DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Bartolome Durado & Delo Be Isugan
v
Foot & Thai Massage Pty Ltd
(U2015/15119; U2015/15122)

Applications for relief from unfair dismissal – determined that Ms Isugan was dismissed and that her dismissal was harsh, unjust and unreasonable – Mr Durado’s dismissal held to be unjust and unreasonable – reinstatement not appropriate – determined that compensation is appropriate in all the circumstances of each case – compensation awarded.

[1] Mr Bartolome Durado and Ms Delo Be Isugan (the Applicants) each made an application under s.394 of the Fair Work Act 2009 (the Act) alleging that the termination of their employment by Foot and Thai Massage Pty Ltd (the Respondent) on 26 October 2015 was unfair. The applications were received by the Fair Work Commission (the Commission) on 16 November 2015.

[2] These matters have a long history and have been the subject of two previous decisions, the first on 10 June 2016 1 and the second on 10 August 20182. The first decision determined that consideration of the applications should be held in abeyance as a result of a Deed of Company Arrangement (DOCA) which had been executed in respect of the Respondent on 11 April 2016. The second decision rejected an application by the Respondent that the Applicants’ unfair dismissal applications be dismissed on the grounds that they were barred by the DOCA.

[3] The applications were part-heard on 1 and 2 March 2018. At those hearings, evidence was given on behalf of the Applicants by Ms Isugan, Mr Durado, Ms Irene Amacio, a friend and co-worker of Ms Isugan, and Ms Bantilan, also a co-worker of Ms Isugan. Mr Colin Elvin, the former Manager and Director of the Respondent who was retained by the Respondent as a consultant, and Mr Jun Millard Puerto, the Respondent’s Massage Supervisor, both gave evidence for the Respondent. The applications were listed for further hearing on 7 May 2015. However on 2 May 2018 the Respondent’s legal representative wrote to the Commission requesting that the 7 May 2018 listing be vacated and the be applications listed for directions to deal with the Respondent’s contention that the applications should be dismissed because they were barred by the DOCA. Following the Commission’s abovementioned second decision, the applications were the subject of a telephone mention and directions hearing on 17 August 2018. At that telephone hearing the Respondent’s representative, Mr Athol Opas of Counsel, advised that the Respondent did not propose to lead any further evidence and suggested that a timetable for the provision of closing submissions be set. The proposed approach was supported by the Applicant’s representative, Mr Stefan Russell-Uren then of United Voice. As a result, directions were subsequently issued by the Commission for the filing of written closing submissions, with the last of those written submissions received on 15 October 2018.

[4] For the reasons outlined below I have found inter alia that:

•  Ms Isugan was dismissed within the meaning of s.386 of the Act, that her dismissal was harsh, unjust and unreasonable and that the Respondent should pay Ms Isugan $29,228.55 (less applicable tax) plus superannuation; and

•  Mr Durado’s dismissal was unjust and unreasonable and that the Respondent should pay him $8,000.00 (less applicable tax) plus superannuation.

Background

[5] Ms Isugan was employed by the Respondent as a massage therapist. She commenced work on 25 June 2012. In her application Ms Isugan stated that she was dismissed with immediate effect on 26 October 2015. Ms Isugan was sponsored by the Respondent to work in Australia under a subclass 457 visa. Ms Isugan comes from the Philippines where she was recruited, together with a number of the Respondent’s other employees, by Mr Elvin.

[6] Mr Durado was employed by the Respondent to undertake cleaning and maintenance duties. His employment commenced on 22 November 2014. Mr Durado was dismissed with immediate effect on 26 October 2015.

The Applicants’ case

[7] Ms Isugan submitted that there were eight essential facts which were the foundation of her claim. Those facts, she contended, were:

(a) the Respondent prohibited its employees from entering into relationships;

(b) the consequence of breaching the relationship rule was being sent home;

(c) the Applicants entered into a relationship in secret;

(d) Ms Amacio reported the relationship to Mr Elvin;

(e) Mr Elvin interviewed everyone but Ms Isugan;

(f) Mr Elvin informed Mr Durado of the Respondent’s intention to send Ms Isugan home;

(g) Mr Durado advised Ms Isugan of Mr Elvin’s intention; and

(h) Ms Isugan fled because of Mr Elvin’s proclamation.

[8] Drawing on the evidence Ms Isugan maintained that she had been constructively dismissed and submitted that her dismissal arose from the Respondent’s practice of sending workers back to the Philippines without process or notice for the infraction which she knew had been discovered. The Applicants in their submissions emphasised the weight and significance of being sent back to the Philippines, highlighting that in the Philippines Ms Isugan, Ms Amacio and Ms Bantilan earned about 6,000 pesos per month (about AUD $165 per month at current exchange rates) while in Australia they earned about 80,000 pesos per month (about AUD $2,180 per month at current exchange rates).

[9] Mr Durado submitted that he had been dismissed for having a relationship with Ms Isugan. More particularly, Mr Durado contended that the Respondent’s blanket prohibition on relationships was not reasonable and that a refusal to comply with an unreasonable direction could not be the foundation of a valid reason for dismissal.

[10] The Applicants submitted that were the Commission to conclude that they were dismissed for having a relationship that it must conclude that their dismissals were unfair.

[11] As to remedy, neither Applicant sought reinstatement as Ms Isugan had secured employment in June 2016 with a business established by relatives of Mr Durado and Mr Durado commenced alternative employment in August 2016. Specifically, Ms Isugan sought compensation totalling $61,914.48 while Mr Durado sought compensation totalling $13,000.00. In respect of the amount of compensation sought in respect of Ms Isugan, the amount is calculated on the amount which she claimed she was entitled to under the Health Professionals and Support Services Award 2010 3 for the hours she worked. However, Ms Isugan submitted that were compensation to be calculated on the basis of what she was paid, the maximum loss over 26 weeks was estimated as $29,159.

[12] The Applicants in their closing submissions contended that the credibility of three witnesses, i.e. Messrs Durado, Elvin and Puerto, was seriously challenged. Key aspects of the Applicants’ submissions in this regard were that:

● the Commission should regard Mr Elvin as a witness of no credibility;

● the Commission should regard Mr Elvin’s participation in the proceedings as tainting the evidence of Mr Puerto, suggesting that Mr Elvin’s conduct in coaching Mr Puerto to deceive the Commission should be referred to the Australian Federal Police (AFP) and positing that it was probable that Mr Elvin had contravened s.678(2) of the Act;

● Mr Puerto should be regarded as a witness who would and did deceive the Commission if Mr Elvin asked him to;

● where Mr Puerto’s evidence supported the Respondent’s case it should not be accepted unless it was corroborated by another independent witness;

● Mr Puerto should be referred to the AFP in relation to the probable contravention of s.678(1) of the Act;

● Mr Durado’s evidence was harmed by his inability to remember some details; and

● the consistency between Mr Durado’s evidence and that of Ms Bantilan, Ms Amacio and Ms Isugan speaks to the truth of Mr Durado’s evidence.

[13] Ms Isugan in her witness statement 4 deposed among other things that in July 2015 she and Mr Durado had begun having a relationship which she kept secret because of the Respondent’s “no relationships” rule which if broken resulted in employees being sent home to the Philippines, adding that she did not want to be sent home because her family needed the money. Ms Isugan further deposed that she admitted being in the relationship to Ms Amacio with whom she was close friends and that over time Ms Amacio became increasingly scared that Mr Elvin might find out that she knew of the relationship and failed to inform him of it. This, Ms Isugan deposed, was because another of the Respondent’s rules was that if an employee knew that another person was breaking the rules and did not report it then both employees would be sent back to the Philippines. Ms Isugan stated that by mid-October 2015, Ms Amacio told her that if she did not break up with Mr Durado that she would report the relationship to Mr Elvin, adding that on 22 October 2015 Ms Amacio asked her not to go to Mr Durado’s house on her day off and that if she did go she would tell Mr Elvin.

[14] As to the events of 26 October 2015, Ms Isugan deposed that:

● at work Mr Elvin started calling in every worker but her for one-on-one meetings, adding that she was concerned that the meetings may have been to discuss her relationship with Mr Durado;

● when she got home that evening she saw she had a message from Mr Durado;

● she spoke with Mr Durado well after 11:00 pm when he told her that she was being sent home to the Philippines the following morning and that he would come past the house to pick her up so that she could run away; and

● she was later told that when Mr Elvin had met with the workers he asked them questions about her relationship and said to them that if they told her about the questions that they would also be sent home.

[15] Key aspects of Ms Isugan’s oral evidence included that:

● Mr Elvin raised concerns regarding her performance with her in 2012, 2013 and 2014 but not in 2015, later adding that she recalled being spoken to by Mr Elvin about burping on customers in 2015; 5

● she had not received a termination letter from the Respondent; 6

● Mr Durado had told her that Mr Elvin was going to speak to her and take her to the airport; 7

● she did not want to leave on the evening of 26 October 2015 but was forced to do so because Mr Elvin was going to send her back to the Philippines the next day; 8 and

● her co-workers did not say anything to her about what Mr Elvin had discussed with them because they were scared that they would be “stuffed” if they told her because that was Mr Elvin’s rule, adding that Mr Elvin’s practice was to call a meeting if he wanted to send someone home. 9

[16] Mr Durado in his witness statement 10 deposed that he worked for the Respondent doing cleaning and maintenance for the period 22 November 2014 to 26 October 2015 earning $1,000 per week at the time that his employment ended. Key aspects of Mr Durado’s witness statement included that:

● he commenced a relationship with Ms Isugan in July 2015;

● Ms Isugan had said to him that Mr Elvin would send her home if he discovered that she was having a relationship with a person in Australia;

● while he and Ms Isugan kept their relationship secret, Ms Amacio (a close friend of Ms Isugan) was aware of the relationship;

● Ms Amacio had said to him that if the relationship did not end she would have to tell Mr Elvin because she did not want to be sent home;

● he returned to the Respondent’s Belconnen store one day in October 2015 (date not specified) and was asked to join Mr Elvin and Mr Puerto who were sitting “out back”, adding that Mr Elvin indicated that he knew about him and Ms Isugan and stated that he was going to send Ms Isugan home and that he should not call Ms Isugan;

● Mr Puerto took him home following that discussion after which he was not offered anymore work by the Respondent;

● he sent Ms Isugan a message just before she finished work that day asking her to call him;

● Ms Isugan subsequently called him on Skype at which time he told her that Mr Elvin was about to send her home the next day, suggested that she should get out of where she was living and said that he would pick her up; and

● Mr Puerto called him later that night and said “what happened” “you me and Colin [Mr Elvin] talked about it already” to which he replied that he could not allow the Respondent to send Ms Isugan home and then hung up.

[17] In his oral evidence Mr Durado attested among other things that:

● he sold items which he had bought at the Jamison trash and treasure market to employees of the Respondent; 11

● prior to October 2015 he had never been given a warning about his employment by Mr Elvin or any warning about being absent from work, later reaffirming that Mr Elvin had not spoken to him about leaving during working hours or asked him to improve his attendance; 12

● he was charged with stolen property offences while he was addicted to heroin, adding that he had not taken heroin for 10 years; 13

● after Mr Elvin told him that he intended to send Ms Isugan home he spoke with Ms Isugan that night and told her to get out after which he picked her up from the house where she was living; 14

● Mr Elvin never said he was going to terminate Ms Isugan but rather that he was going to send her home; 15

● he was the first person to tell Ms Isugan what Mr Elvin had said to him, adding that Ms Isugan did not return to the Respondent because of that; 16

● he was not aware of any written evidence stating that Mr Elvin was going to dismiss Ms Isugan; 17

● he did not recall Mr Elvin having a conversation about stolen goods in which he said that he had video footage of him [Mr Durado] meeting people in the Respondent’s car park;  18 and

● he understood that he had been dismissed by the Respondent because of his relationship with Ms Isugan. 19

[18] Ms Amacio in her witness statement 20 deposed inter alia that:

● she knew that Ms Isugan and Mr Durado were in a relationship, adding that in mid-2015 Ms Isugan denied it when she asked her but a few weeks later confirmed that they were seeing each other;

● she subsequently became very stressed about this because if Mr Elvin found out that she knew of the relationship but had kept it secret she would be sent back to the Philippines;

● on or around 22 October 2015 she told Ms Isugan that if she went to see Mr Durado that day that she would tell Mr Elvin of the relationship;

● after Ms Isugan had left she contacted Mr Puerto and told him of the relationship;

● the following day Mr Elvin spoke to her outside the shop asking about the relationship;

● Mr Elvin told her not to tell Ms Isugan and that he was going to fire Mr Durado first and then send Ms Isugan back to the Philippines;

● on the same day Mr Elvin called the other workers (including Ms Bantilan) to speak to him one by one, adding that none of the therapists told her what Mr Elvin had discussed with them;

● when she got home that evening she felt very bad about what she had done and wanted to take Ms Isugan aside and confess; and

● when she could not find Ms Isugan she realised that she had run away with Mr Durado because Mr Elvin had said to her that he would fire him first and Ms Isugan did not know this when they got home from work that evening.

[19] In her oral evidence Ms Amacio attested that:

● she became aware that Mr Elvin intended to dismiss Ms Isugan because he had told her that he intended to send Ms Isugan to the Philippines, adding that she was not aware of any termination letter having been produced by Mr Elvin; 21

● in her discussion with Mr Elvin he indicated that he would first talk to Mr Durado and remove him from his job and then talk to Ms Isugan and tell her that she would be sent to the Philippines because of her relationship with Mr Durado; 22

● she did not tell anybody of what was discussed in her meeting with Mr Elvin; 23

● she was aware that Ms Isugan had appointments on the day she disappeared; 24

● she did not know how she concluded that Ms Isugan had been dismissed; 25

● she was currently working with Ms Isugan; 26

● she recalled several conversations which Mr Elvin may have had with Ms Isugan about burping on customers; 27 and

● she was not aware of any inappropriate behaviour by Ms Isugan and Mr Durado in the staff area at work during their time together. 28

[20] Ms Bantilan in her witness statement 29 deposed among other things that:

● she worked in the Philippines with Ms Isugan and Ms Amacio as a massage therapist earning about 6,000 pesos per month (about AUD $165 per month at current exchange rates);

● she was recruited by Mr Elvin to work for the Respondent in 2012 along with Ms Isugan and Ms Amacio (among others);

● there were rumours in mid-2015 that Mr Durado and Ms Isugan were romantically engaged;

● in late October 2015 Mr Elvin asked her if Mr Durado and Ms Isugan were together, adding that she replied that she had heard the rumours but did not know for certain;

● Mr Elvin told her that he was going to send Ms Isugan home and to keep this secret, which she did;

● when she came home that evening she saw Ms Isugan looking through her things after which Ms Isugan left the room and was gone; and

● the following day Mr Elvin advised workers that Ms Isugan had gone with Mr Durado and asked if anyone had told her he was going to send her home, adding that they replied ‘no’ and opined that perhaps Mr Durado had told Ms Isugan.

[21] In her oral evidence Ms Bantilan stated in response to a question from the Commission that she knew that Ms Isugan had her employment terminated by Mr Elvin because he told her and all of those in her group that he was going to send Ms Isugan home because of her relationship with Mr Durado. 30 Beyond that, other key aspects of Ms Bantilan’s oral evidence included that:

● she did not see Mr Durado sell items to other employees, though she had heard it from other employees; and 31

● Ms Isugan’s name was in the appointment schedule the day after she left but not thereafter. 32

The Respondent’s case

[22] In its written submissions the Respondent submitted that it did not dismiss Ms Isugan, adding that her claim that she was dismissed appeared to be based solely on her contention that Mr Durado had warned her that Mr Elvin intended to send her back to the Philippines. The Respondent further submitted that Ms Isugan did not contend that Mr Elvin, Mr Puerto or anyone else on behalf of the Respondent informed her that the Respondent intended to terminate her employment. Further, the Respondent posited that there was a factual dispute as to what Mr Elvin had said to Ms Amacio, Ms Bantilan and Mr Durado about his intention to terminate Ms Isugan’s employment. As to what Mr Elvin had said to Mr Durado in this regard, the Respondent characterised Ms Isugan’s submissions as contending that:

● Mr Elvin told Mr Durado he intended to send Ms Isugan home to the Philippines;

● Mr Durado informed Ms Isugan of this after which she left the house where the Respondent’s employees lived and went to the home of Mr Durado’s sister;

● the Respondent had a practice of sending employees back to the Philippines for breaching an alleged no-relationship rule; and

● Ms Isugan was therefore constructively dismissed.

[23] The Respondent contended that if the Commission were to accept Ms Isugan’s evidence at its highest it meant that she heard second hand from Mr Durado that Mr Elvin intended to send her back to the Philippines, adding that on that basis Ms Isugan acted pre-emptively to leave the Respondent’s residence before the Respondent could terminate her employment. The Respondent submitted that even if that were Mr Elvin’s stated intention he did not relay that to Ms Isugan, positing that Mr Elvin could have changed his mind before speaking with Ms Isugan. More particularly, the Respondent contended that these circumstances did not amount to dismissal. In support of its contention in this regard the Respondent relied on the decisions in Bupa Aged Care Australia Pty Ltd t/a Bupa Aged care Mosman v Shahin Tavassoli (Bupa) 33, Pawel v Advanced Precast Pty Ltd34 and ABB Engineering Construction Pty Limited v Doumit35.

[24] The Respondent further submitted that if the Commission found that Ms Isugan had been dismissed that it accepted that the dismissal was unfair and that the Commission only needed to make a finding in respect of remedy. In that regard the Respondent agreed with Ms Isugan that reinstatement was inappropriate and submitted that:

● any compensation should be less than the statutory maximum of 26 weeks;

● the crucial question was how long Ms Isugan would have continued in employment;

● given the short length of her employment and the general dissatisfaction of both parties with the employment relationship, the Commission should not award more than 2 months’ pay; and

● any compensation should be calculated by reference to what Ms Isugan was earning as opposed to what she says she ought to have been paid.

[25] As to Mr Durado, the Respondent stated in its submissions that it was not disputed that it terminated his employment on 26 October 2015 with immediate effect. However, the Respondent disputed that it had dismissed Mr Durado because of his relationship with Ms Isugan, maintaining that it had dismissed Mr Durado because of concerns about him selling stolen goods at the workplace and against the background of it having previously had concerns about similar conduct by Mr Durado. However the Respondent acknowledged that Mr Elvin’s evidence did not address what transpired in his meeting with Mr Durado on 26 October 2015 and that as such it accepted that the balance of probabilities the evidence favoured Mr Durado’s version of the discussion. Against that background, the Respondent conceded that the circumstances of Mr Durado’s termination did amount to unfair dismissal as a result of it failing to afford procedural fairness to Mr Durado.

[26] The Respondent further submitted that as neither party sought reinstatement that in respect of compensation:

● any compensation should be less than the statutory maximum of 26 weeks;

● it was clear that the relationship between Mr Durado and the Respondent had completely broken down;

● even if the Respondent had not dismissed Mr Durado on 26 October 2015 and had sought to do so fairly it was unlikely that the process would have taken more than a month; and

● any compensation should not exceed 4 weeks’ pay.

[27] Mr Elvin provided two witness statements 36 one which related to Ms Isugan and the other to Mr Durado. Among other things, Mr Elvin deposed that:

● he first noticed Ms Isugan’s work performance decline in January 2015 and that he gave her a verbal warning in March 2015 that her performance must improve;

● while Ms Isugan’s attitude and staff interactions subsequently improved for a period of about 2 months, the high number of customer complaints regarding Ms Isugan was sustained;

● in May and October 2015 he received complaints from two different customers upset at Ms Isugan burping during appointments with her, acknowledging that when he discussed the first incident with Ms Isugan she advised him that she had ‘stomach issues’;

● he spoke with Ms Isugan following the second burping complaint and repeated his earlier warning;

● also in October 2015 he discovered that Ms Isugan and Mr Durado had been in a relationship since January 2015;

● around May 2015 he became aware that Mr Durado was selling stolen items as Mr Durado had given him brand new clothing as a gift and then tried to sell him a brand new power drill;

● he gave Mr Durado a verbal warning that if he continued to sell stolen items that he would have to leave;

● when questioning staff in October 2015 he discovered that Ms Isugan intended to leave the Respondent and open up a rival store with Mr Durado, his sister and another;

● at the end of October 2015 he asked staff to hand in the goods they had purchased from Mr Durado, adding that he received what he believed to be a stolen laptop computer and smartphone which he later took to Belconnen Police station together with statements from the employees who had handed the items in;

● the Police later informed him that there was not enough evidence and that they were aware of Mr Durado and his friends;

● on 27 October 2015 Mr Durado admitted to selling stolen goods and promised never to do so, adding that he had said to Mr Durado that he could no longer accept his assurances and that Mr Puerto was also present at that meeting;

● in his discussion with Mr Durado he informed him that he was aware that he was aware of his inappropriate behaviour with Ms Isugan, adding that Mr Durado pleaded with him not to dismiss Ms Isugan to which he responded that he could not guarantee anything;

● Ms Isugan was at work on 26 October 2015 but did not present for work the following day nor did she answer calls to her mobile phone;

● he did not dismiss Ms Isugan nor did he inform Mr Durado that he intended to do so;

● Ms Isugan initiated the termination by disappearing and giving no reason whatsoever, adding that while there were grounds for dismissal he wanted to seek advice as he knew there were underlying issues and possible retribution from Mr Durado; and

● Mr Durado disappeared from work for periods of time and his work was always poor as his duties were often not completed.

[28] Key aspects of Mr Elvin’s oral evidence included that:

● he warned Mr Durado the moment he discovered what he considered to be the criminal activity in which he was engaged; 37

● the Respondent’s employees would come to the shop about 10:00 am and leave about 10:00 pm at night and would do that 6 days a week, adding that they were not required at the shop all day long and only had to massage customers for about 35 hours per week; 38

● he did not dismiss Mr Durado and Ms Isugan because they were in a relationship nor did he inform Mr Durado that he would terminate Ms Isugan; 39

● when he met with staff on 26 October 2015 he did not indicate to them that he was intending to send Ms Isugan back to the Philippines; 40

● he met with staff on 26 October 2015 to discuss Ms Isugan, in particular to gauge her performance and behaviour despite him having observed Ms Isugan being quite loud, rude and laughing in the workplace and having spoken to her four times throughout 2015; 41

● he was unable to explain the inconsistency between his evidence and Mr Puerto’s witness statement (which at that stage was unamended – see below) regarding what was said to Mr Durado in their meeting on 26 October 2015; 42

● he had not concocted his story regarding Mr Durado selling stolen goods for the purpose of supporting the Respondent’s defence in respect of Mr Durado 43;

● Mr Durado was trusted to take $700 to the bank and purchase items with the business credit card despite concerns regarding Mr Durado’s alleged criminal activities; 44

● the security footage of Mr Durado opening the boot of his car, meeting a friend and transferring goods and coming back to the shop in October 2015 had been taped over; 45

● he did not have a conversation with Mr Puerto during the luncheon adjournment (at the hearing of 2 March 2018) regarding his [Mr Elvin’s] evidence despite being under oath and in circumstances where the Commission had earlier that day, prior to a short adjournment, advised him that he could not discuss his evidence with other witnesses or discuss their evidence with them; 46

● he did not discuss with Mr Puerto during the luncheon adjournment the abovementioned inconsistencies between his evidence and some of the statements in Mr Puerto’s witness statement; 47 and

● the document he was holding when photographed during the luncheon adjournment talking to Mr Puerto was a document produced by Mr Puerto which was a statement by Mr/Ms Francis/Frances Akapu which had been received the previous evening about a laptop computer he/she had bought from Mr Durado, adding that he said to Mr Puerto “Don’t worry about it. It’s too late.” 48

[29] Mr Puerto also filed two witness statements 49 which related to Mr Durado and Ms Isugan respectively. Mr Puerto deposed inter alia in his witness statement regarding Ms Isugan that in his opinion she “was not unfairly dismissed as she dismissed herself first by going away with his [sic] co-worker/lover BD.”50 At the hearing, Mr Puerto amended his witness statement regarding Ms Isugan51 so that the first paragraph read “Me and my associates planned to recommend to the company that they dismiss DI [Ms Isugan] due to her work performance” instead of “the boss only mentioned to BD [Mr Durado] that the company planned to dismiss DI due to her work performance.” Mr Puerto also changed a further paragraph in that witness statement so that it read “I don’t think BD, in my opinion was unfairly dismissed either as they just went away with her [sic] co-worker/lover DI after the boss talked to him privately. Me and my associates planned to recommend the dismissal of both BD and DI” (underlining added), with the underlined words replacing the words “about the company’s plan to dismissed [sic] DI.” In his witness statement regarding Mr Durado, Mr Puerto outlined some of the goods which Mr Durado had offered to sell him (i.e. various headphones) and other goods which he “knew” Mr Durado was selling in the months before he [Mr Durado] resigned in October 2015, including several laptop computers and fragrances/perfumes.

[30] In his oral evidence Mr Puerto attested inter alia that:

● he had not discussed his witness statement with Mr Elvin during the luncheon adjournment, adding that what he had discussed with Mr Elvin was the “statement that was – it was for Frances Akapu. It’s – as I said before, he gave me the letter, but he said that, ‘It doesn’t matter now, because it’s too late’… We didn’t discuss this …”; 52

● Mr Elvin had not encouraged him to change his witness statement (as outlined above), reiterating that Mr Elvin had only discussed Mr/Ms Akapu’s message or letter which he [Mr Puerto] had thrown away and stating that the errors in his witness statement were because he copied and pasted the relevant sentences; 53

● despite the relevant sentences not being exactly the same he did copy and paste them as he was changing the words because he was in a hurry; 54

● he was not party to the discussion between Mr Elvin and Mr Durado on 26 October 2015; 55

● one of the reasons why Ms Isugan was dismissed was because she was in a relationship, with another reason being her work performance; 56

● the primary reason that Mr Durado was dismissed was for selling allegedly stolen goods and his disappearance from work from time to time, with his relationship with Ms Isugan a “secondary reason”; 57

● with regard to the translated version of the text message exchange between he and Mr Durado on 27 October 2015 58 the reference to ‘we’ in the following extract “That’s why you don’t listen when we talk to you. You were told that she has 90 days that she can stay after we declare that she is terminated. The company needs to lose is obligation over her” was a reference to the company (i.e. the Respondent);59

● Ms Isugan left because “she is afraid to be sacked, I guess …”; 60

● he did not trust Mr Durado, later clarifying that he trusted Mr Durado as a worker for some things such as banking and purchasing supplies with the business credit card but that he did not trust him about the sale of stolen goods; 61

● he was aware that Mr Elvin had warned Mr Durado to cease selling goods and that Mr Durado did not do so; 62

● Mr Elvin did not tell Mr Durado or any staff members that Ms Isugan would be dismissed; 63 and

● it was a company rule that an employee could not have a relationship with another employee. 64

[31] At the hearing, the Applicants’ representative, Mr Russell-Uren, raised serious concerns about the credibility of Mr Puerto’s evidence, contending that he had changed his evidence in material aspects acting on the advice of Mr Elvin. While this issue is discussed in detail below, I note that in the light of a screen dump of text messages between Mr Elvin and Mr Puerto during the course of the hearing which was produced at the direction of the Commission, Mr Puerto was asked by the Commission whether there was anything in his evidence which he wished to change. Mr Puerto’s response was “No.” 65

The statutory framework

[32] Section 386 of the Act deals with the meaning of dismissed and provides as follows:

“386 Meaning of dismissed

(1) A person has been dismissed if:

(a) the person’s employment with his or her employer has been terminated on the employer’s initiative; or

(b) the person has resigned from his or her employment, but was forced to do so because of conduct, or a course of conduct, engaged in by his or her employer.

(2) …”

[33] In this case the Respondent submitted that it did not dismiss Ms Isugan while Ms Isugan maintained that she had been constructively dismissed by the Respondent. Accordingly, a threshold issue to be determined by the Commission in respect of Ms Isugan’s application was whether she had been dismissed within the meaning of s.386 of the Act.

Consideration of the issues

[34] Before dealing with the abovementioned threshold issue in respect of Ms Isugan, I propose to deal with the issues which arose at the 2 March 2018 hearing which raise serious questions regarding the reliability of Mr Elvin’s and Mr Puerto’s evidence.

The reliability of the Respondent’s evidence

[35] I deal firstly with the abovementioned concerns regarding Mr Puerto’s evidence. As mentioned above, Mr Elvin was cross-examined by Mr Russell-Uren about aspects of Mr Puerto’s witness statement (which at that stage was yet to be tendered to the Commission). Those questions were put to Mr Elvin prior to the luncheon adjournment on 2 March 2018. The transcript of those questions is set out below:

“MR RUSSELL-UREN:  I'd like you to have a look at a document.  This will be - as I understand, there's a statement by Mr Puerto not in evidence.  Can you see the heading BD?  Can you see the heading BD?  If you could turn your attention to the second paragraph, Mr Puerto says "I don't think BD", which is a reference to Mr Durado, "in my opinion was unfairly dismissed.  Either as they just went away with her co-worker lover/DI", Ms Isugan, "after the boss talked to him about the company's plan to dismiss DI".  Your evidence, in this respect, was crystal clear.  Are you able to explain that inconsistency?---No, I'm not.

Well, it's true, isn't it – well rather, your evidence as to whether or not you told Mr Durado that you were going to terminate Ms Isugan's employment, your evidence in that respect was not accurate.  That's right?---No, it's – my evidence is very accurate.  You would have to ask Jun Millard Puerto on his statement and his – you'd have to ask him about that.  I can't answer for him.

Can you please turn to the previous page.  Under the heading of DI, can you please turn your attention to the second sentence.  Mr Puerto says "The boss only mentioned to BD that the company planned to dismiss DI due to her work performance"?---Perhaps Mr Puerto wanted to terminate her and he - basically most staff wanted that to happen.  Whether that – whether I planned anything or whether I had any ideas has nothing to do with that.  That's – that would be Jun Puerto probably speaking on his own behalf of what should have happened.

I see.

THE DEPUTY PRESIDENT:  His reference there to "The boss only mentioned to BD", which would appear to be a reference to you, "that the company planned to dismiss Ms Isugan due to her work performance"?---Sorry, is that the  - - -

The reference to "the boss" is a reference to you?---Which one?  Is it the front page, or?

No, the front page?---Well, I mean, he is part of the company.  He was the massage supervisor.  It was his recommendation to terminate her but we never spoke of that.  I don't tell people that they're going to be terminated.  I don't speak of that.  The final decision has to be made and has to be put in writing before anyone finds out anything.

Again, why do you think Mr Puerto would make those statements, and it's not just once, it's twice?---Because he's upset and he's looking from his own perspective.

Upset about what?---Well, basically the shop in decline with Delo Be there.

Why would he say "I would have dismissed" – why wouldn't he say "I would dismiss" - - -?---Well - - -

"Ms Isugan" rather than referring to you, that you mentioned to Mr Durado?---Well, may I remind you that Mr Puerto has the same English level, perhaps it's more improved these days, but he does have issues and I did not proof read his statement.  He did this of his own volition and you'll have to question him on that.” 66

(Underlining added)

[36] A comparison of the underlined text in the above extract with the amendments which Mr Puerto made to his witness statement indicates a similarity. One possible explanation is that Mr Elvin discussed his evidence with Mr Puerto during the luncheon adjournment.

[37] The previously mentioned screen dump of text messages between Mr Elvin and Mr Puerto during the course of the hearing which was produced at the direction of the Commission is set out below:

[38] From the transcript I note that Mr Elvin withdrew as a witness at 2:47 pm and that the transcript shows Mr Elvin speaking on his mobile phone to Mr Puerto at 2:50 pm. 67 The transcript also shows that Mr Puerto was sworn in as a witness at 3:04 pm.68 A comparison of those timeframes with the above screen dump certainly suggests that Mr Elvin sought to influence Mr Puerto’s evidence regarding the alleged statement by Mr/Ms Akapu as well as other aspects of Mr Puerto’s evidence and the evidence of the Respondent’s other witnesses (who ultimately were not called). The reference in the text message to the email and throwing it away certainly raise significant doubts as to what Mr Elvin and Mr Puerto discussed during the luncheon adjournment. For instance, if they had discussed the alleged statement by Mr/Ms Akapu as both attested they had why was it necessary Mr Elvin to send such a message to Mr Puerto?

[39] Also relevant when considering the reliability of Mr Puerto’s and Mr Elvin’s evidence is the translation of screen dumps of a text message exchange between Mr Durado and Mr Puerto on the afternoon of 27 October 2015 which was tendered by the Applicants. 69 The exchange (as translated) includes the following:

“[Mr Durado] You have no right to make Del go back home.

[Mr Puerto] we are not stopping you from what you want. What we want is [that it is done in] the right way. You are the one who doesn’t understand what Colin is trying to explain to you that Del is the responsibility [obligation] of the company because her visa is under the name of Foot&Thai and the company is making her go home because immigration is going to look for a ticket to show that she is no longer with the company, that [the company] no longer has any responsibility for her. And when she is home, then you can buy her a ticket back, even if it’s the next day. And we will no longer have anything to do with you.

We have the right because her visa is sponsored by [message truncated]

That’s why, you don’t listen when we talk to you, you were told that she has 90 days that she can stay after we declare that she is terminated, but the company needs to lose its obligation over her, that’s why she was given a ticket to go home, it’s the company’s choice, she was already bought a ticket so that she can go back to you the next day. We are not against your relationship … we respect what they want as long as you talk to the boss in a respectful way

Understand my messages, please understand why we are sending her

Because Del is the responsibility of the company. If something happens to her here, that is why

That is why we are sending her home for now, so our responsibility for her ends

[Mr Durado] But I said don’t make her go home, let her work there. I won’t bother her, she has no plans to run away, but you want to make an example of her to the other workers so that

They are afraid of your rules

That dating or having a relationship is not allowed …

[Mr Puerto] The rules of the company were created so that the business runs smoothly … The people came here so that they can support their family in the Philippines, not to date, they each have their own families already

…

[Mr Puerto] Tell her to get her things, we aren’t holding them, we just need her to sign the discharge papers so we are no longer responsible for her. Get them right now, make her sign the documents

[Mr Durado] Discharge paper? You have to give her [a] notice of dismissal

[Mr Puerto] That’s the same [thing], that’s the one she needs to sign

[Mr Durado] I’m going to pick the passport up too, OK”

(Underlining added)

[40] The underlined text in the above translation suggests that Mr Puerto was present when Mr Elvin spoke to Mr Durado which is inconsistent with his oral evidence to the Commission.

[41] Having regard to the above, I have serious reservations about the reliability of both Mr Elvin’s and Mr Puerto’s evidence in respect of the events of 26 October 2015 in particular. Accordingly, I prefer the evidence of Ms Isugan and Mr Durado regarding the events of 26 October 2015 as it is supported by both Ms Amacio’s and Ms Bantilan’s evidence and the above text message exchange between Mr Durado and Mr Puerto on 27 October 2017.

[42] In view of my concerns and the seriousness of those concerns regarding the events of 2 March 2018, I have decided to refer the transcript of the hearing of 2 March 2018, the above screen dump, the photograph provided to the Commission by the Applicants of Mr Elvin and Mr Puerto talking during the luncheon adjournment and a copy of this decision to the General Manager of the Commission to consider whether Mr Elvin and whether Mr Puerto have contravened s.678 of the Act.

Was Ms Isugan dismissed by the Respondent?

[43] As to whether Ms Isugan was dismissed within the meaning of s.386 of the Act, the Full Bench in Bupa made the following observations regarding the operation of s.386:

“[47] Having regard to the above authorities and the bifurcation in the definition of “dismissal” established in s.386(1) of the FW Act, we consider that the position under the FW Act may be summarised as follows:

(1) There may be a dismissal within the first limb of the definition in s.386(1)(a) where, although the employee has given an ostensible communication of a resignation, the resignation is not legally effective because it was expressed in the “heat of the moment” or when the employee was in a state of emotional stress or mental confusion such that the employee could not reasonably be understood to be conveying a real intention to resign. Although “jostling” by the employer may contribute to the resignation being legally ineffective, employer conduct is not a necessary element. In this situation if the employer simply treats the ostensible resignation as terminating the employment rather than clarifying or confirming with the employee after a reasonable time that the employee genuinely intended to resign, this may be characterised as a termination of the employment at the initiative of the employer.

(2) A resignation that is “forced” by conduct or a course of conduct on the part of the employer will be a dismissal within the second limb of the definition in s.386(1)(b). The test to be applied here is whether the employer engaged in the conduct with the intention of bringing the employment to an end or whether termination of the employment was the probably result of the employer’s conduct such that the employee had no effective or real choice but to resign. Unlike the situation in (1), the requisite employer conduct is the essential element.

[48] It is necessary for an applicant for an unfair dismissal remedy whose employment has terminated because the employer has acted on a communication of resignation on the part of the employee to articulate whether they contend they were dismissed in the first or the second scenario above (although it may be possible for both scenarios to arise in a particular factual situation). Where the applicant is self-represented or inadequately represented, it may be necessary for the member of the Commission hearing the matter to clarify with the applicant the precise basis upon which it is contended that the applicant was dismissed. If this is not done, it may lead to the wrong test being applied to the matter.” 70

[44] As previously mentioned, Ms Isugan maintained that she had been constructively dismissed and submitted that her dismissal arose from the Respondent’s practice of sending workers back to the Philippines without process or notice for the infraction which she knew had been discovered. The Respondent on the other hand contended inter alia that Ms Isugan acted pre-emptively to leave the Respondent’s residence before it could terminate her employment and that these circumstances did not amount to dismissal.

[45] In short, Ms Isugan contended that she was dismissed as per the second scenario outlined in the above extract from the decision in Bupa, i.e. s.386(1)(b) of the Act. As such, drawing on the language in Bupa, the Commission needs to determine whether the Respondent engaged in the conduct with the intention of bringing the employment to an end or whether termination of the employment was the probable result of its conduct such that Ms Isugan had no effective or real choice but to resign.

[46] The material before the Commission points to:

● the Respondent having a policy of not allowing employees to have relationships (particularly compelling in this regard is Mr Puerto’s evidence that it was a company rule that an employee could not have a relationship with another employee 71);

● Ms Amacio telling Mr Puerto on 22 October 2015 of Ms Isugan’s relationship with Mr Durado;

● Mr Elvin and Mr Puerto meeting with Mr Durado on 26 October 2015 at which time he was dismissed and informed of the Respondent’s intention to send Ms Isugan back to the Philippines the following day;

● Mr Elvin meeting individually with employees (other than Ms Isugan) on 26 October 2015 asking about the Applicants’ relationship, foreshadowing his intention to send Ms Isugan back to the Philippines and requiring employees not to tell Ms Isugan;

● Mr Durado informing Ms Isugan late on the evening of 26 October 2015 of Mr Elvin’s intention to send her back to the Philippines; and

● Ms Isugan leaving the house where she was residing and not returning to her employment with the Respondent.

[47] Significantly, Ms Isugan deposed in her witness statement that she did not wish to be sent home because her family needed the money 72 while at the hearing she attested that she did not want to leave on the evening of 26 October 2015 but was forced to do so because Mr Elvin was going to send her back to the Philippines the next day.73 While Ms Isugan did not provide the Respondent with a resignation letter, her failure to present for work with the Respondent from 27 October 2015 onwards effectively amounted to Ms Isugan resigning her employment.

[48] Having regard to the test regarding s.386(1)(b) of the Act as set out in Bupa, the evidence in this case supports a finding that Ms Isugan’s decision to walk away from her employment with the Respondent was the result of the Respondent’s conduct in intending to send her back to the Philippines. The economic impact of that would have been significant for Ms Isugan and her family in the Philippines and in my view left her with no effective or real choice but to leave her employment. In other words, the evidence supports a finding that Ms Isugan was dismissed by the Respondent as per s.386(1)(b) of the Act.

Were the Applicants’ dismissals unfair?

[49] The Commission exercises its discretion in relation to an application for an unfair dismissal remedy pursuant to Part 3-2 of the Act. In this case there is no contest that Ms Isugan and Mr Durado were protected from unfair dismissal pursuant to s.382 of the Act. In the context of this matter, the relevant provisions of the Act are ss.385 and 387 which provide as follows:

“385 What is an unfair dismissal

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

(a) the person has been dismissed; and

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

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

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

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

387 Criteria for considering harshness etc.

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.”

[50] There is no dispute that Mr Durado was dismissed. For the reasons outlined above, I have determined that Ms Isugan was dismissed by the Respondent as per s.386(1)(b) of the Act. Accordingly, s.385(a) of the Act is satisfied in respect of both Ms Isugan and Mr Durado. The Applicants contended that their dismissals were unfair so s.385(b) is relevant. It was not contended that the Respondent is a small business employer or that the terminations were cases of redundancy so ss.385(c) and (d) are not relevant.

[51] Therefore, in determining whether the Applicants were unfairly dismissed, I must consider whether their dismissals were harsh, unjust or unreasonable as per s.385(b).

[52] As mentioned above, the Respondent:

● submitted that if the Commission found that Ms Isugan had been dismissed that it accepted that her dismissal was unfair and that the Commission only needed to make a finding in respect of remedy; and

● conceded that the circumstances of Mr Durado’s termination did amount to unfair dismissal as a result of it failing to afford procedural fairness to Mr Durado.

[53] The material before the Commission points to the Respondent intending to send Ms Isugan back to the Philippines because she was in a relationship with Mr Durado. This in my view does not constitute a valid reason for Ms Isugan’s dismissal as per s.387(a) of the Act. Given how Ms Isugan’s employment came to an end, ss.387(b), (c) and (d) of the Act are not relevant in this case. The Respondent also raised performance related issues as to why it intended to send Ms Isugan home. Ms Isugan did not dispute that concerns regarding her performance had been raised with her by the Respondent in 2012, 2013 and 2014 and that she had been spoken to about burping on customers in 2015. While it is not clear if she was advised that her employment was at risk, particularly as the burping incidents appeared related to a medical issue based on a medical report provided by Ms Isugan, 74, in the circumstances the Respondent’s performance concerns support a finding that Ms Isugan’s dismissal was not unfair. It was not contended that Respondent’s size or the Respondent’s lack of human resources specialists/expertise impacted on the procedures followed in respect of Ms Isugan’s dismissal. As such, I consider the factors at ss.387(f) and (g) of the Act to be neutral considerations in Ms Isugan’s case. As to s.387(h) of the Act, Ms Isugan submitted that her case highlighted the disadvantage which afflicts foreign workers who arrive in Australia. While I note that contention, I do not consider it a relevant matter for the purposes of s.387. As such, there are no other matters which are relevant.

[54] Having regard to the above analysis, I consider that in the absence of a valid reason for her dismissal and given the consequences of the dismissal for Ms Isugan and her family that her dismissal was harsh, unjust and unreasonable.

[55] As to Mr Durado’s dismissal, I note that the grounds relied on by Respondent, i.e. the sale of allegedly stolen goods and unexplained absences for the workplace, in many circumstances may constitute a valid reason for dismissal. However, in view of my previously mentioned serious concerns regarding the reliability of Mr Elvin’s and Mr Puerto’s evidence and the absence of any independent and probative evidence to substantiate the Respondent’s contentions in this regard, I am not satisfied that the Respondent’s contentions are made out. I note also Mr Puerto’s evidence that Mr Durado’s relationship with Ms Isugan a “secondary reason” for his dismissal. 75 As such, I do not consider that there was a valid reason for Mr Durado’s dismissal related to his capacity or conduct as per s.387(a) of the Act. I am satisfied that s.387(b) of the Act is satisfied on the basis that I consider it more than likely that Mr Durado was advised on 26 October 2015 of the reason for his dismissal. However, with regard to ss.387(c) and (d) of the Act I do not consider that Mr Durado was provided with an opportunity to respond or provided the opportunity to seek to have a support person attend the meeting of 26 October 2015 with Mr Elvin and Mr Puerto. In respect of s.387(e) of the Act, to the extent Mr Durado’s absences from the workplace are a performance related concern, there is nothing before the Commission which points to the Respondent having raised its concerns about Mr Durado’s attendance with him. Accordingly, ss.387(c), (d) and (e) all support a finding that Mr Durado’s dismissal was unfair because he was in essence denied procedural fairness. Mr Durado did not contend that Respondent’s size impacted on the procedures followed in respect of his dismissal. While Mr Durado was acknowledged that access to human resources expertise by the Respondent may have seen it adopt a more formal process to his dismissal he also posited that it would not have overcome the absence of a valid reason for his dismissal and therefore was a neutral consideration at best. Against that background, I consider the factors at ss.387(f) and (g) of the Act to be neutral considerations in Mr Durado’s case. No other relevant matters were identified by either party.

[56] Having regard to the above analysis, I consider that in view of the absence of a valid reason and the lack of procedural fairness afforded to Mr Durado by the Respondent that his dismissal was unjust and unreasonable.

Remedy

[57] Division 4 of Part 3-2 of the Act deals with remedies for unfair dismissal and is set out below.

“390 When the FWC may order remedy for unfair dismissal

(1) Subject to subsection (3), the FWC may order a person’s reinstatement, or the payment of compensation to a person, if:

(a) the FWC is satisfied that the person was protected from unfair dismissal (see Division 2) at the time of being dismissed; and

(b) the person has been unfairly dismissed (see Division 3).

(2) The FWC may make the order only if the person has made an application under section 394.

(3) The FWC must not order the payment of compensation to the person unless:

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

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

Note: Division 5 deals with procedural matters such as applications for remedies.

391 Remedy—reinstatement etc.

Reinstatement

(1) An order for a person’s reinstatement must be an order that the person’s employer at the time of the dismissal reinstate the person by:

(a) reappointing the person to the position in which the person was employed immediately before the dismissal; or

(b) appointing the person to another position on terms and conditions no less favourable than those on which the person was employed immediately before the dismissal.

(1A) If:

(a) the position in which the person was employed immediately before the dismissal is no longer a position with the person’s employer at the time of the dismissal; and

(b) that position, or an equivalent position, is a position with an associated entity of the employer;

the order under subsection (1) may be an order to the associated entity to:

(c) appoint the person to the position in which the person was employed immediately before the dismissal; or

(d) appoint the person to another position on terms and conditions no less favourable than those on which the person was employed immediately before the dismissal.

Order to maintain continuity

(2) If the FWC makes an order under subsection (1) and considers it appropriate to do so, the FWC may also make any order that the FWC considers appropriate to maintain the following:

(a) the continuity of the person’s employment;

(b) the period of the person’s continuous service with the employer, or (if subsection (1A) applies) the associated entity.

Order to restore lost pay

(3) If the FWC makes an order under subsection (1) and considers it appropriate to do so, the FWC may also make any order that the FWC considers appropriate to cause the employer to pay to the person an amount for the remuneration lost, or likely to have been lost, by the person because of the dismissal.

(4) In determining an amount for the purposes of an order under subsection (3), the FWC must take into account:

(a) 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 reinstatement; and

(b) the amount of any remuneration reasonably likely to be so earned by the person during the period between the making of the order for reinstatement and the actual reinstatement.

392 Remedy—compensation

Compensation

(1) An order for the payment of compensation to a person must be an order that the person’s employer at the time of the dismissal pay compensation to the person in lieu of reinstatement.

Criteria for deciding amounts

(2) In determining an amount for the purposes of an order under subsection (1), the FWC must take into account all the circumstances of the case including:

(a) the effect of the order on the viability of the employer’s enterprise; and

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

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

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

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

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

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

Misconduct reduces amount

(3) If the FWC is satisfied that misconduct of a person contributed to the employer’s decision to dismiss the person, the FWC must reduce the amount it would otherwise order under subsection (1) by an appropriate amount on account of the misconduct.

Shock, distress etc. disregarded

(4) The amount ordered by the FWC to be paid to a person under subsection (1) must not include a component by way of compensation for shock, distress or humiliation, or other analogous hurt, caused to the person by the manner of the person’s dismissal.

Compensation cap

(5) The amount ordered by the FWC to be paid to a person under subsection (1) must not exceed the lesser of:

(a) the amount worked out under subsection (6); and

(b) half the amount of the high income threshold immediately before the dismissal.

(6) The amount is the total of the following amounts:

(a) the total amount of remuneration:

(i) received by the person; or

(ii) to which the person was entitled;

(whichever is higher) for any period of employment with the employer during the 26 weeks immediately before the dismissal; and

(b) if the employee was on leave without pay or without full pay while so employed during any part of that period—the amount of remuneration taken to have been received by the employee for the period of leave in accordance with the regulations.

393 Monetary orders may be in instalments

To avoid doubt, an order by the FWC under subsection 391(3) or 392(1) may permit the employer concerned to pay the amount required in instalments specified in the order.”

[58] The Applicants have both secured alternative employment and did not seek reinstatement. Similarly, the Respondent did advocate reinstatement. In those circumstances I am satisfied that reinstatement is not appropriate in this case. Accordingly, I must turn my mind to whether an order for compensation is appropriate in all the circumstances of the case.

Compensation

[59] Having regard to all of the circumstances in this case, particularly the extended period before both Ms Isugan and Mr Durado found new employment, I consider that orders for compensation are appropriate in this case.

[60] The method for calculating compensation under s.392 of the Act was considered by a Full Bench of the Commission in Bowden, G v Ottrey Homes Cobram and District Retirement Villages Inc. T/A Ottrey Lodge 76 (Bowden). In that decision the Full Bench set out the order in which the criteria and other factors should be applied, taking into account authority under the Workplace Relations Act 1996 in Sprigg v Paul’s Licensed Festival Supermarket77 (Sprigg) and Ellawala v Australian Postal Corporation78. I have adopted the methodology utilised in Bowden in determining the amount of compensation.

Viability – s.392(2)(a)

[61] In the absence of any submissions from the Respondent regarding this factor, I consider the issue of viability to be a neutral consideration.

Length of service – s.392(2)(b)

[62] Ms Isugan was employed by the Respondent for a period of over 3 years while Mr Durado was employed for a period of 11 months. I do not consider that any adjustment to the amount of compensation proposed is warranted on the basis of Ms Isugan’s period of service or Mr Durado’s relatively short period of service.

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

[63] As previously alluded to, Ms Isugan contended that she would have been entitled to receive $61,914.48 in wages under the Health Professionals and Support Services Award 2010 as opposed to $29,159 as measured by reference to the wages she was actually paid by the Respondent. The Respondent on the other hand submitted that as per Sprigg any compensation should be calculated by reference to what Ms Isugan was earning as opposed to what she says she ought to be paid.

[64] In this respect I note that s.392(2)(c) of the Act refers to “the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed.” There is nothing before the Commission to indicate that Ms Isugan would have received anything more than what she had been regularly paid by the Respondent. Accordingly, her compensation will be calculated on that basis.

[65] Turning more particularly to the issue of how much remuneration Ms Isugan would have received, the first issue that needs to be determined is how much longer she would have continued to be employed by the Respondent. Ms Isugan commenced employment with her new employer in June 2016, with her new employer being a new enterprise established by Mr Durado’s relatives. The Respondent submitted that given the short length of Ms Isugan’s employment and the general dissatisfaction of both parties with the employment relationship that the Commission should not award more than 2 months’ pay.

[66] Given that the establishment of a new enterprise would involve a reasonable lead time to secure and fit out premises among other things, I consider it unlikely that Ms Isugan would have continued to be employed by the Respondent beyond the end of April 2016 as it is likely that the Respondent would have been aware of the establishment of the new enterprise at that time and the employment relationship is likely to have become untenable in those circumstances. As such, I consider it likely that Ms Isugan would have continued to work for the Respondent for a further 6 months or 26 weeks.

[67] As to the amount Ms Isugan would have received over this period, appended to her witness statement were four Pay Advices she received from the Respondent relating to fortnightly periods in April, May and June 2013 (unfortunately more contemporary documentation was not provided by Ms Isugan). Those Pay Advices indicate that Ms Isugan’s gross fortnightly wage ranged from $2,243.42 for the fortnight 17-30 June 2013 up to $2,253.29 for the preceding fortnight in 2013. Based on those Pay Advices, Ms Isugan’s average fortnightly wage was $2,248.35. Given my view that Ms Isugan’s employment would have continued for another 6 months/26 weeks, Ms Isugan would have received $29,228.55 (less any applicable tax) plus superannuation over that period.

[68] As to Mr Durado, the Applicants submitted that Mr Durado’s loss in the 6 months after his employment with the Respondent ended was $500 per week or around $13,000 in total after taking into account the Centrelink benefits of around $500 per fortnight which he received. The Respondent submitted that it was clear the relationship between it and Mr Durado had totally broken down and that even if it had not dismissed Mr Durado when it did and instead sought to dismiss him fairly, it was unlikely that this process would have taken more than a month.

[69] Given the nature of the Respondent’s concerns regarding Mr Durado’s conduct I think it likely that he would have only continued to be employed by the Respondent for further 2 months or 8 weeks. Mr Durado’s weekly wage at the time of his dismissal was $1,000 per week. On the basis that his employment would have continued for a further 8 weeks, he would have received $8,000 (less any applicable tax) plus superannuation over that period.

Mitigation efforts – s.392(2)(d)

[70] Ms Isugan deposed in her witness statement that she understood that under the terms of her visa she could only work under sponsorship, adding that she applied for jobs but was unable to secure one with sponsorship until she commenced with her current employer. It was posited in the Applicants’ closing submissions that a failure to accept conditions of employment which would contravene the terms of the Migration Act 1951 (Cth) was not a failure to mitigate.

[71] Mr Durado’s unchallenged evidence was that despite regularly applying for jobs he was unemployed until he secured employment in August 2016.

[72] The Respondent did not contend that any deduction was warranted on the basis of the Applicants’ mitigation efforts.

[73] Based on the material before the Commission I am satisfied that the Applicants’ mitigation efforts were sufficient and that accordingly no deduction on this ground is warranted.

Remuneration earned – s.392(2)(e)

[74] Ms Isugan and Mr Durado did not earn any income until they commenced in their new employment in June and August 2016 respectively. While Mr Durado received Centrelink payments whilst he was unemployed, as stated in Sprigg social security payments are not deducted. 79

[75] Given that neither Applicant earned any income during the abovementioned periods I consider that they each would have continued to have been employed by the Respondent following their dismissals, I consider that no deductions to the amounts of compensation proposed are warranted on this ground.

Income reasonably likely to be earned – s.392(2)(f)

[76] The Respondent did not contend that there should be any reduction in the amount of compensation on this ground. More particularly however I am not satisfied that the income earned by Ms Isugan and Mr Durado during the period between the making of the order for compensation and the actual compensation warrants any reduction in the amount of compensation given the extended period which has elapsed since their dismissals and the determination of their unfair dismissal applications.

Other matters – s.392(2)(g)

[77] There are no other matters that I consider relevant to take into account in determining the amounts of compensation.

Misconduct – s.392(3)

[78] Ms Isugan was not accused of misconduct.

[79] While the Respondent contended that Mr Durado was dismissed for allegedly selling stolen goods and for disappearing from the workplace for periods of time, no independent evidence was provided to support those contentions or to support Mr Elvin’s and Mr Puerto’s evidence in that regard. As such and having regard to my previously expressed serious reservations about the reliability of both Mr Elvin’s and Mr Puerto’s evidence, I am not satisfied that the Respondent’s contentions have been made out.

[80] Against that background, I am not satisfied that any reduction on this ground in the proposed compensation is warranted in respect of either Ms Isugan or Mr Durado.

No component for shock, distress, humiliation or other analogous hurt – s.392(4)

[81] The compensation amount contains no component for any shock, distress, humiliation or other analogous hurt suffered by the Applicants.

Compensation cap – s.392(5)

[82] The compensation cap in respect of Ms Isugan is $29.228.55 (plus superannuation) and for Mr Durado is $26,000 (plus superannuation). These amounts are each lower than half the amount of the high income threshold immediately before the Applicants’ dismissals (i.e. $68,350).

Conclusion

[83] For all the above reasons, I find that:

● Ms Isugan was dismissed within the meaning of s.386 of the Act, that her dismissal was harsh, unjust and unreasonable, that reinstatement is not appropriate, that an order for compensation is appropriate in all the circumstances of her case and that the Respondent should pay Ms Isugan $29, 228.55 (less applicable tax) plus superannuation in compensation within 28 days of the Order issued in conjunction with this decision; and

● Mr Durado’s dismissal was unjust and unreasonable, that reinstatement is not appropriate, that an order for compensation is appropriate in all the circumstances of his case and that the Respondent should pay him $8,000.00 (less applicable tax) plus superannuation in compensation within 28 days of the Order issued in conjunction with this decision.

Appearances:

S. Russell-Uren for the Applicants.

C. Elvin and A. Opas of Counsel for the Respondent.

Hearing details:

2018.

Canberra:

March 1 and 2

May 7 (by telephone)

August 17 (by telephone).

Final written submissions:

Final written closing submission received on 15 October 2018.

Printed by authority of the Commonwealth Government Printer

<PR705666>

 1   [2016] FWC 3759

 2   [2018] FWC 4711

 3   MA000027

 4   Exhibit 1

 5   Transcript at PN46-49 and PN60

 6   Ibid at PN54

 7   Ibid at PN55-59

 8   Ibid at PN141

 9   Ibid at PN150-151

 10   Exhibit 6

 11   Transcript at PN742-743

 12   Ibid at PN813-814 and PN884-885

 13   Ibid at PN857-858

 14   Ibid at PN979-1006

 15   Ibid at PN1008

 16   Ibid at PN1052-1058

 17   Ibid at PN1060-1066

 18   Ibid at PN1090

 19   Ibid at PN1147-1156

 20   Exhibit 3

 21   Transcript at PN343-346

 22   Ibid at PN445

 23   Ibid at PN482

 24   Ibid at PN448

 25   Ibid at PN449

 26   Ibid at PN451

 27   Ibid at PN515-516

 28   Ibid PN518

 29   Exhibit 5

 30   Transcript at PN659 and PN673

 31   Ibid at PN628

 32   Ibid at PN661

 33   [2017] FWCFB 3941

 34   Print S5904

 35   Print N6999

 36   Exhibits 9 and 10

 37   Transcript at PN1377

 38   Ibid at PN1408

 39   Ibid at PN1529 and PN1536

 40   Ibid at PN1537-1538

 41   Ibid at PN1539-1551

 42   Ibid at PN1558-1568

 43   Ibid at PN1600

 44   Ibid at PN1609-1612

 45   Ibid at PN1644-1646

 46   Ibid at PN1795-1799 and PN1499

 47   Ibid at PN1800

 48   Ibid at PN1814

 49   Exhibits 11 and 12

 50   Exhibit 12

 51   Ibid

 52   Transcript at PN1908

 53   Ibid PN1966-1973

 54   Ibid at PN1974-1981

 55   Ibid at PN2008-2012

 56   Ibid at PN2016 and PN2020-2021

 57   Ibid at PN2022

 58   Exhibit 4

 59   Transcript at PN2047-2051

 60   Ibid at PN2083

 61   Ibid at PN2111-2112, PN2153-2154 and PN2180-2186

 62   Ibid at PN2198-2199

 63   Ibid at PN2200

 64   Ibid at PN2201-2217

 65   Ibid at PN2314

 66   Ibid at PN1558-1568

 67   Ibid at PN1823 and PN1828

 68   Ibid at PN1876

 69   Exhibit 7

 70   [2017] FWCFB 3941 at [47] and [48]

 71   Transcript at PN2201-2217

 72   Exhibit 1 at paragraph 31

 73   Transcript at PN141

 74   Exhibit 2

 75   Transcript at PN2022

 76   [2013] FWCFB 431

 77   (1998) 88 IR 21

 78   Print S5109

 79   (1998) 88 IR 21 at 29