Ambrose von Erkel v Solar Station Alpha Pty Ltd T/A Solar Backup

[2016] FWC 7112

[2016] FWC 7112

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Ambrose von Erkel
v
Solar Station Alpha Pty Ltd T/A Solar Backup
(U2016/2082)

DEPUTY PRESIDENT KOVACIC MELBOURNE, 5 OCTOBER 2016

Application for relief from unfair dismissal - extension of time and jurisdictional objection - Respondent is a small business employer - application made within the statutory timeframe - application to be listed for further hearing to deal with small business jurisdictional objection.

[1] On 4 May 2016 Mr Ambrose von Erkel (the Applicant) filed an application under s.394 of the Fair Work Act 2009 (the Act) alleging that the termination of his employment by Solar Station Alpha Pty Ltd T/A Solar Backup (the Respondent) on 13 April 2016 was unfair.

[2] In its Form F3 – Employer Response to Unfair Dismissal Application the Respondent raised two jurisdictional objections, first that the application made outside the 21 day timeframe specified in s.394(2) of the Act on the basis that Mr von Erkel had been dismissed on 9 March 2016 and second that it was a small business and Mr von Erkel’s dismissal was consistent with the Small Business Fair Dismissal Code (the Code).

[3] The Fair Work Commission (the Commission) issued Directions on 9 June 2016, with several revised Directions subsequently issued.

[4] The application was heard on 5 August and 26 September 2016, with the parties requesting that the Commission determine the extension of time issue in the first instance and only deal with the Respondent’s second jurisdictional objection if the Respondent’s first jurisdictional objection was not sustained. At the hearing, Mr Peter Hull appeared with permission for Mr von Erkel, while Mr Paul Wilson, the Respondent’s General Manager, appeared for the Respondent together with Ms Donna-Louise Wilson, a Director of the Respondent, and Mr David Robertson, the National Sales Manager of an associated entity, Arvio Pty Ltd (Arvio).

[5] For the reasons set out below I have found that the Mr von Erkel was dismissed on 13 April 2016 and that his application was therefore made within the 21 day statutory timeframe.

Background

[6] By way of background, the Respondent is one of three associated entities, the other two entities being Arvio and Phase Change Energy Solutions Pty Ltd (Phase Change).

[7] Mr von Erkel commenced employment with the Respondent as a sales representative on 3 December 2014. The letter of offer of employment to Mr von Erkel of 19 November 2014 1 identifies the Respondent as the employer though the offer was made on letterhead which bears the corporate logos of all three associated entities, i.e. the Respondent, Arvio and Phase Change.

[8] On 2 March 2016 Mr von Erkel was issued with a First Warning Letter 2. The letter stated among other things as follows:

“I am writing to you about your current level of sale’s [sic] performance at Arvio Pty Ltd.

…

None of the agreed benchmarks were reached in February, 2016 … At present there are three appointments scheduled for this week and none for the following week. This too is below that which is required.

There is also the sale (…) made by Paul Wilson which was later reversed by you having talked the client out of the sale.

… At present your punctuality has not been consistent.

After considering the situation it is expected that your performance improves in the following areas …

This is your first warning letter and should there be no improvement in your sale’s [sic] performance or be any further company transgressions, it will result in either a second warning letter or dismissal.”

[9] The letter was issued by Mr Robertson on Arvio letterhead and was signed by Mr von Erkel on 2 March 2016.

[10] On 9 March 2016 Mr Robertson and Ms Hayley Burn, the Respondent’s Office Manager, met with Mr von Erkel to discuss allegations that he had bullied a Director of Arvio into resigning. During the course of that meeting, Mr von Erkel was dismissed for misconduct. The termination letter given to Mr von Erkel was issued on Arvio letterhead and read, inter alia, as follows:

“I am writing to you about the termination of your employment with Arvio Pty Ltd for misconduct.

…

While your primary role in Arvio has been sales for which you have underperformed and received a warning letter, it has also been discussed privately and confidentially with you about a possible change of role within the company as a project manager. Due to your record of underperformance in sales it was clearly explained to you by both Paul Wilson and myself this change of position required acceptance from both Arvio’s board and operation’s department. The position of Project Manager was being offered to utilise your former construction experience and also out of respect for you as a valued company employee whom management wanted to see succeed. However in our gaining acceptance from board and staff for your change of role, serious allegations have arisen which violate Section 9.2 (b) (iii) of your Employment contract signed by you 19th November 2014.

“9.2 Resignation or Termination (b) If at any time during the term of this agreement you: (iii) conduct yourself in such a way as to injure or be likely to injure the reputation of the company; the Company (Arvio) will in its sole discretion, be entitled to terminate this agreement without notice immediately, at any time it becomes aware of any of these events ...”

On Thursday, 5th November 2015, you

• deliberately attempted to have Arvio director Gerard Hartog resign his directorship in Arvio Pty Ltd.



• stated to Gerard Hartog, and witnessed by Andrew Bain, that Arvio would fail as a business



• told Gerard Hartog that being a director of Arvio he had “better get out” otherwise creditors will “take all your money”.



• stated on this day that Arvio will fail if Paul Wilson, General Manager remains in that position.



• had a full understanding of the broader ramifications and detrimental effect to Arvio should Gerard Hartog resign his directorship.



• had full understanding Arvio would lose its commercial building license should Gerard Hartog resign his directorship.



• had a full understanding Gerard Hartog resign it would jeopardize existing building contracts.



• Understood fully such statements could jeopardize the employment of all other Arvio employees.

Separate signed statements have been forwarded to Management by both Andrew Bain and Gerard Hartog supporting these facts. It was admitted by Gerard Hartog this should have been brought to management’s attention at the time. While Arvio encourages employees to share their opinion and offer ideas on how to improve business, these statement are highly destructive to Arvio’s reputation. It clearly has the potential to undermine company stability and is misconduct contrary to Section 9.2 of your signed work agreement.

Arvio also view your actions and statements to Gerard Hartog as fallacious, intimidating and ultimately damaging to morale for all employees working in Arvio. In bullying a director to relinquish his directorship endangers the entire business and is considered a serious misconduct. That these statements are mendacious and stated loudly in front of fellow employees leave Arvio management with only one course of action.

Following your first warning letter, unsatisfactory sales history with this company and extremely poor and damaging attitude towards Arvio’s continuing financial viability, your employment will cease immediately for misconduct.” 3 (Underlining added)

[11] Mr von Erkel did not subsequently present for work and on 12 March 2016 left on a previously planned overseas holiday. Mr von Erkel returned from his holiday on 31 March 2016 and subsequently sought legal advice as to the possibility of making an unfair dismissal application.

[12] On 12 April 2016 Mr von Erkel attended the workplace where he informed Mr Wilson that he did not consider his employment to have been terminated because the termination letter was not from his employer. Mr von Erkel left the Respondent’s premises that day on the understanding that he would be provided with a revised termination letter issued by the Respondent and an Employment Separation Certificate. Mr von Erkel returned the next day as if presenting for work, was subsequently asked to return in about an hour when he was provided with a revised termination letter and Employment Separation Certificate. The revised termination letter is dated 9 March 2016 and was issued on the Respondent’s letterhead. The body of the letter is in identical terms to the original termination letter, i.e. the revised letter opens by stating “I am writing to you about the termination of your employment with Arvio Pty Ltd for misconduct.” 4 The Employment Separation Certificate5 identifies the Respondent as the employer.

What was the date of dismissal?

[13] The threshold issue to be determined in this case is the date of Mr von Erkel’s dismissal. If it was 13 April 2016 as contended by Mr von Erkel then his application was lodged with the Commission within the 21 day statutory timeframe. If however the date of dismissal was 9 March 2016 as contended by the Respondent, Mr von Erkel’s application was lodged 35 days outside the 21 day statutory timeframe and the Commission will need to determine whether there are exceptional circumstances as per s.394(3) of the Act warranting the Commission extending the time for Mr von Erkel to make his application. Should Mr von Erkel’s application not be dismissed, the Commission will need to relist the matter to deal with the Respondent’s second jurisdictional object, i.e. that it was a small business and that the dismissal was consistent with the Code.

The Applicant’s case regarding the date of dismissal

[14] Mr von Erkel’s primary position was that he was not dismissed until 13 April 2016 that being the date on which the Respondent provided him with a revised termination letter on its letterhead. While Mr von Erkel submitted that he was dismissed at the abovementioned meeting of 9 March 2016, he contended that his dismissal was of no effect as the termination letter given to him on that date was not issued by his employer but rather by Arvio.

[15] At the hearing Mr von Erkel submitted that his termination could not be valid as the entity that purported to dismiss him on 9 March 2016 was not his employer, i.e. the Respondent. Beyond that, Mr von Erkel submitted that an employee’s employment could not be assigned to another employer in the absence of the employee’s consent, adding that in this case there was no evidence indicating that he had consented to his employment being assigned by the Respondent to Arvio. While Mr von Erkel acknowledged that he performed tasks for Arvio, he contended that it was common place for an employee employed by entity A to work for the benefit of entity B or C.

[16] Key aspects of Mr von Erkel’s evidence were that:

• his business card 6 said he was with Arvio;


• he did not ever believe that he worked directly for Arvio, though he did perform work on behalf of Arvio;
• whilst employed by the Respondent he provided quotes to clients on Arvio letterhead, adding that he could not recall whether he had ever provided quotes to clients on the Respondent’s letterhead;
• he considered that he performed work for a group of companies that presented themselves as Arvio and that he performed work for any or all of those companies depending on what was required, adding that the situation was very fluid in terms of who he performed work for 7;
• following a meeting in September 2015 8 he was made responsible for a product offered by Phase Change called BioPCM;
• with regard to paragraph 81 of the transcript of the meeting of 9 March 2016 which cited Mr Robertson as stating “… we have no alternative but to terminate your contract here” 9, he understood this to mean that he had been “fired”;
• the words “I have only wanted the best for Arvio” in his text message of 9 March 2016 to Mr Robertson 10 did not indicate that he worked for Arvio, adding that he used those words because he was being dismissed for bullying an Arvio director; and


• he believed that technically he was still employed by the Respondent.

The Respondent’s case regarding the date of dismissal

[17] The Respondent submitted that the date of dismissal was 9 March 2016 as Mr von Erkel was verbally advised of his dismissal on that day by his supervisor, Mr Robertson, and was also provided with a written letter of dismissal. The Respondent further submitted that a dismissal takes effect when it is communicated to the employee and that this communication could be oral 11.

[18] Mr Robertson in his witness statement 12 deposed that the Respondent and Arvio work under the same roof and that representatives of both these entities acted as agents for the Respondent in dismissing Mr von Erkel on 9 March 2016. Key aspects of Mr Robertson’s oral evidence were that:

• he considered the Respondent, Arvio and Phase Change to be “one and the same” 13, later adding that Mr von Erkel was fully aware that the three entities were “all one, like the Father, Son and Holy Ghost” and that he was working for Arvio and sold products through all three entities14;


• Mr von Erkel presented himself as a sales representative of Arvio;


• while he was aware that all employees were being transferred to Arvio, he “didn’t have a clue” as to whether Mr von Erkel had been transferred to Arvio 15;


• he did not believe that there was any misunderstanding on 9 March 2016 regarding Mr von Erkel’s dismissal;
• with regard to the reference to Arvio in paragraphs 57 and 75 of the transcript of the meeting of 9 March 2016, the distinction between the entities was for accounting purposes with sales people presenting themselves as being from Arvio; and
• employees working for the Respondent, Arvio or Phase Change all referred to themselves as working for Arvio 16.

Consideration of the issues

[19] An analysis of the material before the Commission indicates that:

• the letter of offer of employment to Mr von Erkel of 19 December 2014 identified the Respondent as the employer;


• Mr von Erkel also performed work for Arvio and Phase Change;


• in the meeting of 9 March 2016 Mr Robertson said “…I’m writing to you about the termination of your employment of Arvio” 17;


• the termination letter given to Mr von Erkel on 9 March 2016 was issued by Arvio and referred to the termination of his employment “with Arvio Pty Ltd”;
• the revised termination letter given to Mr von Erkel on 13 April 2016 was issued on the Respondent’s letterhead but still referred to the termination of his employment “with Arvio Pty Ltd”;
• Mr von Erkel was aware that he had been dismissed on 9 March 2016 but only later realised that he had not been dismissed by the Respondent;
• Mr von Erkel’s pay slip of 9 March 2016 was provided on letterhead bearing the logos of the Respondent and Phase Change and cites the Company ABN as 80 141 300 094 which is the Respondent’s ABN based on the Company Summary regarding the Respondent which is publicly available on the Australian Securities and Investments Commission’s website;
• the Employment Separation Certificate 18 given to Mr von Erkel on 13 April 2016 identified the Respondent as his employer;
• there was no evidence that Mr Von Erkel’s employment had been transferred to Arvio; and
• Mr Von Erkel had not presented for work after receiving the revised termination letter of 13 April 2016.

[20] The documentation before the Commission, i.e. the offer of employment, pay slip and Employment Separation Certificate, all point to the Respondent and not Arvio being Mr von Erkel’s employer. This in turn supports a finding that the termination letter given to Mr von Erkel on 9 March 2016 was ineffective as it was not issued by his actual employer, i.e. the Respondent. While the revised termination letter given to Mr von Erkel on 13 April 2016 potentially suffers from the same error, Mr von Erkel’s conduct in not presenting for work reflects his acceptance of the termination of his employment from that date.

[21] In summary, the material before the Commission supports a finding that Mr von Erkel was dismissed with effect from 13 April 2016. As previously noted, his unfair dismissal application was therefore made within the 21 day statutory timeframe.

Conclusion

[22] For all the above reasons I find that Mr von Erkel’s unfair dismissal application was made within the 21 day statutory timeframe. Accordingly, the Commission now needs to deal with the Respondent’s second jurisdictional objection. The Commission will shortly list the matter for mention to program the hearing of that objection.

Appearances:

P. Hull for the Applicant.

P. Wilson for the Respondent.

Hearing details:

2016.

Melbourne:

August 5.

September 26.

 1   Exhibit 6 at Attachment AvE1

 2   Exhibit 12

 3   Attachment to Form F2 – Unfair Dismissal Application

 4   Exhibit 6 at Attachment AvE 3

 5   Ibid at Attachment AvE4

 6   Exhibit 7

 7   Transcript at PN908-909

 8   Exhibit 11

 9   Exhibit 13

 10   Exhibit 14

 11   Plaksa v Rail Corporation NSW [2007] AIRC 333 (Cartwright SDP, 26 April 2007); citing Barolo v Centra Hotel Melbourne,Print Q9605, 10 December 1998 per Whelan C.

 12   Exhibit 1

 13   Transcript at PN303

 14   Ibid at PN376

 15   Ibid at PN340-357

 16   Ibid at PN539

 17   Exhibit 13 at paragraph 75

 18   Exhibit 6 at Attachment AvE4

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