Fair Work Act 2009

s.394 - Application for unfair dismissal remedy

Application for an unfair dismissal remedy - Small Business Fair Dismissal Code - Other Dismissal - Construction of the Small Business Fair Dismissal Code with respect to Other Dismissal - Applicant dismissed for unauthorised absence - Dismissal was not consistent with Small Business Fair Dismissal Code - Applicant was unfairly dismissed - Compensation Awarded.

[1] Ms Lena Kotykhov (the Applicant) applies to the Fair Work Commission (the Commission) under s.394 of the Fair Work Act 2009 (the Act) for an unfair dismissal remedy with respect to the termination of her employment by Dealer Trade Australia Pty Limited (the Respondent). The Applicant worked on a part-time basis as an Operations Assistant from 17 April 2018 until the termination of her employment on 30 April 2019. The Applicant was dismissed for failing to attend work on 30 April 2019. The Applicant maintains that she had approval from her manager Mr Luke Horsfall, to swap a regular day off scheduled for Thursday 2 May and to take that day off on 30 April 2019.

[2] The matter has some procedural history. In her Form F2 Application the Applicant provided correct contact details and an ABN for the Respondent but named Mr Horsfall as her employer. In accordance with the usual processes of the Commission the application was served on Mr Horsfall. A blank Form F3 Employer Response was also provided with the application and it was requested that the Respondent complete that form and file it with the Commission.

[3] Upon receipt of the application the Chairman of Dealer Trade Holdings Limited & its international subsidiaries, Mr Jarrod Sierocki corresponded with the Commission indicating that Mr Horsfall was not the employer and that neither he nor Mr Horsfall would participate in conciliation irrespective of this fact on the basis that the dismissal of the Applicant was not unfair. That correspondence also provided contact details for a legal representatives in the event that the Commission "wish to become involved" in the matter and advised that all correspondence should be addressed to that legal representative "in the form of a claim." The Form F3 Response was not filed as requested.

[4] The file was allocated to me and my Associate corresponded with the parties indicating that a search of the ABN set out by the Applicant in the Form F2 indicated that it was for an entity known as Dealer Trade Holdings Pty Limited and that Mr Sierocki is a Director of that entity. The correspondence informed Mr Sieroki that the Commission was involved in the matter by virtue of having received an application for an unfair dismissal remedy and requested that the Applicant advise whether she sought to amend her application to name the Respondent as Dealer Trade Holdings Pty Limited. The matter was listed for a Mention/Directions Conference to deal with this and other issues.

[5] Prior to the Mention/Directions Conference the Applicant corresponded with my Associate indicating that she did seek to amend her Application by naming the Respondent as Dealer Trade Australia Pty Limited and providing a copy of her contract of employment indicating that this entity had employed her. Following the Mention/Directions Conference I issued an order amending the application so that the Respondent is Dealer Trade Australia Pty Limited. I did so on the basis that there was no issue taken with the fact that Dealer Trade Australia Pty Limited was the employer and relevant managers were aware of the application so that no unfairness resulted. I also issued directions requiring that the Respondent file and serve a Form F3 Response to the Application given Mr Sierocki's statement at the Mention/Directions Conference that he had not had time to complete it and his failure to indicate an intention to do so despite, the fact that Mr Sierocki had time to correspond with the Commission on a number of occasions setting out his views about various matters. None of that correspondence was a proper response to the application and gave no indication of the jurisdictional objection that the Respondent eventually raised.

[6] In the Form F3 Response which it was necessary to direct the Respondent to provide, it was indicated that the Respondent objected to the application on the basis that it asserted that it is a small business and that the dismissal of the Applicant was consistent with the Small Business Fair Dismissal Code (the Code). Regrettably the manner in which Dealer Trade Australia Pty Limited responded to a simple error in the application caused delay and unnecessarily complicated the matter given that there was no dispute that Dealer Trade Australia Pty Ltd employed the Applicant and had dismissed her and that at all times relevant managers of that Company were aware of the application and could have responded to it in a timely manner.

[7] Notwithstanding Mr Sierocki's title as Chairman of Dealer Trade Holdings Limited & its international subsidiaries the Applicant did not dispute that the Respondent has 8 employees and did so at the time she was dismissed. I am therefore satisfied and find that the Respondent is a small business employer within the meaning of the Act and that the Small Business Fair Dismissal Code (the Code) applied to the Applicant's dismissal.

[8] The dismissal was not a redundancy. The application was made within the period required in s.394(2) of the Act. It is also not in dispute that Ms Kotykhov is a person protected from unfair dismissal as defined in s.382 of the Act. The matter was dealt with by way of a hearing as it was considered that this was the appropriate course, having taken into account the matters set out in s.399 of the Act and the views of the parties.

[9] Initially the Respondent sought to be represented by a lawyer and a submission seeking permission under s. 596 of the Act was filed. At the hearing that submission was not pressed and the Respondent was represented by Mr Luke Horsfall and the Applicant represented herself. Evidence was given by the Applicant on her own behalf. Evidence for the Respondent was given by Mr Horsfall, the Respondent's Head of Sales and Mr Peter Hwang, Director.

[10] The Code has two limbs and covers dismissals on the ground of serious misconduct which justifies instant dismissal and dismissals for other reasons. The Respondent states that the Applicant was dismissed for persistently being late for work and that the events on 30 April 2018 were the last straw. In a termination letter provided to the Applicant on 30 April 2019 she was advised that her employment would end immediately and that she would be paid accrued entitlements and outstanding pay to the date of dismissal only. When she queried this the Applicant was paid four weeks in lieu of notice approximately one month after her dismissal.

[11] It is not contended by the Respondent that the dismissal was for serious misconduct and clearly such a contention could not properly be made given the reason for the dismissal. Accordingly, the Applicant was dismissed for conduct that was not serious misconduct as dealt with in the first limb of the Code and the second limb of the Code is relevant to determination of the issues in dispute.

[12] In unfair dismissal cases where the employer is a small business employer, the Commission must first consider whether the dismissal was consistent with the Code. As previously noted, the Code has two limbs: "summary dismissal" upon the ground of serious misconduct and "other dismissal" on the basis of the employee's conduct or capacity to do the job. The Code is not located in the Act or the Regulations. Rather it is governed by a Ministerial Declaration pursuant to s. 388(1) of the Act. The terms of the Code are as follows:

It is fair for an employer to dismiss an employee without notice or warning when the employer believes on reasonable grounds that the employee's conduct is sufficiently serious to justify immediate dismissal.

Serious misconduct includes theft, fraud, violence and serious breaches of occupational health and safety procedures. For a dismissal to be deemed fair, it is sufficient, though not essential, than an allegation of theft, fraud or violence be reported to the police. Of course, the employer must have reasonable grounds for making the report.

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

The employee must be warned either verbally, or preferably in writing, that he or she risks being dismissed if there is no improvement.

The small business employer must provide the employee with an opportunity to respond to the warning and give the employee a reasonable chance to rectify the problem having regard to the employee's response.

Rectifying the problem might involve the employer providing additional training and ensuring the employee knows the employer's job expectations.

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

A small business employer may be required to provide evidence of compliance with the Code if the employee makes a claim for unfair dismissal to Fair Work Australia.

Evidence may include a completed check list, copies of written warning(s), a statement of termination or signed witness statements."

[13] It has been observed by Members of the Commission that the provisions of the Code are "inelegantly expressed"[1] and "somewhat confusing",[2] and as Anderson DP observed in Hart v Forex 1 Pty Ltd ATF Trading Rental Trust[3], interpreting the requirements of the Code with respect to "Other Dismissal" - dismissal for reasons other than those justifying immediate or summary dismissal - is no straightforward task. I share those views.

[14] It is clear from the Explanatory Memorandum to the Act that the intent is to provide a simpler and more streamlined unfair dismissal regime for small business employers and to reduce the burden placed on small business employers by the provisions of the Act. In this regard the Code focuses on steps small business employers must take in order to effect a fair dismissal. If a dismissal is consistent with the Code it is deemed to be fair, and the more detailed and stringent provisions in s. 387 of the Act do not operate and are not considered. As Hampton C observed in Grigonis v Adelaide Coffee Company Pty Ltd[4]:

"In establishing the Fair Dismissal Code and the preliminary (jurisdictional) point associated with unfair dismissals in that context, the evident intention of Parliament was to establish a particular benchmark against which small business unfair dismissals would be initially considered. The question of fairness is to be assessed having regard to a modified set of considerations that recognise the more informal nature and circumstances of small business and the needs of employees."[5]

[15] In the terms of the Code dealing with "Other Dismissal" the drafters included a reference to "valid reason". The first sentence of that part of the Code requires that the employee be "...given a reason why he or she is at risk of dismissal". The second sentence requires that: "The reason must be a valid reason based on the employee's conduct or capacity to do the job." Consideration of whether a reason is valid is a separate consideration to the requirement that the employee be given a reason for dismissal although the reference to valid reason is a reference to the reason given to the employee.

[16] In relation to the reason being given to the employee, the language in the first sentence of the Code explicitly requires that this occur before a decision to dismiss has been made. That sentence refers to the employee being given a reason why he or she is "at risk of being dismissed". These provisions can be contrasted with those which apply when the fairness of a dismissal is being assessed under s. 387 of the Act. Whether an employee is notified of a reason for dismissal as provided in s. 387(b) is a consideration that is weighed in the overall assessment of whether a dismissal was unfair and a finding that this step was not taken will not necessarily be fatal to a finding that the dismissal was fair.

[17] It appears from the terms of the Code dealing with "Other Dismissal" that if the employee is not given a valid reason for dismissal prior to the dismissal being effected, the dismissal will not be consistent with the Code. It is axiomatic that an employee cannot respond to a reason for dismissal if he or she is not informed of that reason before the dismissal is effected and the employee is given an opportunity to respond. The requirement that the reason be given before a dismissal is effected is consistent with the later requirements of the Code in relation to warnings and opportunity to respond. The effect is that under the Code the employer is stuck with the reason given to the employee and cannot rely on another reason including a reason which may not have been known at the time of the dismissal.

[18] It is also the case that the requirement that the reason is a valid reason based on the employee's conduct or capacity to do a job is not expressed subjectively, on the basis of the view or belief of the employer on reasonable grounds. This can be contrasted with the "Summary Dismissal" part of the Code which refers to the belief of the employer on reasonable grounds (a subjective consideration) rather than whether in fact the conduct occurred and it was conduct that justified summary dismissal (an objective consideration).

[19] The terms "valid reason", "capacity" and "conduct" have well-established meanings in the context of legislation governing unfair dismissal and have been used in legislation which pre-dates the Code. I can see no basis for giving these terms a different meaning. The absence of reference in the "Other Dismissals" section of the Code to the reasonable belief of the employer as to the validity of the reason for dismissal is a further indication that the term should be given the same meaning as it has in s. 387(a) of the Act - a reason that is objectively sound, defensible and well founded and which justifies dismissal. Such a construction is not inconsistent with the legislative intent of the Code as evidenced by the Object of Part 3-2 of the Act in which the Code appears, which includes the needs of employers and employees and the intention to afford a "fair go all round".

[20] The requirements that there be a valid reason for dismissal and that the employee is informed of that reason before dismissal also imply that any response provided by the employee be considered by the employer before deciding to dismiss the employee. Where an employer cannot provide evidence that the response was considered, there may be difficulty in establishing the validity of a reason for dismissal particularly where the response provides an explanation for the conduct or capacity issue which led to the dismissal. This is also consistent with the provisions of the Code in relation to warnings which state that any response to a warning made by the employee should be a matter to which the employer has regard.

[21] The provisions of the Code in relation to warnings are also problematic. Section 387 of the Act starts by requiring consideration of the reason for dismissal including whether it was valid; whether the person was notified of that reason; and whether the person was given an opportunity to respond to the reason for dismissal. Warnings come into play after the matters relating to the reason for dismissal have been considered and where that reason relates to unsatisfactory performance.

[22] The provisions in s. 387 of the Act can be contrasted with those in the Code dealing with dismissal for reasons of conduct or capacity (other than reasons justifying summary dismissal). The provisions of the Code jump from the reason for dismissal being given to the employee and the requirement that the reason be valid, to consideration of whether the employee has been warned about the risk of dismissal if there is no improvement and has been given an opportunity to respond to the warning. This can be contrasted with the provisions in s. 387 of the Act which commence with the requirement that there be a valid reason for dismissal and that the person be notified of the reason and given an opportunity to respond where the reason relates to conduct or capacity.

[23] The confusion is exacerbated by the terms of the Code relating to opportunity to respond. The opportunity to respond which is required by the Code is "an opportunity to respond to the warning" rather than an opportunity to respond to the reason for dismissal. These terms are found in the last paragraph of the section of the Code dealing with "Other Dismissal".

[24] More problematically it is not clear whether the Code requires that the employee be warned on each occasion that conduct which may result in dismissal occurs or that an earlier warning that the employee risks dismissal if certain conduct is repeated or does not improve, will be sufficient to meet this requirement in the Code. If this construction is adopted an employee could be dismissed for repeating conduct about which he or she had previously been warned without any further discussion or opportunity to respond being provided. It is also not clear whether warnings must relate to particular conduct with which the employer takes issue and that where the employee engages in different conduct that the warning process must be repeated.

[25] On one possible view, the wording of the Code in relation to "Other Dismissals" suggests that on each occasion that an employee's capacity or conduct places the employee at risk of dismissal, the employer is required to warn the employee of that risk, provide the employee with a reasonable opportunity to respond to the warning and give the employee a reasonable opportunity to improve. Another possible view is that the intention is that the term "warning" is synonymous with "reason for dismissal" and that it will be sufficient for the employer to give the employee a reason for dismissal and an opportunity to respond to that reason if the employee has been previously warned about conduct or capacity and given an opportunity to improve notwithstanding that the warning may have related to conduct of a different kind or a different issue of capacity.

[26] For the purposes of considering whether a dismissal is consistent with the provisions of the Code relating to "Other Dismissal" I am prepared to proceed on the basis that:

1. Before dismissing an employee for reasons of conduct or capacity (other than those justifying summary dismissal) the employer must give the employee a reason why he or she is at risk of being dismissed.

2. The reason must be a valid reason (in the sense that it is sound, defensible and well founded and justifies dismissal) based on the employee's conduct or capacity.

3. Conduct includes an omission[6] and capacity is the employee's ability to do the job as required by the employer[7] and also includes the employee's ability to do the work he or she was employed to do.[8]

The employer must give the employee an opportunity to respond to the reason for dismissal before dismissing the employee.

The requirement that there be a valid reason for dismissal means that some consideration should be given to the response the employee provides. This will generally be required when the Commission is assessing whether the reason for dismissal was valid.

The employee must have been warned that he or she is at risk of being dismissed either for similar conduct or capacity issues or that the issue that is the subject of the warning has generally placed the employee's employment at risk and that any repetition or further conduct or capacity issues will result in dismissal.

If the employee has previously engaged in conduct that has placed his or her employment at risk and has been warned in relation to it there is no requirement that a further warning be given and it will be sufficient if the employee is notified that the employer believes that the same conduct or further conduct that places the employee's employment at risk has occurred and gives the employee an opportunity to respond before dismissing the employee.

The employee must have been given a reasonable opportunity to improve his or her performance prior to the dismissal being effected which may include the employer providing additional training and ensuring that the employee knows the employer's job expectations.

An employee may request to have another person present to assist in discussions in circumstances where dismissal is possible provided that person is not a lawyer acting in a professional capacity. The employer is not required to offer a support person.

[27] This construction of the provisions of the Code dealing with "Other Dismissals" is consistent with the intent of the Code and the Object of Part 3-2 of the Act. The effect is that the Code in relation to "Other Dismissals" is a more streamlined or minimalist version of the general provisions in s. 387 of the Act. Provided that a dismissal is consistent with the Code the Commission cannot rely on other grounds to find that the dismissal is unfair. In contrast, under the general provisions in s. 387 of the Act the Commission has discretion to find that a dismissal that is for a valid reason and/or is procedurally fair, is nonetheless unfair for reasons such as the consequences for the personal and economic situation of the employee or because there are other mitigating circumstances that outweigh the reason for the dismissal or the manner in which it was carried out.

[28] This construction also affords a fair go all around. It results in a balance between dismissal for serious misconduct, which are considered on the subjective basis of whether the employer had reasonable grounds for believing that the conduct occurred, with dismissals for other reasons, which are considered on the objective basis of whether those reasons were valid reasons for dismissal. Small business employers benefit from an abridged set of requirements which if complied with will result in a dismissal being deemed fair and in return must comply with basic principles of substantive and procedural fairness.

[29] The quid pro quo is that small business employers dismissing employees for reasons of conduct or capacity must have valid reasons for doing so and can only rely on the reasons given to the employee before the dismissal was effected to establish compliance with the Code. Employees can be fairly dismissed for valid reasons related to their conduct and capacity provided the employer can establish that the employee had a reasonable opportunity to respond and was given a reasonable chance to rectify the conduct or capacity issue. To be given an opportunity to respond before a decision with adverse consequences is made is a fundamental tenet of natural justice and procedural fairness and as Kirby J eloquently put the matter in his judgment in Allesch v Maunz[9]: "Even the Almighty reportedly afforded Adam such an opportunity before his banishment from Eden".[10]

[30] The construction of the Code I favour is also consistent with the checklist which is referenced in the part of the Code dealing with Procedural Matters. It appears that the checklist has been promulgated by the Fair Work Ombudsmen (FWO) and the version currently found on the site of the FWO is said to have been updated 1 January 2011. It bears the Australian Government Coat of Arms. The Checklist is referred to in the "Procedural Matters" part of the Code as a means by which employers may provide evidence of compliance with the Code. The terms of the Checklist in relation to "Other Dismissals" are as follows:

"8. Did you dismiss the employee because of the employee's unsatisfactory conduct, performance or capacity to do the job?. Yes. No

a. Did you clearly warn the employee (either verbally or in writing) that the employee was not doing the job properly and would have to improve his or her conduct or performance, or otherwise be dismissed? Yes. No

b. Did you provide the employee with a reasonable amount of time to improve his or her performance or conduct? If yes, how much time was given? Yes. No

c. Did you offer to provide the employee with any training or opportunity to develop his or her skills? Yes. No

d. Did the employee subsequently improve his or her performance or conduct? Yes. No

e. Before you dismissed the employee, did you tell the employee the reason for the dismissal and give him or her an opportunity to respond? Yes. No

f. Did you keep any records of warning(s) made to the employee or of discussions on how his or her conduct or performance could be improved? Please attach any supporting documentation. Yes. No".

[31] If a dismissal was consistent with the Code then the dismissal is fair or the employee has not been unfairly dismissed and the dismissal is not considered against the criteria in s. 387 of the Act. If the Commission is not satisfied that the dismissal was consistent with the Code, the Commission must then consider whether the dismissal was unfair because it was harsh, unjust or unreasonable on the basis of the criteria in s.387 of the Act which are as follows:

In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the FWC must take into account:

(a) whether there was a valid reason for the dismissal related to the person's capacity or conduct (including its effect on the safety and welfare of other employees); and

(b) whether the person was notified of that reason; and

(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and

(d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and

(e) if the dismissal related to unsatisfactory performance by the person - whether the person had been warned about that unsatisfactory performance before the dismissal; and

(f) the degree to which the size of the employer's enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(h) any other matters that the FWC considers relevant."

[32] Applying those criteria, a dismissal may be:

Harsh - because of its consequences for the personal and economic situation of the employee, or because it is disproportionate to the gravity of the misconduct;

Unjust - because the employee was not guilty of the misconduct on which the employer acted; and/or

Unreasonable - because it was decided on inferences that could not reasonably have been drawn from the material before the employer.[11]

[33] I turn now to consider whether the dismissal of the Applicant in the present case was consistent with the Code.

3. WAS THE DISMISSAL CONSISTENT WITH THE CODE?

3.1 Was the Applicant given a reason why she was at risk of dismissal before being dismissed?

[34] The Applicant was dismissed for her conduct in failing to report for work on 30 April 2019. On the evidence before me I am not satisfied that the Applicant was given a reason why she was at risk of dismissal before her dismissal was effected. The evidence is that on 30 April 2019, the Applicant received a letter by email from Mr Horsfall which informed her that her employment was terminated with immediate effect for the following reason:

"You have been advised on numerous occasions that showing up late or not at all is unacceptable. You have previously been sent home due to being late which was also followed up by me telling you in writing on Wednesday 6th Feb that your employment would not continue if you continue with such behaviour. today, Tuesday 30 April 2019 you have not shown up for work at all and have made no attempt to communicate with the business.

We consider that this performance is unsatisfactory and have decided to terminate your employment."

[35] Although the Applicant had previously been notified that continuing lateness or not showing up at work would result in the termination of her employment, she was not informed that on 30 April 2019 Mr Horsfall had concluded that her absence was a repetition of previous conduct. In short, the evidence establishes that the decision to dismiss the Applicant had already been taken before she was notified of the reason for dismissal and the reason was not conveyed to her before she was dismissed. Accordingly the Applicant had no opportunity to respond to the reason for dismissal.

3.2 Was there a valid reason for the Applicant's dismissal

[36] As previously discussed, a valid reason for dismissal is one that is sound, defensible and well founded. The concept of validity brings with it the requirement that the Commission be satisfied on the balance of probability that the conduct in fact occurred and that was conduct to which dismissal was a sound, defensible and well-founded response. I accept the general proposition that repeated absenteeism or lateness on the part of an employee without a reasonable excuse, is a valid reason for dismissal. However, I am unable to accept that the Applicant in the present case was in fact absent without permission or reasonable cause.

[37] The Applicant's usual hours of work were arranged so that she had every Thursday off. It is not in dispute that the Applicant was absent from the workplace on 30 April 2019. The Applicant states that she has never failed to attend work without reason and has not been late since being warned about this matter by text message on 6 February 2019. The Applicant also states that she requested three days of leave on a computer program operated by the Respondent referred to as Xero being Wednesday 24 April, Friday 26 April and Monday 29 April 2019. The period of leave also included Thursday 26 April which was the Anzac Day public holiday. The Applicant further states that she made a verbal request to Mr Horsfall for permission to swap her scheduled day off on Thursday 2 May with Tuesday 30 April and that Mr Horsfall agreed to that request. The Applicant could not recall when she made the request.

[38] In her oral evidence the Applicant contended that the Xero program does not contain a facility to record instances where she swapped a day off and that she had previously arranged swaps by seeking verbal permission from Mr Horsfall. In support of this the Applicant tendered a text message exchange with Mr Horsfall which took place on 5 November 2018. In that exchange Mr Horsfall sent a text message to the Applicant querying whether she was on leave on that date. The Applicant responded stating: "No, last week I verbally confirmed with you it was okay to swap my Monday and Tuesday so I can come to the Melbourne cup." Mr Horsfall's response was as follows: "oh that's right, all good, see u tomorrow". The Applicant also said that she had never been requested to send a calendar invite to Mr Horsfall to confirm when she sought to swap a day off for another day and that she had not done this in the past.

[39] The Applicant also tendered an email she sent to Mr Horsfall upon receipt of the letter terminating her employment. That email included the following:

I believe that I have given sufficient notice. On the 18th of March you approved three days leave (24/04/19, 26/04/19 and 29/04/19) for my cruise. I also asked to swap my Thursday (02/05/19) for the Tuesday (30/04/19), which you verbally agreed. I have previously done this with verbal confirmation from you. For example on the 5th of November 2018 you messaged me asking if I was on leave, however I swapped my Tuesday off for a Monday and confirmed with you prior...."

[40] The email concluded with a question as to whether the Applicant would be paid four weeks in lieu of notice in accordance with her contract of employment. Mr Horsfall's response which was also tendered by the Applicant did not engage with the substance of the Applicant's correspondence but simply indicted that she would be paid four weeks in lieu of notice in accordance with her employment contract.

[41] Mr Horsfall stated in his evidence that the Applicant was dismissed for failing to show up at work on 30 April and that he considered that her non-attendance was an escalation of previous unsatisfactory conduct relating to being repeatedly late for work. Mr Horsfall also stated that he does not have any recollection of the Applicant requesting to be absent from work on 30 April 2019. In his oral evidence Mr Horsfall agreed that the Applicant had previously swapped days off for other days but maintained that he had no recollection of the Applicant having requested to swap her day off on 2 May 2019 for 30 April 2019. Mr Horsfall agreed that the Xero system does not allow swapping of days off to be recorded but maintained that he had always requested that he be sent calendar invites in relation to swapping of days off and had instructed the whole team to do this.

[42] Mr Horsfall also agreed that he knew that the Applicant was on annual leave for the period from 24 April and had gone on a cruise. Mr Horsfall further agreed that there were no incidents of the Applicant being late for work or failing to attend work between 6th February 2019 when she was warned about lateness and 30 April 2019 when the Applicant was dismissed. Mr Hwang's evidence was that he does not recall the Applicant asking to swap her day off. Mr Hwang also said that staff generally send calendar invites to Mr Horsfall in relation to leave.

[43] After considering the evidence I am unable to accept that the Applicant was absent without permission on 30 April 2019. I have reached that conclusion for the following reasons. The Applicant had previously sought verbal agreement from Mr Horsfall to swap her days off. In the text message exchange with the Applicant in November 2018 Mr Horsfall made no mention of any requirement that the Applicant send him a calendar invite about swapping days off. If that was required it would have been a simple matter for Mr Horsfall to include such an instruction in his text message to the Applicant. Mr Horsfall's text message exchanges with the Applicant when he warned her about her lateness were robust and I do not doubt that if the calendar invite was a requirement to confirm a swapped day off, Mr Horsfall would have said so at that time. Furthermore, Mr Horsfall issued a general warning to staff in October 2018 about notification of absences and did not include this requirement.

[44] It is also the case that the alleged unauthorised absence immediately followed a period of annual leave in circumstances where Mr Horsfall knew that the Applicant was on a cruise. The Applicant corresponded contemporaneously with Mr Horsfall when she was told that she had been dismissed for an unauthorised absence and provided an explanation for her absence. Mr Horsfall did not engage with the Applicant's explanation or have any discussion with her. Mr Horsfall simply informed the Applicant that she should return her access card and that she would receive four weeks wages in lieu of notice. In his evidence to the Commission Mr Horsfall accepted that he had received the Applicant's email but gave no explanation as to whether he had considered its contents. Further, Mr Horsfall did not deny that he had verbally approved the Applicant swapping her day off but simply said in his evidence that he did not remember agreeing to this.

[45] As noted below, I have also had regard to the fact that the Applicant had been warned about her lateness in February 2019 and had responded positively to the warning by indicating that she would sort herself out, apologising for inconvenience caused by her lateness and stating that she was anxious to maintain her employment. In those circumstances it is improbable that the Applicant would simply not report to work following her annual leave and it is more probable than not that she did obtain verbal permission from Mr Horsfall to swap her day off. I therefore prefer the evidence of the Applicant to that of Mr Horsfall. In doing so I do not find that Mr Horsfall was dishonest but rather that it is more probable than not that the Applicant asked to swap her day off and Mr Horsfall did not recollect that this request was made.

[46] On balance the Respondent has not established that there was a valid reason for dismissal being a reason that was valid, defensible or well-founded and I am unable to be reasonably satisfied that the conduct for which the Applicant was dismissed occurred.

3.3 Was the Applicant warned that she risked being dismissed?

[47] The Act does not mandate any particular number of warnings that must be given to an employee prior to dismissal or the form that a warning must take so that it meets the requirements in the Code. Although the Code states that it is preferable that an employee be given a warning in writing, a verbal warning may be sufficient to comply.

[48] In the present case I accept that the Applicant was warned about her timekeeping by text message sent to her by Mr Horsfall on 6 February 2019 at 10.17 am. In that text message Mr Horsfall said:

"Just so you are very clear, you will be fired if you can't be consistently on time. It is a very simple requirement of any job. Just get your bus/train timetable sorted out. Everyone else that catches a train or bus manages to do it perfectly 99% of the time. If you just don't want to work at DT then that is fine. Move on, no hard feelings. It's up to you."

[49] The Applicant responded to the text message as follows:

"I completely understand. I will sort myself out. I will still aim to arrive earlier. I am very thankful and proud to be working with Dealer Trade and Car Record and wish to continue for as long as I can. I apologise for the inconvenience I am causing but sincerely hope that I can turn this image of me around."

[50] Mr Horsfall responded to the Applicant in the following terms:

"Lena, we like you. Your image is fine. Just be on time and you can work at DT as long as you want :)"

[51] Mr Horsfall also tendered an email sent to all employees on 16 October 2019. That email stated:

Over the past couple of months we have had an increasing rate of instances where staff have been happy to roll in to the office at a range of times well after the expected time of 8.15am.

With the aim of being very clear and transparent, please read the below and be very aware of expectations around being employed here.

8.15am is the expected time to arrive so you can be ready to actually start working at 8.30am. Make your coffee, have your breakfast, check your Facebook or whatever else it is you like to do prior to commencing work at 8.30am.

I am well aware that on the very odd occasion your train may have broken down, there has a been a traffic accident or a range of other things that can happen in day to day life, however be aware that as a team we expect a certain level of communication to come from any staff member that isn't able to arrive at work by 8.15am. It is required that your employer knows where you are due to health and safety regulations and also just out of basic respect.

- If you are sick - communicate this prior to 7.30am. Text or call Jarrod or myself.

- If you are running late due to travel issues - communicate this any time prior to 8am. Text or call Jarrod or myself.

- If you are late for whatever reason it is expected you will make up the time at the end of the day or be happy to take a reduction in pay for that time.

If you have a special circumstance such as with Sandy who has kids that require certain things to happen with day care at 8.30am and can't be in usually until 8.45am then that is ok also. Feel free to discuss this with us at anytime if your circumstances change and you require some type of flexibility.

If anyone is still unclear about our employment expectations please come and speak to me with any questions you have.

[52] I therefore accept that if it was established on the balance of probabilities that the Applicant was absent from work without reasonable excuse or explanation, that the warnings she had previously received in relation to her timekeeping would have been sufficient to ensure that this requirement was met. For the reasons set out above I do not accept that the Applicant was so absent and accordingly the fact that she had previously been warned about this matter is not relevant to whether the dismissal was consistent with the Code.

3.3 Was the Applicant provided with an opportunity to respond to the reason for her dismissal?

[53] I have previously found the Applicant was warned about lateness. It is also the case that the Applicant had an opportunity to respond to the initial warning about lateness and provided a response. However, the Applicant was not afforded with an opportunity to respond to the reason for her dismissal. In circumstances where the Applicant had previously been warned about arriving to work late, if she did fail to report to work on 30 April it would arguably not have been necessary to provide a further warning and an opportunity to respond.

[54] However, for the reasons set out above, the Applicant did not fail to report to work on 30 April 2019 and was not absent on that date without permission. Had Mr Horsfall emailed or telephoned the Applicant and warned her that he was considering terminating her employment due to a further failure to report for work, the Applicant might have successfully defended her absence by reminding him that she had swapped her day off. The Applicant did provide an explanation for her absence but had no opportunity to do this before the decision to terminate her employment was communicated to her. Furthermore, Mr Horsfall failed to engage with that explanation and to advise the Applicant of the basis for rejecting it.

[55] Even at the point that this application was heard, Mr Horsfall did not establish that the Applicant was absent on 30 April without permission. Notwithstanding the earlier warning, the Applicant was not notified that she was at risk of dismissal when she was absent from work on 30 April 2019 so that she had an opportunity to respond to the reason for dismissal and as a result the Code was not complied with.

[56] Accordingly I find that the Applicant's dismissal was not consistent with the Code and it is necessary to consider whether it was unfair on the basis that it was harsh, unjust or unreasonable considered against the criteria set out in s. 387 of the Act. I turn now to consider those matters.

[57] Turning to the criteria in s. 387 of the Act, for the reasons set out above, I am not satisfied that there was a valid reason for the Applicant's dismissal within the meaning in s. 387(a) of the Act on the basis that I do not accept that the Applicant was absent from work on 30 April without reasonable cause. While the Applicant was notified of the reason for her dismissal the requirement in s. 387(b) has not been met on the basis that the notification occurred after the dismissal took effect and the Applicant was thereby denied the opportunity to respond to the reason for dismissal which was on the basis of conduct so that the requirement in s. 387(c) was also not met.

[58] Given that there was no discussion with the Applicant about the reason for her dismissal she did not have an opportunity to request a support person and the criterion in s. 387(d) is not relevant. In relation to s. 387(e) the Applicant was warned about timekeeping prior to her dismissal and this is a matter I have considered. With respect to s. 387(f) and (g) the Respondent is a small business and I have had regard to this in my overall assessment of whether the dismissal was unfair. Notwithstanding that the Respondent consulted with a lawyer after the Applicant filed her unfair dismissal application, the Respondent did not have access to dedicated human resource management expertise and I have made appropriate allowances for this in my assessment of whether the dismissal was unfair.

[59] I also consider, pursuant to s. 387(h) that there are other matters relevant to consideration of whether the Applicant's dismissal was unfair. The letter informing the Applicant of the termination of her employment indicated that she would be paid only to the time of dismissal. When the Applicant queried the apparent indication that she would not receive payment in lieu of notice, the Respondent informed her that the four week notice period under her contract of employment would be paid to her. However, the Respondent did not pay this amount until four weeks after the Applicant's employment ended. The additional hardship that this would have caused the Applicant is a matter I have weighed in the assessment of whether her dismissal was unfair.

[60] On balance and after weighing the criteria in s. 387 of the Act, I am satisfied and find that the Applicant was unfairly dismissed. The dismissal was unjust because at the point the decision to dismiss the Applicant was made and effected, she had not been given an opportunity to respond to the reason for dismissal. The dismissal was unreasonable because Mr Horsfall concluded that the Applicant was absent without permission or reasonable excuse without considering her explanation for her absence and decided to dismiss the Applicant on the basis that he drew inferences about the absence that could not reasonably have been drawn from the material before him.

[61] Having decided that the Applicant was unfairly dismissed it is necessary to determine whether she should have a remedy. In relation to remedy, s. 390 of the Act provides as follows:

"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."

[62] For reasons set out below, s. 391 of the Act in relation to remedy is not relevant. In relation to compensation s. 392 of 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."

[63] Pursuant to ss. 390(1)(a) and (b) of the Act, I am satisfied that the Applicant was a person protected from unfair dismissal and that she has been unfairly dismissed. The Applicant has made an application for an unfair dismissal remedy under s. 394 of the Act and in my view should have a remedy for her unfair dismissal. The Applicant does not seek reinstatement. Given the response to the Application and the gratuitous comments made about the Applicant in email correspondence from Mr Sierocki responding to the Application I am of the view reinstatement is not an appropriate remedy and I have no doubt that the relationship cannot be re-established. Accordingly, I am satisfied and find that reinstatement is not appropriate. The Applicant has now found alternative employment albeit of a casual nature.

[64] I also consider that an Order for compensation is appropriate. I turn now to the particular criteria I am required to consider in deciding the amount of compensation to be awarded to the Applicant for her unfair dismissal.

The effect of the order on the viability of the Respondent - s. 392(2)(a)

[65] In relation to the consideration in s. 392(2)(a) there is no evidence that the Order for compensation in this matter that I intend to make will have a detrimental financial impact on the Respondent or that the Company is suffering from financial incapacity such that it could not meet the terms of such an Order.

[66] It is not in dispute that the Applicant had been employed by the Respondent for just over one year when she was dismissed.

Remuneration the Applicant would have or would likely have received - s. 392(2)(c)

[67] The Applicant stated in her oral evidence that she started a new job at the beginning of June 2019. Having observed the parties at the hearing I am of the view that if the Applicant was not dismissed she would not have remained in employment for more than two months. The Applicant had been warned about her conduct and I do not doubt that the Respondent would have taken issue with some other matter.

[68] The Applicant was employed on a part-time basis. The Applicant's contract of employment tendered by her at the hearing indicates that her annual salary was $31,340 per annum exclusive of superannuation, paid on a monthly basis. This equates with the Applicant's oral evidence that her earnings were approximately $2,600 per month. Had she remained in employment for a further period of two months the Applicant would have earned an amount of $5,238.33 in wages and $497.64 in superannuation.

The Applicant's efforts to mitigate loss - s. 392(2)(d)

[69] The Applicant gained employment at the beginning of June 2019. Given the period I have assessed that the Applicant would have remained in employment I make no deduction for any failure to mitigate loss.

The amount of any remuneration earned since dismissal - s. 392(2)(e)

[70] Given the period I have assessed that the Applicant would have remained in employment and that the Applicant did not commence her new employment in that period, this consideration is not relevant.

The amount of any income reasonably likely to be earned during the period between the making of the order for compensation and the actual compensation - s. 392(2)(f)

[71] For the reasons set out above, this consideration is also not relevant.

Any other matter that the FWC considers relevant - s. 392(2)(g)

[72] There are no other matters I consider relevant.

[73] In all of the circumstances I make no deduction for misconduct given that I have found that the Applicant did not engage in the conduct for which she was dismissed.

[74] In summary I find as follows:

1. An order for the payment of compensation would not affect the viability of the Respondent's business (s.392(2)(a)).

2. The length of the Applicant's service favours the making of an order for compensation and no diminution of any amount that might otherwise be determined is warranted because of this circumstance (s.392(2)(b)).

3. But for her dismissal the Applicant would have received a further amount of $5,238.33 less tax according to law and superannuation contributions of $497.64 (s.392(2)(c)).

4. I make no deduction for contingencies.

5. I make no deduction on account of a failure to mitigate loss (s.392(2)(d)).

6. I make no deduction for remuneration earned since dismissal (s.392(2)(e)).

7. I make no deduction for income likely to be earned during the period between the making of the order and the actual compensation (s.392(2)(f)).

8. I will make no deduction for misconduct (s.392(3)).

9. There is no requirement to cap the amount of compensation ordered.

[75] I have determined to award Ms Kotykhov an amount of compensation in the amount of $5,238.33 less tax according to law and $497.64 in superannuation contributions. An Order will issue with this decision requiring that Dealer Trade Australia Pty Limited pay these amounts to Ms Kotykhov within 14 days of the date of this decision.

[1] Hart v Forex 1 Pty Ltd ATF Trading Rental Trust [2018] FWC 942 per Anderson DP at [84].

[2] Puri v Sydney Strata Pty Limited [2012] FWA 7317 per Watson VP at [5].

[4] [2011] FWA 1586.

[6] Fair Work Act 2009 s. 12.

[7] Walton v Mermaid Dry Cleaners Pty Limited [1996] IRCA 267; (1996) 142 ALR 681 at 684.

[8] Webb v RMIT University [2011] FWAFB 8336 at [6].

[10] (2000) 203 CLR 172 at 184 citing the earlier decision of Byles J in Cooper v Wandsworth Board of Works [1863] EngR 424; (1863) 14 CB (NS) 180 at 195 [143] ER 414 at 420 referring to Genesis 3:11.

[11] Stewart v University of Melbourne (U No 30073 of 1999 Print S2535) Per Ross VP citing Byrne v Australian Airlines (1995) 185 CLR 410 at 465-8 per McHugh and Gummow JJ.

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