35]. [59] Applicant’s Final Submissions dated 17 January 2017 at [53]. [60] PN792. [61] [2013] FWCFB 431 . [62] (1998) 88 IR 21. [63] Print S5109. [64] Applicant’s Final Submissions dated 17 January 2017 at [64]. [65] Letter from Applicant dated 22 March 2017. [66] Applicant’s Final Submissions dated 17 January 2017 at [59]. [67] Ibid at [65], Letter from Applicant dated 24 March 2017 at [3]. [68] Rounded to the nearest dollar. [69] PN1172 , PN1176. [70] PN1181. [71] PN1183. [72] PN1182. [73] PN1183. Printed by authority of the Commonwealth Government Printer <Price code C, PR589730>