Fair Work Act 2009_

s.394 - Application for unfair dismissal remedy

Kennedys Personal Training Pty Ltd T/A Kennedys Health and Fitness

[1] Ms Christie was employed from 15 April 2008 until 23 June 2105. Ms Christie was employed by Kennedy's Personal Training Pty Ltd to perform reception and administrative duties. Ms Christie also did some general cleaning work but Kennedy's told Ms Christie that cleaning work was no longer required about 10 days before the dismissal. Ms Christie's employment was terminated for alleged poor performance on 23 June 2015 and she was paid in lieu of notice. The parties agree that Ms Christie was a casual employed on a regular and systematic basis and she did not receive any personal leave or annual leave. She generally worked regular shifts each week. Mr Kennedy made the decision to dismiss Ms Christie.

[2] Mr Kennedy who is the manager and an owner of the company provided a response to the unfair dismissal application through legal representatives on 23 July 2015 alleging that the dismissal had been in accordance with the Small Business Fair Dismissal Code. He also provided an outline of submissions on 5 October 2015 and a submission opposing granting of legal representation to the Applicant on 15 October 2015. Having considered the submissions of both parties in respect to the application for the Applicant to be represented by a lawyer I emailed the parties on 15 October 2015 advising that I had granted permission pursuant to Section 596(2)(a) and not 596(2)(b) or 596(2)(c). A response to that email was received from Mr Kennedy on 16 October 2015, the business day prior to the scheduled hearing, as follows:

"Liquidation of Kennedys Personal Training Pty Ltd. For your information from Monday 19th October please refer all inquiries to Greg Andrews of GS Andrews Advisory, 22 Drummond Street Carlton Vic 3050".

[3] I am satisfied based upon the recent correspondence with Mr Kennedy that Mr Kennedy was well aware of the hearing on 19 October 2015. Mr Kennedy did not seek any adjournment of the proceedings or advise that he was going to be absent or represented by another person. Mr Kennedy did not appear at the hearing on 19 October 2015. It is perhaps reasonable to infer that Mr Kennedy or another person has commenced some process from 19 October 2015 to place the business in administration or to liquidate the company. However, Section 471B of the Corporations Act 2001 does not apply to stay unfair dismissal proceedings and the Fair Work Commission has jurisdiction to hear and determine this application notwithstanding the appointment of liquidators. I determined to proceed to hear the matter.

[4] Notwithstanding the non-attendance of Mr Kennedy I have had regard to the material in his unfair dismissal response and his submissions.

[5] I am satisfied of the following matters which are not contested:

1. The Applicant had been employed for a continuous period of more than 12 months at the time of the termination.

2. The Respondent is a national system employer as it is a limited liability company.

3. The Applicant was dismissed by the employer for reasons related to performance.

4. The dismissal was not for reasons of redundancy.

5. The Application for unfair dismissal remedy was made within 21 days of the dismissal.

6. The Respondent is a small business employer for the purposes of the Fair Work Act 2009.

[6] It is not suggested that Ms Christie was denied a support person at the time of the dismissal. I will consider the following matters.

● Was the dismissal in accordance with the small business code?

● Was Ms Christie notified that she was being dismissed for reasons of poor performance?

● Did Ms Christie have an opportunity to respond to the allegations on 23 June 2015?

● Was Ms Christie warned about her unsatisfactory performance before the dismissal?

● To what degree were the procedures followed impacted by the small size of the enterprise and the absence of human resource management expertise?

● If the dismissal was unfair what is the appropriate remedy?

Was the dismissal of Ms Christie consistent with the Small Business Fair Dismissal Code?

[7] The dismissal was not a summary dismissal for serious misconduct. The dismissal was for reasons of poor performance. The poor performance alleged was in respect to general diligence, accuracy of data entry and quality of cleaning. These matters could be a valid reason for dismissal. The most important requirements of the code are therefore:

● Did Mr Kennedy give Ms Christie a warning that she risked being dismissed if there was no improvement in performance?

● Was Ms Christie given an opportunity to respond to the warning and given a reasonable chance to rectify the problem?

● Can Mr Kennedy provide adequate evidence that a warning was given?

[8] There is no suggestion that there was any written warning and there is no other relevant documentary material.

[9] Ms Christie gave evidence that a few months before the dismissal a new gym manager was employed and Ms Christie was told her hours were being cut by 6 hours per week. Ms Christie says that she did not receive any warnings about poor performance during the entire period of her employment.

[10] Mr Kennedy submits that the issue of poor attitude to the cleaning work was raised on 19 June 2015. Mr Kennedy says that he also raised the issue of data entry problems at that time. Ms Christie worked only one shift between that time and the time of the termination of employment. On the 19th of June Ms Christie asked Mr Kennedy if her job was safe given the reduction in her hours and comments Mr Kennedy raised about the cleaning work. Mr Kennedy and Ms Christie agree that Mr Kennedy said that he "didn't know".

[11] Mr Kennedy says that he had raised mistakes in data entry numerous times previously and asked her to slow down and concentrate as the mistakes could be costly. I am not satisfied that this constituted a warning. However, if it is true it is evidence that Ms Christie was on notice about the importance of data entry accuracy.

[12] Ms Christie says that the cleaning duties were a separate cash in hand job to her employment as a receptionist. She says that the three hours per week cleaning work was started when the pervious cleaner left. Ms Christie says that concerns about the quality of cleaning were not raised prior to the work being taken off her by mutual agreement. She agrees with Mr Kennedy's submissions that concerns were raised on 19 June 2015, that she said words to the effect that she was over that work and that it was agreed that she was not required to do that work in the future. Ms Christie agrees with Mr Kennedy's submission that there was an occasion a few months earlier when she made a few errors in addressing material and Mr Kennedy drew this to her attention and told her to slow down. However, she denies that there had been other errors raised with her previously. Ms Christie denies that data entry errors were raised on 19 June 2015 but she agrees that they were mentioned at the dismissal meeting on 23 June 2015. Ms Christie agrees with Mr Kennedy's submission that on 19 June 2015 he did say words to the effect that he felt that she had "gone stale".

[13] Ms Christie gave evidence that at no stage did she receive a written or a verbal warning that there was a problem with her performance and that failure to improve could result in termination of employment. Mr Kennedy does not submit that there was any such warning. Ms Christie says that on 19 June 2015 in response to her queries Mr Kennedy confirmed that he did not have any issues with the performance of her reception duties.

[14] Even if I was to accept the submission of Mr Kennedy and reject the evidence of Ms Christie, I am not satisfied that the matters raised on 19 June 2015 by Mr Kennedy constituted a warning that dismissal could occur if there was not an improvement in performance. If it was then there was certainly not a reasonable opportunity to improve. It is not suggested that the dismissal was a summary dismissal.

[15] I am satisfied that the small business code does not apply given that the termination related to performance and I am not satisfied that Ms Christie was warned that a failure to improve her performance could result in dismissal. In the alternative, if there was a warning then I am satisfied that Ms Christie did not have a reasonable opportunity to improve following any warning as required by the small business code.

[16] The dismissal was for alleged poor performance.

[17] I accept that Mr Kennedy may have had some concerns about the performance of Ms Christie in respect to cleaning and may have drawn attention to data entry errors on one occasion. However, Ms Christie had been employed for seven years. I am not satisfied that there were any serious problems with Ms Christie's performance of her duties such that there was a valid reason for dismissal.

Was Ms Christie notified of that she was being dismissed for reasons of poor performance?

[18] Ms Christie gave evidence that she was worried about her future given that on 19 June 2015 Mr Kennedy had said that he didn't know if her job was safe. The next day she attended for work was 23 June 2015. She worked for an hour and then Mr Kennedy came out of his office and said that he had made his decision. He asked her to come into the office and told her again that she had gone stale and that she was being dismissed. She was told that she would be paid three weeks' notice which was later extended to five weeks and that she was not required to work her notice. Mr Kennedy referred to data errors and the cleaning issues.

[19] I am satisfied that Ms Christie was notified that she was being dismissed for reasons of poor performance at the meeting on 23 June 2015.

Did Ms Christie have an opportunity to respond to the allegations on 23 June 2015?

[20] I am not satisfied that Ms Christie had a reasonable opportunity to respond to the allegations.

Was Ms Christie warned about her unsatisfactory performance before the dismissal?

[21] For the reasons discussed earlier I am not satisfied that Ms Christie was warned about her unsatisfactory performance prior to the dismissal.

To what degree were the procedures followed impacted by the small size of the enterprise and the absence of human resource management expertise?

[22] I am satisfied that the small size of the business and the absence of expertise may have affected the procedures followed.

[23] Based upon the evidence of Ms Christie there was very considerable underpayment of wages over a long period of time. Mr Kennedy in his submission appears to justify the underpayments by suggesting that Ms Christie did not complain about the arrangements and volunteered to work on public holidays. This is only relevant because Ms Christie did receive five weeks' pay in lieu of notice. I do not take into account the payment of five weeks' pay in lieu of notice in judging whether the termination of employment was harsh or unreasonable given I am satisfied that there was significant underpayment of wages and that the notice payment was insufficient to make up for that significant shortfall.

[24] The lack of expertise in the small business is not sufficient to outweigh the lack of a valid reason and the lack of procedural fairness in failing to give a proper opportunity to respond and in failing to warn Ms Christie about her alleged poor performance and the consequences of failing to improve.

[25] The termination was unfair in that it was harsh, unjust and unreasonable.

[26] Ms Christie does not seek reinstatement. I do not consider that reinstatement is appropriate in the circumstances of this case. However, I do consider that an order for compensation would be appropriate.

[27] I have considered each of the requirements in Section 392 of the Act.

[28] There was no submission before me that any order I might make would affect the viability of the enterprise. I am not satisfied that any order I might make would affect the viability of the enterprise.

[29] The length of service was more than seven years which I am satisfied in the circumstances of the industry is a long period of employment.

[30] Ms Christie gave evidence which I accept that she applied for 20 to 25 jobs but has not been successful in obtaining alternative employment. I am satisfied that she has made suitable efforts to mitigate her loss.

[31] Ms Christie gave evidence which I accept that she has earned no income from employment in the period since the dismissal. Ms Christie earned on average $535.50 per week gross not including superannuation. Given the long period of employment and the absence of any misconduct or serious performance issues I estimate that Ms Christie's employment would have continued for a period of twelve months but for the dismissal.

[32] Given that Ms Christie has not earned anything between the time of the termination and this decision I am satisfied she will not earn anything in the short period between the hearing of this matter and the actual compensation.

[33] I am not satisfied that there should be any discount for misconduct as no misconduct is alleged.

[34] I have not included any component for hurt or distress.

[35] There are no other matters I consider relevant except that, for the reasons discussed earlier, I do not take into account the five weeks' paid in lieu of notice. That money should reasonably be regarded as payment of wages for the period worked given the significant level of underpayment.

[36] Ms Christie would have earned $9639 plus superannuation in the 18 weeks between 23 June 2015 and 3 November 2015 which is the date of the actual compensation. There is no reason to make any deduction for contingencies from this known amount.

[37] In the balance of the 12 month period she would have earned $18,207 plus superannuation. Given the uncertainties associated with that period I will deduct 25% for contingencies. That leaves $14,565.60 plus superannuation.

[38] The resulting total compensation of $24,204.60 plus superannuation exceeds the six months cap which in this case is $13,923 plus superannuation.

[39] Therefore I determine that the compensation payable is $13,923 plus superannuation or $15,245.68 gross. That amount, less appropriate taxation, is payable within fourteen days of this decision and order. The employer is at liberty to apply to vary the order in respect to the time period for payment. The Order is published separately.

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