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[2020] FWC 5812
plaintiff. Reinstatement refused as inappropriate; respondent ordered to pay the applicant $4,369.72 compensation in lieu of reinstatement, payable within 21 days (see [55], [57]).
The Fair Work Commission found that Ms Purcell was unfairly dismissed because the employer had no valid, well-founded reason and failed to follow basic procedural fairness (no warning, no specific allegations, no opportunity to respond). An offer to return as a lower-paid casual did not remedy the unfairness. Reinstatement was inappropriate; the Commission ordered compensation of $4,369.72 (four weeks' pay) under the Sprigg approach, payable within 21 days.
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1,642 words · generated 15/06/2026
Rebecca Purcell was employed at Darwin FreeSpirit Resort first as a casual Food and Beverage Attendant from 6 December 2018 to 17 June 2019, and from 17 June 2019 as a full‑time Guest Services Team Leader on an annual salary of $56,806.25 (see [2], [3]). The Permanent Agreement included a six‑month probation clause (cl 2) (see [4]). On 29 November 2019 Ms Purcell attended a meeting with Resort Manager Emmanuel Couch and Sales and Events Manager Laura McArthur in which she was told the Team Leader role was no longer required and that the department needed a Department Manager; she was offered an alternative casual position in bar and reception (see [5], [17]). The termination was given effect on 6 December 2019 (see [1], [6]). Ms Purcell declined the casual offer (text dated in [25]) and filed an unfair dismissal application on 16 December 2019 under s 394 of the Fair Work Act 2009 (see [1]).
A preliminary jurisdictional issue (whether prior casual service counted for the minimum employment period) had been determined in the applicant's favour in an earlier decision ([2020] FWC 3098) which the Commission applied to find protection under the Act (see [2], [27]). The merits hearing proceeded before Deputy President Sams, who heard evidence (some unsworn or untested) from the applicant, two supporting witnesses and the employer's witnesses (see [7], [8]–[11], [18]–[21]).
The Commission concluded the dismissal was unlawful because there was no valid reason and the employer failed to afford procedural fairness. Reinstatement was inappropriate; compensation of $4,369.72 (four weeks' pay) was ordered under the Sprigg methodology and s 392, payable within 21 days (see [33], [34], [38]–[41], [45]–[55], [57]).
The decision follows the statutory tests in ss 385 and 387 of the Fair Work Act. Section 385 requires the Commission to be satisfied that the person was dismissed and that the dismissal was harsh, unjust or unreasonable. Having found jurisdictional prerequisites satisfied (protected person, timely application, not a genuine redundancy), the central question was whether the dismissal was 'harsh, unjust or unreasonable' (see [27]–[29]).
Two major legal strands determined the outcome:
Valid reason (s 387(a)): The Commission applied the long‑standing principle (Selvachandran as explained in the judgment at [32]) that a valid reason must be sound, defensible and well founded. Deputy President Sams found that although the respondent genuinely believed the applicant was struggling, there was insufficient objective foundation: the applicant had performed the role for five months; Mr Couch knew her strengths and weaknesses; there were no particular incidents, no warnings, and no formal performance management steps (see [33], [34], [41]). Therefore the reason relied upon was not a 'valid reason'.
Procedural fairness (s 387(b)-(e)): The Commission emphasised the requirement to notify an employee of reasons for dismissal and to give a real opportunity to respond (citing Crozier, Wadey and Gibson at [35]–[37]). The applicant was not warned, was not given specifics of concerns, had no opportunity to respond in a way that might affect the employer's decision, and had no prior notice of the dismissal meeting or ability to arrange a support person (see [17], [38]–[41]). These procedural deficits reinforced the conclusion that the dismissal was unfair.
The offer of alternative casual employment was considered but rejected as a cure for unfairness because the casual role was remuneratively inferior and not comparable; the offer was effectively Hobson's choice (see [5], [26], [34]). The Commission then addressed remedy: reinstatement was declined as inappropriate (the applicant did not seek it and the relationship had effectively broken down), and compensation was calculated by applying the Sprigg methodology (as articulated in Full Bench authorities summarised at [49]), the Commission assessed an anticipated further employment period of four weeks resulting in compensation of $4,369.72 (see [46], [50]–[55]).
Before this decision: the legal framework applied by the Commission is the established Fair Work Act statutory scheme and settled authorities on 'valid reason' and procedural fairness (Selvachandran; AIRC/Full Bench authorities on Sprigg methodology). The judgment re‑affirms settled principles rather than changing the law.
After this decision: the case confirms that an employer's honest belief in an employee's unsuitability, absent objective evidence, warnings or a chance to respond, will not satisfy s 387(a). It also reinforces that offering lower‑paid casual work will not necessarily remedy unfair dismissal where the alternative is not comparable or reasonable. The approach to compensation follows established Sprigg principles; the decision provides an application example where short service and the employer's conduct led to a four‑week anticipated employment period for compensation purposes (see [50]–[55]).
This judgment does not alter statutory tests, but it provides a practical illustration of applying the established tests to facts where the employer had limited HR expertise, no formal warnings, and had offered an inferior casual role.
Select passages and plain‑English translations:
[34] "In my view, the reasons for the applicant's dismissal were not sound, defensible or well founded, and accordingly, I find there was no valid reason for her dismissal."
[39] "The applicant was provided with no opportunity to respond ... She received no warning ... There were no specifics of the applicant's alleged behaviour ..."
[26] "I accept the casual role was remunerated less ... and, in my view, was not comparable or reasonable alternative employment."
[55] "According to the Sprigg formula ... the amount of compensation is $4,369.72."
[31] (quoting the Explanatory Memorandum) "no factor alone will necessarily be determinative."
Each passage is explicitly applied by the Commission to reach the conclusion that dismissal was unfair, and the remedy calculated appropriately in the circumstances.
This decision is a useful guide where the following facts are present:
Where these elements are present, an unfair dismissal finding is likely if the statutory s 387 factors are weighed similarly.
This decision is an adjudication of a single unfair dismissal application by Deputy President Sams and primarily applies established authorities. The judgment itself does not record later appellate treatment. It cites and follows existing Full Bench and judicial authorities on valid reason, procedural fairness and compensation assessment (see [31]–[33], [49], [50]). To determine how later courts or tribunals have treated this particular decision, one must consult subsequent FWC or court decisions or citators; the decision does not purport to be a precedent‑changing authority but rather an application of settled law to a fact pattern. As such, the weight of the decision is as an instance of applying the established test for valid reason, procedural fairness and the Sprigg compensation approach.
The decision resolves the particular application but leaves some practical questions that remain for practitioners:
Quantifying anticipated period of employment: The Commission assessed four weeks' prospective employment here (see [50(i)]). The determination of that period can vary markedly across cases and depends on inferences about managerial intention and likelihood of continued employment. What evidence will suffice to support shorter or longer anticipated periods remains fact‑sensitive.
Degree of required specificity: The judgment reiterates that specifics of alleged poor performance and warnings are important (see [39], [41]). However, what level of specificity suffices where the employer genuinely perceives poor performance but has no formal HR systems remains for future cases to clarify.
Offers of alternative employment: The judgment treats an inferior casual offer as not curing unfairness (see [26], [34]). Future disputes may refine the boundary between a reasonable offer (that could cure procedural shortcomings) and a Hobson's choice, particularly where operational needs legitimately change.
Weight to employer inexperience: The Commission called the absence of HR expertise a neutral factor here (see [42]). How far lack of expertise can mitigate procedural failures by employers in smaller operations may be developed further.
Interaction with probation: The applicant's complaint that the post‑hire probationary period was unnecessary was noted but not determinative (see [25]). Cases focusing specifically on the enforcement and fairness of extended or layered probation terms may further elaborate the limits on employers' reliance on probation to justify summary terminations.
Practitioners should extract from this decision the emphases on documented reasons, warnings, opportunity to respond, and careful consideration before offering lower‑paid alternatives as a substitute for lawful termination.
s 394 - Unfair dismissal
Aspen Living Villages Pty Ltd t/a Darwin FreeSpirit Resort
Application for an unfair dismissal remedy - regular and systematic casual - employee's full time position no longer required - termination meeting - offer of alternative casual employment - offer not reasonable - applicant's dismissal unreasonable - reinstatement not practical - compensation appropriate - order made.
[1] Ms Rebecca Purcell (the 'applicant') was employed by Aspen Living Villages Pty Ltd t/a Darwin FreeSpirit Resort ('FreeSpirit') until her employment ended on 6 December 2019. At the time, the applicant was employed as a full time 'Guest Services Team Leader' on a salary of $56,806.25 p.a. On 16 December 2019, the applicant filed an unfair dismissal application pursuant to s 394 of the Fair Work Act 2009 (the 'Act')
[2] The application was the subject of an earlier jurisdictional decision as to whether the applicant's prior service as a casual employee should be counted for the minimum employment period under s 383 of the Act. In a decision I issued on 26 June 2020, I found that it did; see: Purcell v Aspen Living Villages Pty Ltd t/a Darwin FreeSpirit Resort [2020] FWC 3098. From 6 December 2018 to 17 June 2019, the applicant was engaged as a casual Food and Beverage Attendant under the FreeSpirit Employment Agreement 2015 (the 'Enterprise Agreement') and also in accordance with an Employment Agreement (the 'Casual Agreement'). The Casual Employment Agreement signed by the applicant contained the not unusual references to a casual employment arrangement as to hours of work and remuneration as follows:
3.1. As you will be employed on a casual basis, you will be offered work on an hourly basis as required by the Company.
3.2. Your hours of work will fluctuate depending on the needs of the business. The Company cannot guarantee you a minimum number, or any, hours of work.
4.1. You will be paid a casual rate of $24.8072 per hour which is inclusive of a 25% casual loading. The casual loading is paid to you in lieu of paid leave entitlements, redundancy pay, notice of termination and other entitlements not payable to casual employees under the Agreement.
4.2. You will also be paid any applicable penalty rates, allowances or loadings under the Agreement while it applies to your employment.
4.3. You will be paid in fortnightly instalments via EFT (Electronic Funds Transfer) to your nominated bank account.
4.4. The Company will deduct applicable taxes from your pay prior to paying the balance to you.'
[3] On 17 June 2019, the applicant commenced full time employment as a Guest Services Team Leader and signed a new Employment Agreement that day (the 'Permanent Agreement'). The majority of her terms of employment were the same as the earlier Casual Agreement save, of course, for the Hours of Work and Remuneration provisions at Cls 4 and 5 respectively, which provide as follows:
4.1 Your hours of work will be determined in accordance with clause 11.3 of the Agreement. Your hours of work are 38 Hours (consider clause 11.3 of Agreement)
The hours above will be subject to ongoing review in accordance with business needs and the peak and non-peak season. You and the Company can agree to change this regular pattern of work at any time in writing.
4.2. You may also be required to work reasonable additional hours as required by the Company.
4.3. You will need to be. flexible about when you work. Given the nature of your role and the Company's business, you may be required to work hours at night, on weekends and public holidays.
5.1. Your salary will be $56,806.25 Annual ($28.7481 per hour) excluding superannuation. This is also known as your Rate of Pay.
5.2. You will be paid in fortnightly instalments via EFT (Electronic Funds Transfer) to your nominated bank account.
5.3. The Company will deduct applicable taxes from your pay prior to paying the balance to you.
5.4. Your pay will be reviewed in accordance with clause 27 of the Agreement.'
[4] However, unlike the Casual Agreement, the new Agreement provided for a probationary period at Cl 2 which reads:
2.1. Your position is subject to the successful completion of a six {6) month probationary period from your Start Date.
2.2. Prior to the conclusion of your probationary period, your Manager will review your performance.
2.3. During the probationary period, either party may terminate this employment agreement with one week's notice in writing. The Company may elect to pay you your Rate of Pay in lieu of your working part or all of your notice period.'
[5] On 29 November 2019, the applicant attended a meeting with Mr Emmanuel Couch, Resort Manager, and Ms Laura McArthur, Sales and Event Manager. It is described as a Notice of Termination meeting. Ms McArthur's notes of the meeting record as follows:
'Position Termination Notice - Guest Services Team Leader
Today Emmanuel Couch & Laura McArthur had a closed meeting with staff member Rebecca Purcell to advise that her role, Guest Services Team Leader, was being terminated.
Emmanuel was very clear that the role was not what was needed in the department. The department requires a Department Manager to take charge of the area and to allow Emmanuel to work on other departments and manage the Park.
Rebecca was also told that she could be still employed at the park and was offered a Casual Position in the Bar area and Reception if needed, as she was originally employed as. Emmanuel was very persistent on the fact that he was happy to keep her on board.
Rebecca understood what she was told and was asked numerous times did she have any queries. It was explained to Rebecca that the role needed in the department is a Department Manager, as discussed when the Team Leader Role was offered it was a trial to see if it could be managed this way.
Rebecca left with no response on if she wanted to continue working with DFSR, she was sent messages, phone calls followed up on potential hours that could be offered.
Rebecca also communicated to the F&B Manager that she was interested in hours in the Bar but nothing was confirmed.'
[6] An Employee Exit Form, dated 6 December 2019, describes the applicant as working out her notice to that date (although the applicant said her employment ended on 29 November 2019).
[7] After the jurisdictional decision, I retained superintendence of the matter and issued directions for a hearing of the merits of the application. The matter was listed for hearing by Microsoft Teams, on 3 September 2019, given the distances involved and the restrictions on in person hearings due to COVID-19. The applicant represented herself and Mr Rod Hearn of Aspen Living Villages, appeared with Mr E Couch for the respondent.
[8] The following persons provided written and/or oral evidence in the proceeding:
Ms Kerrie-Anne May - friend of the applicant - not required for cross examination;
Mr Glen Aylott - not required for cross examination;
the applicant - not required for cross examination;
Mr Rodney Alan Hearn -; and
Mr Emmanuel Martin Couch.
[9] In a witness statement dated 23 February 2020, Ms May described herself as a 'close friend' of the applicant. As Ms May's statement is relatively short, and as she was not required for cross examination, I set it out in full below:
[10] Mr Aylott was an employee of FreeSpirit as a groundskeeper/maintenance person from July 2019 until his resignation in November 2019. He claimed to have had regular dealings with the applicant, and described her as 'approachable and easy to deal with'. Similarly to Ms May, as Mr Aylott's statement was six paragraphs, I set out paragraphs 2 to 6 below:
'2. From my dealings with Rebecca Purcell it was my opinion that she was the office manager because she was in the office most of the time and was the person you went to for help on most issues as she always knew what to do or who to contact on various problems. This was especially useful when I was unable to locate Emmanuel Couch the Resort manager. I have heard Emmanuel Couch mention her as, or refer to her as the office manager on numerous occasions. She also managed the other office staff in a professional and mentoring way.
Mr Aylott was also not required for cross examination.
[11] The applicant filed a document entitled 'Witness Statement for Rebecca Jane Purcell'. Understandably, it contained a potpourri of evidence, opinion, submission and commentary about the circumstances surrounding her dismissal, and the reasons she believes her dismissal was 'harsh, unjust and unreasonable', pursuant to s 387 of the Act. I will treat the statement as incorporating her written submissions, as no additional written submissions were filed.
[12] The applicant commenced employment as Full Time Guest Services Team Leader on 17 June 2019. She claimed that Mr Couch knew that she had 'no experience' in this role prior to commencing. She said that she only received one 20-minute training session 'in the whole time I was there'. On commencing her new position, she was subject to an additional 6 month probationary period (see: [4] above), and referred to at Cl 5.1 of the Enterprise Agreement, which I set out below:
'5.1 There shall be an initial fixed term probationary period of employment not exceeding six (6) months for all employees. This probationary period will facilitate the assessment by FSR of the skills and capacity of the employee, and allow FSR and the employee to determine if they wish to continue with the employment relationship.
[13] The applicant claimed that being subject to an additional 6 month probationary period (totalling 12 months for the duration of her employment with FreeSpirit) was unfair, and was done so as a 'safeguard' Mr Couch's options to promote someone in the peak tourism period, without support or time for adequate training.
[14] The applicant said she was made to sign a 'Job Description'. When she asked Mr Couch what her duties were in her new role, Mr Couch he that he would teach her throughout her role, rather than at the commencement of the position. She said that she was the 'first point of call for customers' when they had issues. Without adequate training, and having been left to 'deal with' customers, this resulted in her being once brought to tears upon being confronted by an angry customer.
[15] On 22 November 2019, after suffering a leg infection whilst she was on a period of approved annual leave, the applicant sought medical attention from her GP. She was prescribed antibiotics and was advised not to work whilst the injury healed. She put the medical certificate on Mr Couch's desk, went for x-rays on 23 November, and was asked by her GP to return for a further appointment on 25 November 2019. At this appointment, she was informed that she would require an additional week of leave, due to ongoing swelling of her leg. She provided a further medical certificate to FreeSpirit shortly after the appointment. She was then texted by the business confirming receipt of the medical certificate, and was asked to advise when she could return to work, so that the respondent would not 'double up' shifts.
[16] Whilst on leave, the applicant claimed that she had received a phone call and multiple messages from Mr Couch saying that she was responsible for doing the work, or finding someone else to do it. During one call, she told Mr Couch that she was on a medical certificate. The applicant believed that Mr Couch's conduct was 'rude and belittling', and she texted him the next day regarding his conduct. As she felt so guilty for being absent from work, and upon feeling slightly better on 27 November 2020, she returned to her GP on 28 November 2020 to receive a return to work clearance. She then texted Mr Couch and advised that she would be returning to work on Friday 29 November 2020. She did not receive an acknowledgement of receipt of this message.
[18] The applicant questioned both Mr Hearn and Mr Couch.
[19] Mr Hearn confirmed that at the relevant time, the hourly rate for a full time employee was $28.75 compared to a casual rate of $25.30. However, the rate which would have applied if the applicant accepted a casual role, was entirely dependent on the actual role that would have been discussed. As it turned out in early 2020, with a greater emphasis on gaming, the rates were increased. On the raw figures, Mr Hearn accepted the applicant may have had a potential loss of income of 28-48% after tax.
[20] Mr Couch gave evidence that at first, the applicant was performing extremely well, but towards the end she was struggling with the simplest jobs and was constantly telling other staff she was looking for other work. She was unhappy in the workplace and pulling the rest of the team down. He believed she was running 'hot and cold' and he required a Team Leader 100% of the time.
[21] Mr Couch believed that when he first offered the applicant the full time job, it was on the basis that if it did not work out, she could always have her casual job back. Mr Couch claimed the applicant never gave him an opportunity to discuss her casual role moving forward. He said she was an asset to the Company and believed he could teach her office and administrative skills. However, her strengths were in the bar area. Mr Couch was asked why he required the applicant to find a replacement for her while she was on sick leave with doctors' certificates. He said he was not expecting her to do the work and ultimately he found someone to fill in. He was not aware at the time that the applicant had a medical certificate and none of the text messages suggest it. He just asked for her support to find a fill in employee.
[22] The respondent submitted that:
the dismissal does not fulfil all criteria within the meaning of s 387 of the Act;
it does not consider the dismissal to be harsh due to the relevant matters of:
[23] The applicant was not required for cross examination and neither were her support witnesses, Ms May and Mr Aylott. Given that both parties were unrepresented, this was understandable. More significantly however, the factual matrix of this case is largely uncontested and much of the applicant's case focused on her concerns with being offered a full time role from 17 June 2019 and her lack of training and support to when the full time role was said to be unnecessary for the business. It is not in dispute that the applicant was offered her former casual role back, but she declined to accept it.
[24] I do not place much weight on Ms May and Mr Aylott's statements, as they were both more of a commentary on the applicant's character, work performance and work ethic. In Mr Aylott's case, it is clear he has some residual resentment towards his former employer.
[25] In my view, character references from 'close friends' and from former employees are not usually objective, and should be treated with considerable caution, particularly when they are not direct witnesses to relevant events. While I consider it was unnecessary to place the applicant on a further six months' probation period when she had already worked for the respondent for seven months and her skills and abilities would have been well known to Mr Couch and Mr Hearn, this does not necessarily make her termination of employment unfair. Nor do I accept that the applicant's medical condition with a leg infection, is relevant to the fairness or otherwise of her termination of employment. Her text message rejecting the offer of casual employment reads:
'Hi thanks for the calls and offer to work at Darwin FreeSpirit resort on a casual basis. After much thought I am going to have to decline the offer. Thanks and all the best. Rebecca Purcell'.
[26] Although there was only one meeting (29 November 2019), I accept the respondent engaged with the applicant about the decision to end her full time role and offered her a return to a casual Food and Beverage Attendant role. She had a reasonable opportunity to consider the offer, but declined it on 5 December 2019. I accept the casual role was remunerated less than her full time role and, in my view, was not comparable or reasonable alternative employment. In hindsight, the process could have been handled better. The respondent had no employment or industrial relations advice or experience and some allowance should be made with this in mind.
[27] As the one jurisdictional objection was dismissed, there are no other jurisdictional objections to the applicant's unfair dismissal application being determined by the Commission. Specifically, I am satisfied that:
(a) Ms Purcell was dismissed at the initiative of the employer on 6 December 2019 (ss 385(a); 386(1)(a));
(b) her unfair dismissal application was lodged within the 21-day statutory time limitation set out at s 394(2)(a) of the Act;
(c) Ms Purcell was a person protected from unfair dismissal in that:
- she had completed the minimum employment period set out in ss 382 and 383 of the Act, being a period of one year; and
- a default Modern Award (C_lerks Private Sector Award 2010_) applied to her employment; (s 382(3)(b)(ii));
(d) her dismissal was not a case of genuine redundancy (s 385(d)); and
(e) her dismissal was not a case involving the Small Business Fair Dismissal Code, as the respondent conceded it employs more than 15 employees (s 385(c)).
[28] Section 385 of the Act defines an unfair dismissal based on the four criteria there set out; each of which must be satisfied if the person seeking a remedy from unfair dismissal is to succeed. The section reads:
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.
[29] As I have just concluded that three of the above criteria have been satisfied ((a)(c) and (d)), this only leaves the question of whether Ms Purcell's dismissal was 'harsh, unjust or unreasonable' and therefore an unfair dismissal. To this end, one must direct attention to s 387 of the Act, which deals with the matters to be taken into account by the Commission in determining whether a dismissal was unfair. It is trite to observe that each of the matters must be considered, and a finding made on each of them, including whether they are relevant or not; for example, if a person was dismissed for misconduct, ss (e) relating to warnings for unsatisfactory performance is usually not relevant.
[30] The matters to be taken into account under s 387 of the Act are:
(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.
[31] All of the criteria in s 387 of the Act must be taken into account when the Commission considers whether a particular dismissal is unfair. The notion of 'taking into account' a matter (such as those described in s 387 of the Act) connotes a genuine consideration of the relevant section and the apportionment of the appropriate weight of each criterion in the circumstances. In ; , J pointed out that '[t]o take a matter into account means to evaluate it and give it due weight' and that 'mere advertence will not be enough'. That said, it must also be steadily borne in mind that no one matter is to be attributed any greater weight than another. That this is so is obvious from the Explanatory Memorandum to the where at para 1541, it reads:
'1541. FWA must consider all of the above factors in totality. It is intended that Fair Work Act 2009 will weigh up all the factors in coming to a decision about whether a dismissal was harsh, unjust or unreasonable and no factor alone will necessarily be determinative.' (my emphasis)
[32] The meaning of 'valid reason' in s 387(a) is found in the judgement of North J in Selvachandran v Peterson Plastics Pty Ltd [1995] IRCA 333; (1995) 62 IR 371 ('Selvachandran'). This meaning has been considered and applied by members of the Commission and its predecessors for many years. For example, in Rode v Burwood Mitsubishi Print R4471, a Full Bench of the AIRC (including by reference to Selvachandran), discussed the meaning of 'valid reason' in the context of the relevant provisions of the Workplace Relations Act 1996. The following is an extract from the Full Bench's decision at para [17]-[19]:
'[17] In relation to the meaning of "valid reason" the following remarks of Northrop J in Selvachandran v Peteron Plastics Pty Ltd are relevant:
"Section 170DE(1) refers to a 'valid reason, or valid reasons', but the Act does not give a meaning to those phrases or the adjective 'valid'. A reference to dictionaries shows that the word 'valid' has a number of different meanings depending on the context in which it is used. In The Shorter Oxford Dictionary, the relevant meaning given is: '2. Of an argument, assertion, objection, etc; well founded and applicable, sound, defensible: Effective, having some force, pertinency, or value.' In The Macquarie Dictionary the relevant meaning is 'sound, just or wellfounded; a valid reason'.
In its context in s 170DE(1), the adjective 'valid' should be given the meaning of sound, defensible or wellfounded. A reason which is capricious, fanciful, spiteful or prejudiced could never be a valid reason for the purposes of s 170DE(1). At the same time the reason must be valid in the context of the employee's capacity or conduct or based upon the operational requirements of the employer's business. Further, in considering whether a reason is valid, it must be remembered that the requirement applies in the practical sphere of the relationship between an employer and an employee where each has rights and privileges and duties and obligations conferred and imposed on them. The provisions must `be applied in a practical, commonsense way to ensure that' the employer and employee are each treated fairly, see what was said by Wilcox CJ in Gibson v Bosmac Pty Ltd, when considering the construction and application of a s 170DC."
[18] While Selvachandran was decided under the former statutory scheme the above observations remain relevant in the context of s.170CG(3)(a). A valid reason is one which is sound, defensible or well founded. A reason for termination which is capricious, fanciful, spiteful or prejudiced is not a valid reason for the purpose of s.170CG(3)(a).
[19] We agree with the appellant's submission that in order to constitute a valid reason within the meaning of s.170CG(3)(a) the reason for termination must be defensible or justifiable on an objective analysis of the relevant facts. It is not sufficient for an employer to simply show that he or she acted in the belief that the termination was for a valid reason.'
See also: Nettleford v Kym Smoker Pty Ltd (1996) 69 IR 370.
[33] In my assessment, while the respondent may have genuinely believed that it had a sound basis for concluding that the applicant was not up to the full time job, she had been working in the role for five months, and a further probation was unnecessary. On his own evidence, Mr Couch knew her strengths and weaknesses. There is no doubt that the respondent described the 29 November 2019 meeting as a 'Notice of Termination Notice Meeting' and the applicant was entitled to treat it that way. More importantly, the provisions of the Act require certain mandatory steps to be followed when effecting such a dismissal. I shall return to these matters shortly.
[34] Further, there can be little doubt from Ms McArthur's notes of the meeting and Mr Couch's evidence that he was dissatisfied with the applicant's performance. He had an alternative plan in mind if the applicant wanted to return to her casual role, which he acknowledged was one she was very good at, and where her strengths were evident. It is irrelevant and of no moment that this alternative job was offered and refused. In some respects, it was 'Hobson's choice' for the applicant. In my view, the reasons for the applicant's dismissal were not sound, defensible or well founded, and accordingly, I find there was no valid reason for her dismissal.
Further matters to be considered under s 387 of the Act
[35] Subsections (b)-(e) of s 387 are generally grouped under the rubric of 'procedural fairness' or 'natural justice' issues. To highlight the importance of procedural fairness issues, in unfair dismissal cases, I cite four authorities on the subject. In C_rozier v Palazzo Corporation Pty Limited t/as Noble Storage and Transport_ (2000) 98 IR 137 ('Crozier v Palazzo'), a Full Bench of the AIRC said at [73]:
'As a matter of logic procedural fairness would require that an employee be notified of a valid reason for their termination before any decision is taken to terminate their employment in order to provide them with an opportunity to respond to the reason identified. Section 170CG(3)(b) and (c) would have very little (if any) practical effect if it was sufficient to notify employees and give them an opportunity to respond after a decision had been taken to terminate their employment.'
[36] In Wadey v YMCA Canberra [1996] IRCA 568, Moore J made clear that an employer cannot merely pay 'lip service' to giving an employee an opportunity to respond to allegations concerning an employee's conduct. His Honour said:
'In my opinion the obligation imposed on an employer by that section has, for present purposes, two relevant aspects. The first is that the employee must be made aware of allegations concerning the employee's conduct so as to be able to respond to them. The second is that the employee must be given an opportunity to defend himself or herself. The second aspect, the opportunity to defend, implies an opportunity that might result in the employer deciding not to terminate the employment if the defence is of substance. An employer may simply go through the motions of giving the employee an opportunity to deal with allegations concerning conduct when, in substance, a firm decision to terminate had already been made which would be adhered to irrespective of anything the employee might say in his or her defence. That, in my opinion, does not constitute an opportunity to defend.'
[37] Nevertheless, procedural fairness steps should be applied in a common sense and practical way. In Gibson v Bosmac Pty Ltd [1995] IRCA 222; (1995) 60 IR 1 ('Gibson'), Wilcox CJ said at [7]:
'Ordinarily, before being dismissed for reasons related to conduct or performance, an employee must be made aware of the particular matters that are putting his or her job at risk and given an adequate opportunity of defence. However, I also pointed out that the section does not require any particular formality. It is intended to be applied in a practical, commonsense way so as to ensure that the affected employee is treated fairly. Where the employee is aware of the precise nature of the employer's concern about his or her conduct or performance and has a full opportunity to respond to this concern, this is enough to satisfy the requirements of the section.'
Whether the person was notified of that reason (s 387(b))
[38] The applicant was notified of her dismissal with effect on 6 December 2019, in a meeting on 29 November 2019, with Mr Couch and Ms McArthur. As the reasons for dismissal were not valid reasons, the applicant was not notified appropriately and this subsection has not been satisfied. This tells in favour of a finding of unfairness.
Whether the person was given an opportunity to respond to any reasons related to the conduct of the person (s 387(c))
[39] The applicant was provided with no opportunity to respond to Mr Couch's concerns with her performance. She received no warning of his concerns or of her dismissal. There were no specifics of the applicant's alleged behaviour and no incidents were put to her. This was unfair. This factor tells in favour of a finding of unfairness.
Any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal (s 387(d))
[40] Given the applicant had no warning of her dismissal, she obviously had no opportunity to request to have a support person with her. It follows that there was no refusal. This factor tells in favour of a finding of unfairness.
If the dismissal related to unsatisfactory performance by the person - whether the person had been warned about that unsatisfactory performance before the dismissal (s 387(e))
[41] There was no evidence that the applicant was warned of her alleged poor performance; let alone was she given an opportunity to improve or perhaps suggest she receive training or further guidance as to what Mr Couch's expectations were. Indeed, the respondent's F3 for these proceedings, when asked if the employee 'was dismissed because of their performance', the answer was 'No'. This is curious and inexplicable in light of how the proceedings developed. This factor tells in favour of a finding of unfairness.
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 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 (ss 387(f) and (g))
[42] While I accept the respondent did not appear to have any expertise in dealing with the circumstances it faced, it is not a small business and might reasonably have been expected to have handled the applicant's dismissal with greater care and attention to the statutory and industrial imperatives in such matters. Nevertheless, I regard this as a neutral factor in this case.
Any other matters the Commission considers relevant (s 387(h))
[43] This section provides the Commission with a broad scope to consider any matters it considers relevant when determining whether a dismissal is unfair. I have taken into account the following:
(a) The applicant has one year of service and seemingly before November 2019 had received no warnings or counselling about her conduct or performance.
(b) The applicant secured alternative employment two weeks after her dismissal.
[44] Having considered and weighed each of the matters set out in s 387 of the Act, I am satisfied that the dismissal of Ms Purcell on 6 December 2019, was 'unreasonable'. Her dismissal was therefore unfair.
[45] Section 390 of the Act sets out the circumstances in which the Commission may make an order for reinstatement or compensation, with an emphasis on reinstatement. The section reads:
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.
[46] The applicant does not seek reinstatement. Given what has transpired and her views of Mr Couch, this is hardly surprising. She secured alternative work about two weeks after her dismissal. Accordingly, I am satisfied that reinstatement would not be appropriate.
[47] Section 392 of the Act sets out the matters the Commission must have regard to when determining:
(a) whether compensation should be ordered;
(b) if so, what amount of compensation should be ordered;
(c) the effect of any order as to any findings of misconduct by the applicant;
(d) the upper limit of compensation; and
(e) specific matters not to be taken into account.
[48] Section 392 reads as follows:
(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.
[49] The methodology to be adopted by the Commission in calculating compensation having regard for each of the matters set out in s 392 of the Act, (often referred to as the Sprigg formula), was considered by a Full Bench of the Commission in Bowden v Ottrey Homes Cobram and District Retirement Villages Inc. t/a Ottrey Lodge [2013] FWCFB 431 ('Ottrey'); see also: Sprigg v Paul's Licensed Festival Supermarket (1998) 88 IR 21 ('Sprigg') and Ellawala v Australian Postal Corporation [1999] AIRC 1250. A Full Bench said in Balaclava Pastoral Co Pty Ltd ATF O'Connor-Fifoot Family Trust v Nurcombe [2017] FWCFB 429 ('Balaclava') at [42]- [43]:
'[42] The correct approach to the assessment of compensation was summarised by the Full Bench in the recent decision in Double N Equipment Hire Pty Ltd t/a A1 Distributions v Alan Humphries as follows (footnotes omitted):
"[16] The well-established approach to the assessment of compensation under s.392 of the FW Act, taking into account the matters specified in s.392(2), is to apply the "Sprigg formula" derived from the Australian Industrial Relations Commission Full Bench decision in Sprigg v Paul Licensed Festival Supermarket. This approach was articulated in the context of the FW Act in Bowden v Ottrey Homes Cobram and District Retirement Villages. Under that approach, the first step to be taken in assessing compensation is to consider s.392(2)(c) - that is, to determine what the applicant would have received, or would have been likely to receive, if the person had not been dismissed. In Bowden this was described in the following way:
'[33] The first step in this process - the assessment of remuneration lost - is a necessary element in determining an amount to be ordered in lieu of reinstatement. Such an assessment is often difficult, but it must be done. As the Full Bench observed in Sprigg:
'... we acknowledge that there is a speculative element involved in all such assessments. We believe it is a necessary step by virtue of the requirement of s.170CH(7)(c). We accept that assessment of relative likelihoods is integral to most assessments of compensation or damages in courts of law.'
[34] Lost remuneration is usually calculated by estimating how long the employee would have remained in the relevant employment but for the termination of their employment. We refer to this period as the 'anticipated period of employment'...'
[17] The identification of this starting point amount "necessarily involves assessments as to future events that will often be problematic" . Once this first step has been undertaken, various adjustments are made in accordance with s.392 and the formula for matters including monies earned since dismissal, contingencies, any reduction on account of the employee's misconduct and the application of the cap of six months' pay. This approach is however subject to the overarching requirement to ensure that the level of compensation is in an amount that is considered appropriate having regard to all the circumstances of the case."
[43] We would add to this that in quantifying compensation, it is necessary to set out with some precision the way in which the various matters required to be taken into account under s.392(2) (and s.392(3) if relevant), and the steps in the Sprigg formula, have been assessed and quantified. That is to say, the way in which a final compensation amount has been arrived at should be readily apparent and explicable from the reasons of the decision-maker.' (footnotes omitted) (my emphasis)
[50] In adopting the above methodology, I make follow findings:
(a) As the respondent put no evidence as to the effect any order of compensation would have on the viability of its enterprise, I am not satisfied that the order I intend to make would not have any deleterious effect on the respondent's viability.
(b) The applicant had 12 months' service with the respondent - a short period of employment.
(c) It is notoriously difficult to speculate with any certainty, how long a period an unfairly dismissed employee would have continued in employment, but for their dismissal. In McCulloch v Calvary Health Care Adelaide [2015] FWCFB 873, the Full Bench of the Commission put it this way and said at [27]:
'[27] We would also observe that, in our view, the evidence upon which the Commissioner relied was insufficient to sustain the inference that, but for the dismissal, the appellant would only have remained in employment for a further 8 weeks, at which time he would be summarily terminated. Implicit in the Commissioner's finding is that the conduct which led to his dismissal (and which the Commissioner found did not constitute a valid reason for termination) would not only be repeated within a relatively short period of time but would in fact be repeated in a more serious form such as to constitute serious misconduct. While the task of determining an anticipated period of employment can be difficult, it must be done. In the context of this case it seems to us that the Commission would require cogent evidence to conclude that a person such as the appellant, who was dismissed without a valid reason, would only have worked another 8 weeks at which time he would have been summarily dismissed. The Commissioner's s.392(2)(c) finding constitutes a significant error of fact, within the meaning of s400(2) of the Act.'
(i) Given the intention of Mr Couch to dismiss the applicant and his failure to afford her procedural fairness, I consider she would not have had a reasonable expectation of more than another 4 weeks' further employment. It is common ground that the applicant's annual salary was $56,806.25. Four weeks equates to 4 x $1,092.43 = $4,369.72.
(ii) The applicant was successful in obtaining alternative employment after two weeks. I have taken this into account. I am obviously satisfied she has made a real and genuine effort to mitigate the losses suffered by her dismissal.
[51] I note the applicant was offered one week (with pay) to consider the casual job offer. I take that, in effect, to be a week's notice. Such notice would have ordinarily applied.
[52] Given I have found that there was no misconduct of the applicant, no deduction in compensation is made on that score (s 392(3)).
[53] The order I intend to make contains no component by way of compensation for shock, distress, humiliation or other analogous hurt (s 392(4)).
[54] The compensation cap in relation to the applicant is the lesser of the amount equivalent to the remuneration earned by her in the 26 weeks immediately before her dismissal (s 392(6)) and half the high income threshold immediately before the dismissal. The high income threshold is not relevant in this case. Remuneration earnt in the 26 weeks' before dismissal was approximately $28.403.00. As mentioned, I have determined that the applicant would have remained in employment for a further period of four weeks equating to 4 x $1,092.43 = $4,369.72.
[55] According to the Sprigg formula, and having regard to all the circumstances of this case; see: Double N Equipment Hire Pty Ltd t/a A1 Distributions v Alan Humphries; the amount of compensation is $4,369.72. This amount is obviously below the cap of remuneration the applicant earnt in the 26 weeks prior to her dismissal. Accordingly, I propose to order an amount of compensation of $4,369.72.
[56] For the aforementioned reasons, I am satisfied the dismissal of the applicant by the respondent was 'unreasonable', within the meaning of s 387 of the Act. Finally, s 381(2) of the Act is a significant and overreaching object of Part 3-2. It is expressed in these terms:
(1) The object of this Part is:
(a) to establish a framework for dealing with unfair dismissal that balances:
(i) the needs of business (including small business); and
(a) to establish procedures for dealing with unfair dismissal that
(ii) address the needs of employers and employees; and
(b) to provide remedies if a dismissal is found to be unfair, with an emphasis on reinstatement.
(2) The procedures and remedies referred to in paragraphs (1)(b) and (c), and the manner of deciding on and working out such remedies, are intended to ensure that a "fair go all round" is accorded to both the employer and employee concerned.
Note: The expression "fair go all round" was used by Sheldon J in in re Loty and Holloway v Australian Workers' Union [1971] AR (NSW) 95.'
[57] In this matter, I am satisfied reinstatement is inappropriate and compensation in the amount of $4,369.72 is appropriate, having regard to all the circumstances of this case. I am satisfied that the remedy I have determined will ensure a 'fair go all round' is accorded to both the applicant and the respondent. The amount so ordered is subject to any deductions of appropriate taxation, according to law. The amount of compensation is to be paid to the applicant within 21 days of today. Orders giving effect to my conclusions will be published contemporaneously with this decision.
Mr R Hearn and Mr E Couch appeared for the respondent.
Printed by authority of the Commonwealth Government Printer
Rebecca Purcell
Aspen Living Villages Pty Ltd t/a Darwin FreeSpirit Resort [2020] FWC 5812
(2011) 195 FCR 74
(1996) 69 IR 370
(2000) 98 IR 137
(1998) 88 IR 21
(1995) 62 IR 371
(1995) 60 IR 1
Reinstatement refused as inappropriate; respondent ordered to pay the applicant $4,369.72 compensation in lieu of reinstatement, payable within 21 days (see [55], [57]).
[17] On 29 November 2020, the applicant returned to work at 8am as rostered. She was called into Mr Couch's office where he and Ms Laura McArthur had a closed-door discussion with her, during which she was notified of her dismissal. She did not receive any warning, nor was she notified that this would be occurring, or that she had the opportunity to have a support person present at this meeting. During the meeting, she was offered a lower position with a substantial pay decrease, which was arranged by Mr Couch and the Food and Beverage Manager, Mr Ned Cartwright.
the remedy should take into account the rejection of continuous employment and the applicant's employment status two weeks after the dismissal;
the applicant was not treated harshly, and the initial offer of an additional two weeks' pay, as a remedy should be accepted as fair and reasonable.
What is an unfair dismissal