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[2018] FWC 3109
General information, not legal advice.
Fair Work Commission
2018-05-31
Original judgment source is linked above.
s.394 - Application for unfair dismissal remedy
[1] Mr Stephen Kenneth Atherton (Mr Atherton) was dismissed from his employment with Airmaster Australia Pty Ltd T/A Airmaster (Airmaster) on 8 January 2018. Shortly thereafter on 17 January 2018 he lodged an application for an unfair dismissal remedy (Application).
[2] Mr Atherton commenced with Airmaster on 24 April 2015 as the Controls and Automation Manager, for the Western Australian branch. Airmaster provides building management systems to commercial entities, and in his position Mr Atherton managed the estimation and preparation of quotes, tender review, preparation of submissions for offers, and the Controls Team. It was accepted that Mr Atherton held a senior position and unsurprisingly was required to have strong leadership skills, well developed interpersonal skills and clear verbal and written communication skills. Mr Atherton reported into Mr Miles Corompt, WA State Manager and Director of Airmaster (Mr Corompt).
[3] On 5 December 2017, Mr Atherton was involved in an incident with a Mr David Repper, Project Manager at Airmaster (Mr Repper) (the Incident). The Incident was the catalyst for a series of events that culminated in Mr Atherton's dismissal.
[4] Without underplaying the seriousness of the Incident, Mr Repper and Mr Atherton had a verbal dispute regarding Mr Repper's communication to one of Mr Atherton's reports (employees). Mr Atherton having considered that Mr Repper had gone behind his back confronted Mr Repper in the tea room; a verbal exchange ensued which involved the use of profanity. Mr Repper admitted that he told Mr Atherton to 'fuck off' and said 'Stephen you are an absolute dickhead'[1]. Mr Atherton similarly engaged in confrontational behaviour although he did not use expletives.
[5] Post Incident, Mr Atherton obtained guidance from an industrial advocate, a Mr Patrick Mullally (Mr Mullally), who relevantly represented him in the Hearing. Mr Atherton was certified unfit for work on 8 December 2017[2], and lodged a workplace bullying complaint with Airmaster on 19 December 2017. The workplace bullying complaint in effect broached two complaints, one against Mr Repper and the other against Mr Corompt. Mr Corompt was said to have been complicit for taking no steps to protect Mr Atherton regarding the Incident and another issue that had arisen in late October involving Mr Repper; and for attempting to shift the blame from Mr Repper to Mr Atherton with regard to the Incident.
[6] Airmaster conducted an internal investigation of the workplace bullying complaint which it found to be unsubstantiated. On 3 January 2018, Mr Ralph Rio, Human Resources Manager of Airmaster, (Mr Rio) conveyed to Mr Atherton the outcome of the workplace bullying investigation to date, and asked what would make him feel comfortable in the workplace. Mr Atherton responded that he thought 'David should be sacked'[3] and his reporting lines changed[4].
[7] Mr McDonald, Managing Director of Airmaster (Mr McDonald), flew from the Eastern States to meet with Mr Atherton on 8 January 2018. In the meeting Mr McDonald offered Mr Atherton a financial settlement having formed the view that Mr Atherton had imposed conditions on returning to work that could not be met by Airmaster and there was a cultural misfit between Mr Atherton's way of dealing with people and that of Airmaster[5]. Mr Atherton was not amenable to the offer of 3 months payment in lieu of notice, and exclaimed in the meeting he was being dismissed. Airmaster admitted that this was the case.
[8] I have taken into account each of the matters specified in s.387 of the Act and in doing so have considered Mr Atherton's capacity and conduct in addition to the actions of Airmaster. I am not satisfied that Airmaster had a valid reason for Mr Atherton's dismissal and have concluded that his dismissal was unjust, unreasonable, and harsh.
[9] While the Act underscores the primacy of reinstatement as a remedy for unfair dismissal and it was this remedy that Mr Atherton sought, in light of the evidence before me I could not say that reinstatement was appropriate in the circumstances. I have found however that an order for compensation is appropriate and determined the amount of compensation as $11,086.87 to be taxed according to law. My reasons follow.
[10] Airmaster consists of three divisions namely Controls, Service and Mechanical Projects. Mr Repper managed Mechanical Projects, Mr Matthew Wisniewski managed Service, and Controls fell under Mr Atherton.
[11] Mr Atherton was employed under an employment contract of 2 April 2015 and received remuneration of approximately $115,000 (exclusive of superannuation) per annum[6] and a car allowance of $20,000 per annum[7]. Under the employment contract either party was required to provide 1 months' notice[8] regarding termination and Airmaster was permitted to make payment in lieu of notice.
[12] During the course of his employment Mr Atherton had participated in performance reviews, which for the most part, were uneventful. In 2017, Mr Atherton's performance review regarding 'responsiveness and communication' stated that he had met expectations but included the following commentary:
Responsiveness is excellent. I would encourage Steve to verbally communicate more, rather than email as can be more constructive in most occasions.
Although improved in the last 12 months, consideration and greater empathy to inter department colleagues will assist in achieving a more positive response[9].
[13] Mr Atherton's method of communication, communication style and interaction with outside employees in addition to colleagues was raised as an issue[10]. However, while Mr Atherton had received verbal counselling from Mr Corompt concerning his communication style, nothing further had been actioned. By this I mean that no disciplinary action had been taken against Mr Atherton regarding his performance or conduct, and a performance management plan had not been commenced. Mr McDonald stated that Mr Atherton had been the subject of discussions at Board meetings and Mr Corompt had been advised to counsel Mr Atherton concerning the way that Mr Atherton dealt with such issues[11].
[14] Much emphasis was placed on the culture of Airmaster and reference was made to the Airmaster Values, which relevantly included:
Everyone at Airmaster fulfils an important role and accordingly deserve the loyalty, respect, co-operation and acknowledgement of their colleagues[12].
In the words of Mr McDonald, culture at Airmaster was 'what makes Airmaster. It's what we sell to our customers'[13].
[15] It was said that before the Incident, Mr Repper and Mr Atherton were getting on well[14]. Reference was made to their attendance at a Melbourne Cup day client event in this regard[15].
[16] At some point, Airmaster won a contract to provide some works at the Galleria Morley[16]. The job was worth just over half a million dollars and the Controls portion amounted to approximately $35,000.00, although Mr Atherton thought it a bit more[17].
[17] Mr Repper sent out an email for the Galleria Project (Project)[18], which set out the timeline for the Project and the completion date of 19 December 2017. As part of the timeline there were several tasks to be completed by 9 December 2017[19].
[18] In response to aforementioned timeline, Mr Atherton responded to Mr Repper's email in two parts. The first addressed Mr Repper and stated '[A]s requested previously Scott needs to be in this communications loop'. The 'Scott' mentioned was Mr Scott Alker (Mr Alker), a technician in Mr Atherton's team[20]. The second part addressed Mr Darren Barry, a representative from a contractor, and it provided 'Please liaise directly with Scott for this project?'. Subsequent to issuing this direction no other direction was issued by Mr Atherton in this regard.
[19] On the morning of 5 December 2017, there was an exchange of emails between Mr Repper and Mr Atherton about work on the Project. The first in the series was from Mr Repper to Mr Alker with Mr Atherton copied[21]. Mr Repper instructed Mr Alker to meet with 'Darren' at the Project site the next day[22]. Mr Atherton responded to the first email advising Mr Repper that more notice was required, questioning why 'Darren' was not in communication with 'Scott' and that 'Scott' had received no contact from 'Darren' to date[23]. Mr Atherton informed Mr Repper further that Mr Alker had commitments and the meeting would need to be re-scheduled and requested that 'Darren' contact 'Scott' directly. Mr Repper replied on email 'Whatever!'[24].
[20] During the course of the day on 5 December 2017 and following on from the email exchange, Mr Atherton proceeded to the lunchroom, which was located downstairs in the office. Beforehand Mr Atherton had collected some food from the upstairs tearoom fridge. During lunch Mr Alker is said to have called Mr Atherton and Mr Atherton said that it was in this phone call he became aware that Mr Repper had gone directly to Mr Alker to discuss the Project[25]. Mr Atherton said that Mr Alker became flustered by the request to meet at the Project site because Mr Alker said he already had a commitment[26]. Mr Atherton gave evidence that he informed Mr Alker that he did not have to reschedule his other meeting because 'Dave demands you to, you report to me'[27].
[21] Following his telephone discussion with Mr Alker, Mr Atherton walked upstairs to the tearoom to return some food[28]. In simple terms the upstairs tearoom was described as small. It was said to be a room in which two people could pass by, but it would be pretty close[29].
[22] On entering the tearoom and having arrived next to where the fridge was situated, Mr Atherton said he saw Mr Repper[30]. According to Mr Atherton, Mr Repper was standing near the coffee machine. Mr Atherton was unable to recall if Mr Repper was holding a cup of coffee[31]. Mr Repper said that he was holding a cup of coffee.
[23] Mr Atherton went to the fridge and was crouching down while looking up toward Mr Repper[32]. Mr Atherton said that he then spoke to Mr Repper using words to the effect '[D]on't go behind my back direct to my guys after I've told ...'. Mr Atherton said that he did not elaborate but the gist of it was that he had already sent an email saying that they weren't available, and questioned why Mr Repper would then bypass him and go direct to the technician[33].
[24] According to Mr Atherton, Mr Repper then proceeded to verbally abuse him, adopted a boxing stance with his two hands free[34]. Mr Atherton said that Mr Repper yelled 'Get lost, just get lost. Go on, fuck off, fuck off' and moved toward him[35]. It was Mr Atherton's account that Mr Repper got louder and more out of control[36].
[25] At some point, said Mr Atherton, Mr Repper's rage escalated and in response to Mr Atherton saying 'right', Mr Repper said 'right. Right what Steve' or 'like what Steve' and then embarked on a dance like a boxer. Mr Repper disputes he raised his fists or danced like a boxer and says he was holding a cup of coffee.
[26] Mr Atherton gave evidence that he was traumatised by having Mr Repper's fists in his face[37].
[27] Mr Corompt said that he was working in his office, which was located adjacent to the upstairs tearoom, when he heard two people 'shouting at the top of their voices[38]. Mr Corompt said he heard Mr Repper say 'back off Stephen and go away' in addition to 'dickhead' and telling Mr Atherton 'to fuck off'[39].
[28] On hearing the exchange Mr Corompt went to the tearoom to stop the argument[40]. Mr Corompt observed that Mr Atherton was blocking the exit of the tearoom and Mr Repper was standing to the rear of the tearoom. Mr Corompt observed that both men were angry, finger pointing at each other and Mr Repper said 'let me out of here'[41]. Despite the presence of Mr Corompt, both men continued shouting and finger pointing toward each other's faces[42]. Mr Corompt positioned himself in the middle of the two men and told Mr Atherton to go to Mr Corompt's office and that Mr Repper would be spoken to after[43].
[29] Mr Repper recalls that on 5 December 2017 he had a conversation with Mr Alker in which he asked Mr Alker to attend the Project at 8.00am the next day to meet with a contractor[44]. Mr Alker informed Mr Repper that he could not because of another job and Mr Repper said that he asked Mr Alker whether he could do it'[45].
[30] Later that day at approximately noon Mr Repper was in the upstairs tearoom[46]. As Mr Repper was taking milk out of the fridge he observed that Mr Atherton walked in[47]. Mr Repper said that Mr Atherton, with a loud voice, stated words to the effect '[D]on't under any circumstances undermine my authority again'[48]. Mr Repper said he had his coffee mug in his hand and attempted to walk towards the door but Mr Atherton blocked his exit[49]. Mr Repper said that he told Mr Atherton to settle down at which point Mr Atherton again warned against going behind his back[50]. The dialogue continued until it appeared to Mr Repper that Mr Atherton was not going to move so he told him to 'fuck off'[51].
[31] According to Mr Repper it was at that point that Mr Corompt entered, gave both Mr Atherton and himself an instruction, and then Mr Repper looked at Mr Atherton and said 'Stephen you are an absolute dickhead'[52].
[32] After the Incident Mr Corompt said that he met with Mr Atherton who reported to him that he thought Mr Repper was going to assault him[53]. Mr Corompt informed Mr Atherton that 'is not what it looked like to me'[54]. Mr Corompt discussed the Incident with Mr Atherton and then referred him to a number of issues regarding his poor verbal communication with colleagues and demanded an improvement in how Mr Atherton communicated with others[55]. Mr Corompt outlined his expectation that Mr Atherton's behaviour would improve[56].
[33] Mr Atherton presented for work on 6 December 2017 and proceeded to send some emails to himself at his personal email address. His rationale for doing so was that he was going to do something about the Incident so he had forwarded the emails to himself as evidence[57]. At lunch time he sought advice from Mr Mullally. He noted at this time he was minded to lodge a bullying complaint[58]. On that same day Mr Atherton called his doctor to make a medical appointment. He attended a surgery on 8 December 2017 and provided a medical certificate to Airmaster that same day certifying that he was unfit.
[34] Mr Atherton did not present for work on 7 December 2017 and was due to return to work on 2 January 2018. The absence for this period consisted of personal leave and a pre-booked absence of annual leave over the Christmas break.
[35] On 19 December 2017, Mr Atherton provided to Airmaster his workplace bullying complaint[59]. Mr Rio said that he received the workplace bullying complaint from Mr Atherton on 20 December 2017 and forwarded it to Mr McDonald[60]. Subsequent to Mr McDonald's instruction, Mr Rio conducted an investigation into the complaint[61]. Mr Atherton was instructed not to attend work during the course of the investigation[62].
[36] Mr Atherton's workplace bullying complaint included a complaint against Mr Repper regarding the Incident in addition to a further incident with Mr Repper in October, and several complaints against Mr Corompt. Further to these matters, the investigation included enquiry into examples provided by Mr Corompt where Mr Atherton's interactions with colleagues and his style of communication had caused concern.
[37] During the course of the investigation Mr Rio interviewed Mr Atherton on 3 January 2018[63]. Mr Atherton was asked what would make him feel comfortable in the workplace to which he responded that he thought 'David should be sacked, I cannot work with him and don't feel safe with him there'[64]. According to Mr Rio this was said more than once during the course of the interview with Mr Atherton on 3 January 2018.
[38] Further, Mr Atherton was said to have informed Mr Rio that a resolution that would suit him would also include having his reporting lines changed[65]. When asked what would best suit him in an ideal situation, Mr Atherton was purported as saying words to the effect '[I]n an ideal situation, David would be sacked and Miles would be at another company but that is an ideal situation'[66].
[39] Mr Atherton gave evidence that Mr Rio informed him that he could not determine who was right or who was wrong regarding the Incident and he would refer things to Mr McDonald.
[40] There was no written report that emanated from the investigation however, Mr Rio sent to Mr McDonald an email on 3 January 2018 that traversed the following:
Please see below the main points received from Steve in regards to our discussion a 10am this morning:
He clearly mentioned that he would like to be working at Airmaster still and wanted some changes within the business so he was comfortable. I did try to see how he would feel working in a Branch under Miles and he said after time hopefully everything would be okay. He would like me to further investigate the report and get greater detail on the situations highlighted.
I will give you a full debrief on Friday however I think it would be a good idea if you spoke to him directly....[67].
[41] Mr McDonald met with Mr Atherton on 8 January 2018 at a hotel in the suburb of Scarborough. Mr Atherton understood that the purpose of the meeting was to discuss the workplace bullying complaint. Mr McDonald gave evidence that he went to the meeting on 8 January 2018 hoping Mr Atherton would have changed the conditions under which he wanted to return to work[68].
[42] Through the course of the discussion with Mr Atherton, Mr McDonald informed him:
Steve there have been a number of disputes between you and other people within Airmaster and within our associated companies and perhaps it's time you need to think about seeking alternative employment[69].
Mr McDonald acknowledged that he offered Mr Atherton some time to actually achieve that, meaning seeking alternative employment by way of a financial settlement[70].
[43] Mr McDonald gave evidence that it was his understanding that Mr Atherton would have liked Mr Repper to have been sacked, reporting lines changed such that Mr Atherton would not have to report to Mr Corompt and if any meetings were to be held with Mr Corompt a third unbiased person was to be present[71]. Mr McDonald said the:
definite impression I received from Mr Rio was Mr Atherton would feel uncomfortable working with Dave Repper and Mr Atherton confirmed that in his discussions with me directly, that he would not feel safe working with Mr Repper[72].
[44] Mr McDonald gave evidence that he considered Mr Atherton had placed 'conditions' on returning to Airmaster [73]. However, when questioned further Mr McDonald acknowledged that Mr Atherton never used the words conditions, but nevertheless that is what Mr McDonald understood them to be[74].
[45] Mr McDonald's evidence was that the employment of Mr Atherton:
became untenable in the circumstances which I was under the firm belief the conditions which Mr Atherton made for his return to work and because, as I said there was a cultural misfit between Mr Atherton's way of dealing with people and the way Airmaster deals with people...[75]
On the evidence it is clear that Mr McDonald's reference to 'conditions' referred to Mr Atherton's reference to the sacking of Mr Repper, reporting lines changed and a third person present when in meetings with Mr Corompt.
[46] In cross examination the grounds for dismissing Mr Atherton were explored with Mr McDonald:
What grounds did you have to dismiss Mr Atherton, Mr McDonald?---The grounds are that Mr Atherton made himself unemployable in the conditions that we have.
If you were wrong about those conditions, you would concede, would you, that you had no grounds to dismiss him?---Well, Mr Atherton didn't - - -
If you were wrong, I said?---Mr Atherton did not make that statement.
If you were wrong about that, I'm asking you. If you were wrong about that, you would not have any grounds, even on your case, to dismiss him?---I would still counsel Mr Atherton that he may like to find another job because of the cultural misfit and the history of Mr Atherton with a whole range of employers, not just in Airmaster but in other companies. That's the whole purpose, right? Culture is very important within Airmaster. It's fundamental. We had our 30th anniversary on Saturday night, Mr Mullally, and there were more a hundred people in the room who had over 10 years' service, right? Culture is what makes Airmaster, Airmaster. It's what we sell to our customers.
So you still say you had grounds to dismiss him?---I said I would have counselled him to seek alternative employment. I may not have - we may not have dismissed him at that time. If he'd have said to me, "I'm happy to come back and work under Miles and I'll work with Dave Repper", we wouldn't be here today.
Do you consider you gave him the opportunity to make that statement in this short meeting?---Absolutely.
Did you put that to him?---No, I did not put that to him.
No, because he says it was a short meeting, he had very little input, you had a firm view of what was going on, you'd had the feedback from Mr Rio and that the conditions that Mr Atherton was imposing on his employment were unworkable, weren't going to happen. "We're not going to sack Mr Repper and we're not going to change your reporting lines." It's as simple as that?---I certainly - - -
Now, you then moved, after you said that, you then moved to say to him, "I think it's time for you to move on", didn't you?---No, I didn't, not like that.
Well, how did you say it? That was the first. This went in three tiers, did it not? The first one was: "It's time to move on, Steve"?---I beg your pardon, Mr Mullally. What happened is we came into the meeting. We sat down. We discussed the issue. I discussed the fact that, you know, we have values. I discussed the fact that we have a bullying policy and the fact that it requires to treat each other with dignity and respect, right? And we then asked about the - we discussed the issue of the bullying complaint, right? And that's how it went. And then, as I said, you know, when we discussed this and the conditions, I asked for confirmation of the conditions that Stephen Atherton would like to return to Airmaster. By the way, he said he did want to return to Airmaster, but he had conditions on it. Those conditions - - -
I put it to you, Mr McDonald, that he did not say, "These are my conditions", did he?---He didn't use those words.
No, he did not. You are using those words. You're saying it was a condition, aren't you?---Well, I'm saying that that's how I understood it, Mr Mullally.
It's not what Mr Atherton said and it's not what he says today, is it? You know that?---I don't know what he says today.
Well, you've seen his application?---But he certainly made it very clear to me that he would not feel safe working with Mr Repper in the same offices. That was made very clear and, as I said, because of all the other issues, the cultural misfit, that's why we tried - I tried to seek a painless method for everyone to leave this situation which is obviously very troubling to everybody and move on with their lives, so Mr Atherton could get on with his life, we could get on with our life, and there is no - there's no angst, if you like, not where we are today[76].
[47] Mr McDonald expanded on what culture meant for Airmaster stating that the culture encompassed working together as teams and achieving corporate objectives. The corporate objectives were said to relate to the customer and included treating each other with dignity and respect, acknowledging the efforts of everybody and working collaboratively to achieve the objectives[77].
[48] Mr Atherton is said to have left the meeting exclaiming he had been dismissed.
[49] At some point on 8 January 2018, Mr McDonald provided Mr Rio with an instruction to prepare a termination letter and send it to Mr Atherton, which Mr Rio did on 9 January 2018. Mr Rio said that he was aware that an ex gratia payment had been paid to Mr Atherton but he was unaware how it had been calculated[78].
[50] The evidence of Mr Atherton was that on termination he had received unpaid accrued annual leave and payment in lieu of notice, the two components amounting to $45,102.93. The payment in lieu of notice represented payment for 3 months[79], which if at work would have taken him up to 8 April 2018[80].
[51] Following his dismissal, Mr Atherton reports doing very little initially due to being traumatised. However, Mr Atherton's evidence was that he was always looking for alternative employment having registered for automated emails to be sent from Seek based on certain keywords (in place for years)[81].
[52] The short point advanced by Mr Atherton was that Airmaster had relied upon collective communication issues, none of which were considered to be serious at the time when they occurred and all of which were explained by Mr Atherton, to form part of a valid reason for dismissal. With regard to Mr Atherton's email communication these matters were known to Airmaster and it could not be said that Airmaster had now discovered misconduct that would justify dismissal. According to Mr Atherton he was not afforded procedural fairness.
[53] Airmaster advanced that it had a valid reason for Mr Atherton's dismissal based on his overall conduct. That conduct included:
(a) his initiation of and participation in the Incident, which says Airmaster amounted to a common law assault;
(b) not adhering or living up to Airmaster's Values of teamwork, loyalty, respect, cooperation and acknowledgment of colleagues;
(c) a history of poor communication (verbal and written) with colleagues, including his superiors, his peers and his subordinates, which poor communication resulted in complaints from other employees;
(d) not making any or any sufficient improvement in his conduct despite having received numerous verbal warnings from Mr Corompt, and demonstrating an inability to work effectively as a team player and his overall conduct in the workplace;
(e) initiating a non-genuine bullying complaint by letter of 19 December 2017 against Mr Repper and Mr Corompt alleging an unsafe working environment which posed a threat to his health and wellbeing;
(f) approaching his superiors and requesting that the employment of Mr Repper be terminated and his reporting line change; and
(g) his demonstrating by both words and action that he could no longer or that he refused to work cooperatively or effectively as a Manager of Airmaster.
[54] The credibility of Mr Atherton was called into question by Airmaster. It submitted that his credibility was an issue in the proceedings and ought to be taken into account in assessing the accuracy or reliability of his evidence. Airmaster relied on various examples to supporting its submission, which I have had regard to.
[55] It is not in contest and I am satisfied on the evidence that:
(a) Mr Atherton is a person protected from unfair dismissal because, at the time of his dismissal, he had completed a period of employment with Airmaster of at least the minimum employment period and his income was less than the high income threshold[82];
(b) Mr Atherton was dismissed by Airmaster[83];
(c) Airmaster was not a 'small business employer' as defined in s.23 of the Act, so the Small Business Fair Dismissal Code was inapplicable[84];
(d) Mr Atherton's dismissal was not a case of genuine redundancy[85]; and
(e) Mr Atherton's Application was made within the period required[86].
[56] With regard to being satisfied that Mr Atherton was dismissed by Airmaster, I think it important to traverse the reasons why this is the case. Clearly, it was articulated by Mr McDonald that he considered that it was Mr Atherton who had in fact made the employment relationship untenable by the imposition of 'conditions' that could not be satisfied by Airmaster.
[57] Those 'conditions' were understood by Mr McDonald to be the sacking or dismissal of Mr Repper, a change of reporting line from that of Mr Corompt and having an unbiased third person present in meetings with Mr Corompt. However, having considered the evidence I am satisfied that it was not the case that Mr Atherton stipulated that these were 'conditions'.
Further, I am not satisfied that Mr Atherton refused to return to work unless such 'conditions' were met. It is therefore understandable that Airmaster submitted that it terminated Mr Atherton's employment on 8 January 2018.
[58] To determine if a dismissal is unfair the Commission must take into account whether there was a valid reason for dismissal relating to the employee's capacity or conduct[87].
[59] Where the reason for termination of employment relates to an employee's capacity or conduct, it is not the Commission's function to stand in the shoes of the employer and determine whether or not the decision made by the employer was a decision that would be made by the Commission. It is for the Commission to assess whether the employer had a valid reason connected with the employee's capacity or conduct[88].
[60] The reasons considered are the employer's 'reason(s)'[89]. The Full Bench in B, C, and D v Australia Postal Corporation T/as Australia Post[90] (Australian Postal Corporation) stated:
[34]... In a misconduct case, the Commission is concerned with whether the misconduct in fact occurred, not with whether the employer has reasonable grounds to believe that it occurred (eg. Yew v ACI Glass Packaging Pty Ltd (1996) 71 IR 201, Sherman v Peabody Coal Ltd (1998) 88 IR 408; Australian Meat Holdings Pty Ltd v McLauchlan (1998) 84 IR 1).
[35] Subject to that, as indicated by Northrop J in Selvachandran, "valid reason" is assessed from the perspective of the employer and by reference to the acts or omissions that constitute the alleged misconduct on which the employer relied, considered in isolation from the broader context in which they occurred. It is the reason of the employer, assessed from the perspective of the employer, that must be a "valid reason" where "valid" has its ordinary meaning of "sound, defensible or well founded". As Northrop J noted, the requirement for a valid reason "should not impose a severe barrier to the right of an employer to dismiss an employee".
[36] A failure to comply with a lawful and reasonable policy is a breach of the fundamental term of the contract of employment that obliges employees to comply with the lawful and reasonable directions of the employer. In this way, a substantial and wilful breach of a policy will often, if not usually, constitute a "valid reason" for dismissal[91].
[61] Therefore, the question of whether the alleged conduct took place and what it involved is to be determined by the Commission on the basis of the evidence in the matter before it. As referred to in Australian Postal Corporation, the test is not whether the employer believed, on reasonable grounds after sufficient enquiry the employee was guilty of the conduct which resulted in termination[92].
[62] The valid reason need not be the reason given to the employee at the time of the dismissal[93] and the reason should not be 'capricious, fanciful, spiteful or prejudiced'[94]. It is the case that the provisions must be applied in a practical, common sense way to ensure that the employer and employee are treated fairly[95].
[63] Airmaster submitted that it dismissed Mr Atherton because of his overall conduct in the workplace. It proceeded to list the particulars of eight events that had contributed to the decision to dismiss. I have taken into account the submissions of Airmaster in this respect. However, it was evident that Mr McDonald, on behalf of Airmaster, made the decision to terminate the employment of Mr Atherton. Mr McDonald was firm with his account on why he brought the employment relationship to an end. And, while Airmaster has referred me to the total conduct of Mr Atherton and to the particulars of the eight events, I consider that in part the evidence of Mr McDonald was both candid and compelling. I am persuaded that the reasons provided by Mr McDonald were those that had bearing on the ultimate decision to dismiss.
[64] The evidence of Mr McDonald was telling when questioned about the reasons for terminating Mr Atherton's employment. It was clear on the evidence that Mr McDonald understood that Mr Atherton had imposed 'conditions' on this return to work that could not be satisfied by Airmaster and that there was a cultural misfit between Mr Atherton's way of dealing with people and the way Airmaster dealt with people[96].
[65] As observed, I am not satisfied that Mr Atherton stipulated that his return to work was dependent on the conditions of sacking or dismissing Mr Repper, changing of reporting lines from that of Mr Corompt and having an unbiased third person present in meetings with Mr Corompt. While that may have been the understanding that Mr McDonald arrived at from his communication with Mr Rio there was no attempt by Mr McDonald to explore with Mr Atherton whether such matters constituted conditions for a return to work. While Mr Atherton may have expressed to Mr Rio that he wanted Mr Repper 'sacked', reporting lines changed and a third unbiased person present in meetings[97], it was not shown that there was a refusal to return to work unless those matters were addressed.
[66] Mr McDonald asserted that Airmaster could not offer Mr Atherton a job where he would not have to interact with Mr Repper and therefore it was no longer safe for Mr Atherton[98]. He continued that Airmaster had a responsibility to provide safe working conditions that didn't affect an employee's physical and mental health, and as Mr Atherton felt a return to work with Mr Repper would endanger his health it had put Airmaster in an impossible position[99]. In the circumstances of this case I am unconvinced that a perceived inability to provide a safe work environment for Mr Atherton provides the basis for a valid reason for dismissal.
[67] Mr Atherton's communication style was undoubtedly problematic given the evidence of several witnesses[100]; whose evidence I have no reason to disbelieve. Further, the evidence of Mr Corompt outlined that there had been previous issues with Mr Atherton concerning verbal[101] and email communication[102].
[68] It was said that Mr Atherton in effect rubbed people up the wrong way. Clearly, that was the unfortunate perception that Mr Atherton left with some of the witnesses. There was a notation in the performance review of 2017 regarding 'consideration and greater empathy to inter department colleagues will assist in achieving a more positive response'[103], and Mr Corompt gave evidence of counselling Mr Atherton on these issues.
[69] But, it could not be said that there was sufficient evidence before me to arrive at a finding that Mr Atherton's ineptitude regarding his interaction with colleagues and communication style was so grave to constitute a valid reason for dismissal in and of itself. Airmaster, up until the time of the Incident, had not considered such issues warranted a formalised approach to performance management, or discipline.
[70] Perhaps it is understandable that Airmaster raised Mr Atherton's communication style post the Incident. The Incident itself arose in circumstances of an interaction between Mr Atherton and another colleague and involved a breakdown in communication. Concerning the description of the Incident, I am persuaded that Mr Corompt's account is most believable given he observed both Mr Atherton and Mr Repper in the heat of the moment and was not swayed by emotive investment. I am inclined to find fault lay with both Mr Atherton and Mr Repper, and am alive to the point that it was Mr Atherton who initiated the communication, in my view poorly. What resulted, was, if I were to phrase it mildly, behaviour that was totally inappropriate within a workplace.
[71] Airmaster opted to issue a verbal warning to Mr Repper and issued a demand to Mr Atherton that he improve his communication with others noting that the minimum standard and expectation is that all employees communicate with each other in a polite and respectful manner[104]. There was a consistency in Airmaster's approach to the two employees in this respect.
[72] Evidence was given that Mr Atherton had previously demonstrated a problematic communication style. While not privy to Mr Repper's performance and disciplinary history, it may have been the case that the disciplinary outcomes for the two could have differed in light of employment histories. But, with that being noted, the problematic communication style of Mr Atherton until that point had not been addressed to the extent that one could consider it sufficiently serious that it threatened the employment security of Mr Atherton. While Mr McDonald referred to Mr Atherton being spoken about at Board level regarding issues[105], and Mr Corompt gave evidence that he had verbally counselled Mr Atherton regarding several events before the Incident[106], there was no evidence to show that Mr Atherton had received a written warning regarding such conduct albeit Airmaster said that verbal warnings had been given.
[73] Concerning the verbal warnings given, I am unpersuaded they evince that an insufficient improvement concerning his communication and team work would result in Mr Atherton receiving a written warning or being dismissed. Therefore, when considering Mr Atherton's work history and the Incident I am not satisfied that both culminated in valid reason for dismissal.
[74] However, it is the case that Airmaster referred to the overall conduct of Mr Atherton and in this respect consideration must be given to the initiation of what Airmaster advanced was a non-genuine bullying complaint.
[75] While the Incident formed part of the bullying complaint, Mr Atherton included detail of events involving Mr Repper in late October 2017. On that occasion Mr Repper was in a room by himself and was swearing. Mr Atherton entered and considered that Mr Repper was swearing at him although he sought no clarification that Mr Repper concerning his perception. In cross examination Mr Atherton said the following:
Mr Atherton, I'm just asking, you said to him, I hope you're not referring to you, and he said, "No"?---He continued, as I walked into his office, he was still ranting, "Fuck, fuck, fuck, incompetent people." He might have been saying it before, he continued saying that as I walked in there.
He wasn't addressing you, was he?---He was looking directly at me when he was saying it.
Well, he saw someone walk into his office, he wasn't directing those comments to you, Mr Atherton, was he?---Well, we were talking about - he was talking about the project that the items had been left off, so it was directed at me[107].
[76] Mr Atherton provided further evidence that he made no complaint at the time to Airmaster as it was an incident that was unpleasant 'to one or both parties and you just get over it and move on and that's what I chose to do on this particular incident'[108].
[77] While making complaints about Mr Repper, Mr Atherton also included Mr Corompt as another party to the bullying complaint. First, for condoning the behaviour of Mr Repper in both the Incident and the October 2017 incident, it was said that Mr Corompt was complicit, and second for addressing Mr Atherton on the day of the Incident about examples where his communication and interaction with others had been problematic.
[78] Submissions were made regarding the genuineness of the complaint due to the input of Mr Mullally regarding its contents. While I consider that nothing much turns on Mr Atherton obtaining advice, guidance or assistance with the drafting of his workplace bullying complaint, I am however plagued with some disquiet that the workplace bullying complaints may not have been genuinely held by Mr Atherton.
[79] Airmaster's document OHS-026H - Discrimination, Harassment & Bulling[109] defined workplace bullying as constituting 'repeated, unreasonable behaviour' (Bullying Document). It was perhaps then the case that the incident of late October 2017 and those involving Mr Corompt were added to the complaint regarding the Incident, so as to make good a workplace bullying complaint under the Bullying Document.
[80] Airmaster submitted that it was open to infer that the workplace bullying complaint was a tactical move by Mr Atherton, on the advice of his advocate, to try and engineer adverse consequences for Mr Repper. However, I am unpersuaded by this submission and consider that it may have been the case that Mr Atherton simply did not know how to frame the complaint. Mr Atherton acknowledged that he would have called the Incident an 'assault'[110] but had sought expert advice which informed him that unless he had actually been hit it was not an assault[111]. Further, it was in evidence that Mr Atherton had sought advice from Mr Mullally regarding the Incident:
Did you change your mind as to whether one incident was enough to constitute bullying?---No, because I mean by then I'd already decided that I had to do something about it, about that incident, and I'd found out that the only thing I could do, from a work perspective, was to file a bullying complaint[112].
[81] There may have been merit in the submission that the evidence calls into question the genuineness of the complaint against Mr Repper regarding his conduct in October 2017 and the totality of the complaint against Mr Corompt. However, I note that Airmaster did not question the genuineness of the complaint until after Mr Atherton's dismissal notwithstanding it being in receipt of the complaint before the dismissal occurred. Had Airmaster considered that the complaint was absent bona fides then it was open to it to present its concern or allegation to Mr Atherton and have him respond.
[82] On receipt of Mr Atherton's workplace bullying complaint, Airmaster commenced an investigation into the matters that were raised within it. There is no criticism directed toward it for doing so, the usual course would be to investigate the matter further. However, having conducted its enquiries into the complaint it is not clear that Airmaster challenged Mr Atherton regarding the genuineness of his complaint or otherwise queried its bona fides while he remained an employee. The evidence of Mr Rio was that he had 'advised Stephen that my investigation into the fact of what had occurred was inconclusive and that I could not take it any further until I had spoken to everyone. Stephen accepted that I should talk to everyone'[113]. Mr Rio ultimately determined that that the bullying claims were unsubstantiated[114].
[83] Therefore, while I may have some disquiet it rests only at that. I am not satisfied that the evidence allows me to arrive at a conclusion that Mr Atherton was disingenuous regarding his workplace bullying complaint or it otherwise was not genuine. I have considered whether the principle in Shepherd v Felt & Textiles of Australia Ltd[115] is relevant in the circumstances and consider that it is not.
[84] For the reasons provided above, I am not satisfied that reasons given by Mr McDonald were sufficiently serious to constitute a valid reason for Mr Atherton's dismissal, and am similarly unpersuaded by the list of reasons traversed in Airmaster's submissions[116]. I am of the view that the conduct or capacity of Mr Atherton was not such that it gave rise to a valid reason for dismissal. The existence of a valid reason is a very important consideration in any unfair dismissal case the absence of such will almost invariably render the termination unfair, and as indicated at the beginning of this decision that was to be the case[117].
Notification of the valid reason -ss.387(b) and an opportunity to respond -ss.387(c)
[85] 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[118], and in explicit[119], 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[120].
[86] Based upon the evidence before I am not satisfied that Mr Atherton was notified of a valid reason for his dismissal before the decision had been made to terminate his employment. Further, I have found he was not provided with the opportunity to respond.
[87] Mr McDonald gave evidence regarding the meeting on 8 January 2018 that he was hopeful he could try and talk Mr Atherton around, 'meaning that he wanted to make sure that Mr Atherton realised the conditions that he was imposing and where they would lead to'[121]. However, the evidence shows that Mr McDonald did not do this[122]. Mr McDonald considered Mr Atherton's imposition of 'conditions' had made him unemployable[123], although the evidence is such that 'conditions' had not been imposed. It was apparent that Mr McDonald had arrived at the conclusion that the employment relationship was untenable prior to suggesting to Mr Atherton that he resign.
[88] When asked whether Airmaster's solution for the problem was termination of Mr Atherton's employment, Mr McDonald responded that 'there was nowhere else to go Mr Mullally'[124]. Mr McDonald did not ascertain from Mr Atherton himself whether Mr Atherton had imposed conditions on his return to work. Instead Mr McDonald progressed the meeting on 8 January 2018 premised on an assumption arrived at before the meeting and that was not clarified by him during the meeting regarding its correctness.
[89] Airmaster submitted it afforded various opportunities for Mr Atherton to 'discuss' his conduct in relation to the Incident and earlier instances of poor conduct and communications, including on 5 December 2017, 2 January 2017 and on 8 January 2018. However, having considered the evidence, particularly the accounts of Mr Atherton and Mr McDonald regarding the meeting on 8 January 2018, I am of the view that the aforementioned opportunities did not constitute an opportunity to respond to the reasons for dismissal. I would further observe, regarding the meeting on the 8th, there was limited opportunity for Mr Atherton to respond, if any opportunity was afforded at all:
Stephen responded that he would not resign, so I indicated that we would assist in making a payment of 3 month's pay, if he would agree to resign. Again, Stephen advised that he would not resign, and I responded that in these circumstances: conditions he required to feel safe at Airmaster, and previous history of aggressive behavior, he was leaving me no alternative but to terminate his employment[125].
Unreasonable refusal of a support person - ss.387(d)
[90] 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 discussions relating to dismissal.
[91] It was not clear on the evidence before me whether Mr Atherton had requested to have a support person present albeit that there was no evidence to suggest that one had been denied. It was perhaps the case that Mr Atherton was unaware that the meeting on 8 January 2018 would in effect be a disciplinary meeting and therefore did not think to request to have a support person present.
Warnings regarding unsatisfactory performance - ss.387(e)
[92] When considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, if the dismissal related to unsatisfactory performance by the person, the Commission must take into account whether the person had been warned about that unsatisfactory performance before the dismissal.
[93] Unsatisfactory performance is more likely to relate to the employee's capacity to do the job, than their conduct[126]. The Commission must take into account whether there was a period between an employee being warned about unsatisfactory performance, and a subsequent dismissal. This period gives the employee the opportunity to understand their employment is at risk and to try to improve their performance[127].
[94] Airmaster submitted that to the extent Mr Atherton's performance of work can be categorised as poor performance and not only poor conduct, it warned Mr Atherton of this and the need to improve. I have considered the evidence of Mr Corompt[128] in this respect given that he was Mr Atherton's line manager and I am unable to perceive how Mr Corompt's counselling constituted a warning or warnings.
[95] The Act requires me to have regard to whether or not Airmaster gave warning to Mr Atherton about the unsatisfactory performance as held to exist at a time prior to his dismissal. In the statutory context, a warning must have been conveyed (with an appropriate level of gravity) so as to leave Mr Atherton in no doubt that the employer anticipated change in one particular area of performance or another. Mr Atherton must have effectively been put on notice prior to the dismissal that Airmaster held genuine and substantial concerns about his performance.
[96] The nature of warnings in the context of ss.387(e) of the Act was discussed in the Full Bench decision in BlueScope Steel Limited v Sirijovski[129]. 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)
[97] Mr Cromopt's evidence while demonstrating that he counselled Mr Atherton does not show that he had provided a 'warning[s]' to Mr Atherton. What appears to be the most serious of Mr Corompt's feedback concerned Mr Corompt informing Mr Atherton that it was rude to send an email to a work colleague who did not have the expertise that Mr Atherton had and inform him to use Google. Mr Corompt said he said to Mr Atherton it was 'unacceptable'[130].
[98] It is said that ss.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 the unsatisfactory performance[131]. An employer however must warn the employee or person of the issue of unsatisfactory performance with the gravity of the warning being the vehicle for conveying the nature of the risk to which the person's employment is exposed[132]. I am not satisfied that the nature of the risk to Mr Atherton's employment was conveyed in the occurrences referred to in Mr Corompt's evidence.
[99] Mr McDonald referred to there being a 'cultural misfit' regarding Mr Atherton and the business. It is somewhat of a nebulous term, although to be fair to Mr McDonald it is a term that at times may be referred to and is not unfamiliar. However, it does not elucidate for the employee the issues that arise from their capacity, conduct or both. In the circumstances of this case there was no evidence before me to suggest that Mr Atherton had been warned about his cultural misfit with the business.
Impact of the size of the respondent on procedures followed and absence of dedicated human resources management specialist/expertise on procedures followed - ss.387(f)-(g)
[100] 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.
[101] Airmaster is a mid-size company with a dedicated Human Resources function. I find that it unlikely that its size or human resources function would impact on the procedures in effecting the dismissal.
[102] Amongst other considerations, it is necessary to consider the impact the dismissal had on the Applicant given all of the circumstances. This includes consideration as to whether the dismissal was harsh in the sense that it was disproportionate to the actual conduct found by the Commission[133].
[103] Further, a dismissal may, depending upon the overall circumstances be considered to be harsh on the person due to the economic and personal consequences resulting from being dismissed[134].
[104] In considering the question of what is 'harsh, unjust or unreasonable' the Commission is to ensure that 'a fair go all round' is accorded to both the employer and the employee[135].
[105] The consideration of whether dismissal was proportionate to the conduct should take into account all of the circumstances, including those that I address below; as will be seen, I consider that dismissal was disproportionate.
[106] I have taken account of the fact that Mr Atherton had only served three years with Airmaster. However, he had a good employment record so far as there was no history of written warning, formal performance management, and by that term I mean that Mr Corompt had not established with Mr Atherton a written performance management plan, and his performance reviews were generally positive. Further, while the inappropriateness of the Incident has been traversed in this decision, I am aware that Mr Atherton was afforded not dissimilar treatment regarding the Incident to that of his colleague Mr Repper.
[107] I appreciate that Mr Atherton is in his fifties and the evidence was such that it may be difficult for him to find work due to his age, although Airmaster refuted this. The emotional impact of the company's decision to dismiss him had been significant according to Mr Atherton. Although Mr Atherton's delay in obtaining medical assessment and treatment is acknowledged.
[108] 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. The decision to dismiss Mr Atherton in the circumstances such as they were at the relevant time was a heavy sanction; and I have found it was unjust, unreasonable, and in my view it was harsh.
[109] I have taken into account each of the matters specified in s.387 of the Act and have considered Mr Atherton's capacity and conduct in addition to the actions of Airmaster. I am not satisfied that Airmaster had a valid reason for Mr Atherton's dismissal and conclude that his dismissal was unjust, unreasonable, and harsh.
[110] Accordingly, I am obliged to consider whether an order with respect to remedy is warranted in the circumstances.
[111] The Act provides the following with respect to remedy:
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.
[112] Subsection 390(3) of the Act underscores the primacy of reinstatement as a remedy for an unfair dismissal.
[113] A decision of the Commission to order a person's reinstatement is a discretionary decision,[136] exercisable if the Commission is satisfied the person was relevantly protected, the person was unfairly dismissed and the person has made a s.394 application[137].
[114] A Commission decision to order the payment of compensation to a person is also a discretionary decision, but is only exercisable if, amongst other things, the Commission is satisfied reinstatement of the person is inappropriate and the FWC considers a compensation order is appropriate in all the circumstances of the case[138].
[115] Section 392 of the Act sets out the criteria to which regard must be had in determining any amount of compensation I ordered.
[116] In determining the amount of compensation to be ordered, the Act provides:
(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.
(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.
(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.
(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.
(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.
(6) The amount is the total of the following amounts:
(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.
[117] Mr Atherton urged the Commission to implement the remedy of reinstatement and placed reliance on the decision in Nguyen and Le v Vietnamese Community in Australia (Nguyen)[139], submitting that the circumstances in this matter are entirely different.
[118] Airmaster submitted that reinstatement would be inappropriate due to the loss of trust and faith in Mr Atherton as a holder of a senior leadership position within its Western Australian operations. Further, Airmaster believes that it would be unworkable to return Mr Atherton to his senior leadership role and restore an effective working relationship between him, Mr Corompt and Mr Repper. This is particularly the case given Mr Atherton's assertions that he felt that his safety was compromised or otherwise he felt unsafe to work with the pair.
[119] In all of the circumstances, including those that contributed to the dismissal and were traversed in the decision, I am satisfied there would be little prospect of re-establishing a productive and cooperative relationship in the absence of trust.
[120] It is the case that reinstatement is the primary remedy in the event of a finding of unfairness and as such Airmaster bears a substantial onus to demonstrate that reinstatement is not appropriate as distinct from undesirable or difficult.
[121] I have considered the decision in Nguyen and its reference to the observations of the Full Industrial Relations Court decision in Perkins v Grace Worldwide (Australia) Pty Ltd (Perkins)[140], in which it was said:
Trust and confidence is a necessary ingredient in any employment relationship. That is why the law imports into employment contracts an implied promise by the employer not to damage or destroy the relationship of trust and confidence between the parties, without reasonable cause: see Burazin v Blacktown City Guardian Pty Limited (Wilcox CJ, von Doussa and Marshall JJ, 13 December 1996, not yet reported). The implication is not confined to employers, it extends to employees: see for example Blyth Chemicals Ltd v Bushell [1933] HCA 8; (1933) 49 CLR 66 at 81-2 and North v Television Corporation Ltd (1976) 11 ALR 599 at 609. So we accept that the question whether there has been a loss of trust and confidence is a relevant consideration in determining whether reinstatement is impracticable, provided that such loss of trust and confidence is soundly and rationally based.
At the same time, it must be recognised that, where an employer, or a senior officer of an employer, accuses an employee of wrongdoing justifying the summary termination of the employee's employment, the accuser will often be reluctant to shift from the view that such wrongdoing has occurred, irrespective of the Court's finding on that question in the resolution of an application under Division 3 of Part VIA of the Act.
If the Court were to adopt a general attitude that such a reluctance destroyed the relationship of trust and confidence between employer and employee, and so made reinstatement impracticable, an employee who was terminated after an accusation of wrongdoing but later succeeded in an application under the Division would be denied access to the primary remedy provided by the legislation. Compensation, which is subject to a statutory limit, would be the only available remedy. Consequently, it is important that the Court carefully scrutinise any claim by an employer that reinstatement is impracticable because of a loss of confidence in the employee.
[122] In Nguyen it was noted the Act now refers to the concept of inappropriate rather than impractical, but it was considered that this did not detract from the relevance of the approach in Perkins and later decisions of the Commission adopted the approach set out in Perkins.
[123] In this matter I am satisfied that the trust that once existed between Mr Atherton and his employer was eroded when Mr Atherton asserted that in an ideal world his safety would be established by the dismissal of a colleague and a change of reporting line concerning his current manager.
[124] Further, I find that Mr Atherton's suggestion that his safety could be addressed by having a third person be present when in meetings with Mr Corompt demonstrates little respect for Mr Corompt and Mr Corompt's ability to act professionally.
[125] Mr Atherton held a senior leadership position within the Western Australia operations. As such, it would not have been unreasonable, where Mr Corompt is concerned, for Mr Atherton to have proffered a well-structured solution to how the situation between the two of them might have been remedied. Instead what Mr Atherton suggested was regrettably somewhat unsophisticated and lacked insight for an employee at his level.
[126] I am left with little doubt that Mr Atherton's response to Mr Rio, namely that he would like Mr Repper sacked and his reporting line changed from that of Mr Corompt has irreparably damaged both relationships. I am of the view that the loss of trust and confidence is soundly and rationally based.
[127] To compel Mr Atherton to return back to work with Airmaster would, in my view, lead to disharmony and thereafter a reduction in productivity of that business. Given the evidence before me it cannot be said that reinstatement is appropriate in the circumstance.
[128] I find an order for compensation is appropriate and will consider each of the criteria in s.392 of the Act to determine the quantum of the compensation.
[129] The 'Sprigg Formula', derived from the Australian Industrial Relations Commission Full Bench decision in Sprigg v Paul Licensed Festival Supermarket[141] (Sprigg), is the well accepted approach for assessing the amount of compensation under ss.392(2) of the Act. The Full Bench in Gloria Bowden v Ottrey Homes and Cobram and District Retirement Villages Inc (t/as Ottrey Lodge)[142] (Bowden) adopted the Sprigg Formula in the context of determining compensation under the Act.
[130] In Bowden the approach was described in the following way:
[33] The first step in this process - the assessment of remuneration lost - is a necessary element in determining an amount to be ordered in lieu of reinstatement. Such an assessment is often difficult, but it must be done. As the Full Bench observed in Sprigg:
'... we acknowledge that there is a speculative element involved in all such assessments. We believe it is a necessary step by virtue of the requirement of s.170CH(7)(c). We accept that assessment of relative likelihoods is integral to most assessments of compensation or damages in courts of law.'
[34] Lost remuneration is usually calculated by estimating how long the employee would have remained in the relevant employment but for the termination of their employment. We refer to this period as the 'anticipated period of employment'...[143]
[131] In Haigh v Bradken Resources[144], the Full Bench reaffirmed the principles set out within Sprigg, and in particular the steps needed to be taken in assessing compensation. The first of those steps is to estimate the amount the employee would have received, or would have been likely to receive if the employment had not been terminated; the second step being to deduct moneys earned since termination; the third being to make deductions for contingencies; fourthly, to calculate any impact of taxation; and fifthly, to apply the legislative cap.[145]
[132] The Full Bench in Double N Equipment Hire Pty Ltd t/a A1 Distributions v Alan Humphries[146] stated:
The identification of this starting point amount 'necessarily involves assessments as to future events that will often be problematic'[147]. Once this first step has been undertaken, various adjustments are made in accordance with s.392 and the formula for matters including monies earned since dismissal, contingencies, any reduction on account of the employee's misconduct and the application of the cap of six months' pay. This approach is however subject to the overarching requirement to ensure that the level of compensation is in an amount that is considered appropriate having regard to all the circumstances of the case.
[133] The notion of 'taking into account' a matter (such as those described in s.392 of the Act) connotes a genuine consideration of the relevant provision and the apportionment of the appropriate weight in the circumstances[148].
Remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed
[134] Mr Atherton received an annual salary of $135,000.00 per annum amounting to a monthly salary of $11,250.00 (gross).
[135] There is evidence before the Commission that Airmaster was dissatisfied with Mr Atherton's performance regarding his interaction with colleagues and external third parties, and his style of communication with others. Mr McDonald gave evidence that the Mr Atherton's performance had been the subject of discussion at the Board level and Mr Corompt provided detailed examples of counselling undertaken to address issues concerning Mr Atherton's email communication. Further, Mr Corompt was of the view that subsequent to the Incident he had warned Mr Atherton about his conduct in the Incident. I am of the view that there is sufficient evidence to infer that Mr Atherton's performance and conduct was not without issue and with time a formal process would have been initiated to address such deficits.
[136] The question of the anticipated period of employment can be a particularly vexed issue requiring an exercise of judgment on what would be reasonable considering all the circumstances. On the one hand Mr Atherton may point to an expectation of indefinite ongoing employment by Airmaster. On the other hand Airmaster can point to an employee who was demonstrating substandard performance or conduct regarding communication and who had been involved in an Incident that may have, in and of itself, resulted in the discontinuation of the employment. However, with regard to the Incident I am cognisant of the disciplinary outcome Mr Repper received.
[137] I am not satisfied that Airmaster had commenced a process of performance management with Mr Atherton that involved a performance management plan and regular meetings to determine progress against expected outcomes regarding his interaction and communication issues. In a business of Airmaster's size, and given it had its own internal human resources capability, it is reasonable to observe that procedural fairness would extend to such a process being initiated and completed when addressing the issues that beset Mr Atherton. While those issues may have been characterised as conduct issues, I am of the view nevertheless that the reasonable approach would be to have formalised the process Mr Corompt had initiated.
[138] Based upon the evidence before me and having regard to the assumption that any dismissal of Mr Atherton by Airmaster later than 9 January 2018 would be in accordance with proper procedure, I have reached the conclusion that Mr Atherton's employment would have continued for at least 4 months of the maximum compensation period. As result, I set the anticipated period of employment at 4 months.
[139] The remuneration that the Applicant would have received or likely to have received would include payment for the period worked on notice, or the payment received in lieu of notice[149]. Notice is payable at the full rate of pay for the hours the employee would have worked had the employment continued until the end of the minimum notice period[150].
[140] Airmaster submitted that Mr Atherton received three months' payment in lieu of notice. Under Mr Atherton's employment contract Airmaster was required to provide one months' notice. Given the additional payment in lieu of notice or what otherwise could be characterised as an ex gratia payment with a temporal association to the dismissal meant that up until 9 April 2018 Mr Atherton had not lost any monies.
[141] I have found that the anticipated employment period was four months and acknowledge that Airmaster has made payment equivalent to three months' payment in lieu of notice; I am therefore minded to reduce the compensatory amount accordingly. Mr Atherton received an annual salary of $135,000.00 per annum inclusive of car allowance, equalling $11,250.00 (gross per month). It follows that the equivalent of 3 months' salary will be deducted from the compensatory amount. This equates to a reduction of $33,750.00.
The effect of the order on the viability of the employer's enterprise
[142] During the course of the Hearing and in closing submissions both Counsel for Airmaster and Mr Mullally were given the opportunity to address remedy. Inevitably this included the opportunity to have particular regard to the effect of the order on the viability of the employer's enterprise. It is apparent that neither chose to do so.
[143] Given the paucity of evidence before me on this point I consider it a neutral factor.
Length of the person's service with the employer
[144] The Applicant had been in the employment for the Respondent from some three years. While not a lengthy period of service, it nevertheless lends support to the making of an order for compensation.
[145] It is noted generally in relation to orders for monetary compensation that payments in lieu of notice are also to be deducted in consideration of the length of service of an applicant, (also relevant to consideration of ss.392(2)(g)[151].
The efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal
[146] Airmaster opposed the submission of Mr Atherton that he had been actively looking for suitable employment and raised a salient point concerning the absence of further evidence before the Commission in this respect.
[147] The evidence of Mr Atherton was that in the first couple of weeks he was traumatised and still in shock from the dismissal[152] and that he had always looked for jobs via automated emails sent from Seek based on key words[153].
[148] When considering what would be reasonable for a person to do to mitigate her or his loss, based on the evidence before me I am not satisfied that Mr Atherton has made such effort. I have therefore reduced the amount of compensation ordered in this respect by 10% to reflect the lack of effort taken on the part of Mr Atherton.
The amount of remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for compensation
[149] Based on the evidence before me I am satisfied that Mr Atherton has been unable to generate an income during the period between the dismissal and the making of the order for compensation.
Any amount of income reasonably likely to be earned during the period between the making of the order and the actual compensation
[150] I am satisfied that Mr Atherton has been unable to secure employment and there is no reasonable expectation that he may obtain income of any kind between the making of the order of compensation and the actual compensation.
[151] I have considered Mr Atherton's behaviour concerning the Incident. It was unimpressive. However, given that he was, according to Mr Corompt warned at the time or otherwise instructed not to repeat the behaviour, and Mr Repper similarly was afforded the same disciplinary outcome, I do not consider there has been any misconduct which would require me to reduce the amount of compensation.
[152] I do not include any component by way of compensation for shock, distress or humiliation caused by the manner of the dismissal.
[153] The amount of compensation the Commission may order is capped. If the appropriate quantum of compensation initially assessed exceeds that cap then the Commission must reduce the amount to the amount of the cap.
[154] The Act stipulates that the compensation cap is the lesser of:
the amount of remuneration received by the person, or that he or she was entitled to receive (whichever is higher) in the 26 weeks before dismissal;
• half the amount of the high income threshold immediately before dismissal.[154]
[155] The high income threshold is defined in s.333 of the Act as an amount prescribed by, or worked out in the manner prescribed by, the Regulations. Regulation 2.13 sets out the manner in which the high income threshold is to be worked out. The steps in Regulation 2.13(3), particularly Step 1 and Step 2, refer to 'ordinary time earnings'. The Act defines 'earnings' such that they exclude contributions to a superannuation fund[155].
[156] Under ss.392(5) of the Act I am obliged to determine the amount worked out under ss.392(6) of the Act. The amount is calculated by reference to the 'total amount of remuneration' received by the person or to which the person was entitled (whichever is higher) for any period of employment with the employer during the 26 weeks immediately before dismissal. 'Remuneration' is not defined in the Act.
[157] Both ss.392(6) of the Act and ss.392(2) of the Act refer to 'remuneration' under Part 3-2.
[158] The meaning of 'remuneration' has been considered in various iterations of what is now the Act and with regard to differing legislative provisions. What appears clear from the decisions is that the term 'remuneration' has adopted a consistent meaning whereby superannuation is included.
[159] In Rofin Australia Pty Ltd v Newton[156] the Full Bench of the Australian Industrial Relations Commission considered that the employee's rate of remuneration included both annual salary and superannuation, the Full Bench stated:
Prior to the amendments made to the Act by the Workplace Relations and Other Legislation Amendment Act 1996 (the WROLA Act), the "salary cap" for the purposes of excluding non-award employees from the operation of the termination of employment provisions was expressed in terms of "relevant wages". The term now used is "remuneration", a term which denotes a broader concept than salary or wages. "Remuneration", in our view, is properly defined as the reward payable by an employer to an employee for the work done by that employee in the course of his or her employment with that employer. It is a term that is confined neither to cash payments nor, necessarily, to payments actually made to the employee. It would include non-pecuniary benefits and payments made on behalf of and at the direction of the employee to another person out of moneys otherwise due to that employee as salary or wages.
[160] Ross VP as he was then in Shorten and Others v Australian Meat Industry Holdings Pty Ltd[157] considered the meaning of 'remuneration' with regard to s.170EE of the WR Act referring to the cases of Ardino v Count Financial Group Pty Ltd[158], May v Lilyvale Hotel Pty Ltd[159] and Rigby v Technisearch Ltd[160]. Ross VP stated:
Plainly, the word 'remuneration' was chosen, for s 170EE(3), in order to denote a concept wider than wages. Non-monetary benefits are not wages: But they fall within the concept of remuneration.....
Accordingly the calculation of lost remuneration includes superannuation contributions and the value of non-pecuniary benefits such as the provision of a car_,_ or free board and/or meals...
[161] The Full Bench of Fair Work Australia in the decision of Tabro Meat Pty Ltd V Kevin Heffernan[161] has affirmed that superannuation forms part of 'remuneration' as that term is understood in ss.392(2)(c) of the Act.
[162] For the purpose of ss.392(5) of the Act, I am satisfied the amount is $11,086.87. In arriving at this amount I have considered that under Mr Atherton's employment contract he was entitled to superannuation contributions at 9.5%.
Any other matter that the Commission considers relevant
[163] I am satisfied that no other matters are relevant regarding my determination of the compensatory amount.
[164] After consideration of the foregoing issues, I find that Mr Atherton was dismissed and that it was unfair within the meaning of the Act.
[165] I find that reinstatement is not an appropriate remedy in this case and that compensation is appropriate. The calculation for compensation is set out in the following table.
Last six months amount of remuneration received by Mr Atherton = $67500.00
Half the amount of the high income threshold = $71,000.00
[166] For the reasons I have given earlier, and on the basis of the calculations completed, I order that Airmaster pay to Mr Atherton an amount of $11,086.87. In determining the amount for the purpose of the order I have taken into account all the circumstances of the case including the criteria set out in ss.392(2) of the Act.
[167] The total amount does not exceed the compensation cap applying at the time of dismissal.
[168] The amount ordered to be paid must be subject to ordinary taxation.
[169] The compensation is to be paid within 14 days from the date of the accompanying order[162] (as issued simultaneously with this decision).
Mr Patrick Mullally, Industrial Agent, for the Applicant.
[1] Exhibit R2 Witness Statement of Mr David Laurence Repper [49].
[3] Exhibit R6 Witness Statement of Ralph Rio.
[8] Exhibit R7 Supplementary Witness Statement of Ralph Rio pg. 27.
[10] Transcript PN 1295; Exhibit R9 [19] - [21]; Exhibit R2 [75]; Exhibit R4 [24].
[18] Exhibit R3 Supplementary Witness Statement of David Laurence Repper, Annexure 5, Email dated 10 November 2017 time stamped 9:51AM.
[19] Transcript PN492-493; Exhibit R3 Supplementary Witness Statement of David Laurence Repper, Annexure, 5 Email dated 10 November 2017 time stamped 9:51AM.
[21] Exhibit R3 Supplementary Witness Statement of David Laurence Repper, Annexure 5, Email dated 10 November 2017 time stamped 9:51AM.
[23] Ibid, Annexure, Email dated 10 November 2017 time stamped 9:51AM.
[24] Exhibit R3 Supplementary Witness Statement of David Laurence Repper, Annexure, 5 Email dated 5 December 2017
[38] Exhibit R8 Witness Statement of Mr Miles Corompt [63].
[44] Exhibit R2 Witness Statement of Mr David Laurence Repper [21].
[53] Exhibit R8 Witness Statement of Mr Miles Corompt [74].
[58] Transcript PN666, PN684 and PN686.
[60] Exhibit R6 Witness Statement of Ralph Rio [6].
[64] Exhibit R6 Witness Statement of Ralph Rio
[67] Exhibit R9 Supplementary Witness Statement of Ralph Rio Annexure FW: Meeting with Stephen Atherton.
[78] Exhibit R6 Witness Statement of Ralph Rio [55].
[88] Walton v Mermaid Dry Cleaners Pty Ltd (1996) 142 ALR 681, 685.
[89] Owen Sharp v BCS Infrastructure Support Pty Limited [2015] FWCFB 1033 [25].
[90] [2013] FWCFB 6191 [34].
[92] King v Freshmore (Vic) Pty Ltd [2000] AIRC 1019 [24]; B, C and D v Australian Postal Corporation T/A Australia Post [2013] FWCFB 6191 [34].
[93] Shepherd v Felt & Textiles of Australia Ltd [1931] HCA 21; (1931) 45 CLR 359 377-8.
[95] Ibid as cited in 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].
[100] Exhibit R8 [23]; Exhibit R6 [57]-[58]; Exhibit R2 [75]; Exhibit R4 [14] - [17]; Exhibit R1 [7(d)].
[102] Ibid [91], [92], [93], [94].
[113] Exhibit R6 Witness Statement of Ralph Rio [30].
[115] [1931] HCA 21; (1931) 45 CLR 359 at 373, 377-78.
[116] Closing Submissions of the Respondent [19].
[117] Parmalat Food Products Pty Ltd v Wililo [2011] FWAFB 1166; (2011) 207 IR 243 [24].
[118] Trimatic Management Services Pty Ltd v Daniel Bowley [2013] FWCFB 5160; Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137 151.
[119] Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137 at 151; Previsic v Australian Quarantine Inspection Services Print Q3730.
[120] Royal Melbourne Institute of Technology v Asher (2010) 194 IR 1 14-15.
[126] Annetta v Ansett Australia Ltd (2000) 98 IR 233 237.
[127] Johnston v Woodpile Investments Pty Ltd T/A Hog's Breath Café - Mindarie [2012] FWA 2 [58].
[128] Exhibit R8 Witness Statement of Mr Miles Corompt [89] - [94].
[129] [2014] FWCFB 2593 [36]-[42].
[130] Mr Ray Diamond v SSUT Pty Ltd T/A Bourbong Street Cellars [2015] FWC 816.
[131] Exhibit R8 Witness Statement of Mr Miles Corompt [92].
[132] Mr Ray Diamond v SSUT Pty Ltd T/A Bourbong Street Cellars [2015] FWC 816.
[133] Australia Meat Holdings Pty Ltd v McLauchlan (1998) 84 IR 1.
[134] Byrne v Australian Airlines Ltd (1995) 185 CLR 410 465.
[136] Ellawala v Australian Postal Corporation, Print S5109 [24].
[137] Gloria Bowden v Ottrey Homes Cobram and District Retirement Villages Inc. T/A Ottrey [2013] FWCFB 431 [15].
[140] (1997) 72 IR 186, 191.
[141] Print R0235, (1998) 88 IR 21.
[143] See also Ellawala v Australian Postal Corporation Print S5109 [34].
[146] [2016] FWCFB 7206 [17].
[148] Ms Diane Lewis v Glendale RV Syndication Pty Ltd T/A Glendale Care Bundaberg [2014] FWC 1086.
[149] Mr Anthony Callahan v Graphic Impressions [2014] FWC 437 [106].
[150] Subsection 117(2)(a) of the Act.
[151] Double N Equipment Hire Pty Ltd t/a A1 Distributions v Alan Humphries [2016] FWCFB 7206 [34].
[155] Subsection 332(2)(c) and (4) of the Act; Craig Ablett v Gemco Rail Pty Ltd [2010] FWA 8124.
[157] (1996) 70 IR 360 at 376.
[161] [2011] FWAFB 1080 [21].
Printed by authority of the Commonwealth Government Printer
Mr Stephen Atherton
Airmaster Australia Pty Ltd T/A Airmaster [2018] FWC 3109
(1996) 71 IR 201
(1998) 88 IR 408
(1998) 84 IR 1
(1933) 49 CLR 66
(1976) 11 ALR 599
(1996) 142 ALR 681
(1931) 45 CLR 359
(2004) 133 IR 458
(2010) 202 IR 17
(2011) 207 IR 243
(2000) 98 IR 137
(2010) 194 IR 1
(2000) 98 IR 233
(1995) 185 CLR 410
(1997) 72 IR 186
(1998) 88 IR 21
(1996) 70 IR 360
(1994) 57 IR 89
(1995) 68 IR 112
(1996) 67 IR 68