Christopher Schilling v Pilbara Distributors Pty Ltd

[2020] FWC 3682

[2020] FWC 3682

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Christopher Schilling
v
Pilbara Distributors Pty Ltd
(U2020/2913)

COMMISSIONER WILLIAMS PERTH, 14 JULY 2020

Termination of employment.

[1] This decision concerns an application made by Mr Christopher Schilling (Mr Schilling or the Applicant) pursuant to s.394 of the Fair Work Act 2009 (Cth) (the Act) for an unfair dismissal remedy. The application was lodged on 12 March 2020. The Respondent is Pilbara Distributors Pty Ltd (the Respondent).

[2] At the hearing of this matter Mr Schilling gave evidence on his own behalf and did not call any other persons to give evidence. For the Respondent evidence was given by Mr Paul Ellison (Mr P. Ellison), the Owner/Operator of the Respondent, Mr Mark Ellison (Mr M. Ellison), the Director of the Respondent, Mr Lance Twidle (Mr Twidle), the Deliveries/Salesperson for the Respondent, Mr Graham Johnston (Mr Johnston), the Orders/Salesperson for the Respondent and Ms Marisa McLeod (Ms McLeod), the Administration/Accounts person for the Respondent.

[3] Both parties in this matter were self-represented.

Evidence and factual findings

[4] The Applicant commenced working with the Respondent in 2018 as its’ Manager.

[5] At the time of the Applicant’s dismissal the business employed two full-time staff and one casual; being a Sales/Orders clerk (Ms Dayna Collins), a Deliveries/Salesperson (Mr Twidle) and a casual Deliveries/Orders worker (Mr Adam Ahern).

[6] The Applicant’s evidence is that he contracted pneumonia in December 2019 however after being hospitalised continued to work through December 2019/January 2020 and part of February 2020.

[7] It is agreed between the parties that the Applicant’s employment was terminated during a phone call with the Owner of the Respondent, Mr P. Ellison on 28 February 2020.

[8] The Applicant identified the remedy he was seeking as payment of his full entitlements owing specifically annual leave, one weeks’ pay for termination notice and two weeks’ pay for termination notice because he is over 45. 1

[9] At the hearing in his oral evidence the Applicant reinforced that his case was just claiming entitlements. 2

[10] One criticism of the Applicant by the Respondent was that given the size of the business he was holding far too much stock. 3 The Applicant did not agree with this arguing one needed to have reasonable stock levels because some stock comes from over East otherwise you run out of stock and get customers offside.4

[11] Another criticism of the Applicant by the Respondent was that he had multiple suppliers for the same sort of stock. The Applicant however said this was necessary because some suppliers have a certain range and other suppliers have a cheaper range and some customers preferred a more expensive range of product whilst others wanted the cheaper range of the same type of product, so you need to have two different suppliers or more. 5

[12] Ms McLeod who worked in the business undertaking administration and accounts processing gave evidence that the Applicant was not managing debtors and customers who were given 30 days credit were not paying within that timeframe but were still being given stock. Allowing a customer to continually buy without paying their bills is not in the best interests of the business and it is very difficult to retrieve monies from customers when you allow their credit to blowout to $85,000. This was not a problem with just one customer, but a number of customers were allowed to have their credit blowout to large amounts.

[13] Ms McLeod’s evidence was similarly the Applicant was not properly managing the creditors. There were a series of suppliers who were issuing letters of demand to the Respondent which had been ignored. This leads to a bad credit rating and other suppliers become aware that the business is not paying its’ bills.

[14] Her evidence was she has been dealing with these problems since the Applicant was dismissed and is daily receiving calls from suppliers wanted to cut them off and telling her that the business is going to be blacklisted because it hasn’t paid its’ bills that go back to June, July, August or September 2019.

[15] The Respondent provided a series of documents that are demands from suppliers for payment of outstanding amounts. 6

[16] Her evidence was that the total amount of money that the suppliers collectively are pursuing the Respondent for is approximately $350,000. Consequently, the only way the business now receive supplies is by paying cash on delivery and this will continue until the debt can be reduced. 7

[17] Under cross examination Ms McLeod explained that a number of customers are now only able to buy from the Respondent when they pay cash on delivery.

[18] Mr Johnston gave evidence that he was asked to assist in the business and resolve out of date and best before stock that had been built up.

[19] His evidence was that he had to reduce the stock by 27 or more pallets that were stored at Sinwa Cold Storage outlet in Karratha. In addition, stock was unable to be stored at the Respondent’s chiller cold room facilities due to over ordering. The Sinwa Cold Storage was costing a monthly charge of $1600 upwards. 8

[20] Mr P. Ellison the Owner of the Respondent also gave evidence.

[21] His evidence was that he had three discussions with the Applicant; the first being on 18 February 2020. He says that the Applicant had sent something to him saying that he was not coping, and he was not going well and asking that if the Respondent could find someone else to take over he would gladly step aside.

[22] Mr P. Ellison says these conversations were quite heated and animated. His evidence was that he pointed out things to the Applicant and the response was always that the Applicant would take it on board.

[23] Mr P. Ellison’s evidence was that the Applicant was told that they were so far in debt as a company they could not afford the staff’s wages and that the suppliers have started to cut them off. He said to the Applicant that they had way too much stock and that the Applicant had never dealt with staff issues or with the customers.

[24] His evidence was the Applicant was under no illusion why he was being dismissed.

[25] Mr P. Ellison concedes that he did not put anything in writing to the Applicant because he believes as a small business it is not helpful to “write people up”. He says if you can’t talk to employees you’ve got big problems.

[26] Consequently, when it was apparent that the business was struggling he sent Ms McLeod and Mr Johnston up to sort things out.

[27] He says in the last 13 months the banks would not lend him any more money for the business because of the poor figures of the Respondent.

[28] His evidence was that the Applicant had run the business into the ground and they were broke. 9

[29] The Applicant explained during submissions at the hearing that 10 weeks after his dismissal he gained new employment. 10

Submissions

The Applicant’s submissions

[30] The application filed by the Applicant states the outcome he is seeking by lodging this application is payment of his entitlements owing which he says are approximately 270 hours of annual leave, one weeks’ pay for termination notice and a further two weeks’ pay because he is over 45.

[31] In his oral submissions at hearing the Applicant explained the reasons he believed the dismissal was unfair was that he was on medical leave at the time. Otherwise he says he accepts the termination and has no issues with that. It is just the entitlements he says he is owed is all he was looking for and seeks no further compensation. 11

The Respondent’s submissions

[32] The Respondent in its Outline of Arguments: merits lists the reason for the Applicant’s dismissal as follows.

[33] The Applicant paid cleaners $1,100 per week to clean the offices and toilets, when previously it used to pay $100 per week.

[34] The Applicant used a staff member to intimidate and threaten Mr Twidle.

[35] The Applicant grossly over ordering of stock and lose of total control of stock requirements; not enough checking was done before orders were placed.

[36] The Applicant gave Ms Dayna Collins, the Sales/Orders clerk, too much freedom with ordering stock which went unchecked which resulted in the overordering; allowing stock to continual build and go passed the best before deadlines.

[37] The Applicant paid a contractor wages, flights and accommodation whom the Respondent alleges that Applicant was having an on-going relationship with.

[38] The Applicant’s failure to manage the business resulted in the business being cut off from nearly all suppliers regarding outstanding invoices. The Respondent submits the situation become so bad the bank will not give it a loan nor extend its’ current loan.

[39] The Respondent received an invoice from North West Realty for cleaning and damage to house that the Applicant resided in.

[40] The Applicant failed to come up with the funds to buy into the business.

[41] The Applicant created a false invoice to Mr Frank Knight to claim money that was not owing to the Respondent.

[42] I note a number of these complaints are not supported by any evidence from the witnesses, a side effect of the Respondent being self-represented.

The legislation

[43] Section 387 of the Act sets out the matters the Commission must have regard for in determining whether a dismissal is harsh, unjust or unreasonable. The section is set out below.

“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.”

Consideration

Valid reason

[44] The Applicant worked as the Manager of the Respondent’s business in Karratha for approximately 17 months before his dismissal.

[45] The weight of evidence demonstrates that towards the latter part of this period he had failed to control the growth of credit extended to a number of customers and at the same time was not able to pay suppliers’ invoices to the point where multiple suppliers were sending final letters of demand to the Respondent and threatening to cut off supply.

[46] Further the Applicant was not maintaining any stock control and as a consequence there was a large amount of stock wastage with some stock being out of date and so unable to be sold. Also, the total amount of stock held was excessive requiring off-site storage to be paid for incurring regular monthly costs for the Respondent.

[47] Overall the Applicant was mismanaging the business.

[48] I am satisfied that the Applicant’s failure to properly manage the business was a valid reason for his dismissal related to his capacity or conduct.

Notification of the reason

[49] I accept that as a result of the multiple discussions leading up to the final conversation in which Mr P. Ellison dismissed Mr Schilling that he was notified of the reasons he was being dismissed before that occurred.

Opportunity to respond

[50] I accept that during those discussions Mr Schilling had the opportunity to respond to the reasons for which he was dismissed however it is apparent that Mr Schilling does not actually contest the reason for his dismissal.

Support person

[51] There is no evidence that Mr Schilling sought to have a support person present to assist him at any discussions relating to dismissal nor that this was unreasonably refused.

Warnings about unsatisfactory performance

[52] There is no evidence that the Respondent warned Mr Schilling that his unsatisfactory performance was likely to result in his dismissal if it did not improve, however noting he was the Manager of the business he was entirely aware of the business decline that was occurring.

The size of the employer’s enterprise and the absence of dedicated human resource management specialists or expertise

[53] The employer is a very small business and has no dedicated human resource management specialists or expertise.

[54] There is no doubt that the small size of the enterprise and the absence of human resource management specialists or expertise are the reason the procedures followed in effecting the dismissal were somewhat deficient.

Other matters

[55] The fact that the Applicant may have been absent from work due to illness on the day of his dismissal does not cause the dismissal to be unfair.

[56] The Applicant had been employed for less than 18 months at the time of his dismissal.

[57] The Applicant was the Manager of the business and so was well-placed to be aware of the decline of the business during his period of employment and to appreciate the likely negative consequence of this for his employment. Mr Schilling explained he was not contesting the reasons for his dismissal. 12

Conclusion

[58] From the outset Mr Schilling has not challenged the reason he was dismissed but rather was seeking to recoup what he believes is payment owing to him for outstanding entitlements.

[59] As was explained during the hearing the Commission when dealing with an unfair dismissal remedy application is not empowered to decide questions of allegedly unpaid entitlements, these are matters for other courts. 13

[60] Considering all the circumstances above I do not agree that the dismissal of Mr Schilling was harsh, unjust or unreasonable. Consequently, this application must be dismissed.

[61] An order [PR720965] to that effect will be issued in conjunction with this decision.

Appearances:

C. Schilling on his own behalf.
P. Ellison on behalf of the Respondent.

Hearing details:

2020.
Perth (by Telephone):
May 29.

Printed by authority of the Commonwealth Government Printer

<PR720964>

 1   See Applicant’s form F2, answer to question 2.1.

 2   Transcript at PN23, PN26, PN27 and PN293.

 3   Ibid., at PN43.

 4   Ibid., at PN47.

 5   Ibid., at PN54.

 6   FWC Court Book at pages 78 to 90.

 7   Transcript at PN114.

 8   Witness statement of G. Johnson, FWC Court Book at page 69 and Transcript at PN142 to PN144.

 9   Transcript at PN268 to PN271.

 10   Ibid., at PN316.

 11   Ibid., at PN311.

 12   Ibid., at PN27.

 13   Ibid., at PN313 to PN314.