Fair Work Act 2009

s.394 - Unfair dismissal

Spinifex Australia Pty Ltd T/A Spinifex Recruiting

Application for an unfair dismissal remedy - whether dismissal was harsh, unjust or unreasonable - responsibilities of labour hire employer to ensure employees are treated fairly - application granted - compensation ordered.

[1] Patrice Tait (the applicant) applied to the Fair Work Commission (the Commission) on 15 November 2017 for an unfair dismissal remedy in accordance with Part 3-2 of the Fair Work Act 2009 (the FW Act) in relation to the termination of her employment by Spinifex Australia Pty Ltd (the respondent) on 26 October 2017.

1. The respondent made a jurisdictional objection to the application on the grounds that the applicant had not completed the minimum employment period. I issued a decision dismissing the respondent's jurisdictional objection on 13 March 2018.[1]

[3] I held a hearing in relation to the merits of the application on 17 May 2018. The applicant represented herself and the respondent was represented by R Reitano, of counsel.

[4] The applicant gave evidence on her own behalf. Gary Ostro, executive recruiter, gave evidence on behalf of the respondent. I have also had regard to the evidence tendered during the jurisdictional proceedings.

[5] The respondent operates a labour hire business. The applicant commenced employment with the respondent as a casual employee and was assigned to work with the Department of Justice - NSW Trustee & Guardian (DOJ) as a Conveyancing Officer. In my jurisdictional decision, I found that the applicant worked 35 hours a week, Monday to Friday, and that at the time of her dismissal, she had a reasonable expectation of continuing employment on a regular and systematic basis.

1. At the hearing, Mr Ostro said that the DOJ told him it no longer wanted the applicant to continue with her assignment on Thursday, 26 October 2017.[2] Gary Head, the Assistant Director in charge of the branch of the DOJ where the applicant worked, sent Mr Ostro an email late on Wednesday, 25 October 2017, which included the following:

Thanks for the catch up today and discussion around Patrice.

As discussed we currently have a number of concerns with Patrice and her attitude towards customers within NSWGT. Whilst these issues have been raised with her on a number of occasions there appears to be no improvement at all. Unfortunately we [are] at the stage that we will need to cease Patrice's contract and as discussed if you could talk with her on Thursday afternoon it would be great.

1. Mr Ostro said he had discussed Mr Head's concerns about the applicant with him '[o]n many occasions, during the length of the assignment'.[4] He did not, however, speak to Mr Head about the contents of the email.

'The conversation was discussed [with the applicant] that particular Thursday afternoon. I advised Patrice that the assignment had ceased and that she was no longer required to attend to [the] Department of Justice. Also advised that we could collect her belongings and she could come to the office to collect it, at our office, to do so.'[5]

1. Mr Ostro said during the hearing that he told the applicant that the respondent would continue looking at other opportunities for her, though there is no evidence that he took any particular action along these lines, as he seemed to assume that her skills were highly specialised.[6] He did add:

'So if an opportunity had arose [sic] I would have given her the opportunity to discuss further, in regards to other options.'[7]

[10] During his cross-examination by the applicant, Mr Ostro effectively conceded that he did not tell her why - in his words - 'the Department of Justice had ceased your employment'.

'At the time did you not feel it was necessary to give me a more detailed explanation as to why that had happened ---? ---Yes, there was ---

--- even after I had asked for such? --- Well, I felt, on compassionate grounds, on the basis that if I provided additional information, you know, in the state that you were in, I felt it wasn't necessary to provide that information to you.'[8]

[11] Mr Ostro added, in response to a question from the Bench about the DOJ no longer requiring her:

'There were performance issues during the course of the assignment and attendance issues, and I believe that's why the client had decided to progress to that point to cease the employment.'[9]

[12] Mr Ostro later added, in reply to a question from the applicant:

'My understanding is this, is that the assistant director is the head of a department, he's come to me directly and said "Gary, we would like to cease this", on the basis of your customer service ethics and on the basis of your performance. They've got the option to do that. So they've advised us, not Spinifex.'[10]

1. In her originating application on Form F2, which formed part of Exhibit 6, the applicant said that she had been reprimanded for how she responded to an email at a meeting at the DOJ on 21 September 2017. There were other indications in the applicant's own evidence of conflict between herself and Mr Head. The applicant had also had to take a considerable amount of time off for illness and other pressing personal circumstances during her time with the DOJ. These had been authorised by her supervisor at the DOJ.[11]

[14] The respondent's primary case, as put by Mr Reitano, was that the 'temporary employment agreement' under which the applicant was employed was not terminated by the respondent. While the assignment at the DOJ had ceased, Mr Ostro's evidence was that the respondent intended to look for other assignments for the applicant. It was the applicant who walked away from the arrangement. As far as the respondent was concerned, while the assignment with the DOJ had ceased, the ending of the assignment did not bring the applicant's employment to an end.

1. Mr Reitano also referred to evidence of the concerns that the DOJ had about the applicant. However, the thrust of his argument was that the nature of the applicant's employment was that it was a labour hire arrangement 'where it's acknowledged that you will be working, effectively, at the discretion of someone else.'[12]

[16] I am satisfied that the applicant's employment was terminated by the respondent. I found in my decision dismissing the jurisdictional objection that the applicant was a casual employee, who worked on a regular and systematic basis and had a reasonable expectation of continuing employment. This was in spite of the terms of the written 'Temporary Employee Agreement'.

[17] The only work the applicant had performed for the respondent was for the DOJ, which was in practice, as I found in the jurisdictional decision, of an indefinite duration. In reality, her work for the respondent began when she commenced her assignment at the DOJ and ceased when that assignment was terminated. It is possible that the respondent might have eventually found the applicant other work, but that would have amounted to a new period of employment.

[18] I accept that there may be cases where labour hire employers move their employees around from assignment to assignment with different 'hosts', and where the mere ending of one assignment with a particular host does not end the employment relationship. However, I do not think this was such a case.

[19] Having found that the applicant's employment was terminated by the respondent, it is necessary to consider whether the dismissal was harsh, unjust or unreasonable.

1. Before turning to the specific statutory provisions, it is appropriate to make some general comments about labour hire arrangements of the type under which the applicant was employed. In particular I wish to reiterate the statement made by Deputy President Asbury in Kool v Adecco[13] (which has been quoted with approval by Full Benches of the Commission in Pettifer[14] and Tasports[15]:

'...the contractual relationship between a labour hire company and a host employer cannot be used to defeat the rights of a dismissed employee seeking a remedy for unfair dismissal. Labour hire companies cannot use such relationships to abrogate their responsibilities to treat employees fairly. If actions and their consequences for an employee would be found to be unfair if carried out by the labour hire company directly, they do not automatically cease to be unfair because they are carried out by a third party to the employment relationship. If the Commission considers that a dismissal is unfair in all of the circumstances, it can be no defence that the employer was complying with the direction of another entity in effecting the dismissal. To hold otherwise would effectively allow labour hire employers to contract out of legislative provisions dealing with unfair dismissal.'[16]

[21] I agree with Deputy President Asbury when she says in Adecco that

'... in the context of labour hire arrangements, the actions of an employer who dismisses an employee following the exercise of a host employer's contractual right to have the employee removed from the host site cannot rely exclusively on the actions of that third party as their defence to a claim of unfair dismissal.'[17]

[22] In this case, it is clear from the evidence that the reason the DOJ no longer wanted the applicant's services was its concerns about her performance. In these circumstances, the applicant's dismissal should be seen as a dismissal on the grounds of unsatisfactory performance and assessed as such.

[23] Section 385 of the Act provides:

A person has been unfairly dismissed if the FWC is satisfied that:

(b) the dismissal was harsh, unjust or unreasonable; and

(c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and

(d) the dismissal was not a case of genuine redundancy.

Note: For the definition of consistent with the Small Business Fair Dismissal Code: see section 388.'

[24] Section 385(a) of the Act is satisfied. As discussed above, the applicant was dismissed.

[25] Section 385(c) of the Act does not apply in this case, as the respondent is not a small business.

[26] Section 385(d) of the Act is satisfied. The applicant was not made redundant.

[27] I must therefore consider whether the applicant's dismissal was harsh, unjust or unreasonable. Section 387 of the Act provides:

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.'

[28] Was there a valid reason for the applicant's dismissal? Mr Ostro's evidence suggests that the DOJ no longer wanted the applicant to continue working with them because of her performance, perhaps including her 'customer service ethics' and also, possibly, issues about her attendance. The applicant denied that there was a reasonable basis for these concerns. There is insufficient evidence before the Commission to conclude that there was a valid reason for the applicant's dismissal.

[29] It is quite clear that the applicant was not told of the real reason for her dismissal. Mr Ostro suggested that he did this out of some desire to spare the applicant's feelings. However it is a fundamental feature of procedural fairness that an employee is told why their employer is planning to dismiss them - even if doing so is sometimes painful for either or both.

[30] Obviously, because the applicant was not told the real reason for her dismissal she was not given the opportunity to respond to that reason.

[31] The issue of a support person does not arise.

[32] There is some evidence that Mr Head had told the applicant about his concerns about her performance, though it is unclear whether he or the respondent ever told her these concerns had placed her continued employment in jeopardy.

[33] The procedures adopted by the respondent to effect the applicant's dismissal were entirely unacceptable. It simply told her the DOJ no longer wanted her to continue her assignment. It simply hid behind the terms of the 'Temporary Employment Agreement' with the applicant. Such documents do not obviate the need for labour hire employees to treat their employees with fairness. There is nothing that suggests that its failure in this regard was due either to the size of the respondent's business or its lack of access to human resources expertise. Rather, its actions appear to reflect its standard operating procedures, which, I would suggest, need review.

[34] I do not consider that there are any other factors that need to be taken into account.

[35] I am satisfied that an order for reinstatement is inappropriate and that an order for payment of compensation is appropriate in all the circumstances of the case.

[36] Section 392 of the FW Act sets out the circumstances that must be taken into consideration when determining an amount of compensation, the effect of any findings of misconduct on that compensation amount and the upper limit of compensation that may be ordered.

(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."

1. The method for calculating compensation under s.392 of the Act was dealt with by a Full Bench of the Commission in Bowden v Ottrey Homes Cobram and District Retirement Villages Inc. T/A Ottrey Lodge (Bowden).[18] In that decision, the Full Bench set out the order in which the criteria and other factors should be applied, taking into account authority under the Workplace Relations Act 1996 (Cth) in Sprigg v Paul's Licensed Festival Supermarket[19] and Ellawala v Australian Postal Corporation.[20] I have had regard to the approach utilised in Bowden in determining the amount of compensation to be paid.

2. The respondent submitted that any compensation awarded should not be substantial, as the employment was inherently short-term and was of a casual and temporary nature. Moreover, there was evidence that the DOJ had concerns about the applicant, which meant the employment was unlikely to go for a long time.[21]

[39] I will turn now to consider each of the criteria that I must take into account.

s.392(2)(a) - Viability of employer's enterprise

[40] There was no evidence that any order would affect the viability of the respondent.

s.392(2)(b) - Length of service

[41] The applicant's length of service was relatively short and would support the award of a lower amount of compensation.

s.392(2)(c) - Remuneration that would have been received

[42] The Applicant's remuneration with the respondent was $1,330 a week.

[43] It is clear that the DOJ had concerns about the applicant's performance, though there is no satisfactory evidence that these concerns were justified. On balance, I am satisfied that the respondent would have continued to employ the applicant for a further three months if she had not been unfairly dismissed.

[44] Taking into account that this three-month period included the Christmas and New Year holidays (and that the applicant was a casual), the amount I estimate the applicant would have received in that time is $15,000.

s.392(2)(d) - mitigating efforts

[45] The applicant's evidence is that she applied for over 100 jobs following her dismissal.

s.392(2)(e) and (f) - Remuneration earned or likely to be earned

[46] The applicant did not receive any remuneration from employment or other work in the three months following her dismissal.

s.392(2)(g) - Other matters

[47] I do not consider there are any other relevant matters to take into consideration.

s.392(3) - Misconduct

[48] There was no evidence of any misconduct by the applicant that contributed to the dismissal.

s.392(4) - Shock, distress etc.

[49] I note that the amount of compensation calculated does not include a component for shock, humiliation or distress.

s.392(5) - Compensation cap

[50] The amount of compensation I will order does not exceed the compensation cap.

[51] I am satisfied that the Applicant was protected from unfair dismissal, that the dismissal was unfair and that a remedy of compensation is appropriate. I award the applicant $15,000 in compensation. An order will be issued with this decision.

R Reitano, counsel, with P Macken, solicitor, for Spinifex Australia Pty Ltd T/A Spinifex Recruiting.

1. [1] [2018] FWC 1363.
2. [2] PN700.
3. [3] Exhibit 8.
4. [4] PN720.
5. [5] PN727.
6. [6] PN728.
7. [7] Ibid.
8. [8] PN732-PN733.
9. [9] PN735
10. [10] PN743.
11. [11] [2018] FWC 1363 [25].
12. [12] PN887.
13. [13] Kool v Adecco Industrial Pty Ltd [2016] FWC 925.
14. [14] Pettifer v MODEC Management Services Pty Ltd [2016] FWCFB 5243.
15. [15] Tasmanian Ports Corporation Pty Ltd t/a Tasports v Gee [2017] FWCFB 1714.
16. [16] [2016] FWC 925 [49].
17. [17] Ibid [48].
18. [18] [2013] FWCFB 431.
19. [19] (1998) 88 IR 21.
20. [20] Print S5109.
21. [21] PN979.

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