The Applicant failed to keep proper records of her working hours and personal time off, resulting in payment for working hours that had not actually been worked.

The Applicant had failed to properly manage the business and was derelict in her duties and responsibilities as set out in her job description.

The Applicant failed or was unable to address and remedy this situation.

[25] A person has not been unfairly dismissed where the dismissal is consistent with the Code. Section 388 of the Act reads:

(1) The Minister may, by legislative instrument, declare a Small Business Fair Dismissal Code.

(2) A person's dismissal was consistent with the Small Business Fair Dismissal Code if:

(a) immediately before the time of the dismissal or at the time the person was given notice of the dismissal (whichever happened first), the person's employer was a small business employer; and

(b) the employer complied with the Small Business Fair Dismissal Code in relation to the dismissal.

[26] The Code is only relevant if the employer is a small business as defined in s 23 of the Act.

[27] The Code provides:

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

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

The employee must be warned verbally or preferably in writing, that he or she risks being dismissed if there is no improvement. The small business employer must provide the employee with an opportunity to respond to the warning and give the employee a reasonable chance to rectify the problem, having regard to the employee's response. Rectifying the problem might involve the employer providing additional training and ensuring the employee knows the employer's job expectations.

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

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

[28] I am satisfied that Ms Thurston was protected from unfair dismissal,[6] her application was made within the required period as prescribed in s 394(2) of the Act, and the dismissal was not by way of genuine redundancy.[7]

[29] As noted, it was uncontroversial that at the relevant time BMI was a small business employer as defined in s 23 of the Act and Ms Thurston had been provided with payment in lieu of notice. The Summary Dismissal part of the Code was therefore irrelevant, noting, neither party advanced an argument to the contrary.

[30] The first issue is whether BMI was compliant with the Code at the time of Ms Thurston's dismissal. This requires consideration of the Other Dismissal aspect of that Code. If Ms Thurston's dismissal was inconsistent with the Code, attention will turn to determining whether Ms Thurston was 'unfairly' dismissed. This will require the factors in s 387 of the Act to be taken into account.

[31] If Ms Thurston's dismissal was consistent with the Code, it cannot be 'unfair' within the meaning of the Act.

[32] The 'Other Dismissal' part of the Code is clear in its terms. It states that an employee must be warned verbally or preferably in writing, that she or he risks being dismissed if there is no improvement. The employer must provide the employee with an opportunity to respond to the warning and give the employee a reasonable chance to rectify the problem.

[33] The Code requires me to have regard to whether BMI gave warning to Ms Thurston about the unsatisfactory work performance, as held to exist at a time before her dismissal. A warning must have been conveyed (with an appropriate level of gravity) so as to leave Ms Thurston in no doubt that BMI anticipated change in one particular area of performance or another. In short, Ms Thurston must have effectively been put on notice prior to her dismissal that BMI held genuine and substantial concerns about her performance. Further, a chance to rectify the performance problem(s), should have been provided.

[34] Mr Boima gave evidence that he spoke to Ms Thurston about her poor work performance in November 2020. Ms Thurston contends this was not the case. Nevertheless, Dr Boima's evidence did not suggest that he had warned Ms Thurston about her performance, and while a business review had been conducted in the latter part of 2019, it would be wrong to suggest that it had culminated in Ms Thurston being informed of her problematic work performance. The evidence does not support such a finding.

[35] From the purported conversation in November 2020 until the time Ms Thurston received the letter of termination on 10 February 2020, there was no evidence that lent itself to finding Ms Thurston had been warned and provided with the opportunity to rectify the performance problem.

[36] The picture presented is that Mr Boima was completely dissatisfied with Ms Thurston's work performance but did little, if not anything, to address it. Dr Boima couched his indifference in managing Ms Thurston's work performance as some sort of protective or softened approach. The Code is clear in what it requires, and there was no evidence before me to suggest that Ms Thurston was so compromised in her fitness for work that she lacked capacity to look after her own interests, or would, for fitness reasons, have been unable to rectify problems in her performance if informed of the same.

[37] Having considered BMI's compliance with the Code, I can only conclude it was non-compliant. BMI has not succeeded with its jurisdictional objection and therefore consideration is now given to whether the dismissal of Ms Thurston was harsh, unjust or unreasonable, as those terms are understood by reference to s 387 of the Act.

[38] Section 387 of the Act contemplates that an overall assessment as to the nature of the dismissal must be made by the Commission. In so doing, the Act sets out a number of considerations that must, where relevant, be weighed up in totality. Those considerations which must be taken into account when determining whether a dismissal was harsh, unjust or unreasonable are:

1. 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.

[39] The type of conduct which may fall within the phrase 'harsh, unjust or unreasonable' was explained by the High Court of Australia in Byrne v Australian Airlines Ltd.[8] McHugh and Gummow JJ explained 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.[9]

[40] It is convenient to use the various provisions of s 387 of the Act, with reference to the relevant circumstances, to outline my consideration of the matter.

[41] While the Commission is obliged to take into account whether there was a valid reason for dismissal relating to the employee's capacity or conduct,[10] this provision should not be construed as requiring there to be a valid reason. Although, whether there is or not will have bearing on the decision reached.

[42] To explain further, 'valid' in this context is generally considered to be whether there was a sound, defensible or well-founded reason for the dismissal.[11] The provisions must be applied in a practical, common sense way to ensure that the employer and employee are treated fairly.[12]

[43] The only reason which Dr Boima gave for Ms Thurston's dismissal at the time was the statement in the letter of termination:

We both know this is coming but I am taking a fast track approach since a HR personnel if [sic] coming to assess BMI's need. This decision is taken purely from the business perspective and BMI would like to divert your remuneration to another employee to perform numerous roles to uplift the business.

[44] It is difficult to postulate what Dr Boima meant when he stated that the decision was taken purely from 'the business perspective and BMI would like to divert Ms Thurston's remuneration to another employee to perform numerous roles to uplift the business'. It would not be farfetched to suggest that the primary reason for the dismissal at the time was the redundancy of Ms Thurston's position.

[45] However, Dr Boima's explanation of the content of the termination letter, was the term 'business perspective' was of sufficient import to cover Ms Thurston's unsatisfactory work performance.

[46] In short, Dr Boima's evidence concerning Ms Thurston's work performance included there being an insufficient number of staff meetings led by Ms Thurston within the practice, efforts to network with other practices (referral sources) to generate business had been limited, and Ms Thurston was frequently absent from work, and did not keep proper records of her working hours and personal time off - resulting in payment for working hours that had not actually been worked.

[47] Expanding on Ms Thurston's absenteeism, Dr Boima explained that during Ms Thurston's time with the business there was not a single time that she applied to Dr Boima for leave.[13] Dr Boima said that he had informed Ms Thurston numerous times that she could not take leave on her own, meaning that she could not apply for leave and approve it herself.[14]

[48] Ms Nicholls similarly gave evidence that when Ms Thurston returned to work after the passing of her daughter (in or around November 2019) she began to have a lot of absences and could often be seen having extended meal breaks and leaving early.[15] Ms Nicholls reported that the relationship between Dr Boima and Ms Thurston had broken down.

[49] With a view to generating business, Dr Boima expected that Ms Thurston would undertake networking and/or marketing of the practice with potential referrers. The evidence indicates that limited work was done in this respect. Dr Boima identified that it was a vital component of Ms Thurston's role to be in contact with other business managers and practices, yet Ms Thurston had verbally indicated to him that she would not be doing this anymore.

[50] Dr Boima verbalised that he had significant concerns about Ms Thurston's work performance. However, it is apparent from the evidence that Ms Thurston's work practices at the time of the dismissal were no different from her practices she had adopted during the last two years of her employment. Those practices were clearly considered by Dr Boima as being inefficient - that is reasonably clear.

[51] However, there is very little probative evidence before me to demonstrate the extent of the purported absenteeism, the duties Ms Thurston had been derelict in, the instructions that had been provided to Ms Thurston concerning the inadequate number of staff meetings and lack of attempts to generate business, or the mishandling or sharing of sensitive, financial and personal company information.

[52] Except for Dr Boima's remarks about addressing Ms Thurston's performance in November 2019, there is no evidence that these issues had been brought to Ms Thurston's attention. On this basis, Ms Thurston had every reason to believe that she was working to an appropriate standard, because of the lack of any substantial criticism of her work over a period.

[53] In these circumstances, I cannot reasonably find that Ms Thurston's work performance was so deficient that it gives rise to a valid reason for her dismissal. To dismiss her in circumstances where the purported reason is said to have been a 'business perspective' rather than to identify her shortcomings with her and give her some opportunity to work to address those performance issues, was objectively unreasonable. I have not found a valid reason for the dismissal of Ms Thurston.

Notification of the valid reason and an opportunity to respond

[54] The Commission must take into account whether notification of a valid reason for termination has been given to an employee protected from unfair dismissal before the decision is made,[16] and in explicit,[17] plain and clear terms. It is accepted that this is to be applied in a common-sense way to ensure the employee is treated fairly and should not be burdened with formality.[18]

[55] Dr Boima spoke of having a discussion with Ms Thurston in November 2019 about her work performance. There is, however, no evidence to show Ms Thurston was notified of a valid reason for her dismissal before the decision was made and was provided with the opportunity to respond.

[56] It would appear from the letter of termination that Ms Thurston was required to intuit that her dismissal was imminent - the reason nebulous - a 'business perspective' to 'divert your remuneration to another employee'.

[57] The decision to dismiss Ms Thurston was made and she was simply informed of the same by way of letter. It cannot be concluded that Ms Thurston was treated fairly in this respect.

An unreasonable refusal by the respondent to allow a support person

[58] When considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the Commission must take into account any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussion relating to dismissal.

[59] It is evident from the preceding paragraphs that there was no meeting held between Dr Boima and Ms Thurston to discuss her dismissal. Therefore, the opportunity to have a support person never arose and proves to be a moot point.

Unsatisfactory performance - was there a warning

[60] The nature of warnings in the context of s 387(e) of the Act was discussed in the Full Bench decision in BlueScope Steel Limited v Sirijovski.[19] At paragraph 37 of that decision, the Full Bench stated:

The purpose of a warning contemplated by s.387(e) of the Act is to demonstrate the seriousness with which an employer regards an employee's performance and/or conduct and to provide an opportunity for the employee to address those concerns and thereby avoid or reduce the risk of dismissal. A warning should identify the relevant aspects of the employee's performance which is of concern to the employer and should make it clear that the employee's employment is at risk unless the performance is improved. In James McCarron v Commercial Facilities Management Pty Ltd T/A CFM Air Conditioning Pty Ltd the nature and purpose of a warning about unsatisfactory performance is described as follows:

[32] The purpose of a warning about unsatisfactory performance must be to identify the performance that is of concern and must make it clear that a failure to heed the warning places the Applicant's employment at risk. Such a warning gives an employee an opportunity to improve in those areas identified as requiring improvement. An integral part of such a warning must be to clearly identify the areas of deficiency, the assistance or training that might be provided, the standards required and a reasonable timeframe within which the employee is required to meet such standards. (Footnotes omitted).

[61] Section 387(e) of the Act does not mean that an employer is obliged to indicate expressly by a distinguishable step that dismissal is a potential consequence of unsatisfactory work performance. But the employer must warn the employee of the unsatisfactory performance imparting the gravity of the situation. The warning is the vehicle for conveying the nature of the risk to which the person's employment is exposed.

[62] While I accept that it is more likely than not that Dr Boima had a discussion with Ms Thurston about her work performance in November 2019, the evidence does not support a finding that he had provided a 'warning' to Ms Thurston. The nature of the risk to Ms Thurston's employment was not conveyed by Dr Boima.

Impact of the size of the respondent on procedures followed and absence of dedicated human resources management specialist/expertise on procedures followed

[63] When considering whether a dismissal was harsh, unjust or unreasonable, the Commission must take into account the degree to which: (a) the size of the employer's enterprise would be likely to impact on the procedures followed in effecting the dismissal; and (b) 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.

[64] The human resource component of the business generally fell upon Ms Thurston to manage. She was after all the Practice Manager. However, when it came to managing Ms Thurston's employment, the responsibility rested with Dr Boima. In short, the internal human resource capability of BMI was resoundingly deficient. Neither Ms Thurston nor Dr Boima demonstrated a sound understanding of employment regulation, and while BMI had engaged a consultant to assist it with restructuring the business, it was apparent he was not well versed in employment law. These factors have been considered in arriving at my decision.

[65] In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the Commission is to take into account any other matters that it considers relevant.

[66] It is well accepted that a dismissal may be harsh, unjust or unreasonable despite the existence of a valid reason for the dismissal. In B v Australian Postal Corporation[20] the Full Bench stated that:

That principle reflects the approach of the High Court in Victoria v Commonwealth and is a consequence of the reality that in any given case there may be "relevant matters" that do not bear upon whether there was a "valid reason" for the dismissal but do bear upon whether the dismissal was "harsh, unjust or unreasonable.[21]

[67] I have taken into account that Ms Thurston had worked for BMI for approximately four years. During that time, she had given birth to a child, and had lost a child, partner and father. She had also lived through the demise of a marriage. Notwithstanding, she had assisted Dr Boima with the establishment of at least one other practice.

[68] These life events and assistance proffered were not lost on Dr Boima. He gave evidence, which was not rebutted, that Ms Thurston explained to him that she was forced to move out of her marital home but was finding it difficult to rent. Dr Boima stated Ms Thurston had indicated the situation was dire for her and she needed finances, which she did not have. In response, Dr Boima gave Ms Thurston $10,000.00. The money was not a loan.

[69] I consider it more likely than not that Dr Boima was dissatisfied with Ms Thurston's work performance. Yet that dissatisfaction was not imparted to Ms Thurston. Apart from the meeting in November 2020 which has been referred to, Dr Boima took no steps to manage Ms Thurston's purported absenteeism, lack of initiative to schedule staff meetings, insufficient networking and marketing, divisive behaviours, and maintenance of proper records. Further, there was little probative evidence to show that such issues existed. Although, it must be acknowledged that Ms Nicholls' account concerning Ms Thurston's absences from the workplace were believable. However, the absenteeism appeared to have escalated at a time where Ms Thurston lost three family members in succession.

[70] The Commission's role is not to consider what it would have done had it been in the position of the employer. Rather, it must consider whether the dismissal was harsh, unjust or unreasonable, taking into account all of the circumstances. I have considerable sympathy for Ms Thurston but do not consider that she was faultless when it came to her work performance. Yet her work performance did not, based on the evidence before me, give rise for a valid reason for dismissal. In addition, the way Ms Thurston's dismissal was effected was attenuated with procedural unfairness.

[71] Having taken into account all of the circumstances, I can only conclude that Ms Thurston's dismissal was harsh, unjust, and unreasonable. The dismissal was therefore unfair within the meaning of the Act.

[72] In due course, the parties will be advised of the further programming of Ms Thurston's unfair dismissal application regarding remedy.

[1] Witness Statement of Dr Daniell Boima.

[2] Witness Statement of Sasha-Marree Nicholls ('Nicholls Statement').

[7] Fair Work Act 2009 (Cth) s 382.

[10] Fair Work Act 2009 (Cth) s 387(a).

[11] Selvachandran v Peterson Plastics Pty Ltd [1995] IRCA 333; (1995) 62 IR 371, 373.

[12] Potter v WorkCover Corporation (2004) 133 IR 458 and endorsed by the Full Bench in Industrial Automation Group Pty Ltd T/A Industrial Automation (2010) 202 IR 17, [36].

[16] Trimatic Management Services Pty Ltd v Daniel Bowley [2013] FWCFB 5160; Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137, 151.

[17] Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137, 151; Previsic v Australian Quarantine Inspection Services Print Q3730.

[18] Royal Melbourne Institute of Technology v Asher (2010) 194 IR 1, 14-15.

[19] [2014] FWCFB 2593.

[20] [2013] FWCFB 6191; (2013) 238 IR 1.

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