Fair Work Act 2009

s.394 - Unfair dismissal

• [1] This decision concerns an application for unfair dismissal remedy made by Mr Saki Elefantis against his former employer, The Trustee for Timber Ridge Unit Trust, which trades as Auscut, as a result of its dismissal of him which took effect on 11 May 2021. At the time of his termination of employment Mr Elefantis had worked for Auscut for more than seventeen years, having commenced employment with the company on 26 January 2004.

• [2] Section 396 of the Fair Work Act 2009 (the Act) requires the determination of four initial matters before consideration of the merits of the application. Those matters are: whether the application was made within the period required in s.394(2); whether the person was protected from unfair dismissal; whether the dismissal was consistent with the Small Business Fair Dismissal Code; and whether the dismissal was a case of genuine redundancy. I am satisfied from the evidence that Mr Elefantis was at the time of his dismissal a person protected from unfair dismissal and that a question of whether his dismissal was a genuine redundancy does not arise. The matter of whether the application was made outside the time prescribed under s.394 was determined by me in an earlier decision0F[1] with the question of whether Mr Elefantis' dismissal was consistent with the Small Business Fair Dismissal Code canvassed in this decision.

• [3] The merits of Mr Elefantis' application were heard by me on Tuesday, 31 August 2021 and 17 September 2021. Mr Elefantis was represented by Ms Emma Barnes-Whelan, Lawyer, Construction, Forestry, Maritime, Mining and Energy Union, Construction and General Division. Auscut were represented by Mr Adrian Ziccone, Senior Employment and Industrial Relations Advisor, Master Builders Association of Victoria. Evidence was given by Mr Elefantis and by Mr David O'Connell and Mr Matt Weeks on his behalf. The witnesses for Auscut were Ms Catherine Thomson, the company's Managing Director, and Mr Trevor Batchelor, Ms Roula Legitsas, Mr Cameron Hughes.

• [4] For the reasons set out below I am satisfied, in relation to the matters referred to above that Mr Elefantis' dismissal was not consistent with the Small Business Fair Dismissal Code and, after consideration of section 387 of the Act, I am satisfied his dismissal was harsh, unjust or unreasonable. Despite that finding I do not order a remedy since application of the appropriate principles leads to the conclusion there is no compensation payable.

• [5] Mr Elefantis was employed as a concrete cutter with the Respondent from 2004 until his dismissal on 11 May 2021.1F[2]

• [6] At the start of 2021, following the death of her father in December 2020, Catherine Thomson commenced the role as Managing Director and took over responsibility for the operation and performance of the business. Soon after she introduced changes in certain of the business' systems. The changes included implementation of new timesheets and timings associated with the weekly pay cycle. A further change was the requirement that employees fill out their own timesheets and submit them weekly to the payroll officer. This change followed Ms Thomson becoming aware that employees (or some of them at least) were not regularly completing their timesheets and the payroll staff were filling them in, perhaps to avoid the delaying payment processes. Ms Thomson requested the practice stop and instructed the payroll staff that employees were to complete their own timesheets on a weekly basis and submit them prior to their pays being processed.

• [7] On 11 May 2021 Mr Elefantis was washing his work vehicle in the Respondent's yard when he was approached by Ms Thomson. She approached him because she was completing the payroll and had timesheets for all employees except Mr Elefantis. What followed was a dispute between them as to the accuracy of his timesheets and frustration on Ms Thomson's part about a timesheet which had not been submitted. In her mind, this meant his pay could not be processed.

• [8] The dispute was loud and heated. Only Mr Elefantis and Ms Thomson were directly involved, although others overheard aspects of what occurred. What transpired led directly to Mr Elefantis' dismissal. Their evidence about the altercation includes the following;

• Says he returned to the yard on 11 May 2021 shortly before lunchtime and was approached by Ms Thomson. Earlier in the day there had been a difference of opinion between the two regarding whether Mr Elefantis could work on the coming Saturday. She was frustrated when he refused to commit to do the work she wanted.

• • When approached by Ms Thomson in the yard she challenged him about the times of his attendance at a job on 5 May which he resisted. In his exchanges Mr Elefantis asserted he had been at the job early which could be checked through the vehicle's GPS information. Ms Thomson challenged him by stating she could not rely on what he said, "when you didn't fill out a timesheet".2F[3]

• Mr Elefantis started walking away, which Ms Thomson challenged. She became angry and told him not to walk away from her, and;

o. Ms Thomson then replied, 'You're not doing timesheets!'

p. I said, 'You know if I'm working or not. You have the book in front of Roula [which states which jobs are allocated to which worker], the docket books and the GPS'.

q. Despite this she responded with, 'It's a sackable offense to not complete a timesheet.'

s. She repeated the claim that not completing a timesheet was a sackable offence and I could see she was getting angrier.

t. I said, 'You go ahead and do what you want to do.'

u. Ms Thomson then told me I was fired."3F[4]

• Ms Thomson left the yard and "a short time later" the supervisor, Trevor Batchelor, returned and gave Mr Elefantis a termination letter which had been prepared by Ms Thomson.

• • Observes that prior to approaching Mr Elefantis in the yard on 11 May she had been completing the payroll in lieu of the staff member who normally does the work since they were on leave. She recalls "having timesheets for all employees, except for Mr Elefantis. As I did not have a timesheet from him, I could not process his pay".4F[5]

• Shortly after Mr Elefantis' return to the yard she went to speak with him and asked to speak about his timesheets. She thought Mr Elefantis was immediately hostile toward her. He said words to the effect that "he didn't need to complete a timesheet because it was a standard week". Ms Thomson then;

"... explained that it didn't matter that he considered it was a standard week, all employees had to complete a timesheet each week. It is difficult to process pays without them. I told him that without a timesheet we have to guess his hours based on the GPS tracking and the job book in the office. Mr Elefantis was insistent that I utilise the GPS tracking on all the vehicles to fill in his timesheets. Mr Elefantis started to become agitated and upset towards me, at one point trying to grab sheets out of my hand as I stood by his van and then poking the sheet with his finger like he was stabbing it."5F[6]

• After several exchanges, Ms Thomson explained the need for him to complete timesheets and that she thought it was unsatisfactory he relied on another employee, Ms Legitsas, to complete them for him. During this part of the exchange Ms Thomson alleges Mr Elefantis was angry and moving within her personal space and pointing, which she took to be "a threat of violence";

"17. I explained to Mr Elefantis that everyone, including the office staff,

complete timesheets, except for him. I told Mr Elefantis that I only found out last week that Ms Legitsas had been completing the timesheets for him despite the clear instructions for him to complete them. I told him that Ms Legitsas was completing them for him rather than confront him for it, because she was scared of his reaction and that he would call in sick the following day leaving her short-staffed.

18. At this stage, Mr Elefantis had paced back towards me. I felt he was in my personal space. While he was close to me, Mr Elefantis said words to the effect '"go on, don't pay me, see what happens'". While saying these words, he was angrily pointing towards me. Given Mr Elefantis' anger and context of our exchange, I interpreted this as a threat of violence. I felt frightened and vulnerable at this point and that Mr Elefantis was about to punch me in the face:"6F[7]

• • Ms Thomson notes the dispute became circular, with Mr Elefantis giving her "every reason under the sun as to why he didn't want to complete a timesheet" and continuing to repeat that she didn't need a timesheet from him in order to pay him.7F[8] The two were moving closer to the factory door and Ms Thomson recollects she "said words to the effect that if Mr Elefantis continues to carry on like this blowing up, then he can stand down right now and go home. Mr Elefantis turned back around and said words to the effect 'I won't stand down, you can't make me'".8F[9]

• Mr Elefantis' response included him "yelling", after which she provided him what she describes as an ultimatum;

"22. In response to Mr Elefantis' escalating behaviour, I provided him with an ultimatum. I said words to the effect that he either start following a reasonable request to complete a timesheet or you can't work here.

23. Mr Elefantis responded with words to the effect of 'it's your choice'. I responded saying words to the effect 'no, it's actually your choice at this point, start following reasonable instruction to complete timesheets or I terminate your employment today'. Mr Elefantis again walked away from me and said 'fine, get me a cab'."9F[10]

• Ms Thomson then describes that she was physically affected by the exchange and felt frightened;

"24. Throughout the encounter; I felt frightened and physically

intimidated. I recall thinking, why haven't the others in the factory come to intervene in the encounter. This guy has gotten so angry and is about to punch me in the face.

25. After Mr Elefantis said to call him a cab, I went straight into the downstairs office and sat down. My whole body was shaking for some time. I remember lifting up my hands and seeing them shake. I even asked a colleague for a cigarette as I was so on edge. I haven't smoked in 14 years."10F[11]

• Ms Thomson then returned to the office and discussed what had occurred with Mr Hughes and Mr Batchelor and then drafted a short letter of termination. She later wrote some notes about what had occurred.

• [9] Auscut's termination letter communicates the following to Mr Elefantis;

We advise your employment is terminated effective immediately due to serious misconduct following our discussion at Auscut premises regarding your timekeeping.

Your refusal to complete a timesheet as part of your employment is not acceptable nor is your continued threatening and intimidating behavior towards staff including myself.

• [10] It is not in dispute that the nature of the exchange between the two parties was heated, with both parties raising their voices. None of the other witnesses distinctly heard or observed the dispute, although several overheard that there was a dispute;

• • Mr O'Connell was a concrete cutter employed by Auscut. He has, however, since left and was a witness for Mr Elefantis. Mr Batchelor told him that "Catherine is giving it to Saki",12F[13] after which he heard Ms Thomson yelling at Mr Elefantis. He heard parts of the dispute, but not all and thought Ms Thomson was not listening to Mr Elefantis. He saw some parts of the dispute, and

"10. By this time I could see both of them and they were standing a couple of

metres away from each other. Ms Thomson was still yelling at him and I recall thinking that Mr Elefantis was handling the situation exceptionally well. He was not yelling, swearing or in anyway acting aggressively. He was simply holding his ground and responding to her allegations.

11. In my view, he did not escalate the situation and actually took steps to achieve the opposite. I could see that he was trying to diffuse the situation but Ms Thomson appeared to be getting angrier and angrier.

12. Mr Elefantis started walking away and said words to the effect of, 'I've had enough of this. I'm going.'

13. I recall her saying words to the effect of, 'If you're going to walk away you can go home!'

14. He asked what she meant by this and she responded with, 'You're fired!'"13F[14]

• • Mr Batchelor is an Auscut supervisor who gave evidence on behalf of the Respondent. He overheard the dispute, hearing yelling, and could tell the dispute was heated and aggressive with both parties loud. However he could not hear all the details, even after moving closer The subject matter of the dispute was Mr Elefantis' failure to complete his timesheets.14F[15] While Mr Batchelor could not recall opining to Mr O'Connell that "Catherine is giving it to Saki" and had difficulty accepting in his oral evidence that Ms Thomson had been yelling, he did recall, somewhat coyly, that both "were having a loud conversation"15F[16] as well as characterising the argument in his witness statement as involving shouting and yelling, with both parties being loud.16F[17]

• • Mr Hughes is also an Auscut supervisor who gave evidence on behalf of the Respondent and saw and heard parts of the dispute with him hearing "some yelling and screaming", but without precision as to the words being said. By the time he and Mr Batchelor moved toward the argument, it was over. Ms Thomson passed by him to the office where he later observed her as being "upset and shaken" by what had taken place.17F[18]

• Mr Weeks was a manager employed by Auscut. He has, however, since left and was a witness for Mr Elefantis. He did not witness the events which led to Mr Elefantis' dismissal.

• Ms Legitsas is the Auscut employee responsible for processing pays and gave evidence on behalf of Auscut. She was on leave on 11 May 2021 and so did not hear or see the dispute.

• [11] Mr Elefantis does not dispute that he failed to complete and submit his timesheets and that he had been informed of the Ms Thomson's requirements.18F[19] He disputes though that he was shown how to fill in the time sheets. In essence he argues that there was an established custom and practice and that he needed time to change and meet Ms Thomson's requirements.19F[20] It was not merely that the method of completion had changed, but also the fact that Ms Thomson had changed the day on which timesheets were to be submitted from Wednesday to Monday, to accord with a changed pay week. Mr Elefantis would sometimes start work on Monday and forget the timesheets needed to be submitted.20F[21] He felt it was normal for him not to complete the timesheet and to leave it to Ms Legitsas; it was not his intention to not complete the timesheet.21F[22]

• [12] Mr Elefantis accepts that the argument when it arose was both because of the need for him to complete the timesheets and because there was a discrepancy in his timekeeping. He argues that he understood the need for him to complete the timesheet and tried to resolve the matter of the discrepancy; however, the new timesheet involved a level of complexity that he had difficulty grappling with, giving this evidence in cross-examination by Mr Ziccone, for Auscut;

"But you would agree that she was trying to get you to follow the new requirement to do the timesheets, wouldn't you? ‑Definitely, yes. I don't - yes, I agree with that. I mean, it just takes me - it takes me a while to do something. My schooling is probably maybe year 7. My spelling is not that great, my maths is not that great, so it just takes me a bit of time. Once I - I'm more hands-on than theory, yes.

I put to you that it's not that hard to complete a timesheet, Mr Elefantis? ‑It's not the - - -

(Indistinct) do it? ‑Yes. The old timesheeting was just you put two numbers down, when you start and when you finish. Her timesheet I think is every job you do on the day, you have to do I think fill it out that way, whatever time you start the first job, what time you finish your first job. And I think in between, I'm not too sure because - yes, so something like that.

And you didn't want to do it because it was added work, right, because there's more that you had to fill in and you didn't want to do that? ‑Not at all. You know, once I've learned it properly and been taught properly it's no different than doing a docket book. You know, I mean, sometimes they let you know when you do a docket book you miss out this, you've got to tick this, and you've got to write in any time waiting time. So yes, for me it wasn't an issue."22F[23]

• [13] Mr Elefantis argued in his oral evidence that his annoyance with Ms Thomson was not about the timesheet discussion, but about the fact she would not accept his explanation about inaccurate timekeeping in the previous week. He had argued to her that she could resolve the problem by checking GPS data for the day in question.23F[24]

• [14] Ms Thomson's oral evidence accepted that her notes from 11 May 2021 did not refer to Mr Elefantis grabbing sheets of paper from her hands and encroaching on her personal space, which she accepted were two of the most serious aspects of Mr Elefantis' conduct on the day. As to the accuracy of her notes, Ms Thomson acknowledged the omission, which surprised her, with her explaining she was still shaken when she wrote the notes, never expecting to have to produce the notes in proceedings such as these.24F[25]

• [15] Ms Thomson's oral evidence included that having become more involved in the business she had become aware that some employees did not fill out their own timesheets and that Mr Elefantis in particular did not, with Ms Legitsas doing it on his behalf. She was not aware that this was a practice for other employees as well,25F[26] however it may well have been a practice for other employees.26F[27] She was aware that Ms Legitsas had been doing this routinely even after the system had been changed, which was in February.27F[28] In relation to the reason for Mr Elefantis' dismissal, Ms Thomson accepted he was dismissed for his conduct, rather than the failure to complete the timesheets, albeit the incomplete timesheets were the catalyst for dismissal; "... if it was just about the timesheet, it could have been dealt with in a warning. But it wasn't just about the timesheet. It was his reaction to being asked about it, so."28F[29]

• [16] Ms Thomson's evidence includes that Ms Legitsas completed the timesheets for Mr Elefantis because she was scared of his reaction and that if she did not, he would call in sick the following day. She states that she learned of this the week before and that she told Mr Elefantis of her knowledge in the course of the argument.29F[30] Ms Legitsas' evidence on the subject of completion and submission of the timesheets does not especially support the characterisation of her being scared of Mr Elefantis' reaction and is generally equivocal; that she had been instructed to no longer complete the timesheets so she did not. Even so, she put in place a workaround - in order to make sure the pay got processed she would fill out the basics and obtain a sign-off from the employee, which only they could do.30F[31] Mr Elefantis was singularly unhelpful in conforming to the new process "not one timesheet was handed in by Saki signed off from start of March till his time leaving us".31F[32]

• [17] Neither Mr Elefantis or Ms Thomson was an especially compelling witness and the evidence of each must be qualified. Mr Elefantis did not want to accept he had been instructed to submit timesheets and continued to present the view that it was acceptable for Ms Legitsas to complete and submit them on his behalf. He had no insight as to his unacceptable or provocative conduct and much of his evidence sought to justify how he was the victim of Ms Thomson's aggression, when that characterisation is simply not believable. Ms Thomson was genuinely afraid of Mr Elefantis' temper, both as demonstrated on the day and by reputation previously. However, as with Mr Elefantis, she would not accept her own failings or that her own conduct was unacceptable for a workplace, let alone the managing director of a workplace. Neither protagonist adequately addressed in their evidence that other witnesses, notably Mr O'Connell, Mr Batchelor and Mr Hughes, each reported hearing mutual yelling and shouting and that each had been involved. As such the evidence of both Mr Elefantis and Ms Thomson about what occurred on 11 May 2021 must be regarded as unreliable on the main contentions.

• [18] Nonetheless, consideration of the evidence in total allows the following findings to be made about the key events which led to Mr Elefantis' dismissal;

• In or around March 2021 Mr Elefantis and other employees were directed to fill in and submit timesheets on a weekly basis. While others conformed, Mr Elefantis did not. Why that is so is not adequately explained in the evidence; perhaps it was a lack of literacy or numeracy; perhaps it was just a dogmatic refusal to change.

• Mr Elefantis had not, as at 11 May 2021, completed and submitted a timesheet for the previous week's work.

• The argument on 11 May 2021 was mutually unreasonable. Each of Mr Elefantis and Ms Thomson were belligerent to the other. Each yelled and shouted.

• The point in the argument at which reference was made about accessing GPS data for the purpose of verification of the time of attendance is not critical. However, it is more likely than not that two critical matters were stated to Mr Elefantis; that irrespective of whether the data could be accessed, he was nonetheless required to complete timesheets accurately; and that in itself the GPS data could well be inaccurate.

• It is more likely than not that Ms Thomson told Mr Elefantis that she knew he was not completing and submitting his timesheets and that he did not at any time say that he would do so either for the past week's work or in the future.

• In all likelihood the argument included some of the physicality described by Ms Thomson, of Mr Elefantis unduly moving within her personal space; angrily pointing at her; and trying to grab paper out her hand. I do not find there was a reasonable apprehension of violence by Mr Elefantis toward Ms Thomson; while the evidence of the other witnesses about the argument has the problem of being incomplete, I consider it likely that if there had been a precursor to physical violence shown by Mr Elefantis it would have been seen or heard by one of those witnesses.

• I do not accept Mr Elefantis' characterisation of the last stage of the argument as him walking away from Ms Thomson in order to defuse the situation; such is extremely unlikely given how the argument developed and progressed. Instead it is likely he walked away simply because he did not accept what Ms Thomson was saying.

• Ms Thomson dismissed Mr Elefantis in the course of the argument. It is likely that his dismissal followed her stating to him that he must complete his timesheets, probably put as an ultimatum to do so or no longer work for Auscut, which was not accepted by Mr Elefantis.

• [19] Determination of Mr Elefantis' application requires consideration of several points of the Act. In relation to those matters and for the reasons set out below;

• While I am satisfied Auscut is a Small Business Employer as defined, I find its dismissal of Mr Elefantis was not consistent with the Small Business Fair Dismissal Code;

• After consideration of the general unfair dismissal criteria within s.387 I find Mr Elefantis was unfairly dismissed; and

• In relation to the question of remedy, I find that reinstatement is not appropriate, but that compensation is appropriate.

Consistency with the Small Business Fair Dismissal Code

• [20] At the time of his dismissal, Auscut employed 12 employees32F[33] and so is a Small Business Employer, with s.23 of the Act defining the term to be an employer employing fewer than 15 employees at a particular time. Auscut dismissed Mr Elefantis under the summary dismissal provision of the Small Business Fair Dismissal Code (the Code), that is without notice, with the Code providing the following on the subject;

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."

• [21] It has been held on the subject that;

"(1) If a small business employer has dismissed an employee without notice - that is,

with immediate effect - on the ground that the employee has committed serious misconduct that falls within the definition in reg.1.07, then it is necessary for the Commission to consider whether the dismissal was consistent with the "Summary dismissal" section of the Code. All other types of dismissals by small business employers are to be considered under the "Other dismissal" section of the Code.

(2) In assessing whether the "Summary dismissal" section of the Code was complied with, it is necessary to determine first whether the employer genuinely held a belief that the employee's conduct was sufficiently serious to justify immediate dismissal, and second whether the employer's belief was, objectively speaking, based on reasonable grounds. Whether the employer has carried out a reasonable investigation into the matter will be relevant to the second element."33F[34]

• [22] Auscut submits that Mr Elefantis' conduct constituted serious misconduct as defined at Regulation 1.07 of the Fair Work Regulations 2009 in that the conduct "was wilful and deliberate and inconsistent with the continuation of employment. It is also likely to constitute conduct that causes serious and imminent risk to the health and safety of a person. In its submission there can be no doubt that the Applicant's behaviour was sufficiently serious and amounts to serious misconduct under the regulations."34F[35]

• [23] The allegations of serious misconduct included that Mr Elefantis:

• Behaved aggressively and verbally threatened the Managing Director outside the Company Factory;

• Wilfully came within close proximity to Ms Thomson as a means of physical intimidation;

• • The conduct was wilful and deliberate and inconsistent with the continuation of employment.35F[36]

• [24] I accept that Ms Thomson genuinely held the belief that Mr Elefantis' conduct was sufficiently serious to justify immediate dismissal. She believed he was aggressive and acting in a way that meant he had no intention of following her directives. She was emotionally shaken by the encounter and continued to be for some hours after the event.

• [25] I do not accept that Ms Thomson's belief at the time was held on reasonable grounds. In significant respects her belief about Mr Elefantis' conduct overstates what he did, and her belief takes no account of her own contribution to the dispute. Her belief and reaction may have been driven in part by her previous experience of violence.

• [26] The circumstances of 11 May 2021 are that only Mr Elefantis and Ms Thomson have direct and complete knowledge of what occurred. There was no investigation conducted and it must be observed that, even if one had been conducted, its results may have been inconclusive because of the fact that only Mr Elefantis and Ms Thomson were involved.

• [27] On the basis of the evidence before me, an objective assessment of the events would show that each was involved in a heated argument and that the various descriptions of there being yelling and shouting were correct; such conduct, though, was mutual. I accept that the dispute involved two subject matters; the failure to complete the timesheets as well as the time Mr Elefantis first attended a job in the previous week.

• [28] There is little doubt that each was belligerent to the other. To varying degrees each witness who overheard the dispute heard raised voices consistent with inappropriate workplace conduct. The yelling came about because neither protagonist was about to calmly accept the other's view. Ms Thomson it seems likely was annoyed Mr Elefantis had, yet again, failed to follow her directions; there was little doubt that in his explanation he was indeed giving her "every reason under the sun as to why he didn't want to complete a timesheet".36F[37] It is doubtful though that Mr Elefantis' conduct crossed the line into threatening or violent behaviour. At worst he shouted (as did she), grabbed papers, made points by stabbing with his fingers, and moved close to her, invading her personal space. Through his words Mr Elefantis also made it plain he would not complete the timesheets in the way Ms Thomson sought, or at least not complete and submit the timesheets for the past week.

• [29] While those things may not be conducive to a continued positive employment relationship, neither do they allow the requisite findings that Mr Elefantis' dismissal was consistent with the Summary Dismissal part of the Code. Ms Thomson genuinely held a belief that Mr Elefantis' conduct was sufficiently serious to justify immediate dismissal; however, the evidence does not allow the conclusion that Ms Thomson's belief was, objectively speaking, based on reasonable grounds.

• [30] Despite Auscut's direction to employees about the changed timesheet arrangements, an informal workaround was in place between Mr Elefantis and Ms Legitsas. Whether it had arisen because Mr Elefantis just could not see the point of completing his timesheets, or because he had a problem with literacy or numeracy, is not clear on the evidence or, for that matter, especially relevant. Instead, the fact of the workaround became known to Ms Thomson only in the week before 11 May 2021, and then became an issue for Ms Thomson on that day because Ms Legitsas was away and she had to complete the payroll herself. When Ms Thomson became angry with Mr Elefantis and challenged him, he reciprocated and dug in. Ms Thomson probably was "giving it to Saki", and he gave it to her in response. The evidence on those matters, though, does not lead to a finding that Mr Elefantis' conduct was wilful, and deliberate, and inconsistent with the continuation of employment.

• [31] Mr Elefantis' conduct likely did not cause a serious and imminent risk to the health and safety of a person. The elements of physical misconduct I found occurred are that Mr Elefantis unduly moved within Ms Thomson's personal space, angrily pointed at her, and tried to grab paper out of her hand. While those matters are misconduct, being both foolish and an indicator that Mr Elefantis would not follow directions given to him unless he happened to agree with them, they are at the lower end of the scale and, on their own, and in the absence of a warning of dismissal if repeated, do not amount to serious misconduct.

• [32] The Code provides that notification to the police of a reasonably held allegation of theft, fraud or violence is sufficient to establish consistency with the Code. While in this case there was no report to the police such is a neutral consideration since I have found Mr Elefantis' dismissal was not consistent with the Code for other reasons.

• [33] In conclusion, on the subject of the consistency of Mr Elefantis' dismissal with the Code, Ms Thomson erroneously held the belief that termination of his employment was, objectively speaking, based on reasonable grounds. Her belief included the matters referred to above, however only some of the elements can be objectively sustained, and then only at the lesser standard of misconduct, and were not serious misconduct.

• [34] Accordingly, I am unable to find Mr Elefantis' dismissal was consistent with the Small Business Fair Dismissal Code.

• [35] Determination of whether Mr Elefantis' dismissal was consistent with the Code, is one of the initial matters that must be decided before determination of the merits of his application. Having determined that his dismissal was not consistent with the Code, I am subsequently required to consider the merits of his application in the manner set out in s.387, the provisions of which section are as follows:

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

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

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

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

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

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

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

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

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

• [36] Determination of whether the Applicant's dismissal was harsh, unjust or unreasonable requires each of the matters specified in s.387 to be taken into account. The Full Bench has summarised the approach that should be taken by the Commission to the criteria within s.387 in the following way:

"The following propositions concerning consideration as to whether there is a valid reason for dismissal for the purpose of s.387 are well established:

• • a valid reason is one which is sound, defensible and well-founded, and not capricious, fanciful, spiteful or prejudiced;37F[38]

• • a reason would be valid because the conduct occurred and justified termination; conversely the reason might not be valid because the conduct did not occur or it did occur but did not justify termination (because, for example, it involved a trivial misdemeanour);38F[39]

• • it is not necessary to demonstrate "serious misconduct" or misconduct sufficiently serious to justify summary dismissal in order to establish a valid reason for dismissal;39F[40]

• • the existence of a valid reason to dismiss is not assessed by reference to a legal right to dismiss40F[41] (so that, for example, where summary dismissal has occurred, it is not necessary to determine whether the right of summary dismissal was legally available); and

• • the criterion for a valid reason is not whether serious misconduct as defined in reg.1.07 has occurred, since reg.1.07 has no application to s.387(a) (although a finding that misconduct of the type described might well ground a conclusion that there is a valid reason for dismissal based on the employee's conduct).41F[42]" 42F[43] (original references)

• [37] A dismissal is unfair in the case of a person protected from unfair dismissal, dismissed by the employer which is not a small business employer and for reasons other than genuine redundancy, if it was harsh unjust or unreasonable, taking into account the criteria within s.387. I will deal with each of the criteria within s.387 in turn.

(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)

• [38] To be a valid reason the reason must be "... sound, defensible or well-founded." A reason which is "... capricious, fanciful, spiteful or prejudiced ..." cannot be a valid reason. 43F[44] The reason for termination must be defensible or justifiable on an objective analysis of the relevant facts.44F[45] The valid reason for termination is not to be judged by legal entitlement to terminate an employee, "... but [by] the existence of a reason for the exercise of that right" related to the facts of the matter.45F[46] Ascertainment of a valid reason involves a consideration of the overall context of the "practical sphere" of the employment relationship.46F[47]

• [39] Where an employee has been dismissed without notice (summary dismissal) for serious misconduct the Commission may find that, although there was a valid reason for the dismissal, the dismissal was harsh because summary dismissal was a disproportionate response. Where the conduct involves serious misconduct, the principle established in _Briginshaw v Briginshaw_47F[48] may be relevant. While an "elevated standard",48F[49] the standard of proof remains the balance of probabilities, but "the nature of the issue necessarily affects the process by which reasonable satisfaction is attained" and such satisfaction "should not be produced by inexact proofs, indefinite testimony, or indirect inferences" or "by slender and exiguous proofs or circumstances pointing with a wavering finger to an affirmative conclusion".49F[50]

• [40] It is not the Commission's role to "stand in the shoes of the employer and determine whether or not the decision made by the employer was a decision that would be made by the court."50F[51] However, the Commission "must consider the entire factual matrix in determining whether an employee's termination was for a valid reason."51F[52]

• [41] For there to be a valid reason related to the Applicant's conduct, it must be found that the conduct relied on occurred as a necessary step in the process of determining whether a valid reason existed.52F[53] Further, "[t]he question of whether the alleged conduct took place and what it involved is to be determined by the Commission on the basis of the evidence in the proceedings before it. The test is not whether the employer believed, on reasonable grounds after sufficient enquiry, that the employee was guilty of the conduct which resulted in termination."53F[54]

• [42] It has been said by the Full Bench with reference to the definition of "serious misconduct" within the Fair Work Regulations 2009 that "the criterion for a valid reason is not whether serious misconduct as defined in reg.1.07 has occurred, since reg.1.07 has no application to s.387(a) (although a finding that misconduct of the type described might well ground a conclusion that there is a valid reason for dismissal based on the employee's conduct)."54F[55] The Full Bench has also found there is not a "clear rule of law defining the degree of misconduct justifying summary dismissal",55F[56] and that it "is certainly well established that, for the purposes of s.387(a), it is not necessary to demonstrate misconduct sufficiently serious to justify summary dismissal on the part of the employee in order to demonstrate that there was a valid reason for the employee's dismissal (although established misconduct of this nature would undoubtedly be sufficient to constitute a valid reason)."56F[57]

• [43] The reason for Mr Elefantis' termination of employment was as set out in the Respondent's letter to him dated 11 May 2021 confirming Ms Thomson's earlier verbal dismissal, namely that he exhibited serious misconduct in the 11 May 2021 discussion, allied with his refusal to complete a timesheet and claims of his threatening and intimidating behaviour, both then and at earlier times.

• [44] For the reasons considered in relation to the Code, the Applicant's conduct on 11 May 2021 was as described, namely that Mr Elefantis was belligerent to Ms Thomson (as she was to him); that each yelled at the other; that Mr Elefantis attempted to grab at papers she held, made points by stabbing with his fingers, and moved close to her, invading her personal space. Finally, Mr Elefantis made it plain he would not complete the timesheets in the way Ms Thomson sought, or at least the timesheets for the past week. While this was misconduct it was not serious misconduct and such evidence as is available about prior behaviour does not give rise to a finding that Mr Elefantis' behaviour on 11 May 2021 was part of a pattern of threatening and intimidating behaviour. While claims were made by several of the employer witnesses that Mr Elefantis was difficult to deal with and had to be carefully managed in order to avoid an unpleasant confrontation, those claims are either too distant in time from May 2021 or are too imprecise to be relied upon in these proceedings.

• [45] Aside from the misconduct of his belligerence, Mr Elefantis failed to agree to submit his future timesheets as he had been directed. This was also misconduct. There can be little doubt from the evidence that he knew this was Auscut's direction and his failure to accept the direction was misconduct. Instead of accepting Ms Thomson's challenge to follow his employer's direction, Mr Elefantis dissembled, not directly saying he would complete them in future.

• [46] Despite this, at the time she dismissed Mr Elefantis, Ms Thomson did not have a valid reason to dismiss him. The fact there was a mutually heated argument with mutual yelling reduces a finding that yelling of itself was a valid reason. The physicality of Mr Elefantis' actions was also insufficient as a reason for dismissal. The closest element of Mr Elefantis' conduct to a valid reason for dismissal was his failure to agree to submit his timesheets as directed. He neither said to his employer - or the Commission for that matter - that he would submit them in the future, or that matters of literacy or numeracy prevented him from doing so. Plainly he did not see a need to submit them and was not about to agree to do so. I am satisfied he had no intention of doing so in the future.

• [47] However, even in tandem with the matters of his belligerence and physical conduct, the failure to agree to submit timesheets does not rise in this case to be a valid reason for dismissal since it seems the unambiguous direction of complete the time sheets or leave was only given to Mr Elefantis in the course of the altercation with Ms Thomson. His failure to agree should have been tested and if he failed to heed the direction, there may have then been a valid reason for dismissal

• [48] Ms Thomson's feelings of anger or anxiety during the argument should have been a trigger for her to step back, return to calm and, at a later time, decide what should be done about Mr Elefantis; but they were not. Instead, she dismissed Mr Elefantis in the course of the altercation and then swiftly afterward confirmed his dismissal in writing. Thinking the matter through, investigating Mr Elefantis' claims, or why Ms Legitsas was completing his timesheets, or seeking advice about what had just transpired, should have brought Ms Thomson to the conclusion that immediate termination was not justified.

• [49] Consequently, when Ms Thomson dismissed Mr Elefantis' in the heat of the moment Auscut did not have was a valid reason for the dismissal related to his capacity or conduct.

(b) whether the person was notified of that reason

• [50] Mr Elefantis was notified of his dismissal first when Ms Thomson told him of the fact, which was after she told him he had to start following her instructions of be terminated, and then shortly afterward when he was given a letter confirming her decision and the reasons held by her.

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

• [51] For the Commission to have regard to whether an employee has been given an opportunity to respond to the reason for dismissal there needs to be a finding that there is a valid reason for dismissal.57F[58] There being no finding by me of a valid reason for dismissal, consideration of this criterion is a neutral factor in my overall consideration of s.387.

(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

• [52] There were no discussions with Mr Elefantis about an impending dismissal. Accordingly, consideration of this criterion is a neutral factor in my decision.

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

• [53] There had been no recent warnings to Mr Elefantis of unsatisfactory performance relevant to the events of 11 May 2021. Auscut referred in its case to two warnings about Mr Elefantis conduct, given much earlier than 2021, namely in 2009 and 2017. Mr Elefantis contested both the fact and the relevance of the warnings. Given their age I place no reliance on them. Consideration of this criterion is a neutral factor in my decision.

(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

• [54] There is no direct evidence before the Commission that the size of the employer's enterprise impacted on the procedures it followed in effecting Mr Elefantis' dismissal. Nonetheless, I consider the way in which Auscut - or more precisely, Ms Thomson - determined to dismiss Mr Elefantis was impacted upon by the size of Auscut's enterprise. It may be presumed that a larger firm, more experienced in dealing with workplace conflict and misconduct, would have been more likely to follow a firm procedure to either call Mr Elefantis to account and have him agree to complete and submit timesheets, or to fairly dismiss him as a consequence of his repeated failure.

(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

• [55] As with the previous criterion I consider the absence of dedicated human resource management specialists or expertise in Auscut's enterprise may have impacted on the procedures it followed in effecting Mr Elefantis' dismissal.

(h) any other matters that the FWC considers relevant

• [56] Mr Elefantis' length of service and his age are both matters that should be taken into account as leaning in his favour. The Applicant commenced employment with Auscut in January 2004, 17 years ago, and is presently 58 years of age. Even though Auscut put forward that Mr Elefantis could be difficult to deal with and angered easily, the relationship continued for a lengthy period. It may be expected that some greater consideration is shown toward someone who has been employed for so long, is in the age bracket in which reemployment becomes difficult and is toward the age that employment often ends. It may be expected in this regard that an unequivocal written warning is given, or training offered, or a longer time period given to remedy a problem. That these things were not done is a factor which leans in Mr Elefantis' favour.

• [57] I do not consider there to be any further matters requiring consideration under s.387(h).

• [58] After considering each of the criteria within s.387, I am not satisfied there was a valid reason for Auscut's dismissal of Mr Elefantis, and I am further satisfied Auscut did not take into account the length of his service or his age when Ms Thomson decided to dismiss him. To the extent it could be considered there was some fine balance on the matter of whether there was a valid reason for Mr Elefantis's dismissal, the failure to take into account his length of service and age shifts the subject firmly in his favour.

• [59] The Act requires the Commission to consider whether a dismissal was harsh, unjust or unreasonable by taking into account the matters at ss.387 (a) to (h). The meaning of the term "harsh, unjust or unreasonable" was considered by the High Court in the matter of Byrne and Frew v Australian Airlines Limited:

"It may be that the termination is harsh but not unjust or unreasonable, unjust but not

harsh or unreasonable, or unreasonable but not harsh or unjust. In many cases the concepts will overlap. Thus, the one termination of employment may be unjust because the employee was not guilty of the misconduct on which the employer acted, may be unreasonable because it was decided upon inferences which could not reasonably have been drawn from the material before the employer, and may be harsh in its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct in respect of which the employer acted."58F[59]

• [60] It has been further held that a dismissal may be unjust, because the employee was not guilty of the misconduct on which the employer acted; unreasonable, because it was decided on inferences which could not reasonably have been drawn from the material before the employer; and/or harsh, because of its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct.59F[60]

• [61] I find that Mr Elefantis' dismissal was harsh, unjust and unreasonable. It was harsh because the penalty of dismissal was disproportionate to the misconduct he committed and did not take into account the matters of length of service and age to which I have referred. It was unjust since he was not afforded an opportunity to fully explain his situation calmly and away from the heated altercation. Finally, it was unreasonable because it did not adequately take into account the facts of the conduct that could be established.

• [62] The sections of the Act dealing with remedy once a finding of unfair dismissal has been made are set out in ss.390 - 393.

• [63] Pursuant to sub-s.390(3) an order for the payment of compensation to a person must not be made unless the Fair Work Commission "is satisfied that reinstatement of a person is inappropriate" and also that the Commission "considers an order for payment of compensation is appropriate in all the circumstances of the case."

• [64] Mr Elefantis does not seek reinstatement from his application, relying on "circumstances surrounding his dismissal and the fractured nature of the employment relationship".60F[61] Auscut argue against reinstatement since Mr Elefantis "engaged in conduct that the Respondent submits can only be considered as wholly inappropriate", with that conduct directed toward Auscut's most senior officer, Ms Thomson, the Managing Director.61F[62] In all, the evidence from each party on the matter of the appropriateness of reinstatement is low and, in a case which did not involve a heated argument directed at the head of a small business coupled with a refusal to accept her instructions, may not have been accepted by me. However, in this case I discern an unworkability of the relationship which may well have arisen with the arrival of Ms Thomson after the death of her father. To some extent the parties may well have arrived at this point because Ms Thomson was no longer prepared to accept things that may once have been overlooked. As the Managing Director, Ms Thomson was quite entitled to make the changes to the payroll system she did; they were reasonable and proportionate. There is a totemic nature to Mr Elefantis' refusal to accept them and I could not be satisfied that if he were reinstated that he would follow other directions from Ms Thomson and others for changes to business procedures. In the circumstances I am satisfied that it would not be appropriate to reinstate Mr Elefantis.

Compensation - what must be taken into account in determining an amount?

• [65] Having determined that reinstatement is inappropriate compensation may only be ordered if the Commission considers an order for payment of compensation is appropriate in the circumstances of the case (s.390(3)(b)). That is, an order for compensation is not automatic if reinstatement is found to be inappropriate and is instead a discretion to be exercised subject to certain further consideration. In this regard s.392(2) of the Act requires all of the circumstances of the case to be taken into account when determining an amount to be paid as compensation to the Applicant in lieu of reinstatement including:

"(a) the effect of the order on the viability of the Respondent's enterprise;

(c) the remuneration that the Applicant would have received, or would have been likely to receive, if the Applicant had not been dismissed;

(d) the efforts of the Applicant (if any) to mitigate the loss suffered by the Applicant because of the dismissal;

(e) the amount of any remuneration earned by the Applicant from employment or other work during the period between the dismissal and the making of the order for compensation;

(f) the amount of any income reasonably likely to be so earned by the Applicant during the period between the making of the order for compensation and the actual compensation; and

(g) any other matter that the Commission considers relevant."

• [66] I consider all the circumstances of the case below.

Effect of the order on the viability of the Respondent's enterprise

• [67] There is no evidence before me about the effect of an order for compensation on the viability of the employer's enterprise.

• [68] Mr Elefantis' length of service was in excess of 17 years, having commenced employment in January 2004. This is considerable service with the one employer, and I accept it is a factor that ought to be taken into account in assessing the remuneration the Applicant would have received had he not been dismissed.

Remuneration that the Applicant would have received, or would have been likely to receive, if the Applicant had not been dismissed

• [69] Assessment of the remuneration an applicant would have received had it not been for their dismissal is both an essential and difficult task.

• [70] As stated by a majority of the Full Court of the Federal Court, "[i]n determining the remuneration that the Applicant would have received, or would have been likely to receive... the Commission must address itself to the question whether, if the actual termination had not occurred, the employment would have been likely to continue, or would have been terminated at some time by another means. It is necessary for the Commission to make a finding of fact as to the likelihood of a further termination, in order to be able to assess the amount of remuneration the employee would have received, or would have been likely to receive, if there had not been the actual termination."62F[63]

• [71] Mr Elefantis was summarily dismissed for the argument which developed when he was challenged by Ms Thomson principally regarding his failure to submit weekly timesheets as directed as well as what was said to be his "continued threatening and intimidating behavior towards staff". He should not have been dismissed for those matters and a more reasonable action by Auscut would have been to issue a written warning to Mr Elefantis in unambiguous terms that he would be dismissed if he lost his temper with anyone at work again, or if he failed to heed directions he was given by Auscut, such as to complete and submit timesheets on time.

• [72] Mr Elefantis though is not a person who would particularly heed such a warning. Ms Thomson had been belligerent and provocative toward him certainly, however the evidence suggests he is a person who likely does what he wants to do and resists things he does not. For her part, Ms Thomson saw the payroll system she inherited upon arrival as inadequate and requiring change. She directed there be a change, and what she put in place was neither unreasonable nor unusual. Had she not said to Mr Elefantis in the argument that took place that he was dismissed, but instead simply said, "this is my system and you have to follow it unless you give me a reason why you cannot" it is doubtful the Applicant would either have changed or changed for long.

• [73] A warning on the subject would likely have been breached soon after it was given. My assessment then of Mr Elefantis' anticipated remaining period of employment is that it would be no more than 4 to 6 weeks. Because of the need to take into account his lengthy period of employment, I find the remaining period of employment would be 6 weeks.

• [74] A payslip filed by Mr Elefantis in these proceedings and dated 11 May 2021 shows his year-to-date earnings for a period of 314 days to be $72,964.25, comprised of the following;63F[64]

• [75] This suggests a weekly average pay of $1,626. Superannuation was paid to Mr Elefantis at a flat rate of $215 per week. Six weeks pay at the weekly average is $9,756 to which would be added $1,290 for the flat rate superannuation payments for the same period. The sum of the two amounts is $11,046 which is the amount of remuneration Mr Elefantis would have received, or would have been likely to receive, if he had not been dismissed.

Efforts of the Applicant to mitigate the loss suffered by the Applicant because of the dismissal

• [76] The Applicant must provide evidence that they have taken reasonable steps to minimise the impact of the dismissal.64F[65] What is reasonable depends on the circumstances of the case.65F[66]

• [77] Mr Elefantis' submissions are that between the date of his dismissal and when they were filed, a period of about 12 weeks, he applied for four positions and was not successful in any of the applications. This is a somewhat tepid effort on Mr Elefantis' part to mitigate his loss. Making an average of one job application each three weeks is by no means sufficient to mitigate his loss, especially given the difficulties in obtaining further employment which may be assumed could arise because of his age. I consider a reduction in compensation of 5% is appropriate.

Amount of remuneration earned by the Applicant from employment or other work during the period between the dismissal and the making of the order for compensation

• [78] After he was dismissed Mr Elefantis applied to the Incolink fund for the payment of accrued funds and was paid the gross amount of $66,117 in three instalments between 23 June 2021 and 16 August 2021. Mr Elefantis has not earned any other remuneration from employment or other work since his dismissal.

• [79] The CFMMEU argues on behalf of Mr Elefantis that the Incolink payments are not remuneration of the type contemplated by s.392(2) being the product of contributions made over the years as a result of an enterprise agreement obligation. This matter is dealt with in more detail further in this decision.

Amount of income reasonably likely to be so earned by the Applicant during the period between the making of the order for compensation and the actual compensation

• [80] At the time of the hearing Mr Elefantis was not in employment. As late as 26 October 2021 the Commission was advised he had not received any remuneration other than the Incolink payments since leaving Auscut's employment, and it seems the Incolink payments have now ended. It is unlikely then that Mr Elefantis would earn any income during the period between the making of the order for compensation and the actual compensation.

• [81] A further relevant matter includes Mr Elefantis' age. According to the Incolink PAYG statements filed on his behalf he is presently 58 years old. His age, together with his length of service, are factors which would suggest compensation should be higher than would be otherwise the case.

Compensation - how is the amount to be calculated?

• [82] The well-established approach to the assessment of compensation in unfair dismissal matters is to apply the "Sprigg formula" derived from the Australian Industrial Relations Commission Full Bench decision in Sprigg v Paul's Licensed Festival Supermarket (Sprigg).66F[67] The approach and Sprigg reasoning has been confirmed several times in Full Bench decisions, and most recently in ERGT Australia Pty Ltd v Kevin Govender.67F[68]

• [83] The approach in Sprigg is as follows:

Step 1: Estimate the remuneration the Applicant would have received, or have been likely to have received, if the employer had not terminated the employment (remuneration lost).

Step 3: Discount the remaining amount for contingencies.

Step 4: Calculate the impact of taxation to ensure that the employee receives the actual amount he or she would have received if they had continued in their employment.

• [84] I have estimated the remuneration Mr Elefantis would have received, or would have been likely to have received, if Auscut had not terminated him to be $11,046 on the basis of my finding that the Applicant would likely have remained in employment for a further period of 6 weeks. Mr Elefantis' failure to energetically mitigate his loss from dismissal requires the deduction referenced abov. I have set the anticipated period of employment at the upper-end of what would be a reasonable period taking into account both Mr Elefantis' length of service and his age. If he was younger with less service, I would have set the anticipated period of employment at 4 weeks or less. This estimate of how long Me Elefantis would have remained in employment is the "anticipated period of employment".68F[69]

• [85] The second step in Sprigg requires the deduction of moneys earned since termination, with the only exclusions being moneys received from other sources and unrelated to work done. The Full Bench unequivocally found in ERGT Australia Pty Ltd v Kevin Govender (Govender) that redundancy or severance pay is not an excluded amount and is instead an amount to be deducted at this step in the calculation of compensation;

"[40] As noted by the Full Bench, "[t]he well-established approach to the assessment of

compensation under s.392 of the FW Act... is to apply the "Sprigg formula" derived from the Australian Industrial Relations Commission Full Bench decision in Sprigg v Paul's Licensed Festival Supermarket.69F[70] This approach was articulated in the context of the FW Act in _Bowden v Ottrey Homes Cobram and District Retirement Villages_70F[71]."71F[72]

[41] The Sprigg formula was decided under previous legislation. However, a number of Full Benches of the Commission have confirmed its continuing relevance to the calculation of compensation, taking into account the factors in s.392(2) of the Act.72F[73] More recently, it was said that the decision in Sprigg sets out a well-established, structured and transparent methodology for the assessment of compensation.73F[74]

[42] It is important that the methodology in Sprigg is applied in a consistent manner by the Commission and this includes consistency in the treatment of moneys paid to an Applicant by way of severance or redundancy pay when considering s.392(2)(e). Indeed, the Full Bench in Sprigg stated that "it is desirable that a consistent and predictable technique for determining an amount to be ordered in lieu of reinstatement should emerge in Commission practice."74F[75] We consider that principle to be no less important today as it was when Sprigg was decided.

[43] The decision in Sprigg, essentially adopted the approach set out by Vice President Ross as he then was in Shorten v Australian Meat Holdings Pty Ltd (Shorten):75F[76]

"Steps 1 to 4 set out as part of principle 5 in Shorten in our view continue to be

appropriate and relatively necessary steps in the estimation and appropriate assessment of remuneration lost."76F[77]

[44] Step 2, as it was set out in Shorten, reads as follows:

"Deduct moneys earned since termination. Workers compensation payments are

deducted but not social security payments. The failure of an applicant to mitigate his or her loss may lead to a reduction in the amount of compensation awarded."77F[78]

[45] In settling on the approach to step 2, his Honour Vice President Ross referred to the decision of Wilcox CJ in _Mullany v Active Concrete_78F[79]:

"The Court is required under s 170EE(3), in working out the amount of

compensation, 'to have regard to the remuneration that the employee would have received or would have been likely to have received if the employer had not terminated the employment'; but the amount must not exceed the amount of remuneration that would have been received by the employee in respect of the period of six months that immediately followed the date of termination. I think that the subsection directs attention to remuneration received in respect of work done, not money received from other sources and unrelated to work done; for example, social security receipts or gifts received from organisations or persons who take a charitable interest in the employee's plight. Accordingly, I do not propose to reduce the amount of compensation to which I think the applicant is otherwise entitled because of the social services payments."79F[80]

[46] It is apparent from the foregoing that the methodology in Sprigg contemplates as a second step in the process, the deductions of "moneys earned since termination". The only moneys excluded from this is moneys received from other sources and unrelated to work done.

[47] The payment of redundancy pay made to Mr Govender in this matter is not money received from another source and nor is it unrelated to work done. It should therefore, consistent with a proper application of step 2 in Sprigg, be deducted from the amount of remuneration established in step 1.

[48] We agree that the purpose of redundancy pay is to, among other things, compensate an employee for the loss of the types of things cited in the Redundancy Case80F[81] such as sick leave However, that does not mean that the payment made is not "remuneration" within the meaning of s.392(2)(e).

[49] This is consistent with a proper reading of the text of s.392(2). As was said by the Full Bench in Deborah Kable v Bozelle, Michael Keith T/A Matilda Greenbank:

"A compensation remedy is designed to compensate an unfairly dismissed

employee in lieu of reinstatement for losses reasonably attributable to the unfair dismissal within the bounds of the statutory cap on compensation that is to be applied. That this is so is evident from the nature of the considerations to which the Commission must have regard set out in s.392 of the Act."81F[82]

[50] More recently, the Full Bench in _Chesson Pty Limited t/a Pay Per Click v Nicole Knutson_82F[83] confirmed that the function of compensation ordered pursuant to s.392 is to compensate for loss arising from the dismissal."83F[84] (original references)

• [86] Ms Barnes-Whelan for Mr Elefantis argues that Govender has no application to determination of compensation in this case, with it being argued Mr Elefantis' case is distinguishable since he has been in receipt not of redundancy pay as such, but rather payments upon cessation of employment from a portable severance scheme, which is not a subject considered in Govender. Further, that feature as well as the industrial means by which the employer's contributions were made to Incolink would suggest the path followed in Govender should not be followed here;

"29. Turning to the present matter, the obligation of the Respondent to pay weekly contributions to the Applicant's Incolink fund arises under the terms of the applicable enterprise agreement. These contributions are not paid on some good faith or discretionary basis - employees within the construction industry have bargained for these contributions in recognition of the unpredictable nature of the construction industry whereby work is often only guaranteed for the duration of a project. These workers could have foreseeably bargained for a higher hourly rate but instead, prioritised having weekly contributions put aside to access at a time of need.

30. Significantly, employees who are registered and are entitled to contributions are able to access the funds on cessation of their employment, regardless of whether the employment relationship came to an end due to resignation, redundancy or termination for some other reason.

31. When considering whether Incolink funds should be considered remuneration and have the effect of reducing an award of compensation in an unfair dismissal application, Senior Deputy President Watson stated the following in McClean v Transfield Services:84F[85]

"It is a payment instead of the accrual of a contingent liability in respect of redundancy and does not constitute remuneration for the purposes of s 392 of the Act."

32. More recently, in _Jeremy Rankin v Pileworx_85F[86] Deputy President Asbury considered the question of whether a worker's access to funds from BERT (an equivalent interstate portable scheme) should reduce the compensation awarded. At paragraph 85 of that decision the Deputy President stated the following:

"I do not intend to make a deduction for redundancy payments the Applicant may have accessed from BERT on the basis that those payments would also have been available to the Applicant if he accessed them at the point at which I have estimated that his employment would have ended"

33. The approach taken by Deputy President Asbury and Senior Deputy President Watson is consistent with the principles arising at common law in circumstances whereby tortfeasors have sought (unsuccessfully) to argue against a higher award of damages due to a plaintiff having access to an income protection insurance. One of these cases arose in the context of a worker having accessed an income protection scheme through Incolink, to whom the defendant employer was required to make payments under the terms of an enterprise agreement. The case is _Papadopoulos v MC Labour Hire Services Pty Ltd (No 2)_86F[87] and the Supreme Court of Victoria relevantly stated the following:

"...it was not paid as some discretionary payment or act of grace. It was payable because the plaintiff had, by his work, bought his entitlement to it. If the plaintiff had recovered damages from either defendant before the Incolink payment was made to him, there is no suggestion that his receipt of damages could have been pleaded in an answer to that claim. It follows for the reasons that I have given that the Incolink payment does not fall to be taken into account in the assessment of the plaintiff's pecuniary loss damages." 28 29. Turning to the present matter, the obligation of the Respondent to pay weekly contributions to the Applicant's Incolink fund arises under the terms of the applicable enterprise agreement. These contributions are not paid on some good faith or discretionary basis - employees within the construction industry have bargained for these contributions in recognition of the unpredictable nature of the construction industry whereby work is often only guaranteed for the duration of a project. These workers could have foreseeably bargained for a higher hourly rate but instead, prioritised having weekly contributions put aside to access at a time of need."87F[88] (original references and emphasis)

• [87] Mr Ziccone for Auscut argues Govender has application, with the deduction of the Incolink payments then being necessary. In particular, Auscut note the derivation of the Incolink payments is from the National Employment Standards, which explicitly sanction industry specific redundancy schemes in lieu of the severance payments otherwise to be paid.88F[89]

• [88] Of course, it is the case that Mr Elefantis was not made redundant but dismissed for misconduct. Under any view redundancy payments are not due to him. However, the consideration at this Step is whether the payments made to him by Incolink are moneys earned since termination.

• [89] Ms Barnes-Whelan refers to the analysis of moneys excluded in three decisions, each of which appear on their face to be contrary to the determination in Govender. In McLean v Transfield, SDP Watson explicitly identified that the Incolink payments made by the employer were in respect of the employee's possible redundancy89F[90] as were the payments in Rankine v Pileworx.90F[91] Each of those decisions are, respectfully, inconsistent with Govender and I elect not to follow the reasoning set out therein. The judgement of the Supreme Court of Victoria in _Papadopoulos v MC Labour & Anor (Ruling No. 2)_91F[92] notes firstly that the contributions to Incolink are made for purposes which "include redundancy payments which are held on trust for employees and paid to them in times of unemployment"92F[93] and that they were paid as a contractual obligation arising from an enterprise agreement,93F[94] but that, in finality, the payments should be excluded from deduction from an award of pecuniary loss damages.94F[95] Papadopoulos potentially gives rise to a body of reasoning which may have been inadequately explored in Govender, however it must be observed that Govender was also dealing with the matter of whether a contractual payment should be excluded from deduction. Govender explicitly decided that redundancy pay "is not money received from another source and nor is it unrelated to work done. It should therefore, consistent with a proper application of step 2 in Sprigg, be deducted from the amount of remuneration established in step 1." It would be disharmonious with the Full Bench's reasoning in Govender for me not to make the deduction here. If no deduction were made a greater compensation benefit would be available to employees working under enterprise agreements with external redundancy funds; such would plainly be anomalous.

• [90] For these reasons I find the payments made to Mr Elefantis from Incolink must be deducted from the moneys calculated in Step 1.

• [91] It is necessary to consider the impact of both favourable and unfavourable contingencies on the amounts likely to be earned by the Applicant for the remainder of the anticipated period of employment,95F[96] noting that it may not be appropriate to deduct contingencies if all of the projected period of continued employment has passed.96F[97] In Mr Elefantis' case, I find there are none that ought to be taken into account in this matter, since the whole of the anticipated period of employment has passed.

• [92] I have considered the impact of taxation but have elected to settle a gross amount as set out in the table below and the compensation to be ordered will be subject to taxation according to law.

• [93] Having applied the formula in Sprigg, I am nevertheless required to ensure that "the level of compensation is an amount that is considered appropriate having regard to all the circumstances of the case,"97F[98] including my findings that Mr Elefantis' length of service and age warranted higher compensation. Since I have already taken account of those matters in setting the anticipated period of employment, I do not consider there is a need to adjust the overall amount of compensation for those matters.

• [94] The argument may be made that an upward adjustment to the compensation is required in order to ensure Mr Elefantis gains something from the injustice afforded to him. I would disagree with such logic; notwithstanding Ms Thomson's provocation he was the principal architect of his dismissal by shouting at his employer and failing to commit to her expectations. No matter the length of one's service such conduct is not to be rewarded. Further, the benefits he obtained from Incolink were considerable and entirely contingent on him losing his employment. Such loss as he has endured has been offset by those benefits.

Compensation - is the amount to be reduced on account of misconduct?

• [95] If I am satisfied that misconduct of the Applicant contributed to the employer's decision to dismiss_,_ I am obliged by section 392(3) of the Act to reduce the amount I would otherwise order by an appropriate amount on account of the misconduct.

• [96] In determining the amount by which it is appropriate to reduce an order for compensation on account of misconduct, the Commission must consider, amongst other things, whether the Applicant engaged in misconduct and, if so, whether that misconduct contributed to the Respondent's decision to dismiss the person. A Full Bench of the Commission has observed that, "[t]he section seems to require such consideration even if the FWC has found there was no valid reason for the person's dismissal."98F[99] However, the Full Bench goes on to say that, "if there was no valid reason for the dismissal we think that may be relevant to the FWC's decision as to the 'appropriate' amount by which to reduce the amount of compensation the FWC would otherwise order."99F[100]

• [97] For the reasons set out above I am satisfied that Mr Elefantis' misconduct contributed to Auscut's decision to dismiss. He yelled and shouted at Ms Thomson; tried to grab papers from her hand; and failed to commit to follow her directions. While there is little question Ms Thomson contributed to the unpleasantness of the situation and thereby provoked Mr Elefantis, he himself committed misconduct. On the other hand, it must be taken into account that he has and will continue to suffer from the loss of long term, well-paid employment. In the circumstances the deduction to be made should be significant, but not crushing. A deduction of 25% or 33% would be far too high in the circumstances, whereas a deduction of only 5% would be inappropriately low.

• [98] I would reduce the amount of compensation to be awarded to Mr Elefantis on account of his misconduct by 10%.

• [99] My calculation of the amount payable to Mr Elefantis is set out in the following table;

1. Estimate the amount the employee would have received or would have been likely to receive if the employment had not been terminated;

6 weeks projected lost income at the rate of $1,626 per week

Employer superannuation contribution - flat rate of $215 per week

• [100] The above calculation shows the deductions to be made from the compensation to be order are greater than the compensation itself. Accordingly, no order for compensation will be made.

• [101] Mr Elefantis' application is determined accordingly.

Ms Emma Barnes-Whelan, on behalf of the Applicant

[1] [2021] FWC 3955.

[2] Applicant Outline of Submissions, 25 June 2021, [1].

[3] Exhibit A2, Witness Statement of Saki Elefantis, [9]; Hearing Book, p.50.

[5] Exhibit R1, Witness Statement of Catherine Thomson, [11]; Hearing Book, p.87.

[6] Ibid, [13]; Hearing Book, pp. 87 - 88.

[7] Ibid, [17] - [18]; Hearing Book, p.88.

[10] Ibid, [22] - [23]; Hearing Book, p.89.

[11] Ibid, [24] - [25]; Hearing Book, p.89.

[12] Exhibit A2, Attachment SE-2; Hearing Book, p.54.

[13] Exhibit A4, Witness Statement of David O'Connell, [5]; Hearing Book, p.56.

[14] Ibid, [10] - [14]; Hearing Book, p.57.

[15] Exhibit R2, Witness Statement of Trevor Batchelor, [15]; Hearing Book, p.80.

[17] Exhibit R2, Witness Statement of Trevor Batchelor, [14] - [15]; Hearing Book, pp.79 - 80.

[18] Exhibit R3, Witness Statement of Cameron Hughes, [19]; Hearing Book, p.83.

[30] Exhibit R1, Witness Statement of Catherine Thomson, [17]; Hearing Book, p.88.

[33] Exhibit R6, Respondent's Outline of Submissions, [60]; Hearing Book, p.72; Exhibit A5, Applicant's Outline of Submissions, [41]; Hearing Book, p.45.

[34] Ryman v Thrash Pty Ltd [2015] FWCFB 5264, [41].

[35] Exhibit R6, Respondent's Outline of Submissions, [35]; Hearing Book, p.70.

[37] Exhibit R1, Witness Statement of Catherine Thomson, [19]; Hearing Book, p.88.

[38] Selvachandran v Peteron Plastics Pty Ltd [1995] IRCA 333; (1995) 62 IR 371, 373.

[39] Edwards v Giudice [1999] FCA 1836; (1999) 94 FCR 561, [6] - [7].

[40] Sharp v BCS Infrastructure Support Pty Limited [2015] FWCFB 1033, [32]; Annetta v Ansett Australia (2000) 98 IR 233, [9] - [10].

[41] Sharp v BCS Infrastructure Support Pty Limited [2015] FWCFB 1033, [32]; He v Lewin [2004] FCAFC 161; 137 FCR 266, [15].

[42] Sharp v BCS Infrastructure Support Pty Limited [2015] FWCFB 1033, [33] - [34]; O'Connell v Wesfarmers Kleenheat Gas Pty Ltd [2015] FWCFB 8205, [22] - [23].

[43] Titan Plant Hire Pty Ltd v Shaun Van Malsen [2016] FWCFB 5520, [28].

[44] Selvachandran v Peteron Plastics [1995] IRCA 333; (1995) 62 IR 371, 373.

[45] Robe v Burwood Mitsubishi Print R4471 (AIRCFB, Ross VP, Polites SDP, Foggo C, 11 May 1999).

[46] Miller v UNSW [2003] FCAFC 180 (Gray J) [13].

[47] Selvachandran v Peteron Plastics [1995] IRCA 333; (1995) 62 IR 371, 373.

[48] [1938] HCA 34; 60 CLR 336.

[49] Wong v Taitung Australia Pty Ltd [2017] FWCFB 990, [11].

[50] [1938] HCA 34; 60 CLR 336, 350, 363.

[51] Commonwealth of Australia (Australian Taxation Office) t/a Australian Taxation Office v Shamir [2016] FWCFB 4185, [46] citing Walton v Mermaid Dry Cleaners Pty Ltd [1996] IRCA 267; (1996) 142 ALR 681, 685.

[52] Commonwealth of Australia (Australian Taxation Office) t/a Australian Taxation Office v Shamir [2016] FWCFB 4185, [46] citing Allied Express Transport Pty Ltd v Anderson (1998) 81 IR 410, 413.

[53] Edwards v Giudice [1999] FCA 1836, [7].

[54] King v Freshmore (Vic) Pty Ltd Print S4213 (AIRCFB, Ross VP, Williams SDP, Hingley C, 17 March 2000) [23] - [24].

[55] Titan Plant Hire Pty Ltd v Malsen [2016] FWCFB 5520, [28].

[56] Sharp v BCS Infrastructure Support Pty Limited [2015] FWCFB 1033, [36].

[58] Chubb Security Australia Pty Ltd v Thomas Print S2679 (unreported, AIRCFB, 2000) [41].

[59] [1995] HCA 24 (McHugh and Gummow JJ) [128].

[60] Australia Meat Holdings Pty Ltd v McLauchlan (1998) 84 IR 1, 10 citing Byrne v Australian Airlines Ltd [1995] HCA 24 (McHugh and Gummow JJ) [128].

[61] Exhibit A5, Applicant's Outline of Submissions, [44]; Hearing Book, p. 46.

[62] Respondent's Closing Submissions, 11 October 2021, [70].

[63] He v Lewin [2004] FCAFC 161, [58].

[64] These amounts are the "YTD" amounts derived from the Applicant's final payslip and do not include amounts attributed to Leave Annual, Leave Loading, RDO Accrued (deducted), CSD Allowance (deduct for RDO), Union Fees, Tattslotto, Annual Leave Accrual or CBUS Superannuation EBA.

[65] Biviano v Suji Kim Collection PR915963 (AIRCFB, Ross VP, O'Callaghan SDP, Foggo C, 28 March 2002) [34] citing Lockwood Security Products Pty Ltd v Sulocki and Ors PR908053 (AIRCFB, Giudice J, Lacy SDP, Blair C, 23 August 2001) [45].

[66] Biviano v Suji Kim Collection PR915963 (AIRCFB, Ross VP, O'Callaghan SDP, Foggo C, 28 March 2002) [34] citing Payzu Ltd v Saunders [1919] 2 KB 581.

[67] [1998] AIRC 989; (1998) 88 IR 21.

[68] [2021] FWCFB 5389, [35].

[69] Ellawala v Australian Postal Corporation Print S5109 (AIRCFB, Ross VP, Williams SDP, Gay C, 17 April 2000) [34].

[70] [1998] AIRC 989; (1998) 88 IR 21.

[71] [2013] FWCFB 431.

[72] Double N Equipment Hire Pty Ltd t/a A1 Distributions v Humphries [2016] FWCFB 7206, [16].

[73] Bowden v Ottrey Homes Cobram and District Retirement Villages [2013] FWCFB 431; See also in Smith v Fearon Howard Real Estate Pty Ltd T/A Ray White (Balmain) [2021] FWCFB 581.

[74] Chesson Pty Limited t/a Pay Per Click v Nicole Knutson [2018] FWCFB 4149.

[75] [1998] AIRC 989; (1998) 88 IR 21, [31].

[76] (1996) 70 IR 360.

[77] [1998] AIRC 989; (1998) 88 IR 21, [35].

[78] (1996) 70 IR 360, 381.

[79] (1995) 62 IR 237.

[80] (1996) 70 IR 360, 376.

[81] [2004] AIRC 287; (2004) 129 IR 155.

[82] [2015] FWCFB 3512, [17].

[83] [2018] FWCFB 4149.

[84] ERGT Australia Pty Ltd v Kevin Govender [2021] FWCFB 5389, [40] - [50].

[85] [2013] FWC 2573, [140].

[86] [2020] FWC 6406.

[87] [2009] VSC 176 (5 May 2009).

[88] Applicant's Closing Submissions, 4 October 2021, [29] - [33].

[89] Respondent's Closing Submissions, 11 October 2021, [58] - [64]; see also FW Act, s.123(4)(c).

[90] [2013] FWC 2573, [140].

[91] [2020] FWC 6406, [85].

[92] [2009] VSC 176.

[96] Enhance Systems Pty Ltd v Cox [2001] AIRC 1138, [39]

[97] Bowden v Ottrey Homes [2013] FWCFB 431, [54].

[98] Double N Equipment Hire Pty Ltd t/a A1 Distributions v Humphries [2016] FWCFB 7206, [17].

[99] Read v Gordon Square Child Care Centre Inc [2013] FWCFB 762, [83].

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