s.394 - Application for unfair dismissal remedy

[1] On 27 April 2023, Mr. Brian Wood (the Applicant) made an application to the Fair Work Commission (Commission) under s.394 of the Fair Work Act 2009 (Cth) (FW Act) for a remedy alleging that he had been unfairly dismissed from his employment with Tricon Security Pty Limited (the Respondent). The Applicant seeks compensation arising from the circumstances of his dismissal.

When can the Commission order a remedy for unfair dismissal?

[2] Section 390 of the FW Act provides that the Commission may order a remedy if:

(a) the Commission is satisfied that the Applicant was protected from unfair dismissal at the time of being dismissed; and

[3] Both limbs of this section must be satisfied. I am therefore required to consider whether the Applicant was protected from unfair dismissal at the time of being dismissed and, if I am satisfied that the Applicant was so protected, whether the Applicant has been unfairly dismissed.

When is a person protected from unfair dismissal?

[4] Section 382 of the FW Act provides that 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

(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.

• [5] The Applicant was employed by the Respondent for a period of almost seventeen years. Initially, the Applicant was employed as a casual employee working 2 to 3 days per week. The Applicant later became a full-time employee and worked Monday to Friday and averaged 37 hours work each week.[1] Although it is unclear exactly when the Applicant became a full-time employee, having regard to the evidence in relation to the Applicant's earnings and the superannuation contributions that had been found to be outstanding from the Respondent to the Applicant[2] and the evidence as to calculation of his outstanding long service leave entitlements.[3] I am satisfied that the Applicant's employment exceeded the minimum employment period. I note also that the Respondent did not put the minimum employment period in issue. The Respondent accepted that the Transport (Cash in Transit) Award applied to the Applicant's employment.[4] I am satisfied that the requirements of s.382(a) and (b) have been met and that Applicant was protected from unfair dismissal at the relevant time.

[6] Section 385 of the FW Act provides that a person has been unfairly dismissed if the Commission is satisfied that:

(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.

• [7] Although there is some uncertainty in the Respondent's Response Form F3,[5] the Respondent ultimately objected to the application on the basis that the Applicant had not been dismissed. According to the Response, the Applicant had not been dismissed but rather 'had been asked not to work until further notice' and 'advised not to work due to cash flow issues.' The Response also said, 'at the time of the applicant's application for unfair dismissal the applicant had not been dismissed.'[6]

[8] The matters referred to at points (c) and (d) above were not raised by the Respondent.

[9] Accordingly, the question of whether the Applicant has been unfairly dismissed will depend on whether the Commission is satisfied firstly that the Applicant was 'dismissed' within the meaning of s. 385(a) and further, whether any dismissal was harsh, unjust or unreasonable within the meaning of s.385(b).

[10] Section 386 of the FW Act sets out the circumstances in which a person is taken to have been dismissed under s.385. It provides, relevantly:

(a) the person's employment with his or her employer has been terminated on the employer's initiative; or

(b) the person has resigned from his or her employment, but was forced to do so because of conduct, or a course of conduct, engaged in by his or her employer.

[11] Before turning to consider whether the Applicant has been dismissed under s.386 and thereafter unfairly dismissed under s.385, it is convenient to briefly describe some of the factual background relevant to the proceedings, none of which was put in issue by the Respondent.

[12] The Applicant commenced employment with the Respondent on or about June 2006. He worked for the Respondent as a security officer in the cash in transit industry for public schools and businesses in regional New South Wales where both the Applicant and Respondent's director, Mr. Patrick McDonald, were based. The Respondent company was a small business usually employing only the Applicant or, on occasions, one other employee. In his long years of service with the Respondent, the Applicant had not had any negative performance reports or counselling related to the performance of his duties. The Applicant had received positive references from business owners he had serviced in the Lithgow area.

[13] The Applicant last worked for the Respondent in January 2023. In January 2023 he was employed on a full-time basis. From that point onwards, the Applicant was not provided with any duties to perform by the Respondent and was not paid. Despite repeated attempts by the Applicant to contact the Respondent and seek clarification as to his work status or when he would be able to recommence work, the Respondent did not reply to the requests set out in the Applicant's text or email messages. Having not received any meaningful response from the Respondent by 27 April 2023, the Applicant lodged the unfair dismissal application.

[14] The Applicant's evidence was that following his last working day with the Respondent on 3 January 2023, he made numerous attempts to contact the Respondent to either raise issues about outstanding entitlements, obtain more work or have his employment status confirmed. The evidence shows that the Applicant made the following efforts to contact the Respondent:

(i) An email on 1 February 2023 raising concerns about long service leave dating back to 2021;[7]

(ii) A text message on 5 February 2023 saying the Applicant had not worked or received wages for 5 weeks and seeking clarification as to his employment;[8]

(iii) A text message on 13 February 2023 saying the Applicant had not received a reply to the previous message and asking when the Applicant could recommence work;[9]

(iv) A further text message on 13 February 2023 asking to be advised of recommencement date or to confirm that the Applicant's employment was being terminated;[10]

(v) An email on 15 February 2023 asking for confirmation of his status or provision of 'termination papers';[11] and

(vi) A text message on 25 February 2023 seeking long service leave payments.[12]

• [15] There was little by way of response to these messages from the Respondent. In reply to the Applicant's text message of 13 February, the Respondent said, 'Your super will be paid as soon as I can.' When the Applicant pointed out that the inquiry was about returning to work not unpaid superannuation, the Respondent replied (on 15 February), 'How am i going too pay you if you work you would take me too court for unpaid wages.(sic)'[13] On 16 March 2023 the Applicant received a message from the Respondent saying that '...all super has been lodged and recorded with the Australian Taxation Office for a number of months and will be paid as soon as possible.'

[16] Aside from these exchanges there was no evidence of any communication from the Respondent to the Applicant from the last date the Applicant worked on 3 January 2023 to the lodgment of the unfair dismissal application on 27 April 2023.

[17] There was some limited evidence as to the pay slips that were provided by the Respondent to the Applicant after 3 January 2023. It appears that pay slips continued to be generated and provided by email to the Applicant although they recorded nil income. There was also some irregularity as to when they were provided. In the original application of 27 April, the Applicant indicated that he had not received a pay slip for the week ending 20 April. He regarded the absence of that pay slip in that week as an indication that he was no longer 'on the books of the Respondent.' This appeared to prompt the unfair dismissal application. Some time thereafter the 'nil' pay slips resumed. At the hearing, the Applicant indicated that he had continued to receive 'nil' pay slips up until 30 June 2023. Mr. McDonald said he was not aware that pay slips had continued to be provided and that they must have been generated and sent automatically.

[18] Despite maintaining the objection that the Applicant had not been dismissed, the Respondent ultimately accepted at the hearing that the Applicant had ceased to be employed by the Respondent 'at some time in April or May 2023.' The Respondent was unable to explain how it was that the cessation of employment had come about.

• [19] In order for an employee to be 'dismissed' under s.386, it must be shown that they fall within one of the two limbs in that section. In some factual situations it might be possible for both limbs to be engaged.[14] In this matter, the essential facts giving rise to the application were not in dispute and it remains for me to determine whether the requirements of the section have been satisfied.

[20] The Applicant last performed work for the Respondent on 3 January 2023. Despite repeated attempts by the Applicant to contact the Respondent about returning to work or advice as to whether the Applicant was still employed, the Respondent failed to meaningfully respond to the Applicant between January 2023 and the filing of the application on 27 April 2023. The Respondent did not provide the Applicant with any work in that period and did not pay the Applicant any wages. The Applicant was ready and willing to work and actively seeking a return to work. It appears the Respondent had formed the view that because of cash flow problems for the business, the Respondent could simply ignore the Applicant's messages, not provide work, and thereby avoid any liability to pay wages to the Applicant.

• [21] Section 386(1)(a) provides that a person is dismissed if that person's employment has been terminated on the employer's initiative. The reference to 'employment' is taken to be a reference to the employment relationship rather than the employment contract.[15] Thus the focus is on the termination of the relationship rather than the employment contract, the latter of which may, in some circumstances, continue even after the relationship is at an end.[16]

• [22] Termination 'on the employer's initiative' is a termination that is brought about by an employer and which is not agreed to by the employee.[17] If an act of the employer results 'directly or consequentially in the termination'[18] or the employer's actions are the 'principal contributing factor' which lead to the termination of the employment relationship,[19] the termination of employment will be 'on the employer's initiative.' In Mohazab the Court also referred to termination at the employer's initiative as being action of the employer which, had it not been taken, the employee would have remained in the employment relationship.[20]

[23] Here the employment relationship was brought to an end by the action of the Respondent in not providing work or wages to the Applicant for a period of approximately 16 weeks. The obligation to provide work and wages is fundamental to both the employment relationship and the contract of employment. The failure to meet that obligation is also a repudiation of the contract of employment between the parties. Had the employer not refused to meet that obligation the employment relationship would likely have continued. The Applicant indicated in his message of 15 February that he had 'no intention of resigning.' However, the failure of the Respondent to provide work and wages meant that on any objective analysis the employment relationship had come to an end by 27 April 2023. It had ended because of the actions of the Respondent employer whose conduct resulted, directly or consequentially, in bringing the relationship to an end. The Applicant was entitled to regard the employment relationship as having come to an end. He treated it as having come to an end by filing the application for unfair dismissal on 27 April 2023. The filing of the application was also an acceptance by the Applicant of the Respondent's repudiation of the contract of employment.

• [24] The matter bears some similarities with the case of White v. Superior Facilities Pty Ltd.[21] In that case Colman DP concluded that the Respondent employer's failure to pay wages meant that the relationship had been brought to an end at the employer's initiative. Here I also conclude that the employment of the Applicant was terminated on the employer's initiative within the meaning of s.386(1)(a). I conclude that the termination took effect on 27 April 2023.

Was the dismissal harsh, unjust or unreasonable?

[25] Section 387 of the FW Act provides that, in considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the Commission 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.

• [26] I am required to consider each of these matters, to the extent they are relevant to the factual circumstances before me.[22] I set out my consideration of each below.

Was there a valid reason for the dismissal related to the Applicant's capacity or conduct?

[27] The Applicant submitted that he had not been given a reason for the termination of his employment. He submitted that there was no valid reason related to capacity or conduct and that there were no performance or conduct issues raised with him over the lengthy period of his employment. The Respondent did not submit otherwise.

[28] The Respondent maintained that the company was unable to pay the Applicant because of a downturn in the business. That may well have been the case, but it did not excuse the Respondent from the obligations it had as the employer of the Applicant. The Respondent could have terminated the employment of the Applicant when it became unable to pay the Applicant's wages. That would have at least given the Applicant some certainty about his position. It would have allowed the Applicant to apply for Centrelink payments or alternative employment. The Respondent chose not to do that. Instead, the Respondent simply ignored the Applicant.

• [29] The Applicant submitted that not only was there no valid reason for the dismissal but that the treatment he received from the Respondent was attributable to complaints he had made to the Australian Taxation Office (ATO) about the Respondent's failure to pay his superannuation contributions dating back as far as 2016.[23] The Applicant said at the time of his unfair dismissal application he was owed in excess of $15,000 in unpaid contributions from the Respondent and that after he contacted the ATO they in turn contacted the Respondent to resolve the matter. This apparently prompted the Respondent to stop providing the Applicant with pay slips for a period. The Applicant brought that failure to the attention of the Fair Work Ombudsman. The issue of unpaid superannuation was clearly of some interest to the Respondent by the time the Respondent stopped paying the Applicant's wages. The only responses the Respondent gave to the Applicant's messages were the two text messages of 13 February and 16 March 2023. Both related to the Applicant's unpaid superannuation.

• [30] The Applicant also referred to the Respondent's failure to make good its long service leave obligations. The Applicant first complained to the Respondent about unpaid long service leave in late 2021. He received no response. He raised the matter again in January and February 2022 and indicated he had involved the NSW Department of Industrial Relations in the matter. By July 2022 the Department had calculated the Applicant's available long service leave entitlement to be $9,804.51. By October 2022, the Respondent had advised the Applicant that these payments would be paid by weekly instalments as the company could not afford to pay a lump sum.[24] According to correspondence tendered by the Applicant, by March 2023 the Respondent had been found to be in contravention of both the Long Service Leave Act 1955 (NSW) (for failing to provide long service leave and making payments to a worker in lieu of long service leave) and the Industrial Relations Act 1996 (NSW) (for failing to comply with a requirement of an industrial inspector). The Respondent's director Mr. McDonald was found to have contravened the same legislation for conduct related to the Respondent's contraventions.[25]

[31] It is unnecessary for me to reach any conclusions as to whether any of these complaints by the Applicant prompted the Respondent to disregard the Applicant's efforts to return to work, not provide him with work or wages and ultimately bring the employment relationship to an end. On the face of it, conduct of that kind could amount to a contravention of Part 3-1 of the FW Act. It is noteworthy though that the Respondent had previously adopted the approach of ignoring the Applicant for what he regarded as 'trouble-making' behaviour. On 16 March 2022 the Respondent sent the following message to the Applicant:

If you send your hours you get paid you havnt sent hours policy is no hours no pay so send the fucken hours and stop being a smartass cunt causing trouble where it is not needed I don't care for your attitude anymore thats why im ignoring you Ps make sure you toddle off to IR with this message because I dont give a fuck[26] (sic)

[32] There was no reason, let alone a valid reason, proffered by the Respondent for the dismissal. I find that there was no valid reason for the dismissal related to the Applicant's capacity or conduct.

Was the Applicant notified of the valid reason?

[33] Given my conclusion above that there was no valid reason for the dismissal there was nothing for the Applicant to be notified of. There is nothing further to consider under this heading and section 387(b) is a neutral consideration here.

Was the Applicant given an opportunity to respond to any valid reason related to their capacity or conduct?

[34] There was no reason given for the dismissal and no valid reason related to the Applicant's capacity or conduct. In that case there is nothing further to consider under this heading and section 387(c) is a neutral consideration here.

Did the Respondent unreasonably refuse to allow the Applicant to have a support person present to assist at any discussions relating to the dismissal?

[35] There were no discussions relating to the dismissal and no opportunity for the Applicant to have the presence of a support person. In that case there was no unreasonable refusal that needs to be considered and section 387(d) is a neutral consideration here.

Was the Applicant warned about unsatisfactory performance before the dismissal?

[36] There was no issue of unsatisfactory performance in this case and therefore no relevant warning was required or given. Section 387(e) is a neutral consideration here.

To what degree would the size of the Respondent's enterprise be likely to impact on the procedures followed in effecting the dismissal?

[37] The Respondent is a small employer. It obviously lacks the resources and sophisticated processes that larger employers have available to them. It would lack the familiarity with termination processes that comes with employing large numbers of people. Nonetheless it does not follow that the procedures that are to be adopted by such an employer in bringing an employment relationship to an end should lack fairness for employees. This case is unusual in the sense that there were no active steps or identifiable 'procedures' taken by the employer to effect the dismissal. In the circumstances the Respondent can draw nothing in its favour under this heading to weigh against a finding that the dismissal was harsh, unjust or unreasonable.

To what degree would the absence of dedicated human resource management specialists or expertise in the Respondent's enterprise be likely to impact on the procedures followed in effecting the dismissal?

[38] The Respondent had no dedicated human resource management specialists or expertise. The absence of such expertise presumably did have an impact on the 'procedures' followed in effecting the dismissal. However, there was no difficult factual matrix for the Respondent to navigate or complex legal questions to resolve. Given the lack of an employer 'procedure' the absence of access to expertise here does not weigh in the Respondent's favour and nothing can be counted under this heading against a finding that the dismissal was harsh, unjust or unreasonable.

[39] Section 387(h) requires the Commission to take into account any other matters that the Commission considers relevant.

• [40] The effects of dismissal on the personal or economic situation of the dismissed employee may be taken into consideration under s.387(h) of the FW Act.[27] I am satisfied that the effects of the Applicant's dismissal on his personal and economic situation would have been significant and adverse. The Applicant has been without work since January. He has only recently obtained another job. His evidence was that he was seeking formal notification of the termination of his employment in part to allow him to access social security payments. The failure to provide those details would have made that task more difficult. These are factors that weigh in favour of a conclusion that the dismissal was harsh, unjust or unreasonable.

[41] The Applicant was first employed by the Respondent in June 2006. There was nothing to suggest that the Applicant had been anything other than a diligent and reliable employee since that time. An employee's long and satisfactory work performance or history may be taken into consideration under s.387(h) of the FW Act and, depending on all the circumstances, may weigh in favour of a conclusion that the dismissal of the employee was harsh, unjust or unreasonable.[28] In my view the Applicant's long and unblemished history of employment with the Respondent is a factor that weighs strongly in his favour in this case.

Is the Commission satisfied that the dismissal of the Applicant was harsh, unjust or unreasonable?

[42] Having considered each of the matters specified in section 387 of the FW Act and given appropriate weight to each of the findings relating to those matters, I am satisfied that the dismissal of the Applicant was harsh, unjust or unreasonable.

• [43] Given my conclusions above I am satisfied that the Applicant was protected from unfair dismissal at the time of being dismissed and was unfairly dismissed. In that event, I turn to the issue of what remedy should follow. [29]

• [44] Where a person has been unfairly dismissed the circumstances in which remedies are available are set out in s. 390 the FW Act. Compensation cannot be ordered unless the Commission is satisfied that reinstatement is inappropriate and an order for compensation is appropriate in all the circumstances.[30] In considering an appropriate remedy in a case of unfair dismissal, regard must also be had to the legislative object set out in s.381 of the FW Act. This includes an emphasis on the remedy of reinstatement[31] and on ensuring that a "fair go all round" is accorded to both the employer and employee concerned.[32]

[45] The Applicant did not seek reinstatement in his application. In the circumstances this is unsurprising. Even given the Applicant's length of service it is unlikely that the employment relationship could be successfully re-established. I am satisfied that reinstatement would be inappropriate in this case. I turn then to the issue of compensation.

[46] Section 392(2) of the FW Act provides that in determining an amount of compensation the Commission must take into account all the circumstances of the case including a number of listed matters. It provides:

(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

• [47] Awards of compensation are remedial in nature. In determining the amount, all the circumstances are to be taken into account, including those prescribed by s 392(2) of the Act. The 'Sprigg' formula is to be applied to determine the quantum of any order for compensation.[33]

• [48] The Respondent is a small employer and a large award of compensation may have an effect on its viability. However, there was little evidence as to the true financial situation of the Respondent. The Respondent was directed to file material, including material relating to any remedy that might arise from the proceeding, but did not do so. The Respondent submitted during the hearing that the cash-in-transit industry had been significantly affected by the rise of the cashless economy. However, the business continues to operate and there was evidence that there was another employee employed by the Respondent as at June 2023.[34]

[49] The Applicant had a lengthy period of service with the Respondent. There were no conduct or performance issues during that time.

[50] The Applicant's history of service is relevant in relation to the issue of remuneration that would have been received or would have been likely to have been received if the dismissal had not occurred. Clearly, the Applicant had experienced difficulties with receiving payments from the Respondent in the past and yet managed to continue working. To the extent that short term cash flow problems contributed to a lack of available work and ultimately the termination, it is conceivable that given the Applicant's long work history with the Respondent, the Applicant would have continued to work despite a short-term interruption to his paid employment had the Respondent not allowed the employment relationship to reach the point of complete breakdown. The Applicant was prepared to keep working for the Respondent even though a significant amount remained outstanding on account of superannuation contributions. However, the ongoing financial viability of the Respondent remains a factor here. Although the Respondent continues to trade and has another worker working since the Applicant stopped working for the Respondent, some account must be taken of the prospect of the Applicant's employment coming to an end in any event because of the financial circumstances of the Respondent.

[51] The Applicant has taken only limited steps to mitigate the loss suffered because of the dismissal. He had applied for a job in late June 2023 and was working in that position by the time of the hearing. Aside from this, he said he had not earned any other income. Given his lengthy service with the Respondent I regard it likely that the Applicant will continue to earn income from the new employer in the period between the making of an order for compensation and the actual compensation that he might receive. I also take into account the fact that the unfair dismissal application was not made until 27 April and note that there was no evidence of the Applicant taking steps to bring the matter to a head after his communication to the Respondent on 25 February. Further, I take into account the circumstances in which the Applicant's employment relationship was brought to an end and the conduct of the Respondent in bringing that relationship to an end. The Respondent's treatment of the Applicant, an employee of many years standing, was, to put it mildly, very poor.

[52] Having regard to all the circumstances of the case and taking into account the matters referred to in s.392 of the FW Act, I have determined that the amount of compensation should be ten weeks' pay. I note that this does not exceed the compensation cap in s.392(5). The ten weeks' pay should be calculated in accordance with s.392(6).

[53] For all the reasons given, I have decided that the dismissal of the Applicant by the Respondent was harsh, unjust or unreasonable and that the appropriate remedy is that an order should be made for the payment of compensation to the Applicant in the amount of ten weeks' pay. An order to this effect will issue separately.

By Video using Microsoft Teams at 9:00am AEST on Friday, 14 July 2023.

[1] Applicant's Outline of Argument, Court Book page 34.

[4] Employer Response Form F3 Court Book page 27.

[5] See page 27 and 29 of the Court Book.

[14] Bupa Aged Care Australia v. Tavassoli [2017] FWCFB 3941; (2017) 271 IR 245, [48].

[15] Khayam v Navitas English Pty Ltd t/a Navitas English [2017] FWCFB 5162, [75] ('Khayam').

[16] Searle v Moly Mines Limited (2008) 174 IR 21.

[19] Mohazab v. Dick Smith Electronics Pty Ltd (No 2.) [1995] IR 200, 205.

[21] [2020] FWC 3035.

[22] Sayer v Melsteel Pty Ltd [2011] FWAFB 7498, [14]; Smith v Moore Paragon Australia Ltd PR915674 (AIRCFB, Ross VP, Lacy SDP, Simmonds C, 21 March 2002), [69].

[27] Ricegrowers Co-operative v Schliebs PR908351 (AIRCFB, Duncan SDP, Cartwright SDP, Larkin C, 31 August 2001), [26].

[28] Telstra Corporation v Streeter [2008] AIRCFB 15, [27].

[32] BlueScope Steel Limited v Sirijovski [2014] FWCFB 2593 at [73].

[33] See Bowden v Ottrey Homes Cobram and District Retirement Villages Inc. [2013] FWCFB 431

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