Fair Work Commission|2025-05-15

Sandy Grace v L'Arche Melbourne Inc / Bendigo [2025] FWC 1340 (15 May 2025)

s.394 - Unfair dismissal

Application for an unfair dismissal remedy - valid reason - whether dismissal harsh, unjust or unreasonable - no valid reason found - procedural fairness considered - termination considered unfair - reinstatement considered not appropriate - compensation ordered.

[1] On 19 November 2024, Ms Sandy Grace (the Applicant) made an application under s.394 of the Fair Work Act 2009 (the Act) alleging that she was unfairly dismissed from her employment on 4 November 2024.

[2] Ms Grace's employer, L'Arche Melbourne Inc/Bendigo (L'Arche or the Respondent), denies these allegations. Their position is that there were valid reasons for Ms Grace's dismissal and that she was provided procedural fairness. Further, the Respondent asserts Ms Grace's contract as House Coordinator at Bethany House, Bendigo was terminated on 4 November 2024, not her contract as House Assistant. That she was not terminated from her ongoing employment on 4 November 2024, but accepting she did not return to this position, was in fact terminated on 10 January 2025, with cause.

[3] The matter was allocated to my Chambers on 11 December 2024. Subsequently, I issued directions for the merits of the application to be determined at a hearing on 19 February 2025.

[4] Having considered all the submissions and evidence submitted by the parties, I have found that the circumstances of this case are such that Ms Grace was unfairly dismissed. I have not been satisfied there was a valid reason for her dismissal. I have found the termination of her employment was harsh, unjust and unreasonable. The reasons for these findings are set out below and the consequences for both the Applicant and the Respondent are found at the conclusion of this decision.

When can the Commission Order a Remedy for unfair dismissal?

[5] Section 390 of the Act provides that the Commission may order remedy if:

(a) the FWC is satisfied that the Applicant was protected from unfair dismissal at the time of being dismissed; and

[6] Both limbs must be satisfied. Therefore, I am required to consider whether the Applicant was protected from unfair dismissal at the time of being dismissed and, if I am so satisfied, next consider whether the Applicant has been unfairly dismissed.

When is a person protected from unfair dismissal?

[7] Section 382 of the Act provides that a person is protected from unfair dismissal if, at the time of being dismissed:

(a) the person is an employee who has completed a period of employment with his or her employer of at least the minimum employment period; and

(ii) an enterprise agreement applies to the person in relation to the employment;

(iii) the sum of the person's annual rate of earnings, and such other amounts (if any) worked out in relation to the person in accordance with the regulations, is less that the high-income threshold.

[8] Section 385 of the Act provides that a person has been unfairly dismissed if the FWC is satisfied that:

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

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

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

[9] The relevant factual background to this matter is as follows:

The Respondent provides live in community support services to high need and NDIS recipients and their families, including specialised in-home community care in the Bendigo area.

Ms Grace started working with the Respondent on 28 February 2022 as a part-time assistant.

After negotiating live-in arrangements, in December 2023, Ms Grace moved into Bethany House as a full-time live-in Assistant.

Prior to Ms Grace taking on the role, Bethany House did not have a live in Assistant role. In July 2024, the Respondent commenced a review of the 'live-in' Assistant's role. Ms Grace participated in the review, including a feedback survey. Other Assistants and community family members were also asked to participate, and some completed the survey.

On 8 July 2024, Ms Grace was advised she was being promoted to the position of House Coordinator. Her promotion was communicated to other staff, community and family members the following day. She commenced a 3-week induction process into the role, commencing in the position from 5 August 2024.

At a team meeting on 6 August 2024, Ms Grace became aware some of the other assistants were unhappy about her 'live-in' presence at Bethany House and wanted her to move.

On 9 September 2024, the Respondent's Acting Chair, Mr Jim Rolfe, called Ms Grace and advised her of complaints from family members and staff about her. These included some 'in-house' matters that had been previously discussed at a team meeting on 3 September 2024.

During this phone call, Mr Rolfe advised Ms Grace of his concerns with her conduct and performance. This included concerns about his confidence in her ability to lead; her ability to create a happy home; her focus on tasks, commitment and consistency. He also advised her that she would need to improve her performance in these areas.

Ms Grace provided Mr Rolfe with a written response to his concerns on 11 September 2024.

In a meeting on 12 September 2024, Mr Rolfe and Ms Carolyn Ebsary spoke to Ms Grace in further detail about the concerns and complaints received from family members. Ms Grace provided an explanation of her position in response.

On 4 November 2024, Ms Grace received a letter terminating her as Bethany House Coordinator with immediate effect. The letter advised Ms Grace as follows:

"... your contract as House Coordinator for Bethany has been terminated, effective immediately. This does not relate to your previous contract as an assistant, however your ongoing employment with L'Arche Bendigo will need to be in areas of operation outside Bethany.

Furthermore, given that there is little likelihood of being able to achieve a more cohesive and integrated care regime under the current live in arrangements the offer of accommodation at Bethany has been withdrawn. You are requested to remove your personal items as soon as possible but not later the end of November and it is in the interests of everyone that you arrange alternative accommodation elsewhere as soon as possible."[1]

On receipt of this letter, Ms Grace took steps to move her personal things and belongings. She did not pursue an offer of interim alternative accommodation or ongoing employment somewhere outside of Bethany. She believed she had been dismissed without cause or notice. On 19 November 2024, she made this unfair dismissal application with the Commission.

Shortly afterwards, the Respondent received notification of Ms Grace's application from the Commission. On 2 December 2024, Ms Lawler, the Respondent's National Leader, filed the F3 employer response form confirming Ms Grace's termination took effect on 4 November 2024. The employer response did not raise a jurisdictional objection to the application.

On 6 December 2024, the FWC convened an initial conciliation conference with the parties in response to Ms Grace's application. At the conciliation conference, the Respondent confirmed Ms Grace's employment remained ongoing and that she was continuing to be paid.

At the end of this conference, the Respondent also indicated it had recent complaints of serious misconduct against Ms Grace that were being investigated.

On 16 December 2024, Ms Grace received a "Show Cause" letter from Mr Rolfe dated 13 December 2024. The letter asked her to show cause as to why her employment should not be terminated considering allegations against her that she had 'physically pinned' a community member on 28 September 2024.

Ms Grace denied these allegations and confirmed this in a response the same day.

After considering Ms Grace's response and additional evidence, including the eyewitness account of Ms Margaret Segrave, on 10 January 2025 Mr Rolfe confirmed his decision to terminate Ms Grace's employment with immediate effect, without notice for serious misconduct.

[10] There being contested facts involved, the Commission is obliged by s.397 of the Act to conduct a conference or hold a hearing. Considering the views of the parties and the circumstances of this case, I determined a hearing was the most effective and efficient way to resolve the matters of contention.

[11] A hearing was conducted on 19 February 2025. Ms Grace represented herself in proceedings. The Respondent was represented by Ms Zoe Anderson (Of Counsel) whom I granted leave to appear after considering Ms Grace's objections pursuant to s.596 of the FW Act.

[12] Ms Grace filed an outline of submissions and provided a witness statement to the Commission, along with a series of supporting documents in addition to her F2 application. Ms Grace also gave sworn evidence during proceedings.

[13] In advance of proceedings, I issued orders for Mr Bhupinder Singh and Ms Carolyn Ebsary to attend the Commission to provide evidence at Ms Grace's request. Both Mr Singh and Ms Ebsary provided sworn evidence to the Commission.

[14] The Respondent filed written submissions, and a series of documents in support of its position in addition to its F3 employer response. The Respondent's submissions were supported by the sworn evidence of Ms Segrave and Mr Rolfe.

[15] Both Ms Grace and the Respondent filed written submissions at the conclusion of the Hearing at my request relevant to s.392(2) with final submissions being received by the Commission on 26 February 2025.

[16] A court book, containing all materials filed by the parties was compiled and distributed to the parties prior to the Hearing. I received the entirety of the court book into evidence, subject to appropriate weight being given to the evidence that was tainted by opinion, irrelevance or hearsay.

[17] Section 396 of the Act sets out the following:

"The FWC must decide the following matters relating to an application for an order under Division 4 before considering the merits of the application:

(a) Whether the application was made within the period required in subsection 394(2);

(b) Whether the person was protected from unfair dismissal;

(c) Whether the dismissal was consistent with the Small Business Fair Dismissal Code;

(d) whether the dismissal was a case of genuine redundancy."

[18] As set out above in s.396 of the Act, consideration as to whether the dismissal was unfair cannot occur unless the Commission is first satisfied that the provisions of s.396 have been met. In the present case, it is not contested, and I am satisfied that Ms Grace has made her application within the requirements of the Act. It is not contested, and I am satisfied that Ms Grace was earning below the high-income threshold and is a person protected from unfair dismissal. It is also not contested, and I am satisfied, that the Respondent is not a small business. Nor is it asserted, and I am satisfied this is not a case of genuine redundancy.

[19] As I have been satisfied that the requirements of s.396 are met, I am required to consider the merits of whether Ms Grace's dismissal was harsh, unjust or unreasonable.

[20] Ms Grace contends she has been unfairly dismissed - twice. Firstly, on 4 November 2024 when she was given a letter of termination instantly dismissing her from her position as House Coordinator, without any prior notice, valid reason, procedural fairness or right to representation. She submits this was unfair. And that she was not provided procedural fairness in an opportunity to review or respond to details of complaints from other assistants or family members about her.

[21] Further, that it was harsh in that she was dismissed instantly as if she had engaged in serious misconduct. And harsher still in that she was evicted from her residence in a rental crisis, forced to pack up her belongings with a shoulder injury and cancel her holiday plans.

[22] She contends she was a dedicated and good performing employee. That any concerns raised about her performance were motivated by disaffected co-workers who used the staff survey and connections with community family members, outside the Respondent's policies and procedures, to undermine her position and ultimately force her out.[2]

[23] Ms Grace accepts she continued to be paid by the Respondent for her minimum contracted hours from the last day she attended the Respondent's premises for work on 4 November 2024 to 10 January 2025.[3]

[24] Secondly, in relation to her "second dismissal" on 10 January 2025 for her alleged contact with a client on 28 September 2024. Ms Grace denies this contact ever took place. That she did not "pin" or otherwise come in physical contact with the client. That she has no prior history, or complaints against her for engaging in behaviour of this kind in the history of her employment. Further, that if this serious incident did occur it would not have taken over 6 weeks for it to be reported to Mr Rolfe and 3 more weeks before it was put to her. Moreover, that it would have been reported to the NDIS Commission as a requirement of the Respondent's licence, which it has not.

[25] Ms Grace's oral evidence supports her submissions. Mr Singh's evidence supports her contention that she was a competent, good performing employee with no history of unnecessary contact with clients in care. Ms Ebsary's evidence is similar but also acknowledges the legitimacy of the Respondent's concerns with her capacity to meet the needs of its community members and the justification for her dismissal.

[26] On this basis, Ms Grace submits the Commission should find she was unfairly dismissed. That her terminations were harsh, unjust and unreasonable and make an order for compensation.

[27] The Respondent's position is that Ms Grace's employment was not terminated on 4 November 2024. Rather, they submit she was demoted from her position as House Coordinator.

[28] That there were valid reasons for this decision. That Ms Grace was made aware of the concerns with her conduct and performance. That she was not denied an opportunity to be represented as she made no request for representation. That she was offered ongoing rental assistance, which she refused, and ongoing employment outside of Bethany, which she also refused by not returning to work and making this unfair dismissal application to the FWC.

[29] Mr Rolfe's witness statement and evidence to the Commission supports these submissions. Mr Rolfe's evidence provides a chronology of the concerns raised with Ms Grace about the numerous complaints he had received, including during the week of 9 September 2024. He submits from this time, Ms Grace was on notice that her conduct and performance needed to improve - particularly her leadership, communication and team building skills. Ms Grace's performance failed to improve.[4]

[30] Mr Rolfe received further complaints. On 4 November 2024, he concluded he had lost confidence in Ms Grace's capacity to perform the role as Bethany House Coordinator and advised her she was being terminated from this position with immediate effect. He further advised her she would need to find somewhere else to live by the end of the month but could use a room at Isabella House until the end of 2024.

[31] Ms Grace did not return to work at Bethany or elsewhere for the Respondent. On 20 November 2024, the Respondent received notice of Ms Grace's unfair dismissal application and filed its F3 employer response on 2 December 2024.

[32] On 11 November 2024, Mr Rolfe became aware Ms Segrave had witnessed Ms Grace physically "pin" a community member on 28 September 2024.[5] Mr Rolfe made Ms Grace aware of this allegation and to expect further correspondence from the Respondent at an FWC conciliation on 6 December 2024.

[33] On 13 December 2024, Mr Rolfe provided Ms Grace with a Show Cause letter seeking her response to Ms Segrave's allegations and to show cause why she should not be dismissed. Mr Rolfe then proceeded to make additional enquiries into the allegations.

[34] Mr Rolfe received Ms Grace's response on 16 December 2024. Considering this response and his additional enquiries, Mr Rolfe determined Ms Segrave's evidence was more compelling to that of Ms Grace. He resolved to terminate Ms Grace's employment and advised her of this decision on 10 January 2025.

[35] Ms Segrave provided sworn evidence to the Commission supporting the Respondent's position.[6] This evidence, supporting that of Mr Rolfe, provides the basis for the Respondent's position that its decision to end Ms Grace's employment was based on a valid reason. That it was sound, defensible and well founded. That Ms Grace was provided an opportunity to respond to the allegations against her. That after due consideration, given the seriousness of the allegations and the gravity of the misconduct, Mr Rolfe was justified in making the decision to terminate Ms Grace's employment.

Was the dismissal harsh, unjust or unreasonable?

[36] I must consider all the circumstances of the case along with the relevant authorities.[7] A dismissal may be unfair, when examining if it is 'harsh, unjust or unreasonable' by having regard to the following reasoning of McHugh and Gummow JJ in Byrne v Australian Airlines Ltd:[8]

"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."

[37] Section 387 of the Act provides for the criteria for consideration whether a dismissal was harsh, unjust or unreasonable 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."

[38] I am required to consider each of these factors, to the extent they are relevant to the factual circumstances before me.[9]

[39] I have set out my consideration of each below.

s.387(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)

[40] In order to be a valid reason, the reason for the dismissal should be "sound, defensible, or well founded"[10] and should not be "capricious, fanciful, spiteful or prejudiced."[11] However, the Commission will not stand in the shoes of the employer and determine what the Commission would do if it was in the position of the employer.[12]

[41] Where a dismissal relates to an employee's conduct, the Commission must be satisfied that the conduct occurred and justified termination.[13] The 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 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.[14]

[42] Deputy President Asbury (as she was then) summarised the relevant principles in relation to an employer's onus of establishing that there was a valid reason for a dismissal on the balance of probabilities as follows in Mellios v Qantas Airways Limited, which was confirmed on appeal by the Full Bench:[15]

"[17] In considering whether there is a valid reason for the Applicant's dismissal, I am required to be satisfied on the balance of probabilities that he engaged in the alleged misconduct or in misconduct to which dismissal was a valid, sound and defensible response. I must be conscious of the gravity of the allegations and the ramifications for the Applicant if they are made out. However, the standard of proof does not change and the issues in dispute must be determined on the balance of probabilities. Put another way, it must be more probable than not that the Applicant engaged in the relevant misconduct."

[43] I have applied these principles to the matter before me.

[44] Ms Grace submits she was first dismissed on 4 November 2024, when she was also evicted. And secondly, when she was told about a termination letter that was emailed to her dated 10 January 2025.

[45] The Respondent rejects both these assertions. With regards to the first, their position is Ms Grace was demoted from her position as House Coordinator for valid reasons. Reasons, including complaints about Ms Grace's conduct and performance in the House. Her relationship with other employees, clients in her care, and their families. That she was made aware of these reasons. That she was provided clear direction she needed to improve and failed to do so.

[46] Ms Grace does not accept there were fair and valid reasons for her to be removed from her role as House Coordinator. Her position is that while there were some complaints made by other assistants and family members, these were made by disgruntled co-workers who were upset about changes she was making. That these complaints were not formally made consistent with the Respondent's policies or procedures. Mr Singh's evidence, which I accept, supports her version of events.

[47] Ms Grace's position is that as House Coordinator she was not provided with adequate support in the face of these unfounded attacks. Rather, the Respondent has given in to pressure from upset staff; upset clients; and complaints and demands from family members that she had to go.

[48] I accept Ms Grace's evidence that the concerns raised about her were not properly made and may well have been maliciously motivated. I do not accept, however, that Ms Grace was not made aware of these concerns by Mr Rolfe on 12 September 2024 and told things needed to improve.

[49] Ms Grace submits Mr Rolfe did not provide her a clear instruction, direction or place her on notice that if she failed to improve, her position as House Coordinator was at risk. My assessment of the evidence of both Ms Grace and Mr Rolfe in proceedings leads me to favour Mr Rolfe's evidence in this regard. In contrast to Ms Grace, I found his evidence clear and consistent.

[50] Furthermore, I have had regard to the eye-witness evidence of Ms Ebsary that her impression of the environment in the House while Ms Grace was coordinator was one of "chaos".[16] That it could not go on and needed to change.[17] This evidence confirms my conclusion that Mr Rolfe had valid reasons to bring Ms Grace's role as House Coordinator to an end by demoting her on 4 November 2024. Also, that Ms Grace's conduct, including her failure to maintain harmonious relationships and adequately deescalate was a contributing factor to this decision.[18] Further, I also accept that this was Mr Rolfe's intention, as clearly recorded in the letter he gave to Ms Grace on that day.

[51] While this is the case, however, it does not mean I accept this decision was not unfair. Nor do I accept that when Ms Grace left this meeting, she did not legitimately believe she had been dismissed and had cause to make her unfair dismissal application.

[52] Ms Grace's compelling evidence is that she was shocked by this meeting. She believed she was attending a normal management meeting at which she was told she was being dismissed and needed to find somewhere else to live. I accept this evidence, that it was more likely than not Ms Grace believed she had been dismissed from her job on 4 November 2024.

[53] Had this been the end of the matter, I would have concluded Ms Grace was in fact terminated within the meaning of the FW Act on 4 November 2024 by being demoted. I would have further concluded the Respondent had valid reasons to make this decision. Considering the circumstances of dismissal, the way it was communicated, and confusion arising and the consequences for Ms Grace, I would have concluded her dismissal was also harsh.

[54] Supplementary submissions from the Respondent received after the Hearing clarified they no longer dispute the potential that Ms Grace could not have been unfairly dismissed by being demoted on 4 November 2024. For the above reasons, I am satisfied this was the case.

[55] Despite this conclusion, the facts of this case are such that the matter does not end here. In proceedings, Ms Grace accepted that she continued to be paid by the Respondent her usual contracted 25-hours a week up until 10 January 2025.

[56] In explaining this, Ms Grace's evidence was that she assumed this was either sick leave or workers compensation payments made to her because of a workplace injury claim she thought she had made just prior to being dismissed.

[57] The Respondent's initial position was as Ms Grace had a period of 4 weeks annual leave scheduled from 4 November 2024, it had no reason to be think she misunderstood being demoted, not dismissed, until they received notification of her unfair dismissal application from the FWC. Once this occurred, the fact they did not raise a jurisdictional objection to Ms Grace's application in their F3 response form and acknowledged she was terminated on 4 November 2024 is to be explained by their own misunderstanding of dismissal or demotion, and decision to engage in the formal FWC process Ms Grace had commenced.

[58] I consider this explanation implausible. Mr Rolfe's evidence was not that of a person unaware of the significance of completing an F3 form, unaware why employees were being paid, or overwhelmed by the prospect of appearing before the Commission.

[59] The Respondent's supplementary submissions concede this point. These submissions clarified Ms Grace was paid the equivalent of her minimum of 15 hours a week for the period of 4 November 2024 to 10 January 2025. She was not paid the additional 10 hours for her position as House Coordinator. Furthermore, these payments were initially paid out of sick leave entitlements, then reattributed to ordinary hours when Ms Grace failed to provide a sick leave certificate.[19]

[60] Despite this confusion, it is a fact that Ms Grace continued to receive payments from the Respondent for the period of 4 November 2024 to 10 January 2025 as if she remained employed. The status of these payments and her employment, or otherwise, during this period remain contested. In circumstances where these materials were not properly examined prior to the conclusion of the Hearing, I cannot safely conclude Ms Grace was in fact dismissed from her employment, not just her House Coordinator position on 4 November 2024.

[61] In circumstances where Ms Grace was also dismissed from employment on 10 January 2025, I am not satisfied it is essential I make a finding her employment ended 4 November 2024. For the reasons set out above, I am not satisfied I can safely come to this conclusion.

[62] It follows from the above, that I find the effective date of Ms Grace's termination to be 10 January 2025, when Ms Grace was terminated for serious misconduct without notice. The termination letter she maintains she did not receive but was made aware of, advised her that the allegations that she had made unreasonable physical contact with/and or unreasonably restrained a client were substantiated. And that this finding of serious misconduct was grounds for her immediate termination.

[63] Mr Rolfe's evidence is that he was first made aware of Ms Grace's conduct when Ms Segrave made him aware on 11 November 2024. Ms Segrave's report to him was as follows:[20]

"On Saturday 28th September I was visiting Bethany for a Grand Final BBQ. We came inside (sic) to watch TV when I heard Yvonne yelling in distress from another room. I went out to find Yvonne physically pinned to the filing cabinet by Sandy because she had taken a small bag of chips from the top of the cabinet and Sandy was forcibly trying to take them."

[64] Despite the gravity of this statement and the conduct it alleged, Mr Rolfe's evidence is that it was not until 13 December 2024 that he first took steps to make Ms Grace aware of the allegations and his concerns, sending her a show cause letter.[21]

[65] His only explanation for this delay is that he understood Ms Grace was on leave from 4 November 2024. That not long after, he was made aware that Ms Grace filed this unfair dismissal application with the Commission. Once aware this was the case, he decided the best course of action was to wait to action his serious concerns with Ms Grace's serious misconduct. He did this after the FWC convened an initial conciliation conference and it was apparent that Ms Grace was determined to dispute the dismissal she believed to have occurred on 4 November 2024.[22]

[66] Mr Rolfe's version of events does little to disavow the legitimacy of what Ms Grace believes to have occurred. Ms Grace received Mr Rolfe's show cause letter on 16 December 2024 and replied to it the same day. She denies engaging in any physical contact with Ms Yvonne on 28 September 2024 and maintains the version of events she recorded in her contemporaneous file note of the day is what happened. As follows:[23]

"Yvonne came into the office & took a bag of chips... Sandy said "Yvonne have already had a bag today, I will get you a healthier choice." Yvonne became argumentative + aggressive. Grabbed the inside of my arm & pinched me. Made a bruise. Yvonne then accused me of pinching her & swearing at her. I asked her to stop pinching me. Yvonne began to accuse me again & saying I was pushing her. (margaret was there) I managed to get Yvonne to leave the office & She followed me accusing me of all sorts of thing (sic). I went outside for space. Yvonne followed me. I went around the house with Yvonne following fast behind. I went into the house & closed myself in office & wrote report. Gave space between myself and Yvonne to allow time for peace."

[67] Ms Grace reiterated this version of events in her reply to Mr Rolfe on 16 December 2024. She provided the same evidence to the Commission. Given the contemporaneous nature of this evidence, and that it has been consistently provided, I favour Ms Grace's version of what happened on 28 September 2024 to that of the Respondent. It follows from this that I am not satisfied on the balance of probabilities that the conduct Ms Grace is alleged to have engaged in in fact occurred.

[68] I am confident of this finding considering the evidence of Ms Grace weighed against that of the Respondent. Specifically, that it took Mr Rolfe until 13 December 2024 to take any action to the serious allegations Ms Segrave made against Ms Grace on 11 November 2024. Further, that at the time of the Hearing, Mr Rolfe had not made any report of this incident or his findings of serious misconduct to any external body or Ms Yvonnes's family members.[24]

[69] I am also not convinced by Ms Segrave's evidence to the Commission and recollection of what occurred on 28 September 2024. I accept Ms Segrave was visiting that day and that she was recovering from cancer therapy. I accept these facts may have impacted her recollection of events as well as the imperative to either do something to assist someone being assaulted, or at the very least report Ms Grace's conduct to Mr Rolfe as a matter of urgency. Not until almost 6 weeks later after she became aware of Ms Grace's dismissal as House Coordinator.

[70] Ms Grace asserts Ms Segrave's evidence is a convenient construction manufactured by the Respondent to cover up her unfair dismissal on 4 November 2024. While I appreciate Ms Grace having this perspective, I do not accept this to be the case.

[71] I have no doubt Ms Segrave witnessed an incident involving Ms Yonne and Ms Grace on 28 September 2024. Ms Grace's own evidence acknowledges this to be the case. I accept Ms Segrave would have been alarmed and concerned by this. I do not accept that Ms Segrave witnessed Ms Grace physically pinning Ms Yvonne to the filing cabinet, "holding her arms back" while at the same time grabbing for a bag of chips in Ms Yvonne's hand. Ms Segrave's evidence to the Commission that this is what she saw was unconvincing.[25] Nor do I accept the strength of Ms Segrave's evidence supports a suggestion the Commission can safely conclude Ms Segrave's evidence infers Ms Grace was trying to take the chips.

[72] Mr Rolfe's additional evidence is that in addition to the witness statement of Ms Segrave, he has had regard to Ms Grace's own notes of the incident, her failure to deny pushing Ms Yvonne and Ms Yvonne's own complaints. He accepted in evidence that he did not directly interview Ms Segrave, Ms Yvonne or any other members of staff on shift that day prior to making his final decision.[26] He also accepts that he is aware from others that a symptom of Ms Yvonne's condition is to distort the truth.[27] Mr Singh, Ms Grace and Ms Ebsary provided similar evidence.

[73] The Respondent's position is that there was a valid investigation into the events of 28 September 2024. That Mr Rolfe seriously considered the evidence before him and made the considered and reasonable decision on the evidence available to terminate Ms Grace's employment. Despite Mr Rolfe providing this sworn evidence to the Commission, I find it as convincing as his evidence he waited almost 6 weeks to take any action about an alleged assault of a client.

[74] I accept there was an incident on 28 September 2024 in which Ms Grace could have handled herself differently or avoided the incident occurring. I do not accept however, that Ms Grace's conduct on 28 September 2024 amounted to anything near the level of conduct required to justify the termination of her employment.

[75] Therefore, I am not satisfied of a valid reason for the dismissal. This finding weighs in favour of Ms Grace that her termination was unfair.

s.387(b) Whether the person was notified of that reason

[76] Proper consideration of s.387(b) requires a finding to be made as to whether the Applicant "was notified of that reason". Contextually, the reference to "that reason" is the valid reason found to exist under s.387(a).[28]

[77] Notification of a valid reason for termination must be given to an employee protected from unfair dismissal before the decision is made to terminate their employment,[29] in explicit,[30] plain and clear terms.[31]

[78] As identified by the Full Bench in Crozier v Palazzo Corporation Pty Ltd:

"As a matter of logic procedural fairness would require that an employee be notified of a valid reason for their termination before a decision taken to terminate their employment in order to provide them an opportunity to respond to the reason identified."

[79] Ms Grace accepts she was provided with a show cause letter on 16 December 2024. She does not accept she ever received her termination letter dated 10 January 2025, but accepts she was made aware of this termination shortly thereafter.

[80] Despite the peculiarity of this case, I am satisfied the Respondent clearly set out its allegations of serious misconduct and provided the reason for the termination of her employment. As I have not been satisfied that there is a valid reason for dismissal, however, this factor is not strictly relevant in this case.[32]

[81] Therefore, I consider this to be a neutral factor.

s.387(c) Whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person

[82] It is not contested that Ms Grace was provided an opportunity to respond to the allegation against her in relation to her dismissal on 10 January 2025. This was in the form of the show cause letter received on 16 December 2024.

[83] I have also found that Ms Grace was made aware of the concerns about her performance in the role of House Coordinator and provided an opportunity to respond to these concerns. In these circumstances, I consider this factor weighs in favour of the Respondent.

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

[84] This factor is not relevant to the facts of this case. Ms Grace neither requested nor was denied representation.

s.387(e) If the dismissal related to unsatisfactory performance by the person‑ - whether the person had been warned about that unsatisfactory performance before the dismissal

[85] I have considered this factor above and despite the anomalies identified, I accept that Ms Grace was put on notice in a meeting with Mr Rolfe on 12 September 2024 that her conduct and overall performance needed to be improved. Whilst it is not clear whether Ms Grace understood the gravity of this communication, I accept the Respondent attempted to make clear that her positions were at risk if things didn't improve. Ultimately, however, when Ms Grace's confusion became clear, the Respondent did not take effective steps to clarify its position deferring to proceedings before the Commission. I therefore consider this a neutral factor.

s.387(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 s.387(g) - Whether the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise impacted on the procedures followed

[86] The Respondent is a relatively small organisation without a dedicated human resource specialist and reliant on volunteers. The Respondent is not a small business. It has some level of leadership and people management professionals, including Mr Rolfe and Ms Lawler.

[87] While I have considered these factors, I do not consider the significance of the employer's status as a provider of faith-based services to disabled members of our community warrants consideration of this factor in their favour.

[88] I therefore consider this to be a neutral factor.

s.387(h) Any other matters that the FWC considers relevant

[89] The provisions of s.387(h) requires the Commission to take into account any other matters it considers relevant. In the circumstances of this case, the Respondent identifies the significance of relational aspects of roles of its assistants and the community members in their care. They submit this is a relevant factor to be considered.

[90] I accept these submissions of the Respondent in that reinstatement is not an appropriate remedy in these circumstances. I have also considered that the significance of what has occurred for Ms Grace. It resulted in her being left homeless and without a job.

[91] I consider this factor relevant. I also acknowledge the offer Mr Rolfe made of an alternative place to live in his meeting with Ms Grace on 4 November 2024.

[92] However, I have accepted the gravity of this meeting, and its implications resulting in Ms Grace not fully comprehending what was being put to her. Consequently, she moved out. It is also significant that the employer did nothing to disavow her of this misunderstanding or make any attempt to restate its offer of alternative accommodation. I consider this factor weighs in Ms Grace's favour that her dismissal was unfair.

[93] I have not been satisfied that there was a valid reason for the dismissal.

[94] I have been satisfied that Ms Grace was notified of the reasons for her dismissal, but not of a valid reason.

[95] I have been satisfied Ms Grace was given an opportunity to respond to the reasons for her dismissal.

[96] There was no unreasonable refusal to a support person as there was no request for support.

[97] I am satisfied that there was relevant unsatisfactory work performance prior to the dismissal and that attempts were made to make Ms Grace aware of these concerns. Ultimately, however positions were not clarified, leading me to consider this to be a neutral factor.

[98] I consider that the size of the Respondent's business and the absence of employed dedicated human resource management is a neutral factor.

[99] I have also had regard to the other matters I consider are appropriate and conclude that Ms Grace also lost her place to live as a result of being dismissed and this weighs in her favour.

[100] On this basis, I am satisfied Ms Grace was unfairly dismissed within the meaning of s.385 of the FW Act.

[101] Having been satisfied that the Applicant:

made an application for an order granting a remedy under s.394;

was a person protected from unfair dismissal; and

was unfairly dismissed within the meaning of s.385 of the Act;

I may, subject to the Act, order the Applicant's reinstatement, or the payment of compensation to the Applicant.

[102] Under section 390(3) of the Act, I must not order the payment of compensation to the Applicant unless:

(a) the FWC is satisfied that reinstatement of the Applicant is inappropriate; and

(b) the FWC considers an order for payment of compensation is appropriate in all of the circumstances of the case.

Is reinstatement of the Applicant inappropriate?

[103] Ms Grace does not seek to be reinstated to her position, but rather to be compensated for her unfair dismissal. The Respondent opposes reinstatement, citing a breakdown of the employment relationship and it being beyond repair.

[104] Considering all the circumstances in this case and the submissions of the parties, I do not consider reinstatement appropriate. Ms Grace has not worked with the Respondent since 4 November 2024. The circumstances of her departure were not without controversy. Moreover, I am satisfied the nature of relationship with her employer, clients in their care and their families have been damaged beyond repair. These conclusions support the Respondent's submissions that it has lost trust and confidence in Ms Grace and her capacity and competence to perform in her role.

[105] I accept this to be the case, I am therefore satisfied reinstatement is not an appropriate remedy.

Is an order for payment of compensation appropriate in all the circumstances of the matter?

[106] Having determined that reinstatement is not appropriate, it does not automatically follow that a payment for compensation is appropriate. As noted by the Full Bench:

"[t]he question whether to order a remedy in a case where a dismissal has been found to be unfair remains a discretionary one..."[33]

[107] Where an Applicant has suffered financial loss as a result of the dismissal, this may be a relevant consideration in the exercise of this discretion.[34]

[108] Ms Grace submits she would have continued to work for the Respondent for a further 5 years. The Respondent accepts Ms Grace's current employment contract expired on 1 June 2025. Ms Grace submits she has not been able to secure comparable alternative employment since her termination, despite attempts. On this basis, I am satisfied that the Applicant has incurred financial loss in the period since her termination and that some compensation is appropriate.

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

[109] Section 392(2) of the Act requires all 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 employer's enterprise; and

(b) the length of the person's service with the employer; and

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

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

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

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

(g) any other matter that the FWC considers relevant.

[110] After the conclusion of the Hearing, I invited both parties to address these criteria and sought additional submissions. Considering all the circumstances of this case, the evidence before me and the additional submissions, I am satisfied I can form a view as to compensation and consider each of these criteria below.

(a) the effect of the order on the viability of the employer's enterprise

[111] The Respondent provided submissions that it recorded a loss for the 2023-2024 financial year and that any significant award of compensation beyond that already paid to Ms Grace for the period of 4 November 2024 - 10 January 2025 will have a significant impact on the viability of the organisation and its capacity to provide its important ongoing community services.

[112] Ms Grace does not agree this should be the case.

[113] I have considered the Respondent's submissions and evidence and consider the potential impact on the viability of the Respondent a relevant factor to be taken into account in the calculation of compensation.

(b) the length of the person's service with the employer

[114] Ms Grace commenced working for the Respondent in 2022 and remained in the workplace until 4 November 2024 and on the payroll until 10 January 2025. This is not a period of significant time.

[115] I therefore do not consider that the Applicant's length of service supports increasing the amount of compensation ordered in the circumstances.

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

[116] As stated by a majority of the Full Court of the Federal Court:

"...in determining the renumeration 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 has 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 the likelihood of a further termination in order to be able to assess the amount of renumeration the employee would have received, or would have been likely to receive, if there had not been the actual termination".[35]

[117] In the present circumstances, the Applicant's evidence is that she would have continued in her employment until the expiration of her current contract on 1 June 2025 and beyond. The Respondent submits Ms Grace's contract would not have been extended considering the breakdown of the relationship between the parties. Further, they submit it is more likely than not the Respondent would have had reason to terminate Ms Grace's employment sooner than this with cause considering its concerns with her conduct and performance.

[118] I accept this submission. Considering the evidence of Mr Rolfe and Ms Ebsary of the Respondent's concerns with Ms Grace's conduct, performance and her relationship with other staff, community members and their families, I accept it is more likely than not Ms Grace's employment relationship would have been legitimately ended by her employer before 1 June 2025.

[119] Given Ms Grace's period of leave, her injury and the holiday season, I anticipate the procedural steps for this process to have been concluded by 21 February 2025.

Sandy Grace v L'Arche Melbourne Inc / Bendigo [2025] FWC 1340

At a glance

Court

Decision date

Source

Judgment (279 paragraphs)

Sandy Grace v L'Arche Melbourne Inc / Bendigo [2025] FWC 1340 (15 May 2025)

Parties

Legislation Cited (1)

Cases Cited (4)