Alirio Londono v Espresso Apartments Pty Ltd

[2018] FWC 3091

[2018] FWC 3091

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Alirio Londono
v
Espresso Apartments Pty Ltd
(U2017/13632)

DEPUTY PRESIDENT CLANCY MELBOURNE, 30 MAY 2018

Application for an unfair dismissal remedy - applicant found to be employee - not dismissed within the meaning of s.386 of the Fair Work Act 2009 - application dismissed.

[1] Mr Alirio Clavijo Londono was engaged by Espresso Apartments Pty Ltd (Espresso) as a Cleaner between April 2010 and 9 December 2017. Mr Londono has applied under s.394 of the Fair Work Act 2009 (the Act) for unfair dismissal remedy and seeks compensation in lieu of reinstatement.

[2] Espresso has objected to Mr Londono’s application on two matters of jurisdiction.

[3] Firstly, in its Form F3 – Employer Response to Unfair Dismissal Application (Form F3) filed on 2 January 2018, Espresso claims there was no dismissal because Mr Londono advised he would not continue to clean apartments for Espresso.

[4] Secondly, Espresso advised it objects to Mr Londono’s application on the basis that Mr Londono was a contractor and not an employee.

[5] The matter was referred to conciliation on 23 January 2018 but did not resolve. Subsequently, the matter was listed for a Jurisdiction and Arbitration Conference/Hearing which occurred on 10 April 2018, with the parties notified of this on 5 February 2018.

[6] Mr Darryl Leigh, Managing Director, represented Espresso. Mr Londono sought permission, under s.596 of the Act, to be represented by a paid agent. I considered oral submissions on this issue from the parties at the hearing. After weighing up the circumstances and the considerations in s.596 of the Act, I declined permission for Mr Londono to be represented. I then proceeded to conduct a determinative conference.

[7] I raised with the parties my observation that their Outlines of Argument (particularly Espresso’s) appeared to contain material that was in the nature of proposed evidence and it was my intention to treat it as such. I was conscious Mr Leigh was not represented and may not have fully appreciated the distinction between an Outline of Argument and Statement of Evidence in Fair Work Commission (Commission) proceedings. I also noted that in his witness statement, Mr Londono had responded to material contained in the Outline of Argument of Espresso.

Initial matters to be considered

[8] There is no dispute between the parties, and I am satisfied, in relation to three of the four matters referred to in ss.396(a)-(d) of the Act, as follows.

[9] Firstly, Mr Londono’s application was made within the 21 day period required by s.394(2) of the Act (s.396(a) of the Act).

[10] Secondly, as Espresso has not contended the dismissal was consistent with the Small Business Fair Dismissal Code (s.396(c) of the Act), this matter does not require my consideration.

[11] Thirdly, neither party suggested this case involves a dispute as to whether or not the circumstances involved a genuine redundancy (s.396(d) of the Act).

Section 396(b) - was Mr Londono protected from unfair dismissal?

[12] As to the fourth matter referred to in s.396(b) of the Act, the analysis begins having regard to the fact that Part 3-2 of Chapter 3 of the Act covers the unfair dismissal of national system employees. Where the term employee is used in Part 3-2, it means a “national system employee”, 1 which is in turn defined by s.13 of the Act as “an individual so far as he or she is employed…by a national system employer…” In Victoria, with some limited exceptions not applicable to Mr Londono, all persons who are employees fall within the provisions of Part 3-2 of the Act.2

[13] Espresso claims Mr Londono was a contractor and not an employee. Whether Mr Londono was an employee or a contractor for the purpose of an application for unfair dismissal remedy is a question of jurisdictional fact and requires the application of multifactorial tests established through the Courts and more recently confirmed by the Full Bench of the Commission in Kimber v Western Auger Drilling Pty Ltd 3 (Kimber).In Kimber, the Full Bench endorsed the approach in Jiang Shen Cai trading as French Accent v Do Rozario4 (Jiang Shen).

[14] In Jiang Shen, the Full Bench of Fair Work Australia summarised the general law approach to distinguishing between employees and contractors as follows.

“(1) In determining whether a worker is an employee or an independent contractor the ultimate question is whether the worker is the servant of another in that other’s business, or whether the worker carries on a trade or business of his or her own behalf: that is, whether, viewed as a practical matter, the putative worker could be said to be conducting a business of his or her own of which the work in question forms part? This question is concerned with the objective character of the relationship. It is answered by considering the terms of the contract and the totality of the relationship.

(2) The nature of the work performed and the manner in which it is performed must always be considered. This will always be relevant to the identification of relevant indicia and the relative weight to be assigned to various indicia and may often be relevant to the construction of ambiguous terms in the contract.

(3) The terms and terminology of the contract are always important. However, the parties cannot alter the true nature of their relationship by putting a different label on it. In particular, an express term that the worker is an independent contractor cannot take effect according to its terms if it contradicts the effect of the terms of the contract as a whole: the parties cannot deem the relationship between themselves to be something it is not. Similarly, subsequent conduct of the parties may demonstrate that relationship has a character contrary to the terms of the contract.

(4) Consideration should then be given to the various indicia identified in Stevens v Brodribb Sawmilling Co Pty Ltd and the other authorities as are relevant in the particular context. For ease of reference the following is a list of indicia identified in the authorities:

•  Whether the putative employer exercises, or has the right to exercise, control over the manner in which work is performed, place or [sic] work, hours of work and the like.

Control of this sort is indicative of a relationship of employment. The absence of such control or the right to exercise control is indicative of an independent contract. While control of this sort is a significant factor it is not by itself determinative. In particular, the absence of control over the way in which work is performed is not a strong indicator that a worker is an independent contractor where the work involves a high degree of skill and expertise. On the other hand, where there is a high level of control over the way in which work is performed and the worker is presented to the world at large as a representative of the business then this weighs significantly in favour of the worker being an employee.

“The question is not whether in practice the work was in fact done subject to a direction and control exercised by an actual supervision or whether an actual supervision was possible but whether ultimate authority over the man in the performance of his work resided in the employer so that he was subject to the latter’s order and directions.” “[B]ut in some circumstances it may even be a mistake to treat as decisive a reservation of control over the manner in which work is performed for another. That was made clear in Queensland Stations Pty. Ltd v Federal Commissioner of Taxation, a case involving a droving contract in which Dixon J observed that the reservation of a right to direct or superintend the performance of the task cannot transform into a contract of service what in essence is an independent contract.”

•  Whether the worker performs work for others (or has a genuine and practical entitlement to do so).

The right to the exclusive services of the person engaged is characteristic of the employment relationship. On the other hand, working for others (or the genuine and practical entitlement to do so) suggests an independent contract.

•  Whether the worker has a separate place of work and or advertises his or her services to the world at large.

•  Whether the worker provides and maintains significant tools or equipment.

Where the worker’s investment in capital equipment is substantial and a substantial degree of skill or training is required to use or operate that equipment the worker will be an independent contractor in the absence of overwhelming indications to the contrary.

•  Whether the work can be delegated or subcontracted.

If the worker is contractually entitled to delegate the work to others (without reference to the putative employer) then this is a strong indicator that the worker is an independent contractor. This is because a contract of service (as distinct from a contract for services) is personal in nature: it is a contract for the supply of the services of the worker personally.

•  Whether the putative employer has the right to suspend or dismiss the person engaged.

•  Whether the putative employer presents the worker to the world at large as an emanation of the business.

Typically, this will arise because the worker is required to wear the livery of the putative employer.

•  Whether income tax is deducted from remuneration paid to the worker.

•  Whether the worker is remunerated by periodic wage or salary or by reference to completion of tasks.

Employees tend to be paid a periodic wage or salary. Independent contractors tend to be paid by reference to completion of tasks. Obviously, in the modern economy this distinction has reduced relevance.

•  Whether the worker is provided with paid holidays or sick leave.

•  Whether the work involves a profession, trade or distinct calling on the part of the person engaged.

Such persons tend to be engaged as independent contractors rather than as employees.

•  Whether the worker creates goodwill or saleable assets in the course of his or her work.

•  Whether the worker spends a significant portion of his remuneration on business expenses.

It should be borne in mind that no list of indicia is to be regarded as comprehensive or exhaustive and the weight to be given to particular indicia will vary according to the circumstances. Features of the relationship in a particular case which do not appear in this list may nevertheless be relevant to a determination of the ultimate question.

(5) Where a consideration of the indicia (in the context of the nature of the work performed and the terms of the contract) points one way or overwhelmingly one way so as to yield a clear result, the determination should be in accordance with that result. However, a consideration of the indicia is not a mechanical exercise of running through items on a check list to see whether they are present in, or absent from, a given situation. The object of the exercise is to paint a picture of the relationship from the accumulation of detail. The overall effect can only be appreciated by standing back from the detailed picture which has been painted, by viewing it from a distance and by making an informed, considered, qualitative appreciation of the whole. It is a matter of the overall effect of the detail, which is not necessarily the same as the sum total of the individual details. Not all details are of equal weight or importance in any given situation. The details may also vary in importance from one situation to another. The ultimate question remains as stated in (1) above. If, having approached the matter in that way, the relationship remains ambiguous, such that the ultimate question cannot be answered with satisfaction one way or the other, then the parties can remove that ambiguity a term that declares the relationship to have one character or the other.

(6) If the result is still uncertain then the determination should be guided by “matters which are expressive of the fundamental concerns underlying the doctrine of vicarious liability” including the “notions” referred to in paragraphs [41] and [42] of Hollis v Vabu.” 5 (references omitted)

[15] As Jiang Shen makes clear, the nature of the work Mr Londono performed and the manner in which he performed it must be considered. The terms and terminology used in the contract existing between him and Espresso must also be considered. The parties cannot alter the true nature of their relationship by simply putting a different label on it. Indeed, the conduct of parties to a contract may demonstrate their relationship had a character contrary to its terms. In this case, there was no written contract between the parties 6 and no apparent label attached to their relationship.

Control over the manner in which work is performed, place of work, hours of work and the like

[16] Mr Londono began performing work for Espresso in 2010 but there was no written agreement between the parties. The work was the cleaning of self-contained, inner-city apartments that Espresso offered as short-term accommodation to paying guests. At the time Mr Londono says he was dismissed, Espresso had approximately 70 apartments on its books.

[17] For many years Diego Gonzalez and Diana Gonzalez have managed the cleaning of the Espresso apartments, by either performing the cleaning themselves or arranging others to do so.

[18] The allocation of cleaning jobs operated through a system whereby the cleaners were given a password which enabled them to access a website. The website displayed a schedule of guests checking into and out of each Espresso apartment. The schedule indicated which apartments needed cleaning and when. It was the indicator for how the various cleaners should schedule their cleaning jobs.

[19] Mr Londono and the other cleaners would email their timesheets to Espresso’s bookkeeper each fortnight, advising as to the hours they had worked. This operated as an ‘honesty system.’ There were no fixed starting and finishing times each day and these times were not recorded, only the number of hours per apartment each day was recorded.

[20] The cleaners engaged by Espresso worked unsupervised. They would collect cleaning supplies plus laundered towels and sheets from a storeroom operated by Espresso and proceed to the apartments they were to clean. The only feedback they received was from any online surveys completed by apartment guests that were forwarded to them.

[21] On the evidence before me I find, on balance, that Espresso had control over Mr Londono’s work because it controlled the access to the premises at which he provided his services and set times within which tasks were to be completed, even if it did not seek to exercise control over the manner of his work. On fine balance, I find this factor resolves in favour of Mr Londono being an employee.

Work for others

[22] While it was not suggested there was anything to prevent Mr Londono performing work for others, he said he only performed work for Espresso and did not own or operate a business and I accept his evidence on this point.

[23] That Mr Londono did not perform work for others suggests, in this case, he was an employee.

Whether the worker has a separate place of work and/or advertises his or her services to the world at large

[24] Mr Londono did not have a separate place of work and nor did he advertise his services to the world at large. This factor resolves in favour of Mr Londono being an employee.

Tools or equipment

[25] As outlined above, the cleaners engaged by Espresso would collect cleaning supplies and equipment plus laundered towels and sheets from an Espresso storeroom. The cleaners used their own vehicles to get to and from cleaning jobs and there was no company branding on any of them. On balance, I find this factor resolves in favour of Mr Londono being an employee.

Delegation or subcontracting

[26] There was nothing formalised by the parties which either permitted or prevented Mr Londono from delegating or subcontracting his work. This suggests I should regard this factor as neutral. There is, however, a dispute between the parties as to whether Mr Londono did in fact do so.

Rights to suspend or dismiss

[27] There do not appear to have been any formal arrangements for bringing the relationship between Mr Londono and Espresso to an end. For the large part, neither party turned their mind to this while Mr Londono was performing work for Espresso. In this case, I do not consider much turns on this factor because Mr Londono asserts he was a casual employee and Espresso asserts he was a contractor.

Whether the worker held out as an emanation of the business

[28] Mr Londono was not required to wear a uniform and nor did he have a business card. However, he did not come into contact with the tenants who occupied the apartments.

[29] Tenants had the opportunity to provide feedback regarding the cleanliness to Espresso, so it could be concluded that tenants would perhaps have regarded cleaners such as Mr Londono to be an emanation of Espresso. On balance, I find this factor resolves in favour of Mr Londono being an employee

Income tax

[30] Mr Londono produced PAYG payment summaries for the years ending 30 June 2012-2015 and 2017 which each outlined the total tax withheld from his earnings from Espresso. 7 He said he derived no other income during that period. Mr Londono also said he lodged no tax invoices, held no ABN and no GST was payable on his work.

[31] Mr Leigh said Espresso had deducted the PAYG tax by mistake.

[32] This factor resolves in favour of Mr Londono being an employee.

Remuneration

[33] It has been stated that employees tend to be paid a periodic wage or salary, whereas independent contractors are often paid by reference to the completion of certain tasks, although, “in the modern economy this distinction has reduced relevance.” 8

[34] The pay rates were initially $20 per hour. The rates were increased to $25 per hour. Periods within which cleaning was to be completed were set as follows; $75 for a one bedroom apartment, $100 for a two bedroom apartment and $125 for a three bedroom apartment.

[35] Mr Londono confirmed his rate of remuneration was $25 per hour plus superannuation. He attached a payslip for the pay period 7 November 2016 - 20 November 2016 which indicated this, together with year to date earnings and the deduction of PAYG tax. 9 He also attached a statement from AustralianSuper which outlined quarterly superannuation payments made by Espresso.10

[36] Mr Leigh confirmed Espresso paid workers’ compensation premiums for Mr Londono.

[37] In thiscase, the distinction between periodic payment and payment by reference to the completion of tasks has reduced relevance. Mr Londono was paid a sum periodically, with reference to timesheets he submitted in which he appeared to arbitrarily record the set times within which the cleaning tasks were to be completed, according to apartment size.

[38] I find this criterion to weigh in favour of Mr Londono being an employee.

Paid holidays or sick leave

[39] There were no accruals for holidays or sick leave. While Mr Londono says this was because he was engaged as a casual employee, there would likewise have been no accruals if he was engaged as a contractor.

[40] I regard this factor as neutral.

Profession, trade or calling

[41] It was not submitted and nor do I find that the cleaning tasks undertaken by Mr Londono were such that he was undertaking a profession, trade or calling. I find this factor resolves in favour of Mr Londono being an employee.

Goodwill

[42] Mr Londono said the tenants of the apartments did not know who he was and that client satisfaction surveys they completed were for Espresso. He said he held no goodwill as a result of the work he carried out. I find this factor resolves in favour of Mr Londono being an employee.

Expenditure of remuneration on business expenses

[43] Mr Londono says he did not incur business expenses for which he was reimbursed, albeit he says he received $170.00 reimbursement for a service on his vehicle every three to four months. Mr Leigh says some cleaners were reimbursed when they bought supplies but produced no evidence of this. On this point, I prefer Mr Londono’s evidence and find this factor resolves in favour of him being an employee.

Was Mr Londono a servant in the business of Espresso, or was he carrying on a business on his own behalf?

[44] Having considered the evidence before me and applied it to each of the factors set out above I am satisfied that Mr Londono was not carrying on a business on his own behalf, of which his work for Espresso formed part. I find Mr Londono was a servant in the business of Espresso and the relationship between the parties was one of employment.

[45] Having found Mr Londono was an employee, I am further satisfied he was a casual employee. He was paid an hourly rate of pay ($25.00) but did not receive annual or personal/carer’s leave entitlements. Further, rather than having a guaranteed number of hours of work, Mr Londono was engaged through the system whereby he would select/accept cleaning assignments via the Espresso website listing the various apartments that required cleaning on any given day.

[46] I am satisfied Mr Londono’s employment as a casual employee was on a regular and systematic basis and that during his service, he had a reasonable expectation of continuing employment by Espresso on a regular and systematic basis, such that his service as a casual counts towards his period of employment 11 and that he therefore completed the minimum employment period that s.383 of the Act requires.

[47] I am also satisfied Mr Londono was covered by the Hospitality Industry (General) Award 2010 12 and his annual rate of earnings was less than the high income threshold.

[48] I am therefore satisfied Mr Londono was a person protected from unfair dismissal as required by s.396(b) of the Act.

Section 385 – was Mr Londono’s dismissal unfair?

[49] As I am satisfied in relation to each of the four matters referred to in ss.396(a)-(d) of the Act, I can now consider the merits of Mr Londono’s unfair dismissal application.

[50] A dismissal is unfair if I am satisfied, on the evidence before me, that all of the circumstances set out at s.385 of the Act existed. Section 385 provides the following:

“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

[51] A person has been unfairly dismissed if the termination of their employment comes within the definition of “dismissed” for the purposes of Part 3–2 of the Act. Section 386(1) of the Act provides:

“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.”

[52] The provisions of ss.386(2) and 386(3) of the Act do not apply in this matter.

[53] If Mr Londono was not dismissed by Espresso within the meaning of s.386(1) of the Act, there is no jurisdictional basis for him to pursue his unfair dismissal application. That is to say, if Mr Londono’s employment was not terminated at the initiative of Espresso (s.386(1)(a) of the Act), or if it is not found that he was forced to resign because of conduct or a course of conduct engaged in by Espresso (s.386(1)(b) of the Act), there is no jurisdictional basis for him to pursue his unfair dismissal application.

[54] It will only be necessary for me to consider the matters in ss.385(b), 385(c) and 385(d) of the Act if I am satisfied Mr Londono was dismissed within the meaning of s.386(1) of the Act.

[55] Accordingly, this is the first matter I will determine.

Section 385(a) – was Mr Londono dismissed?

[56] As its wording makes clear, s.386(1) of the Act provides for two ways in which a person may be considered dismissed. The Explanatory Memorandum to the Fair Work Bill 2008 discusses the distinction between a dismissal falling under s.386(1)(a) and one falling under s.386(1)(b), and seeks to explain it as follows:

“Clause 386 – Meaning of dismissed

1528.            This clause sets out the circumstances in which a person is taken to be dismissed.  A person is dismissed if the person’s employment with his or her employer was terminated on the employer’s initiative.  This is intended to capture case law relating to the meaning of ‘termination at the initiative of the employer’ (see, e.g., Mohazab v Dick Smith Electronics Pty Ltd (1995) 62 IR 200). 

1529.            Paragraph 386(1)(b) provides that a person has been dismissed if they resigned from their employment but were forced to do so because of conduct, or a course of conduct, engaged in by their employer.  Conduct includes both an act and a failure to act (see the definition in clause 12). 

1530.            Paragraph 386(1)(b)  is intended to reflect the common law concept of constructive dismissal, and allow for a finding that an employee was dismissed in the following situations:

•  where the employee is effectively instructed to resign by the employer in the face of a threatened or impending dismissal; or

•  where the employee quits their job in response to conduct by the employer which gives them no reasonable choice but to resign.”

[57] The Full Bench in City of Sydney RSL & Community Club Limited v Mrs Roxana Balgowan 13 (Balgowan) recently considered this distinction:

“[10] It seems clear…that the concept of constructive dismissal is to be accommodated by s.386(1)(b) and that concept is not subsumed in s.386(1)(a).

[11] Section 386(1)(a) seems plainly to be intended to capture the case law determining the meaning of termination (of the employment relationship) at the initiative of the employer. In Mohazab the Court considered that the expression “termination at the initiative of the employer” was:

“. . . a reference to a termination that is brought about by an employer and which is not agreed to by the employee. Consistent with the ordinary meaning of the expression in the Convention, a termination of employment at the initiative of the employer may be treated as a termination in which the action of the employer is the principal contributing factor which leads to the termination of the employment relationship. We proceed on the basis that the termination of the employment relationship is what is comprehended by the expression ‘‘termination of employment.’’” (references omitted)

Section 386(1)(a) - was Mr Londono’s employment terminated on Espresso’s initiative?

[58] I will now consider whether Mr Londono was dismissed within the meaning of s.386(1)(a) of the Act. This provides that a person has been dismissed if the person’s employment with his or her employer has been terminated on the employer’s initiative.

[59] Mr Londono says Mr Leigh sent him an email at 11.44am on 8 December 2017, which stated:

“Hi Alirio

As you are no doubt aware, Espresso is still struggling financially.

We have to take steps at the moment to reduce costs.

We are taking many steps across all areas of the business to achieve this.

As part of this, we need to reduce our cleaning costs. We are able to pay the following fixed amount per clean for cleans (including packing the basket for each clean) from tomorrow onwards:

1brd $60

2brd $80

3brd $110

I understand you are currently taking responsibility for approx. one third of cleans.

If you are able to work within the above fixed prices, you are welcome to continue being responsible for those cleans.

If not, please let me know so we can discuss.

Darryl.” 14

[60] In a reply email, Mr Londono expressed his reservations about the rates. He indicated they were not acceptable and proposed some options as an alternative, stating “[h]opefully we can find a good point and keep working for the company.” 15

[61] Having considered the email correspondence that passed between the parties on 8 December 2017, I do not believe either piece of correspondence terminated Mr Londono’s employment. Both invited further conversation and this was had.

[62] Mr Leigh said the reply email from Mr Londono indicated to him that he should provide a clearer explanation for the changes he had proposed and accordingly, he telephoned Mr Londono.

[63] The parties have a different version as to what was said in the phone call from Mr Leigh to Mr Londono that followed.

[64] Mr Londono says Mr Leigh told him there would be no negotiation and Diego (Gonzalez) would do all the work. 16 He said he interpreted this as meaning there was no work for him.17 Mr Londono denies resigning but also said Mr Leigh did not tell him the relationship or work was “finished”, nor say that he (Mr Londono) was “fired.”18

[65] Mr Londono denies Mr Leigh sought to explain the reason for the proposed changes.

[66] Mr Leigh said he called Mr Londono and told him the change was being made because guests were spending less time in each apartment and accordingly, he required Mr Londono to spend less time cleaning each apartment. He also said he explained to Mr Londono there would be more apartments to clean and more hours of work available and so, he was not reducing pay by introducing $60 for a one bedroom clean, $80 for a two bedroom clean and $110 for a three bedroom clean.

[67] When asked whether Mr Londono resigned, Mr Leigh said:

“Well, he told me that he's not prepared to work under those conditions and he's going to have all of the keys back in the storeroom in two days, and I'm going to need to start thinking about a compensation amount for him.  So, whether he resigned, or if he's an independent contractor he said he's no longer prepared to provide services, I can't remember whether he resigned or not, but that's what you [sic] said, and certainly his decision.” 19

[68] I have considered the versions of the telephone conversation on 8 December 2017 given by Mr Londono and Mr Leigh and the context within which it occurred. In particular:

•  Mr Leigh had, until that time, little cause to have any contact with Mr Londono during the course of his employment, mainly dealing with Mr and Ms Gonzalez;

•  Mr Leigh had also been “out of action” for approximately three years which had left the Espresso business operations without a great deal of supervision or oversight;

•  The parties had different opinions regarding the times within which cleaning was to be completed (one bedroom: three hours, two bedroom: four hours, three bedroom: five hours) that had been in operation up until then: Mr Leigh said they were targets, with the cleaners asked to clean the apartments as quickly as possible, while Mr Londono was of the view that they entitled him to a fixed amount per clean and adopted the practice of always charging his time according to a benchmark, regardless of the time actually spent;

•  Espresso cleaners worked unsupervised and the entire system of time/task recording was honesty-based. The starting and finishing times for cleaning each apartment were not recorded. Only the quantum of hours was submitted.

•  The accommodation market had become more competitive. Running costs had come into focus and there was a need to reduce overall cleaning costs;

•  When he started to scrutinise operations, it became apparent to Mr Leigh that the nature of Espresso’s business had changed, with the average stays in its apartments reducing from an average of 15 days’ duration to five days;

•  Mr Leigh formed the view that the shorter stays in the apartments warranted shorter cleaning times, i.e. the time spent on each clean could be less;

•  He also formed the view that shorter stays meant greater turnover in apartment occupancy, meaning there would be more cleans per apartment and more work available to the cleaners engaged by Espresso;

•  Having discussed shorter cleaning times with Mr and Ms Gonzalez, it became apparent to Mr Leigh that he would also have to discuss them with Mr Londono because Mr Gonzalez told him that Mr Londono had become “entitled” to clean a proportion of the Espresso apartments; 20 and

•  As such, he sent the 8 December 2017 email to Mr Londono.

[69] I have also had regard to the following evidence given by Mr Leigh:

“THE DEPUTY PRESIDENT:  Your version of the telephone conversation was to confirm?

MR LEIGH:  To confirm that there's nothing to negotiate.  "I'm not asking you to reduce the amount you're getting paid per hour or to work for any time unpaid.  I'm just asking you to please try to submit timesheets.  To spend less time in the apartments", which I was assuming must be possible given the reduction from 15 days to five.  And I think these guys are resting their hats on the proposition that my initial email said – was in the terms that it was, but I telephoned Alirio and explained very clearly that the idea was that that was translated into dollar terms because that's what I was talking to Diego about and thinking about from a management point of view, but there was no expectation, on our part, that there would be any reduction in pay.  And, in fact, there should be an increase in the overall pay because there's more apartments to clean.

THE DEPUTY PRESIDENT:  How did you explain there would be more apartments to clean?

MR LEIGH:  Because - - -

THE DEPUTY PRESIDENT:  Or did you explain that?

MR LEIGH:  I did explain that.  I know, because this was at the front of mind and, you know, I'd just done a whole heap of analysis which, like, highlighted in black and white what I suspected, and that was that the length of stay had significantly decreased and I had spread sheets which showed that, you know, where previously cleaners were arriving to apartments that had been inhabited for 15 days; now they were arriving to apartments that had been inhabited for only five on average, and which led me to consider, well, why are we still getting charged the same amount to clean.  It must be taking them less time.  This was all explained.

THE DEPUTY PRESIDENT:  When?

MR LEIGH:  Were explained to him in the conversation that I had with Alirio immediately after the email that he sent to me.

THE DEPUTY PRESIDENT:  Right.

MR LEIGH:  So when I sent the email I didn't expect that there would be any resistance because I was thinking that I was simply redirecting them as to how to, you know, apply their efforts.  And then when he sent that email I realised there was a whole lot of confusion here and that's why I telephoned him and he says it was a quick telephone call, but I know that it wasn't a quick telephone call, and I explained during that call that I'm not asking him to – It's just, like, spend less time in each apartment, please.

THE DEPUTY PRESIDENT:  How did the phone call end?

MR LEIGH:  The phone call ended by him saying he's not prepared to work under those conditions, and he would be handing all the keys back within two days, and that I should consider what kind of compensation I was going to pay to him.  And at that stage he wasn't talking about compensation to do with unfair dismissal or anything like that.  He was talking about compensation for working during the period where there was disruption in the business.” 21

[70] As to what was discussed in the telephone conversation between Mr Leigh and Mr Londono, I ultimately prefer Mr Leigh’s account. On the whole, I found Mr Leigh to be a more credible witness than Mr Londono and there were a number of specific examples that contributed to my forming this view:

a) After Mr Londono had elected to accuse Mr Leigh of being on drugs and “dragging the company down”, 22 Mr Leigh responded frankly:

“MR LEIGH:  The phone call ended by him saying he's not prepared to work under those conditions, and he would be handing all the keys back within two days, and that I should consider what kind of compensation I was going to pay to him.  And at that stage he wasn't talking about compensation to do with unfair dismissal or anything like that.  He was talking about compensation for working during the period where there was disruption in the business.

THE DEPUTY PRESIDENT:  What disruption in the business?

MR LEIGH:  There was a couple of years where I had a substance abuse problem.  He's referring to that previously.  And during that time I wasn't – you know, I suffered terribly, and according to the cleaners that affected, you know, their situation.  But – and I think that that's sort of at the heart of this to some extent, Alirio's point of view, but when he initially – during that telephone call at the end he said he's not prepared to work under those conditions.  He's going to hand all the keys back, and I need to consider what kind of compensation I'm going to pay him, and he was referring to – he did refer to that period of two years.” 23

b) Mr Londono engaged in what I regard as some sharp practices in recording his hours of work. Timesheets provided by Espresso reveal six examples of him having claimed 20 or more hours on a single day. He claimed either 42 or 30 hours work on the Queen’s Birthday public holiday in 2017. He submitted a timesheet for a fortnight with 170 hours of work claimed as follows:

•  Monday: 24 hours

•  Tuesday: 12 hours

•  Wednesday: 5 hours

•  Thursday: 12 hours

•  Friday: 11 hours

•  Saturday: 9 hours

•  Sunday: 9 hours

•  Monday: 27 hours

•  Tuesday: 17 hours

•  Wednesday: 14 hours

•  Thursday: 9 hours

•  Friday: 4 hours

•  Saturday: 13 hours

•  Sunday: 4 hours. 24

Mr Londono’s explanation as to why hours were recorded in this fashion was “that's a mistake that we made which is to write the apartments in the day they come into the schedule, but not the actual date that we finish the apartment.” 25 I do not regard this as credible.

c) Mr Londono engaged in what appeared to be subcontracting of his duties to Ms Karen Villada, paying her on multiple occasions for cleaning work at the rate of $22 per hour, having recorded her hours on his timesheets and then himself receiving the payment of $25 per hour for them. I consider Mr Londono’s evidence relating to Ms Villada inconsistent and lacking in credibility. In his witness statement he had said:

“In around October 2017 Diana arranged for Karen Villada who was a personal friend of hers to come and do some cleaning work. Karen worked with me on about 12 times. I understood she was employed directly by Espresso and also worked with both Diego and Diana.” 26

However, at the hearing, the following evidence was given:

“THE DEPUTY PRESIDENT:  There are allegations here, Mr Londono, made by Mr Leigh that you employed others to do some of the work for you.

MR LONDONO:  That's not true, Deputy President.  I read the statement of Mr Leigh.  When he says - he tried to say that I employed Karen - I can't remember her - - -

THE DEPUTY PRESIDENT:  Ilada?

MR LONDONO:  Yes, which is completely true.  It isn't completely true, I'm sorry, Deputy President.  It's completely false.  Karen come to work to Espresso through Diana or Diego.  I believe it was Diana.  She brings Karen to Espresso.  Espresso was paying or supposed to pay the wages to Karen and in some moment when the apartments were like very busy, like, for example, that I had three or four apartments to finish during the day and I didn't have the time, she comes to work with me.  Diana was the one who told her to come and work me or Diana asked me:  "Do you need Karen to help you?"  So she comes to me, but she was working before she start helping me.  She was working with Espresso and she was getting paid by Espresso.

THE DEPUTY PRESIDENT:  Mr Leigh, do you have anything that you want to say there?

MR LEIGH:  Did you pay Karen?

MR LONDONO:  Now, that's another point, Deputy President.  Like you said, there is no proof here at the moment.  In this time, it was October, November last year.  We were not getting paid on time.  It was very difficult to get paid from Espresso.  And this girl was working with Espresso, but Espresso wasn't paying her and I did pay her, like, maybe, I don't know, a few times for the two, three hours that she worked with me.  I paid with her - I paid to her and I charged the hours in my time sheet just to help her because Espresso wasn't paying her and, yes, I give some money to her.

MR LEIGH:  How much did you pay her?

MR LONDONO:  What do you mean how much?  There's no - what do you mean by how much?

MR LEIGH:  I'm sorry, how much money did you pay her?

MR LONDONO:  How many I pay per hour?

MR LEIGH:  Yes.

MR LONDONO:  I paid $22 for an hour.

MR LEIGH:  $22 an hour.

MR LONDONO:  Yes.

MR LEIGH:  You were getting paid 25.

MR LONDONO:  Yes.

MR LEIGH:  And if she put her time sheet in to us she would have been paid 25.

MR LONDONO:  Yes, because I had to pay my tax and that.  I was paying the tax.  If I make a mistake, I apologise.  I did pay her 22.  I got the other three thinking on the tax that I will receive.

THE DEPUTY PRESIDENT:  Hang on, what did you do with the tax?

MR LONDONO:  I paid the tax.

THE DEPUTY PRESIDENT:  Where?

MR LONDONO:  When my PAYG comes to me.

THE DEPUTY PRESIDENT:  Yes, but what about Ms Ilada, did she pay tax?

MR LONDONO:  I guess so.  I don't know.

THE DEPUTY PRESIDENT:  Well, how do you know?  You don't know.

MR LONDONO:  I don't know.

THE DEPUTY PRESIDENT:  You just gave her some cash.

MR LONDONO:  At that moment, Deputy President, yes.

THE DEPUTY PRESIDENT:  How often did you do it?

MR LONDONO:  Maybe, I think, during the two months she worked with me about eight or 10 times, two or three hours.

THE DEPUTY PRESIDENT:  Eight to 10 times and - - -

MR LONDONO:  And two months a little bit, yes, for two, three hours.” 27

[71] Viewed within the context outlined above, I accept Mr Leigh was attempting to respond to the changed industry conditions and challenges his business faced by introducing cleaning arrangements better suited to shorter, more frequent apartment stays.

[72] I accept Mr Leigh’s evidence that this decision was based on his analysis that the average length of stay in an Espresso apartment had fallen from fifteen days to five days and, as a result, he decided less cleaning time per apartment was required. I am satisfied Mr Leigh told Mr Londono this is what he wanted him to do and why.

[73] I am persuaded there is a rational basis for Mr Leigh’s assumption there would be more cleaning assignments because of the increased turnover of apartments and this could in turn increase earning potential. I am also satisfied he told Mr Londono this.

[74] However, it is evident from his reply email that Mr Londono did not accept that the changes proposed by Mr Leigh would not reduce his earnings and I am satisfied he maintained this view in the subsequent telephone conversation.

[75] It is therefore necessary to consider whether any action of Espresso amounted to termination of employment, noting that Mr Londono maintains he did not resign from his employment and argues instead that the employment relationship was “finished” when Mr Leigh advised him the terms were not negotiable.

[76] In Barkla v G4S Custodial Services Pty Ltd, 28 the Full Bench outlined a body of law it said articulates the nature of employer conduct which will bring an employment contract to an end:

“[23]It is necessary in the first instance to consider the communications of the employer to the employee to determine whether any of these communications constitutes an express termination...

[24]It is then necessary to consider whether any action of the employer amounted to termination of employment. It should be noted in this case that Mr Barkla did not resign from his employment. Rather he alleges that the employer’s conduct amounted to dismissal. There is considerable law on whether a resignation is forced by conduct of the employer or that the employer’s conduct amounts to a constructive dismissal either at common law or within the statutory definitions. In our view this law is helpful in the present context because it articulates the nature of employer conduct which will bring an employment contract to an end. This is what Mr Barkla has argued in this case. In O’Meara v Stanley Works Pty Ltd a Full Bench of the Australian Industrial Relations Commission discussed the relevant case law and outlined the legal considerations in the following terms:

…

[23] In our view the full statement of reasons in Mohazab which we have set out together with the further explanation by Moore J in Rheinberger and the decisions of Full Benches of this Commission in Pawel and ABB Engineering require that there to be some action on the part of the employer which is either intended to bring the employment to an end or has the probable result of bringing the employment relationship to an end. It is not simply a question of whether “the act of the employer [resulted] directly or consequentially in the termination of the employment.”  Decisions which adopt the shorter formulation of the reasons for decision should be treated with some caution as they may not give full weight to the decision in Mohazab. In determining whether a termination was at the initiative of the employer an objective analysis of the employer’s conduct is required to determine whether it was of such a nature that resignation was the probable result or that the appellant had no effective or real choice but to resign.” (References omitted, emphasis added)

[77] Thus, it can be seen that the conclusion of the Full Bench of the Australian Industrial Relations Commission in O’Meara v Stanley Works Pty Ltd 29(O’Meara) is:

•  there must be action by the employer that either intends to bring the relationship to an end or has that probable result; 30 and

•  that in determining whether a termination was at the initiative of the employer, an objective analysis of the employer’s conduct is required to determine whether it was of such a nature that resignation was the probable result or that the employee had no effective or real choice but to resign. 31 (my emphasis)

[78] I am not persuaded Espresso took action with the intention of bringing the relationship to an end or had that probable result. Mr Londono was invited to continue his work for Espresso and I accept Espresso was not seeking to reduce employee income and rates of pay but rather, wanted its cleaners to reduce the amount of time they spent cleaning each apartment, in circumstances where stays were becoming shorter and more frequent.

[79] As indicated above, I accept this decision was based on analysis indicating the average length of stay in an Espresso apartment had fallen from fifteen days to five days and, as a result, Mr Leigh decided he would require the cleaners to spend less time cleaning each apartment. I am satisfied Mr Leigh told Mr Londono this is what he wanted him to do and why.

[80] I am persuaded there was rational basis for Mr Leigh’s assumption there would be more cleaning assignments due to the increased turnover of apartments and further, this could in turn increase earning potential. I am satisfied Mr Leigh told Mr Londono this.

[81] Mr Londono’s submission that he was terminated for not accepting reduced remuneration is based on the proposition that when cleaning the apartments, a one bedroom apartment would inevitably take three hours to clean, a two bedroom apartment would take four hours and a three bedroom apartment, five hours. However, Mr Londono’s own evidence revealed that in practice, this cannot be assumed and significantly, he conceded it is not possible to know in advance how long an apartment clean will take. 32 As outlined above, I have reservations about Mr Londono’s credibility as a witness and due to the unsupervised nature of the work and the honesty-based system of time recording, there was no way of independently verifying the hours he claims to have worked or the times he started or finished cleaning particular apartments.

[82] In any event, Mr Londono’s proposition that he was going to be required to spend the same time on an apartment for a reduced payment per clean is not sustainable. Mr Leigh informed Mr Londono that going forward, Espresso’s requirement would be that he was to spend less time cleaning each apartment.

[83] These circumstances did not objectively lead to a situation whereby Mr Londono had no effective or real choice but to resign or treat his employment as terminated by Espresso.

[84] The evidence does not persuade me that Mr Londono’s employment was terminated at the initiative of Espresso and as such, I find that Mr Londono was not dismissed within the meaning of s.386(1)(a) of the Act.

Section 386(1)(b) - did Mr Londono resign and if so, was he forced to do so because of conduct, or a course of conduct, engaged in by Espresso?

[85] As outlined above, Mr Londono denies resigning but also said Mr Leigh did not tell him the relationship or work was “finished” or say that he (Mr Londono) was “fired.” 33

[86] Mr Leigh’s account is that during their telephone conversation on 8 December 2017 “he [Mr Londono] told me that he's not prepared to work under those conditions and he's going to have all of the keys back in the storeroom in two days, and I'm going to need to start thinking about a compensation amount for him.” 34 

[87] As a matter of the common law of employment, and in the absence of an agreement to the contrary, each occasion that a casual employee works is viewed as a separate engagement pursuant to a separate contract of employment. 35 It is also well established that casual employees may be engaged from week to week, day to day, shift to shift, hour to hour or for any other agreed short period.

[88] In Balgowan, the Full Bench discussed the nature of casual employment in the ordinary sense in the following manner:

“[23] Although the notion of casual employment developed by reference to the characteristic that a casual employee was someone who had occasional or irregular work, this is plainly no longer the case. Casual employees now frequently work for a single employer on regular hours over extended periods. Casual employees may be used in the short term or for much longer or extended periods; they may be employed as a casual employee on a regular and systematic basis with an expectation of continuing employment on that basis; or they may be called upon to work as a casual employee infrequently or irregularly and have no expectation of being engaged otherwise. That this is so is plainly recognised in s.384(2) of the Act which describes the method by which a period of service as a casual employee is counted towards an employee’s period of employment for the purposes of ascertaining whether an employee has completed a period of continuous service with the employer at the time of his or her dismissal so as to meet the minimum period of employment identified in s.383 of the Act.

[24] The general contractual characteristics of casual employment is that a person who works over an extended period of time as a casual employee will be engaged under a series of separate contracts of employment on each occasion a person undertakes work, however they will not be engaged under a single continuous contract of employment. There are some, albeit rare, cases where a casual employee has been found to have been engaged under a single continuing contract of employment, but the accepted orthodoxy of casual employment is the notion that each engagement is under a separate contract rather than a continuing contract of employment. True it is that service rendered under a series of separate casual employment contracts may be regarded as continuous in respect of statutory entitlements such as long service leave, certain entitlements prescribed under the National Employment Standards and accident compensation legislation, and as is evident from the above for the purposes of assessing whether a particular employee had been engaged for the minimum employment period for the purposes of making an unfair dismissal remedy application under the Act. But such recognition of casual service does not alter the fundamental contractual character of regular casual employment as a series of engagements, each under a separate contract of employment.” 36 (references omitted)

[89] It has been held that the continuous service by a casual employee who has an established sequence of engagements with an employer is broken only when the employer or the employee make it clear to the other party, by words or actions that there will be no further engagements. 37 (my emphasis)

[90] Having regard to the evidence in this case, I am satisfied this is what Mr Londono did during his telephone conversation with Mr Leigh on 8 December 2017.

[91] Putting to one side the vexed question of whether or not a casual employee can resign his or her employment in the ordinary meaning of that term and indeed, within the meaning of s.386(1)(b) of the Act, I have nonetheless considered whether, when Mr Londono told Mr Leigh that he was not prepared to work under the changed conditions and was going to return all of the keys in two days while claiming compensation, he was forced to do so because of conduct or a course of conduct engaged in by Espresso.

[92] The Full Bench in Bupa Aged Care Australia Pty Ltd T/A Bupa Aged Care Mosman v Tavassoli 38 (Tavassoli) recently said in relation s.386(1)(b) of the Act:

“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 [sic] result of the employer’s conduct such that the employee had no effective or real choice but to resign… the requisite employer conduct is the essential element.” 39

[93] In proceeding to consider the elements of this test in the circumstances of this matter, some observations regarding casual employment observed by Gooley DP in Andrew Kim v ORC International Pty Ltd, 40are apt:

“It is difficult to see how this common law concept of repudiation has any work to do in relation to casual employees. At common law a casual employee’s contract of employment ceases at the end of each engagement. An employer of a casual employee does not repudiate that contract when it fails to offer another shift.” 41

[94] I consider that as much as can be said regarding the conduct of Espresso is that it intended to change the terms upon which work in future engagements would be offered and it invited Mr Londono to accept future engagements in accordance with the changed terms. I do not, however, accept that Mr Londono had no effective or real choice but to say that he was not prepared to work under the changed conditions.

[95] Together with the advice as to the new rates for cleaning the various apartments, Mr Londono had been told to spend less time cleaning them than before. He had also been told that with the shorter stays, he could expect there would be more apartment cleaning to do and this could increase his earnings. As I have outlined above, I accept there was a rational basis for these assumptions.

[96] Mr Londono either failed to take into account or simply ignored both the direction to spend less time cleaning each apartment and Mr Leigh’s advice conveyed in the phone call of 8 December 2017 and instead, concluded that his earnings would decrease. I am not persuaded he had no effective or real choice but to say he was not prepared to work under the proposed, changed conditions.

[97] For completeness, I also do not consider the proposal to introduce the changed conditions was a repudiation of a contract of employment between Mr Londono and Espresso, casual or otherwise. In the factual setting of this casual employment relationship, the amount of time to be allowed for the cleaning of each variety of apartment was not contractual and it is not open to conclude that the proposed new rates for the cleaning of the various apartments represented a repudiation.

[98] As such, I am not persuaded that Espresso engaged in conduct with the intention of bringing the employment to an end. I am also not persuaded that there was a termination of Mr Londono’s employment that was the probable result of Espresso’s conduct, such that he had no effective or real choice but to resign. Therefore, I find that Mr Londono was not dismissed within the meaning of s.386(1)(b) of the Act.

Conclusion

[99] As I have not been persuaded that either s.386(1)(a) nor s.386(1)(b) of the Act applies to Mr Londono, I have found he was not dismissed within the meaning of s.386 of the Act. As such, the requirement in s.385(a) of the Act is not satisfied.

[100] Having found Mr Londono was not dismissed from his employment within the meaning of s.386 of the Act, there is no jurisdictional basis for him to pursue his unfair dismissal application. It is therefore not necessary for me to otherwise deal with s.385(b) of the Act.

[101] I dismiss Mr Londono’s unfair dismissal application and an order to this effect will be issued along with this decision.

DEPUTY PRESIDENT

Appearances:

Mr A Londono on his own behalf.

Mr D Leigh for Espresso Apartments Pty Ltd.

Hearing details:

2018.

Melbourne:

April 10.

Printed by authority of the Commonwealth Government Printer

<PR607590>

 1 Section 380 of the Fair Work Act 2009.

 2 Section 30C of the Fair Work Act 2009.

 3   [2015] FWCFB 3704.

 4   [2011] FWAFB 8307.

 5 Ibid at [30].

 6   Transcript PN 178-179.

 7   Exhibit A5.

 8   [2011] FWAFB 8307 at [30].

 9   Exhibit A4.

 10   Exhibit A3.

 11 Section 384(2)(a) of the Fair Work Act 2009.

 12   MA000009.

 13   [2018] FWCFB 5.

 14   Exhibit A1.

 15   Ibid.

 16   Transcript PN 738 and 744.

 17   Transcript PN 909.

 18   Transcript PN 738.

 19   Transcript PN 808.

 20   Transcript PN 728.

 21   Transcript PN 918-929.

 22   Transcript PN 530.

 23   Transcript PN 929-931.

 24   Exhibit R6.

 25   Transcript PN 514.

 26 Exhibit A7 at [22].

 27   Transcript PN 544-576.

 28   [2011] FWAFB 3769 at [24].

 29   PR 973462.

 30 Ibid at [23].

 31   Ibid.

 32   Transcript PN 344-359

 33   Transcript PN 738.

 34   Transcript PN 808.

 35   Shortland v The Smiths Snackfood Co Ltd[2010] FWAFB 5709 at [10].

 36   [2018] FWCFB 5 at [23]-[24].

 37   Shortland v The Smiths Snackfood Co Ltd[2010] FWAFB 5709 at [13].

 38   [2017] FWCFB 3941.

 39 Ibid at [47].

 40   [2016] FWC 1029.

 41 Ibid at [47].