s.394 - Unfair dismissal

Application for an unfair dismissal remedy - whether dismissal harsh, unjust or unreasonable

• [1] Mr Sandesh Bhatta was employed by DPW Staff Services Pty Ltd (DPW) as a casual Warehouse Assistant on 4 October 2021. On 8 January 2024, Mr Bhatta was promoted to the role of System Administrator Manager. He later began using the title of General Manager (although there is a dispute about whether this title was ever conferred upon him). On 2 January 2025, Mr Bhatta was summarily dismissed for "ongoing poor performance and conduct".

• [2] On 20 January 2025, Mr Bhatta applied in time for an unfair dismissal remedy under section 394 of the Fair Work Act 2009 (the Act). Mr Bhatta is protected from unfair dismissal because the minimum employment period of at least one year has been completed; the employment was covered by a modern award; and his annual rate of earnings was below the high-income threshold. The dismissal was not a case of genuine redundancy. At the time of dismissal, it is not in dispute that DPW was a small business employer for the purposes of the Act.

1. Was the dismissal consistent with the Small Business Fair Dismissal Code (the Code)?
2. Was the dismissal harsh, unjust or unreasonable (such that Mr Bhatta was unfairly dismissed)?
3. If Mr Bhatta was unfairly dismissed, what is the appropriate remedy?

• [4] For the reasons that follow, I am not satisfied that the dismissal was consistent with the Code and I find that Mr Bhatta has been unfairly dismissed. The appropriate remedy is compensation.

• [5] At approximately 3.00pm on 2 January 2025, Mr Bhatta was directed to attend a meeting with DPW's Managing Director, Mr Deepak Gidwani. During the meeting, two allegations were made against him:

1. That he had failed to supervise staff properly, particularly when it came to them taking lunch breaks or completing set tasks, and
2. That he came and left the workplace as he pleased.

• [6] Mr Bhatta denied the allegations. He explained that his workload was high due to a staff shortage and relocation of the warehouse. At the end of the meeting, Mr Bhatta was dismissed without notice.

Was the dismissal consistent with the Small Business Fair Dismissal Code?

• [7] At the time of dismissal, DPW was a small business employer for the purposes of the Act because it had less than 15 employees.

• [8] The Small Business Fair Dismissal Code (the Code) applies to small business employers. Because Mr Bhatta was dismissed without notice or warning, the Code applies as it relates to "summary dismissal":

"Summary Dismissal

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.

...

Procedural Matters

In discussions with an employee in circumstances where dismissal is possible, the employee can have another person present to assist. However, the other person cannot be a lawyer acting in a professional capacity. A small business employer will be required to provide evidence of compliance with the Code if the employee makes a claim for unfair dismissal to Fair Work Australia, including evidence that a warning has been given (except in cases of summary dismissal). Evidence may include a completed checklist, copies of written warning(s), a statement of termination or signed witness statements."

• [9] Mr Bhatta says that he was not given any warnings during the period of employment and that his dismissal came without warning. DPW submits that it gave him 6 warnings from management. It has submitted documents with the heading "Written Warning Record" purporting to be warnings given to Mr Bhatta. Mr Bhatta denies ever having seen these documents, let alone receiving them. The only documentary evidence of their being transmitted from one person to another is a covering email from a staff member of DPW to Mr Gidwani on 5 March 2025 (more than 2 months after dismissal) that says:

"Hello Deepak,

Please find a Staff written warning report attached."

• [10] The oral evidence about how these warnings came into existence is vague and inconsistent, including in relation to who prepared the documents, when they were prepared, and when (or if) they were given to Mr Bhatta. The content of the warnings does not appear to reflect important factual matters such as when the alleged conduct of concern occurred. That is, although dates are specified, the evidence suggests that these are not an accurate reflection of the dates on which the alleged incidents are said to have occurred. In one instance, DPW's evidence was that a warning was given to Mr Bhatta on a Saturday, when Mr Bhatta denies he was at work. The denial is plausible in light of supporting WhatsApp message evidence of him giving instructions to other staff members about the organisation of work for that day. I am not satisfied on the evidence as to the origins of these documents or when they were prepared. One possibility - separate to that put by DPW - is that they are records created after dismissal by reference to earlier recollections of events and/or diary notes that were not produced to the Commission. I accept Mr Bhatta's evidence that he never saw or received these documents. As noted above, the dismissal occurred without notice or warning to Mr Bhatta. Mr Bhatta was never told that his employment was in jeopardy until the meeting on 2 January 2025, when he was dismissed.

• [11] That is not to say that I accept Mr Bhatta's evidence that he was never told of any concerns the business held about his conduct or performance. There were regular Monday meetings, in which matters such as staff and store performance were discussed. One of these matters was lateness for work. I accept the evidence of Ms Utumporn Viriyatornpun (known by her colleagues as Amilia) about a meeting with Mr Bhatta after one such Monday meeting on or about 7 August 2024, where she raised his late arrival at work and asked if this was related to the late arrival of another employee with whom she had been told he was in a relationship. Although the meeting is not disputed by Mr Bhatta, he disputes the content of the meeting. Mr Bhatta submits that lateness for work was not discussed and that they only discussed the matter of his alleged relationship (which he denies). I prefer the evidence of Ms Viriyatornpun on this matter. Ms Viriyatornpun had repeatedly complained to Mr Gidwani about Mr Bhatta's lateness for work and his lack of help for tasks such as the cash in process. On the evidence, she was not the only one who had noticed Mr Bhatta regularly arriving late for work.

• [12] The parties can at least agree that the meeting prompted Mr Bhatta to go directly to speak to another employee, Ms Daljeet Kaur, about why she had told Amilia that he was in a relationship with the other employee. He said to her: "Why do you have to tell everyone I am in a relationship?" Ms Kaur replied: "Why are you always late to work with your girlfriend?" Mr Bhatta then said: "This is not your business. It is my real life.". His tone made Ms Kaur cry, and she went to speak to Amilia about it. Later on, Ms Kaur was told that Mr Bhatta had been given a warning about how he had spoken to her. She cannot say whether a warning was actually issued.

• [13] A separate dispute between the parties arose about whether Mr Bhatta's taking annual leave in December 2024 was authorised. DPW submits that Mr Bhatta decided to take annual leave without obtaining Mr Gidwani's approval. Although the date of the leave is not entirely clear, it appears to have been for the purpose of attending a wedding. Mr Gidwani denies ever approving this leave and says that staff are not able to take annual leave in the last quarter of the year because this is its busiest time. At this particular time, DPW was even busier than usual, because it was in the process of closing down one store and opening another (with a move out date of 2 January 2025). The evidence confirms that Mr Bhatta did not seek Mr Gidwani's approval for this leave. Mr Gidwani described this as "the last straw".

• [14] It was Mr Gidwani's belief, when he decided to dismiss Mr Bhatta on 2 January 2025, that Mr Bhatta's conduct in not supervising staff properly, and coming and going as he pleased, including by taking a day of annual leave without his approval, was disrespectful to the business. Mr Gidwani felt that Mr Bhatta had lost the respect of the team and that this was a "cancer" to the business. At the time, Mr Gidwani was under immense pressure himself. He was working between two locations, trying to close down one store and open another, at the busiest time of the year.

• [15] Although I accept that these beliefs were genuinely held by Mr Gidwani, I am not satisfied that they amounted to a reasonable belief that Mr Bhatta's conduct in each respect (or even taken together) was sufficiently serious to justify immediate dismissal. Objectively, these were performance issues that called for a lesser disciplinary response than summary dismissal. Indeed, there is reference in the materials to Mr Gidwani's decision not to provide Mr Bhatta with notice of termination - not because of the seriousness of his conduct but because of his failure to return business property. Neither Mr Bhatta's failure to help others with certain tasks nor the conversation that made Ms Kaur cry formed part of the allegations against Mr Bhatta that led to his dismissal but were matters raised later. Time logs prepared by Mr Gidwani (also after the fact) led him to conclude that Mr Bhatta had engaged in 'time theft'. At the time the decision to dismiss was made, this information had not yet crystallised in his mind and was accordingly not a belief held on an objectively reasonable basis.

• [16] It follows that I am not satisfied that the dismissal was consistent with the Code.

Was the dismissal harsh, unjust or unreasonable?

Was there a valid reason for the dismissal related to capacity or conduct, and was it notified to Mr Bhatta?

• [17] DPW submits that it had valid reason for the dismissal of Mr Bhatta because:

1. He failed to supervise staff properly, particularly when it came to them taking lunch breaks or completing set tasks.
2. He did not perform key duties such as cash ups and store walks.
3. He came and left the workplace as he pleased, including taking annual leave without approval.
4. He allowed his alleged girlfriend to come into work whenever she wanted.
5. He had been chronically late for work since July 2024 and left early and laughed at Managers when they asked him about it.
6. He abused Ms Kaur in front of other staff and customers.

• [18] Dealing with each allegation in turn, the first is not made out on the evidence. The second allegation is supported by the evidence of Ms Viriyatornpun but not established in the absence of evidence as to what his key duties were. The third allegation is established to the extent that I am satisfied Mr Bhatta arrived late to work regularly enough to invoke comment and criticism from his peers. For the reasons above, I also accept that Mr Bhatta took annual leave without approval of Mr Gidwani. The fourth allegation is not established on the evidence. The fifth allegation is related to the third and is established except in relation to Mr Bhatta laughing at his managers when asked about being late to work. I prefer the evidence that he shrugged off these comments and sometimes smiled. Those raising the issues with him were not his managers. They were other employees managing aspects of DPW's small retail business. The sixth allegation is established in part in that Mr Bhatta confronted Ms Kaur and spoke rudely to her in August 2024 as described above. I am not satisfied that he "abused" her in this conversation, but I do accept that his tone was unkind and that he made her cry.

1. arrived late to work regularly enough to invoke comment and criticism from his peers;
2. took annual leave without approval of Mr Gidwani on one occasion in December 2024;
3. shrugged at other employees when they asked him why he was late and sometimes smiled; and
4. confronted Ms Kaur in August 2024, spoke rudely to her and made her cry.

• [20] Taken together, I find that this conduct gave DPW a valid reason for dismissal.

Was there an opportunity to respond to any capacity or conduct related reason?

• [21] Mr Bhatta was given an opportunity to respond to the reason for termination but only in the meeting on 2 January 2025 when his employment was terminated. In the circumstances, the opportunity was not a meaningful one. He was not on notice of what would be discussed before he entered the meeting. He had no understanding of the nature of the allegations against him, or any opportunity to prepare to respond to those matters before he was asked to do so.

Was there any unreasonable refusal to allow a support person to be present to assist at any discussions relating to dismissal?

• [22] There was no refusal to allow a support person to be present in discussions about the dismissal. No request for a support person was made.

Was Mr Bhatta warned about relevant unsatisfactory performance?

• [23] Mr Bhatta was not given any formal warnings about his performance and conduct. However, for the reasons above, I am satisfied that concerns were raised with him about coming late to work. I also consider it likely that he was spoken to (but not formally warned) about making Ms Kaur cry. The reality of the operation was that as a small business, things were done informally and in person. Some things were overlooked because it was so busy. Where issues were raised with employees, it was usually by way of a discussion that avoided conflict where possible with a view to keeping DPW's small team happy and productive.

Degree to which the size of the employer's business and any absence of dedicated human resources management specialists or expertise in the business would be likely to impact on procedures followed in effecting the dismissal

• [24] DPW does not have any dedicated management or relevant expertise in the business in relation to human resources and industrial relations matters. In my view, each of these characteristics affected the procedures followed by DPW in effecting the dismissal and contributed to what can only be characterised as a denial of procedural fairness for Mr Bhatta.

• [25] Mr Bhatta's length of service was approximately 3.25 years. No notice of termination was paid or given.

• [26] DPW submits that Mr Bhatta's regular late arrival or early departure from work amounted to theft, in the sense that Mr Bhatta submitted time sheets and was paid for time that he did not attend for work. There is merit to the principle of the submission, but insufficient evidence to permit any finding to be made beyond my finding above that Mr Bhatta was regularly late to work. Neither the timesheets nor the employment contract of Mr Bhatta were provided to the Commission. A time log prepared by Mr Gidwani, apparently taken from CCTV footage, is unreliable as evidence on its own. Concessions were made (appropriately) by Mr Gidwani that he may have made errors in preparing the document, including mistaking the identity of persons captured on the footage. The CCTV footage was also not produced to the Commission.

• [27] DPW submits that Mr Bhatta misused the title of 'General Manager' of DPW to aid his job prospects on LinkedIn and that this was never approved. There is conflicting evidence about whether he was given the title during the employment. I find that Mr Bhatta was responsible for the order of business cards with this title under his name. I find that he also created his own email signature with the title, because this is a task that usually belongs to the holder of the email account. DPW must have been aware of Mr Bhatta's use of the title of General Manager. It had visibility over his business cards (which were given to suppliers) and his email signature (because he sent emails to the business). There is no evidence that Mr Bhatta was ever told to stop using the title or that he was counselled in that regard. DPW appears instead to have acquiesced to the matter, probably because Mr Gidwani was busy with more important matters, and it did not have any practical impact on the performance of Mr Bhatta's role of managing purchasing for the business. It is not a matter that has any material bearing on the issues to be decided in the case. If there were discussions about an increase in salary associated with the different title, they never crystallised in the form of a pay rise. Mr Bhatta's role and salary remained as it was when he was promoted to the title of 'System Administrator Manager'.

• [28] In a similar vein, there is a dispute about whether Mr Bhatta was in a relationship with another employee of DPW which it says contributed to his declining work performance. The status of the relationship is not established and nor is it necessary to decide.

• [29] Mr Bhatta submits that the adverse effect of the dismissal upon him was 'profound'. Other than a loss of income in the 5week period between dismissal and finding another job, there is no evidence to support the submission.

• [30] In summary, I find that there was a valid reason for the dismissal of Mr Bhatta, but a denial of procedural fairness. The small size of the business likely contributed to the denial of procedural fairness, which occurred despite Mr Bhatta having been employed for more than 3 years and holding a relatively senior role in the business. It was reasonable for him to expect some form of notice that his employment was at risk before the decision to dismiss was taken and then implemented. On balance, I am satisfied that dismissal was unreasonable in the circumstances. Mr Bhatta has been unfairly dismissed.

• [31] Reinstatement is not supported by DPW and it is not sought by Mr Bhatta, who has found another job. I find that reinstatement is not an appropriate remedy in the case. Compensation is the appropriate remedy.

• [32] Section 392(2) of the Act deals with how compensation is to be assessed in connection with an unfair dismissal. The established methodology is elaborated on in Bowden v Ottrey Homes Cobram and District Retirement Villages Inc (Bowden).[1]

• [33] Viability (s.392(2)(a)): There is some suggestion, but no evidence, that an order requiring DPW to pay Mr Bhatta compensation would have a negative effect on the viability of DPW's enterprise after its hard work to survive the difficult economic conditions of the recent pandemic. In the absence of supporting evidence, this is a neutral consideration.

• [34] Remuneration Mr Bhatta would have received, or would have been likely to receive, if he had not been dismissed (s.392(2)(c)): In my view, Mr Bhatta would not have remained in employment with DPW for any longer than he did. As DPW is a small business, the dismissal appears to have been timed to coincide with both the start of a new year and the move of DPW from one location to another.

• [35] Remuneration earned between dismissal and decision (s.392(2)(e)) and income reasonably likely to be earned between decision and payment of compensation (s.392(2)(f)): Mr Bhatta earned no income after the dismissal until he commenced a new job 5 weeks later. This was a lost economic opportunity of $8173.10 (based on $1634.62 gross per week). His earnings increased from the commencement of the new role by approximately $288.46 per week (to $1923.08 per week). That amount will have been earned for 16 weeks as at the date of payment of compensation (which will be 14 days after the date of this decision). On the available information, these figures give a total economic loss of $3557.74 ($8173.10-(16 weeks x $288.46)).

• [36] Length of service (s.392(2)(b)): Mr Bhatta's length of service was approximately 3.25 years. This is a relatively ordinary period of continuous service and no adjustment in the amount of compensation is made on this account.

• [37] Mitigation efforts (s.392(2)(d)): Mr Bhatta found a new job within 5 weeks of his dismissal. In time, he will have successfully mitigated his loss. No adjustment is made on this account.

• [38] Other matters (s.392(2)(g)): No discount for contingencies is warranted in this case.

• [39] Misconduct (s.392(3)): Mr Bhatta's misconduct contributed to the dismissal, but it was not so serious as to warrant any further adjustment of the compensation amount.

• [40] Shock, Distress (s.392(4)): The amount of compensation does not include a component for shock, humiliation or distress.

• [41] Compensation cap (s.392(5)&(6)): The amount of compensation is less than the compensation cap of 26 weeks' pay and no further adjustment of the amount is necessary.

• [42] Instalments (s.393): No application was made by DPW to pay any compensation awarded by instalments and no order will be made to that effect.

• [43] A compensation amount of $3557.74 is neither clearly excessive nor clearly inadequate in the circumstances of the case.

• [44] Order PR787280 will issue separately giving effect to this decision. The matter is determined accordingly.

[1] [2013] FWCFB 431

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