Fair Work Act 2009

s.394 - Application for an unfair dismissal remedy

Australian Catering Solutions Pty Ltd T/A Hearty Health

Application for an unfair dismissal remedy - small business employer - summary dismissal - whether employer complied with Small Business Fair Dismissal Code - serious breach of occupational health and safety procedures - significance of delay in effecting dismissal - application dismissed.

[1] This decision concerns an application made by Ms Li Li Chen under s394 of the Fair Work Act 2009 (Cth) (Act) for an unfair dismissal remedy.

[2] From 1 December 2014 until her dismissal, Ms Chen was employed as a part-time catering assistant by Australian Catering Solutions Pty Ltd, trading as Hearty Health (Hearty Health). Ms Chen worked at a child care centre in Carlton in Victoria. Ms Chen's duties involved preparing meals for the children, including heating the meals in a microwave and delivering them from the kitchen to the children's room.

[3] On 7 February 2017 Ms Chen perforated the plastic wrappings of the fish meals that were to be served to children at the centre that morning. A fly entered the hole Ms Chen had made in the plastic wrapping of one of the bowls, and laid its larvae in the meal. The fly and larvae were noticed by a childcare worker and the incident was reported to Hearty Health.

[4] Ms Chen's employment was terminated on 24 February 2017, effective that day. She was paid the equivalent of one week's notice. The employer's reason for dismissing Ms Chen was that she had committed a serious breach of food safety procedures.

[5] Ms Chen contends that her dismissal was unfair. She seeks compensation, rather than reinstatement.

[6] Section 396 of the Act requires that I decide four matters before considering the merits of Ms Chen's application. There is no dispute between the parties, and I am satisfied, of the three matters referred to in s396(a), (b) and (d), as follows.

[7] First, Ms Chen's application was made within the 21 day period required by s394(2) of the Act.

[8] Secondly, Ms Chen was a person protected from unfair dismissal, as she earned less than the high income threshold (s382).

[9] Thirdly, Ms Chen's dismissal was not a case of genuine redundancy.

[10] The fourth matter that I must consider before proceeding to the merits of the application is whether Ms Chen's dismissal was consistent with the Small Business Fair Dismissal Code (Code). Hearty Health claims that the dismissal was consistent with the Code. Ms Chen contends otherwise.

[11] The dismissal of an employee will not be unfair if it was consistent with the Code (see s385). Section 388(2) of the Act provides:

(1) The Minister may, by legislative instrument, declare a Small Business Fair Dismissal Code.

(2) A person's dismissal was consistent with the Small Business Fair Dismissal Code if:

(a) immediately before the time of the dismissal or at the time the person was given notice of the dismissal (whichever happened first), the person's employer was a small business employer; and

(b) the employer complied with the Small Business Fair Dismissal Code in relation to the dismissal."

[12] I find that Hearty Health was a "small business employer" as defined in s23 of the Act at the relevant time. It employed fewer than 15 employees, for the purposes of that section.

[13] The Code declared by the Minister pursuant to section 388(1) of the Act is brief and in the following terms:

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, that 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 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 will be required to provide evidence of compliance with the Code if the employee makes a claim for unfair dismissal to Fair Work Australia, including evidence that a warning has been given (except in cases of summary dismissal). Evidence may include a completed checklist, copies of written warning(s), a statement of termination or signed witness statements."

[14] In order to determine whether Hearty Health complied with the Code, it is necessary to consider the factual setting of this matter. Although the Act provides that the Commission must determine the question of compliance with the Code before it considers the merit of the application, it should be understood that, if the Commission finds that the employer complied with the Code, the consequence will be that the dismissal was not unfair, and the application will be dismissed.

[15] At the hearing, Ms Chen gave evidence in support of her application, with the assistance of a Mandarin interpreter. Mr Chasteau, who is the co-owner of Hearty Health, gave evidence on behalf of the company, as did Mr Hand, who was Hearty Health's operations manager and Ms Chen's supervisor at the relevant times.

[16] Ms Chen's evidence was that around 10.25am on 7 February 2017, she began preparing fish meals for the baby room. She portioned the fish, placing it in bowls, and covered each bowl with cling wrap. She perforated the wrapping over each bowl with a knife. Ms Chen then heated the bowls of fish in the microwave, each for around 7 minutes at 70 degrees, and then put them on a trolley. She delivered the bowls to the baby room around 10.45am and placed them on a bench.[1]

[17] At approximately 11.30am, child care staff working in the baby room noticed that in one of the bowls of fish there was a fly and larvae underneath the plastic wrapping that covered the bowl. The fly and the larvae were alive.

[18] One of the child care staff called Mr Hand to report the incident. Mr Hand went to the centre and saw the bowl with the fly and larvae. It was covered in glad wrap that had a perforation in it. Mr Hand shut down the meal service and set out to investigate what had occurred.

[19] Mr Hand spoke to Ms Chen about her activities that morning. Ms Chen told Mr Hand that she had not seen a fly in any of the bowls before serving the meals. Mr Hand asked Ms Chen about the holes in the cling wrap. Ms Chen acknowledged that she had made them. As discussed further below, this is a critical fact in the case.

[20] The parties differed on several points of detail concerning the events of 7 February 2017.

[21] First, according to Mr Hand, Ms Chen told him that, after placing the fish in the bowls, wrapping them, and poking holes in the wrap, she had then placed the bowls on top of the microwave.[2] Mr Hand said that he was concerned about this,[3] as it pointed to a misunderstanding by Ms Chen about the hygiene rule that food must not be left out of the refrigerator unless it has been adequately heated first.

[22] Ms Chen said that she did not put the bowls on top of the microwave. Rather, she put them into the microwave, heated them, took them out, and placed them on the trolley, which she then took into the baby room.[4]

[23] Secondly, Hearty Health believed that the fly had entered the bowl of fish in the kitchen, rather than in the baby room.[5] Mr Hand's evidence was that the contaminated bowl had been re-covered with a second sheet of plastic wrapping. He believed that Ms Chen had re-covered the bowl, placed the relevant stickers on the new plastic cover, and then delivered it to the baby room.[6] It was Ms Chen's role to handle and prepare the food and it was unlikely that the child care workers would have recovered the bowl.

[24] Ms Chen's evidence was that she had not re-covered the bowls. For Ms Chen, this was important. On her account, the bowls sat in the baby room uncovered for around half an hour, during which time, she believes, the fly flew in through the hole. Ms Chen believed that the fly could not have entered the bowl when it was under her care as she had the bowls of fish constantly in sight; they were in transit from the fridge to the microwave and then to the baby room for some 15 minutes.[7] Her job was to deliver the fish to the baby room. After that, she was finished with them.[8] For Ms Chen, if the fly entered the bowl in the baby room, this was not her fault.

[25] I consider that it is not necessary for me to make a finding as to whether Ms Chen put the bowls of fish on top of the microwave, or whether she re-covered the fish. Nor is it necessary for me to establish when and where the fly flew into the bowl of fish.

[26] For Hearty Health, the serious breach of safety procedures in this matter was Ms Chen's actions in perforating the plastic wrapping covering the bowls of fish.

[27] Mr Chasteau gave evidence that for him, the question of whether the bowl was re-covered was simply not relevant.[9] The point of the matter was, he said, that Ms Chen had perforated the wrapping which left the food exposed to contamination, and that the fly had entered through the hole that Ms Chen had made.[10]

[28] Mr Hand gave evidence that perforating the plastic wrapping that covers food is a clear breach of food safety standards. He said that properly covering food is a 'fundamental point of food hygiene'.[11]

[29] Mr Hand is a qualified chef with twenty years' experience. He gave evidence that he had obtained a food handling certificate of the kind Ms Chen was required to have in order to work as a catering assistant. He said that the training for this kind of certificate deals with the rule about properly covering food.[12] Mr Hand also has a Supervisors' Certificate IV in Commercial Cookery.[13] His evidence was that food is 'absolutely to be covered',[14] and that the purpose of this rule is not to allow any foreign particles to come into contact with the food.[15]

[30] Mr Chasteau, who is a chef with thirty years' experience, also said that puncturing the wrapping was a serious safety breach. He gave evidence that he had also done a food handling course of the kind that Ms Chen was required to undertake in order to work as a catering assistant.[16] He gave evidence that such a course covers the importance of wrapping food.[17]

[31] Ms Chen gave evidence that she had completed a food handling course.[18] However, she disputed that it covered the requirement to cover food.[19] Mr Hand acknowledged that there are several food handling courses that one can do, and that they can be done in person or online. However, Mr Hand said that, '100 per cent', a course of this kind covers this 'fundamental' issue.[20]

[32] Mr Chasteau gave evidence that the reason for covering food is not just to keep foreign particles out, but to keep the contents in. Particularly in the context of a child care centre, there is a concern to avoid cross contamination.[21] If a child were to have an allergy to fish, there would be a risk of the child having an allergic reaction if an uncovered fish meal were in the child's vicinity. In this regard, consuming maggots (larvae) would pose a variety of health risks, for the simple fact that it is not known what the maggots themselves have eaten.

[33] Mr Chasteau also gave evidence that Hearty Health is a 'category one' food business, which is the highest risk category, relating to work with vulnerable people, including hospitals, aged care and child care.[22]

[34] Ms Chen seemed to challenge the employer evidence that puncturing the plastic wrapping was a breach of safety procedures. She asked Mr Hand to tell her where it is written that plastic cannot be punctured.[23]

[35] Ms Chen also gave evidence that Mr Chasteau's mother had told her to puncture the plastic. Mr Chasteau denied that his mother had had any role in training Ms Chen. His mother had, it appears, introduced Ms Chen to Mr Chasteau.

[36] I accept the evidence of Mr Hand that properly covering food is a fundamental point of food hygiene. I also accept his evidence that food handling courses cover the proper procedure for wrapping food in plastic. Mr Hand is a senior chef with extensive experience in the food industry. Both he and Mr Chasteau said that this question of covering food was covered by the food handling courses that each of them undertook.

[37] I accept Mr Chasteau's evidence that his mother had no role in training Ms Chen. Further, in my view, even if Mr Chasteau's mother did express a view to Ms Chen about making holes in wrapping, there is nothing in the evidence to suggest that Ms Chen ought to have had regard to it.

[38] Given their credentials and experience, I accept the evidence of both Mr Chasteau and Mr Hand that it is breach of safe food handling procedures to perforate the plastic wrapping covering food. The credibility of Mr Chasteau and Mr Hand in matters of food safety is substantial. By contrast, Ms Chen's only experience in handling food prior to joining Hearty Health was working in a sushi shop some 15 years ago.[24]

[39] The parties agree on two critical facts: Ms Chen made holes in the plastic wrapping that covered the fish bowls; and that a fly entered the bowl in question through one of these holes. Ms Chen clearly acknowledged this in her evidence.[25]

[40] At this point, it is appropriate, for the sake of Ms Chen, that my decision record one further aspect of the evidence.

[41] The employer did not believe or suggest that Ms Chen deliberately delivered to the baby room a bowl of fish that she knew to have a fly and larvae in it. It seems that Ms Chen was concerned that the employer might have held this view.[26] Quite understandably, Ms Chen found this upsetting. However, at the hearing Mr Chasteau said very clearly that he did not believe for a moment that Ms Chen would do such a thing.[27] Rather, the employer considered that Ms Chen may not have noticed the black fly on the white fish because the coriander seasoning had camouflaged it.

[42] As noted above however, the focus of the employer's argument was that Ms Chen made the hole; this was a fundamental breach of food safety procedures; and this is how the fly got into the fish bowl.

Mr Hand's discussions with Ms Chen and the 'warning' of 8 February

[43] On the day after the incident, 8 February 2017, Mr Hand visited the centre again, and spoke with Ms Chen. She denied being responsible for the fly entering the bowl of fish, although she confirmed that she had poked holes in the cling wrap. Mr Hand discussed food safety practices with Ms Chen.

[44] Mr Hand told Ms Chen that the plastic wrap that covers food must not be perforated. He told her that food must not be left out of the refrigerator unless it has been appropriately heated first. Ms Chen told Mr Hand that her understanding was that food could be left out of the refrigerator for 2 hours before heating. Mr Hand was alarmed at this and explained that it is only after food has been properly heated that it can be left out for 2 hours before consumption.[28]

[45] Mr Hand's evidence was that, by the time he had finished his discussion with Ms Chen on 8 February 2017, he was satisfied that she understood that she was not to perforate cling wrap, and that she understood the 'essentials'. It was therefore safe to allow her to continue working at the child care centre.[29] However, Mr Hand and Mr Chasteau continued to have serious concerns about what had occurred.

[46] On 8 February 2017, Mr Hand gave Ms Chen a 'written warning'. It stated:

'This is a written warning in response to an incident at [omitted] Children's Centre on the 7/2/17.

Due to the seriousness of the incident and potential of impact on our clients Hearty Health has issued you with this formal warning letter.

The position at [omitted] Children's Centre as a catering assistance requires Lili Tren (sic) to have completed a Food Handling Certificate which we have on file but your actions and the processes you have followed leading up (to) the incident fall well outside of your training and these guidelines.

Hearty Health are currently reviewing your training and assessing your work place performance to best ascertain a resolution to this extremely serious matter.'

[47] As will be apparent, this was not a warning in the commonly used sense of providing an employee with an admonition but also 'another chance'. Rather, it foreshadowed that the company had yet to 'ascertain a resolution to this extremely serious matter'.

[48] The focus of the employer's evidence about what occurred from 8 February 2017 was on efforts to ensure that Ms Chen could continue to work at the centre without posing a safety risk, while Hearty Health looked for someone else who could do the job. In the latter regard, Mr Chasteau explained that, to replace Ms Chen, he needed to advertise, find a candidate, have the person approved by the centre's owner to work as a kitchen hand, and then formally train the person, all of which takes 2 to 3 weeks.[30]

[49] Mr Chasteau gave evidence that he started searching for a replacement for Ms Chen 'straight away', and put an advertisement in the paper. In the employer's outline of argument, there is a reference to efforts to improve Ms Chen's performance following the incident on 7 February 2017. I take these to be a reference to the discussions Mr Hand had with Ms Chen on 8 February 2017 and subsequent monitoring that occurred by Mr Hand.

[50] Mr Chasteau gave evidence that he asked the owners of the child care centre whether they were comfortable with the arrangements that he had put in place. His evidence was that he had to explain to them that he did not have someone on standby who could simply replace Ms Chen and that he would have to advertise and employ someone. Mr Chasteau said that the owners were content with this, so long as Ms Chen's conduct had been 'corrected'. They asked Mr Chasteau to advise the centre manager if Mr Hand was not going to be on hand so that Ms Chen could be watched and monitored.[31]

[51] The employer's evidence was that while this process was in train, Mr Hand did monitor Ms Chen's work. He attended the centre on several occasions and called the centre manager approximately every second day to check on Ms Chen's performance.[32]

[52] Ms Chen's employment was terminated 17 days after the incident on 7 February 2017. The decision was made jointly by Mr Chasteau and Mr Hand.[33] Mr Hand visited the centre and told Ms Chen that her employment was terminated effective that day.

[53] Mr Chasteau gave evidence that he had lost confidence in Ms Chen[34] and that he dismissed her because of the incident[35]. Mr Hand gave evidence that, although Ms Chen was a lovely lady, he would not want her serving food to his child, and that he did not feel comfortable with her working at the centre.

[54] The Code has two streams. The first concerns summary dismissal. It provides that 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 serious breaches of occupational health and safety procedures. I consider these elements below.

[55] Ms Chen was dismissed without notice. However, she was provided with one week's pay; Mr Chasteau gave evidence that he wanted to make a payment as a 'responsible business owner.'[36] Ms Chen received a 'warning', but it was a warning that the employer was considering its position. It was not a warning that a repeat of the conduct could result in dismissal, which in my view is the kind of warning contemplated by the summary dismissal stream of the Code. In my view, Ms Chen was dismissed 'without notice or warning.'

[56] The next question is whether Hearty Health believed, 'on reasonable grounds', that Ms Chen's conduct was 'sufficiently serious to justify immediate dismissal'. Under the general unfair dismissal provisions (aside from the Code), the Commission must itself consider whether there is a valid reason for dismissal. But the Code deems it sufficient, for summary dismissal, that a small business have reasonable grounds that the conduct was sufficiently serious.

[57] Ms Chen acknowledged that she perforated the plastic wrap. She also acknowledged that the fly must have entered the bowl through the hole that she made. The parties therefore agree that it was Ms Chen's conduct that led to the fly and its larvae being present in the bowl of fish. Mr Hand's evidence was that the 'fundamental' requirement to cover food properly is covered by the training courses that food handlers such as Ms Chen are required to undergo. Even if, as Ms Chen contended, the bowls were left sitting in the baby room for some time, the fly nevertheless found its way to the fish because of the perforation that Ms Chen made. Ms Chen's conduct led to the presence of the fly and larvae in the bowl of fish.

[58] Based on the evidence of Mr Chasteau and Mr Hand, I have found earlier that perforating the plastic wrapping was a serious breach of safe food handling procedures. For the purposes of the Code, it is only necessary that an employer believe on reasonable grounds that the conduct is sufficiently serious to justify summary dismissal, including 'serious breaches of occupational health and safety procedures'.[37]

[59] I consider that Mr Chasteau and Mr Hand held this belief, and that the belief was reasonable in the circumstances.

[60] In this regard, I take into account that Ms Chen was working in a child care centre, and that Mr Chasteau's business was a category one food business.[38] Perforating the plastic wrapping gave rise to a risk not only of contaminates entering the bowl (which risk eventuated) but also of allergens in the food escaping.

[61] I have also taken into account that, whilst Hearty Health dismissed Ms Chen without notice or warning for a very serious incident, it dismissed her 17 days after the incident. I have considered whether this casts doubt on whether Hearty Health believed Ms Chen's conduct was 'sufficiently serious to justify immediate dismissal'.

[62] I do not consider that the Code's 'summary dismissal' stream requires an employer to dismiss an employee 'immediately'. The relevant provisions of the Code refer first to the dismissal, which must be without notice or warning; and then to the employer's reasonable belief, which is that the conduct is serious enough to justify immediate dismissal. The Code does not state that the dismissal will only be fair if it is effected immediately.

[63] In my view, the Code contemplates some period between the conduct justifying immediate dismissal and the dismissal. It requires that the employer must have a reasonable basis to believe that the conduct is sufficiently serious. It may take the employer some time to satisfy itself that there is a reasonable basis for immediate dismissal. It may be necessary to conduct an investigation into the relevant conduct. Where an employer does not dismiss an employee immediately once it has investigated the relevant conduct, doubt might in some cases be cast on whether the employer truly believed (on reasonable grounds) that the conduct was serious enough to justify summary dismissal.

[64] However, in this regard, all of the circumstances of the particular case must be taken into account, including any reason the employer may have for not effecting the dismissal immediately. It must also be remembered that the Code applies to small businesses, whose needs and challenges are different from those of larger enterprises. In this connection, regard should be had to the objects of Part 3-2 of the Act, which are to establish a framework for dealing with unfair dismissals that 'balances the needs of business (including small business) and the needs of employees' (s381(1)(a)). The objects of the Act itself also include consideration of the special circumstances of small businesses (s3(g)).

[65] According to Mr Chasteau, if he had dismissed her immediately, he would have had no-one to undertake the work at the child care centre. He said there was a lead time of two to three weeks to find a replacement, taking into account recruitment, the need for the child care centre to approve the person, and training requirements. Mr Chasteau gave evidence that he advertised for a new kitchen assistant 'straight away'.

[66] In my view, Hearty Health had an operational reason for not acting immediately to dismiss Ms Chen. It was in a difficult position. Ms Chen had committed a serious food safety breach warranting summary dismissal. However, Hearty Health had to find a replacement for her. Unlike a larger enterprise, where employees could perhaps be redeployed from elsewhere, or sourced from group companies, Mr Chasteau 'could not get anybody to fill in her position down at the centre'.[39] He sought to fill the position 'as fast as he could'.[40] He was resolute that her conduct was serious and that she should be dismissed. He gave evidence that he did not consider an alternative disciplinary course was warranted.[41]

[67] In these circumstances, I consider that the 17 day period between the misconduct and the date of dismissal does not call into question the employer's belief, or the reasonableness of the employer's belief, that the conduct justified immediate dismissal.

[68] Ms Chen was not told that Hearty Health was working to find a replacement for her. However, the warning of 8 May 2017 put her on notice that the employer had yet to 'ascertain a resolution to this extremely serious matter'.

[69] Following Mr Hand's discussions with Ms Chen on 8 February 2017, Hearty Health was satisfied that she could work safely for the time being. However, she had caused a very serious food safety incident. Her role required her to work autonomously in a category one food business, with vulnerable people (children).[42] Hearty Health had lost confidence in her.

[70] I am satisfied that Hearty Health complied with the summary dismissal stream of the Code. It dismissed Ms Chen 'without notice or warning', as it 'believed on reasonable grounds' that her conduct was 'sufficiently serious to justify immediate dismissal'. The conduct in question constituted a serious breach of occupational health and safety procedures. Although Hearty Health did not immediately dismiss Ms Chen, there was an operational reason for this, such that the gap between the misconduct and the dismissal does not call into question the reasonableness of the employer's belief that the conduct was sufficiently serious to justify immediate dismissal.

[71] I note Ms Chen's evidence that she cared for the children and I accept this evidence. I also record Ms Chen's evidence that she finished her shift on the day of her dismissal, even though she was very upset. I accept that Ms Chen did this out of concern for and devotion to the children at the child care centre.

[72] However, as I have found that Ms Chen's dismissal by Hearty Health complied with the Code, it follows that Ms Chen was not unfairly dismissed.

[73] Ms Chen's application for an unfair dismissal remedy is therefore dismissed.

[1] Transcript at PN121. See also Form F2 application, section 3.2

[5] Respondent's outline of arguments, section 4a; Form F3 Employer response, section 3.2

[7] Applicant's outline of arguments, section 6d

[37] See generally the decision of the Full Bench of the Commission in Pinawin v Domingo [2012] FWAFB 1359, and at 29.

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