s.394 - Unfair dismissal

• [1] On 18 August 2024, Ms Irena Kennedy (Ms Kennedy) made an application to the Fair Work Commission (the Commission) under section 394 of the Fair Work Act 2009 (Cth) (the Act) for a remedy, alleging that she has been unfairly dismissed from her employment with Warwick Fabrics (Australia) Pty Ltd (Warwick).

• [2] The matter was listed for a hearing on 11 November 2024.

• [3] Ms Kennedy was represented by Mr Trainor (support person) at the hearing and Warwick was represented by Mr Wareham from GPS Consulting. Permission for Warwick to be represented was granted under section 596 of the Act for noting that, due to the material before the Commission, it would allow for the matter to be dealt with more effectively and efficiently.

• [4] Ms Kennedy gave evidence on her own behalf and Mr Maffey, National Sales Manager, gave evidence on behalf of Warwick. The parties filed written submissions prior to the hearing.

• [5] It is not disputed that Ms Kennedy was dismissed at the initiative of the Warwick.

• [6] Ms Kennedy is a person protected from unfair dismissal as her employment was covered by the Commercial Sales Award 2020.

• [7] Ms Kennedy was dismissed on 29 July 2024 and filed her application on 18 August 2024, within the 21-day time period as required under the Act. Ms Kennedy's dismissal was not a case of genuine redundancy.

• [8] Warwick employed in excess of 15 employees at the time of the dismissal, therefore the Small Business Fair Dismissal Code did not apply. Ms Kennedy was employed for greater than six (6) months at the time of her dismissal.

• [9] Ms Kennedy commenced employment with Warwick in September 2018 and was employed in the position of Decorative Sales Manager at the time of her dismissal. Ms Kennedy worked both in the showroom and on the road. A report was submitted into evidence, completed by Doctor Mingguo Li, dated 26 May 2023, outlined Ms Kennedy's duties as "customer relations and servicing....wholesale drapery clients. It includes answering the phones, preparing orders, meeting and serving clients, working in the wholesale showroom, lifting and carrying samples weighing between 10kg to 25kg, and standing on her feet".

• [10] On 3 August 2022, Ms Kennedy was departing from a client site and, when stepping down the kerbside, she felt instant pain in her foot. Following a medical assessment, it was determined that Ms Kennedy had a fifth metatarsal fracture. Initially, it was recommended that Ms Kennedy rest and see if surgery on her injured foot could be avoided. However, as time progressed, it was determined that surgery was the only option.

• [11] Ms Kennedy would not return to work at Warwick following her injury on 3 August 2022. Ms Kennedy states that she would have liked to complete a return-to-work program at Warwick. However, this was not accommodated by Warwick. Ms Kennedy submits that Warwick appeared to have very little interest in her recovery and her return to the workplace, with the process being outsourced to a third party.

• [12] Ms Kennedy submits that, at the time of her dismissal, there was no valid reason for the termination of her employment, as she was fit to return to the workplace with no restrictions. Ms Kennedy notes that she attended a medical appointment at the direction of GIO (Warwick's Insurance Company) in early April 2024. Ms Kennedy provided a medical reported completed Dr Mingguo Li (dated 8 April 2024) in which the following observations in relation to her capacity and future prognosis were made by the Doctor:

• "Current Symptoms - Ms Kennedy reported experiencing dull-aching along the lateral edge of the right foot when walking on hard surfaces or on sand. She has minimal or no foot pain otherwise. She reported having pain in the posterolateral side of her left thigh when sitting or driving for a long period. She stated that walking is "not too bad"."

• "Current Treatment - Ms Kennedy takes Nurofen when required. She attends physiotherapy weekly for treatment on her right foot and the thigh pain."

• "Current Level of Function - Work - Ms Kennedy reported that she has been participating in a work trial/work placement with Jalgam Holdings since December 2023. Her duties include customer service, administration and light cleaning. She progressed to working 5 hours a day 5 days a week until two weeks ago when her hours were reduced to 4 hours a day due to increasing right thigh pain."

• "Summary and Assessment - My clinical examination showed that she was able to walk with a normal gait. She had mild tenderness at the site of the fracture. In my opinion, Ms Kennedy's fracture has united. No further investigation or specific treatment, including physiotherapy, is clinically indicated. She has reached maximum medical improvement. Her condition is unlikely to change substantially in the foreseeable future with or without further treatment. From the right foot injury point of view, she is fit for pre-injury duties without restrictions. There is no assessable permanent impairment as a direct result of the right foot injury" (emphasis added)

• [13] Warwick outlines that, on 7 May 2024, following an absence from the workplace for over 18 months, it wrote to Ms Kennedy and outlined that, at that time, she had not been able to provide Warwick with a timeframe as to when she would return to work. Warwick outlines that they were concerned Ms Kennedy would be unable to return to her substantive position and they were considering terminating Ms Kennedy's employment as she could no longer perform the inherent requirements of her position.

• [14] Warwick requested to meet with Ms Kennedy to discuss a timeframe for her return to work and to consider her response to a show clause letter. Ms Kennedy met with Warwick in person on 15 July 2024.

• [15] Following the meeting, Mr Maffey emailed the Ms Kennedy the following:

Thank you for taking the time to visit today. As discussed in the meeting, can you please provide the following.

• [16] It was the submission of Warwick that Ms Kennedy did not respond to this email. And, as a result, Warwick reached the conclusion that Ms Kennedy had no further information she wished for them to consider.

• [17] Warwick proceeded to dismiss Ms Kennedy on the basis that she had been absent from work for greater than 18 months and there was no timeframe for a potential return to work with no medical restrictions. In summary, Warwick dismissed Ms Kennedy on grounds of incapacity.

• [18] At the hearing on 11 November 2024, it was evident that Warwick had not internally assessed the medical report completed by Dr Mingguo Li completed on 8 April 2024. This document outlines that Ms Kennedy's fracture to her fifth metatarsal had healed and she was fit to return to complete her workplace duties.

• [19] There appears to be no logical explanation as to why Warwick did not receive a copy of this report previously from their insurance company or from Ms Kennedy directly. It was the evidence of Mr Maffey that he requested a copy of this report from Ms Kennedy at the show cause meeting of 15 July 2024, however, Ms Kennedy did not provide it to him directly.

• [20] Email records submitted by Ms Kennedy indicate that she emailed a Ms Sarah Watson (of Working Life; the third-party provider engaged by Warwick to manage the workers' compensation claim) to inquire about the medical report and if it had been sent to Warwick. The email from Ms Kennedy reads:

Are you able to tell me if the email below from Aimee at GIO was also sent to Warwick Fabrics? Either sent from yourself or GIO. And if so, could you let me know on what date it was sent".

• [21] The email response from Ms Watson reads:

I am unable to confirm if the below email was sent to Warwick Fabrics. It's possible they sent a copy to Warwick Fabric's in a separate email which I wasn't in".

• [22] It is clear Ms Watson confirmed directly to Ms Kennedy that she did not know if the medical report had been sent to Warwick by GIO and, if it had been, she was not included in on the correspondence. Ms Kennedy has not provided any satisfactory explanation as to why, after receiving the email from Ms Watson confirming she was not aware if Warwick were in receipt of the medical report, she did not email a copy of the report to Mr Maffey as he had requested in writing on 15 July 2024. Had Ms Kennedy taken this action, Warwick would have certainly received this medical report, and, in all probability, they would not have terminated her employment.

• [23] In order to be a valid reason, the reason for the dismissal should be "sound, defensible or well founded"[1] and should not be "capricious, fanciful, spiteful or prejudiced."[2] However, the Commission will not stand in the shoes of the employer and determine what the Commission would do if it was in the position of the employer.[3]

• [24] It is well established that "the reason for termination must be defensible or justifiable on an objective analysis of the relevant facts. It is not sufficient for an employer to simply show that he or she acted in the belief that the termination was for a valid reason"[4] and, further, that "the Commission is bound to consider, for itself, whether, on the evidence in the proceedings before it the termination was "harsh, unjust or unreasonable".[5]

• [25] Having reviewed the submissions and evidence of the parties before the Commission, I have concluded that there was no valid reason for the dismissal of Ms Kennedy. The decision to terminate the employment of Ms Kennedy needed to be based on a "sound, defensible or well founded" allegations. Prior to deciding to terminate Ms Kennedy's employment, Warwick had a basic duty of care to ensure that they had all relevant information on hand prior to terminating her employment. Ms Kennedy attended the medical with Dr Li on 5 April 2024 and the report was issued on 8 April 2024. However, Warwick were not aware of this report until 11 November 2024 at the hearing before the Commission. This oversight speaks volumes about that lack of attention to detail Warwick paid prior to terminating Ms Kennedy's employment.

• [26] The medical report, completed by Dr Li on 8 April 2024, articulates that Ms Kennedy has "reached maximum medical improvement. Her condition is unlikely to change substantially in the foreseeable future with or without further treatment. From the right foot injury point of view, she is fit for pre-injury duties without restrictions. There is no assessable permanent impairment as a direct result of the right foot injury". From the medical evidence available, Ms Kennedy was in fact able to return to work and should have been able to do so.

• [27] Warwick, as the employer of the injured employee, had a basic obligation to keep themselves informed and up to date with the prognosis and status of Ms Kennedy's injury. This is especially so in circumstances where they were considering the termination of Ms Kennedy's employment. Warwick should have been aware through the various service providers it engaged of Ms Kennedy's ability to return to work in April 2024. It is therefore evident that Warwick decided to terminate the employment of Ms Kennedy on incomplete information and without a sound, defensible, or well-founded reason.

• [28] I accept that Mr Maffey provided Ms Kennedy with an opportunity to provide this information and Ms Kennedy failed to do so, I will discuss Ms Kennedy's culpability further in this decision.

• [29] Having determined there was no valid reason for the dismissal of Ms Kennedy, ss387 (b) and (c) cannot have been satisfied.

• [30] There is no suggestion that Ms Kennedy was unreasonably refused a support person (s387(d) of the Act) and, in fact, at the meeting of 15 July 2024, Mr Trainor was present. There is no suggestion that the performance of Ms Kennedy was a factor in her dismissal, accordingly s 387(e) is not a relevant consideration in this matter.

• [31] Warick is not a small business employer for the purpose of the Act. However, the business does not appear to have notable internal human resources management expertise. As a result, Warwick is reliant on external advice and support. I have formed the opinion that Warwick were overly reliant on external support, and this likely impacted the process followed. This is evident from Warwick not being aware of the medical report of 8 April 2024, as it had either not been provided to them by the insurance company or, if Warwick had been sent the report, they did not understand that the report confirmed Ms Kennedy could return to work. As a result, I have formed that opinion that the size of Warwick's operations and lack of internal human resources management support were factors in the dismissal of Ms Kennedy (ss387 (f) and (g)).

• [32] Neither party made submissions in relation to section 387(h) of the Act. As I have highlighted previously in this decision, the conduct of Ms Kennedy contributed to the decision of Warwick to terminate her employment. Ms Kennedy was aware that there was a medical report confirming she was fit to return to work. However, Ms Kennedy did not take any action to bring this report to the attention of Mr Maffey or anyone else in management at Warwick until after the matter was before the Commission. Had Ms Kennedy alerted Mr Maffey to the existence of the medical report prior to her termination, such as during the show cause process as she was prompted, it is likely her employment would not have been terminated. This factor may hold relevance in the future determination of remedy.

• [33] I have made findings in relation to each matter specified in section 387 of the Act as relevant. Having considered each of the matters specified in section 387 of the Act, I am satisfied that the dismissal of the Applicant was unjust. There was no valid reason for the termination of Ms Kennedy. Ms Kennedy was not incapacitated or unable to perform the inherent requirements of her position at the time of her dismissal. Warwick failed to complete a proper internal investigation or review of the medical report to establish that Ms Kennedy was incapacitated and unable to perform her duties, the conclusion was reached on assumptions or incomplete information.

• [34] I am therefore satisfied that Ms Kennedy was unfairly dismissed within the meaning of section 385 of the Act. The parties will be contacted regarding the programming of the matter to determine remedy.

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

[3] Walton v Mermaid Dry Cleaners Pty Ltd [1996] IRCA 267; (1996) 142 ALR 681, 685.

[4] Rode v Burwood Mitsubishi Print R447, [19].

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