David Appleyard v Dragi Panovski t/as Powr Electronics and Alarms

[2015] FWC 5320

[2015] FWC 5320

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s 394 - Application for unfair dismissal remedy

David Appleyard
v
Dragi Panovski t/as Powr Electronics & Alarms
(U2014/12766)

DEPUTY PRESIDENT SAMS SYDNEY, 5 AUGUST 2015

Termination of employment – unfair dismissal application – dismissal not a case of genuine redundancy – whether dismissal harsh, unreasonable or unjust – dismissal substantively and procedurally unfair – remedy of reinstatement impractical – compensation ordered – account taken of applicant’s role in dismissal circumstances – orders made.

BACKGROUND
[1] On 6 March 2015, in a decision of the Commission as presently constituted, I found that an unfair dismissal application, lodged by Mr David Appleyard (the ‘applicant’), pursuant to s 394 of the Fair Work Act 2009 (the ‘Act’) had been lodged within the 21 day statutory time period; See: David Appleyard v Powr Electronics[2015] FWC 1560 (the ‘jurisdictional decision’).

[2] During the earlier proceeding, the employer, Drag Panovski t/as Powr Electronics & Alarms (the ‘respondent’) had claimed that:

(a) the applicant’s unfair dismissal application was lodged outside the 21 day statutory time limit set out at s 394(2) of the Act; and

(b) the applicant’s dismissal was a case of ‘genuine redundancy’ and therefore he was not a person protected from unfair dismissal (s 385 of the Act).

[3] In summary, the Commission firstly determined that the applicant was dismissed at the employer’s initiative on 19 September 2014. As his application was filed on 24 September 2014, the unfair dismissal application had been filed within the prescribed time limit. Secondly, after reciting an extraordinary set of circumstances (in which the applicant had played a less than honourable role), it is apparent from my conclusions at paras [25]-[33], that the employer’s claim of a ‘genuine redundancy’ was patently false. As the earlier proceedings dealt solely with the question of whether the application was lodged in time and, if not, whether an extension should be granted, pursuant to s 394(3) of the Act, I did not expressly find that the dismissal was not a ‘genuine redundancy’, within the meaning of s 389 of the Act. To the extent that it is necessary to do so and, given my findings at paras [25]-[33] of the jurisdictional decision rejecting the version of events of the respondent, I find that the applicant’s dismissal was not a case of genuine redundancy. That being so, and without repeating my earlier findings, it appeared, prima facie, that the applicant’s dismissal was substantively and procedurally unfair, or in the express words of the statute – ‘harsh, unreasonable and unjust’ within the meaning of s 387 of the Act.

[4] However, as neither party had expressly addressed the provisions of s 387 or 392 of the Act, the parties were directed to file any further evidence and submissions on the issues of whether the applicant’s dismissal was unfair and, if so, what remedy, if any, should be awarded by the Commission. Unfortunately, both parties largely repeated their earlier evidence and submissions. I note, in particular that the respondent’s submission sought to reagitate the very matters he relied on in the earlier proceedings and which the Commission had expressly rejected in the jurisdictional decision.

[5] The matter was listed for further hearing on 25 June 2015. The applicant was assisted by Ms J Francis and Mr Panovski appeared for himself, as the owner of the respondent. Given the unusual circumstances of this case, I decided to direct the parties to confer as to settlement of the claim. However, upon resumption, the Commission was advised that no agreement could be reached.

[6] Both parties then put brief submissions as follows:

‘MR APPLEYARD:  I believe throughout my employment with Powr Coffee and Powr Electronics this employer has manipulated my entire workplace existence to his own advantage, believing he is above the law and can do whatever he wants to do to people without repercussion.  He did this knowing - without any conscience or care about me.  He thought he could take advantage of not long of him knowing my competence, he’s shown he’s continuous throughout my employment and he has manipulated me.

He has underpaid me to suit himself and then terminated my employment without a second thought, totally dismissing my rights as an employee or my financial gain for himself.  His treatment and not only his manipulation - his conduct and his behaviour as an employer is wrong in every sense.  It’s also illegal.  I believe not only has his treatment towards me been nasty, unfair, dishonest, I hope never to encounter an employer or a person like this in my working life again.  I believe this employer should be dealt with accordingly and that my termination is seen exactly the way it is, given on how it was carried out and that what he has done is seen not only harsh, manipulative, dishonest, unreasonable.  I believe he should be penalised with his wrongdoings and the court finds out the income in my favour.’

[7] Mr Panovski said:

‘MR PANOVSKI:  I don’t believe that I’ve - there’s any reason why I unfairly dismissed him and there’s no hard - unjust.  I believe everything I’ve done is what was required at the time to help support me, my family and my business.  I don’t think I’ve harshly - gave Dave any harsh injustice.  I gave him termination due to the fact that we just never had the volume of work.  The reason is just, yes - I just feel the request of what they’re seeking is just too harsh for me.’

[8] As little had been said about remedy, the Commission invited the parties to address the issue of remedy in further written submissions supported by any other documentary evidence. Considering Mr Panovski’s comments on record about his difficult financial circumstances, he was particularly directed to focus on the viability of the employer’s enterprise, as required by s 392(2)(a) of the Act.

FURTHER SUBMISSIONS

[9] Mr Panovski provided the Commission with the following documents:

• Unsigned personal income and expenditure statements for the years 2013 and 2014 seemingly prepared by a tax agent, Mr Tony Vallasso (also unsigned) on 25 June 2015. It is unclear whether these statements had been actually lodged with the ATO.



• A final statement for a contract of the sale of a property owned by Mr Panovski.



• A one year residential tenancy agreement for the above property, with Mr Panovski as the named tenant.

Mr Panovski added that he had downsized his business from 20 employees to nine in the last 12-18 months.

[10] As to remedy, Mr Panovski noted the applicant sought 15 weeks’ compensation based on the period he claimed he was out of work. However, Mr Panovski referred to a print-out of a Facebook exchange between the applicant and Mr Panovski’s business partner, Shawn Burns on 1 October 2014, which was expressed as follows:

Mr Burns:

got a job yet

Applicant

Mr Burns:

what does that mean?

Applicant

Ye

Mr Burns:

what doing?

with dragi [Mr Panovski]?

Applicant:

Nah not with him

Just working with brother for now

Mr Burns:

nice doing what?

Applicant:

Loading and unloading new car at holden

Mr Burns:

sweet you like it?

Applicant:

Ye man drivin brand new cars

Mr Burns:

Sweet

Applicant:

Wbu

Mr Burns:

nah leg is still broken

[11] The applicant responded to Mr Panovski’s filed documents by submitting that:

(a) the unsigned personal tax file returns were not properly audited Profit and Loss statements of his business/es. They were prepared on the day of the hearing and do not even appear to have been lodged with the ATO. In any event, they show that Mr Panovski could still draw a wage for himself from his business/es;

(b) none of the documents relating to the sale of Mr Panovski’s house (or any other document) indicate that the sale was made in order to pay an unpaid tax bill, as claimed. The documents disclose that Mr Panovski received $382,594.48 after discharging a loan over his property. The applicant noted that the respondent had failed to mention he was renting his former house, because he was building a new house in the Elizabeth Hills area;

(c) despite promising to do so, the respondent had never provided him with a breakdown of payments made to him on termination;

(d) Mr Panovski trades as a sole trader and the business register discloses he is a partner (with SD Burns) of the Company trading as Powr Coffee.

[12] In any event, the applicant put that the respondent should not be permitted to adduce further evidence when he has had five months to do so and he continued to file misleading, incomplete and irrelevant material.

[13] As to the Facebook conversation, the applicant responded by providing his personal bank records. These show he had not been paid any wages in the three month period September – November 2014. He provided a signed letter from his new employer, which stated:

‘To Whom It May Concern,

This letter serves to verify that David Appleyard is employed by the Peninsula Motor Group in our Detailing section.

Initially we were able to provide David with a few hours of work over the 2014 Christmas period but were unable to offer him any further work until late February 2015.’

[14] The applicant further denied that he was an apprentice at the time of his termination as claimed by Mr Panovski, in order to absolve him from making redundancy payments to the applicant.

[15] Finally, the applicant provided Facebook extracts from Mr Panovski, in which he frequently says, ‘livin the dream’. Such a comment is hardly consistent with someone struggling financially.

CONSIDERATION

[16] Section 387 of the Act is in the following terms:

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.

[17] The well known passage from Byrne & Frew v Australian Airlines Ltd (1995) 185 CLR 410 (‘Byrne’) is relevant to the consideration of whether a dismissal is ‘harsh, unjust or unreasonable.’ Their Honours McHugh and Gummow JJ said at para [128]:

‘It may be that the termination is harsh but not unjust or unreasonable, unjust but not harsh or unreasonable, or unreasonable but not harsh or unjust. In many cases the concepts will overlap. Thus, the one termination of employment may be unjust because the employee was not guilty of the misconduct on which the employer acted, may be unreasonable because it was decided upon inferences which could not reasonably have been drawn from the material before the employer, and may be harsh in its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct in respect of which the employer acted’.

[18] The meaning of ‘valid reason’ in s 387(a) was considered by Northrop Jin Selvachandran v Peterson Plastics Pty Ltd (1995) 62 IR 371. This meaning has been applied by members of the Commission and its predecessors for many years:

‘In its context in s 170DE(1), the adjective “valid” should be given the meaning of sound, defensible or well founded. A reason which is capricious, fanciful, spiteful or prejudiced could never be a valid reason for the purposes of s.170DE(1). At the same time the reasons must be valid in the context of the employee’s capacity or conduct or based upon the operational requirements of the employer’s business. Further, in considering whether a reason is valid, it must be remembered that the requirement applies in the practical sphere of the relationship between an employer and an employee where each has rights and privileges and duties and obligations conferred and imposed on them. The provisions must “be applied in a practical, commonsense way to ensure that the employer and employee are treated fairly.’

[19] Ultimately, this matter is very straightforward. For the avoidance of doubt, I make findings under s 387 of the Act as follows:

(a) there was no valid reason for the applicant’s dismissal (s 387(a)), in that he participated in a sham arrangement with his employer, Mr Panovski, in a plan in which the applicant and another employee were to be dismissed for reasons of redundancy, but the applicant was secretly promised his job was safe. Mr Panovski had other ideas. The reasons for dismissal were capricious, fanciful and concocted.

(b) the notification of the reason for dismissal was given. However, that reason was proven to be based on a falsehood (s 387(b)).

(c) there was no evidence to suggest that the applicant was dismissed for any reasons related to his capacity or conduct. Accordingly, there was nothing to which the applicant could respond (s 387(c));

(d) there was no unreasonable refusal for a support person to be present because there was no meeting in which the applicant was informed of the real reason for his dismissal (s 387(d));

(e) Apart from some vague, irrelevant and post facto claim of damage to a farm vehicle owned by the respondent, warnings of poor or unsatisfactory performance were never given (s 387(e));

(f) the size of the employer’s enterprise (20 employees) is a neutral factor in this case (s 387(f));

(g) had the respondent sought any advice about the matter, no credible advisor would have advised or sanctioned Mr Panovski’s conduct (s 387(g));

(h) as to other relevant matters, I simply refer the reader to my earlier decision.

[20] Having found the applicant’s dismissal was unfair, I turn to the question of remedy, but make a few pertinent comments at the outset.

[21] Regrettably, Mr Panovski has repeatedly promised to provide evidence to substantiate his claims, but when put to the test, the evidence he provides is either suspect, incorrect, incomplete or irrelevant. It beggars belief that someone in business would operate in such a cavalier and unprofessional manner when called upon to make good his promises with documents which, more often than not, bear little relevance to the issue or fact they purport to demonstrate. His approach to this case has been consistently unsatisfactory and self-serving.

[22] More recently, Mr Panovski told the Commission, on the record, that he could provide properly audited Profit and Loss Statements for his business/es as the following exchange indicates:

‘MR PANOVSKI:  Whatever you request; if you need profit-and-loss statements for the company I’m happy to supply them.

THE DEPUTY PRESIDENT:  Are they audited; properly audited?

MR PANOVSKI:  Yes, they are.’

[23] Instead, Mr Panovski produced unsigned personal income tax returns for 2013 and 2014. These statements are obviously not evidence of the properly audited Profit and Loss Statements of his companies and/or businesses. They do not fulfil what Mr Panovski undertook to provide during the hearing on 25 June 2015. In any event:

(a) Given the statements are unsigned by Mr Panovski and his tax agent, it is entirely unclear if they are the statements which were actually filed with the ATO at the relevant times, or at any time; and

(b) It is very curious that the statements are dated 25 June 2015, the very day of the hearing of this matter and immediately after Mr Panovski said he would make audited Profit and Loss Statements available to the Commission.

[24] I do not accept that these incomplete returns represent a true picture of the financial state of Mr Panovski’s business/es. Given that no other evidence was provided as to the viability of the employer’s enterprise, I am unable to make findings, as sought by the respondent, that the order I propose to make would adversely impact on the viability of Mr Panovski’s business/es. I will accept no further evidence (should it exist) on this matter, given the numerous opportunities Mr Panovski has had to demonstrate that the applicant’s dismissal was a case of genuine redundancy, or that he is in difficult financial circumstances.

[25] Secondly, residential property sales are not an indicia of the viability of the employer’s enterprise, particularly when the sale relates to a private residence, for which no explanations for the reasons for the sale or the subsequent rental of the same property by the former owner, were offered. On its face, it seems a very odd arrangement.

[26] Thirdly, Mr Panovski’s silly and desperate attempt to discredit the applicant by providing new evidence in respect to a Facebook exchange between the applicant and Mr Burns fell flat on its face. I accept that the applicant had not misled the Commission when he said he had obtained alternative employment in February 2015. This was plainly demonstrated by the letter from the applicant’s new employer. The fact the applicant may have secured a few hours’ work prior to this time is not inconsistent with what he told the Commission. I accept his bona fides in that regard. On the other hand, I note, in passing, that the material from Facebook provided by the applicant (also new evidence) appears to suggest Mr Panovski had attended a number of interstate sporting events in recent times. While this might appear to be inconsistent with Mr Panovski’s account of financial difficulties, it is unnecessary to take this matter any further.

[27] Fourthly, Mr Panovski has repeatedly promised to provide a breakdown of the payments made to the applicant on his termination. He has consistently failed to do so. While not a matter for this Commission, I am not satisfied that Mr Panovski has fulfilled all of his obligations in this respect and it is open for the applicant to pursue these matters through the Fair Work Ombudsman and/or a Court of competent jurisdiction.

[28] If it is not already pellucidly clear, I find Mr Panovski to be an employer who has emerged from these proceedings with little credit. He is a person who makes statements and claims which cannot be substantiated. He chooses to ignore legitimate and simple requests for relevant information or provides material which is either dubious, incomplete or irrelevant.

Appropriate remedy

[29] I turn now to set out the provisions of ss 390-392 of the Act:

390 When the FWC may order remedy for unfair dismissal

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

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

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

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

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

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

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

391 Remedy—reinstatement etc.

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

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

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

(1A) If:

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

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

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

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

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

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

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

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

Order to restore lost pay

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

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

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

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

392 Remedy—compensation

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(a) the total amount of remuneration:

(i) received by the person; or

(ii) to which the person was entitled;

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

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

[30] Further to my earlier decision, the circumstances described therein and the fact the applicant has obtained alternative employment, I am satisfied that reinstatement of the applicant in this case is inappropriate (s 390(3)(a).

[31] I propose to make an order for compensation for the applicant’s unfair dismissal. As the applicant sought 15 weeks’ pay based on the period he was out of work, I can award no more than he has claimed. However, I am prepared to take that amount as the starting point. In doing so, I have taken into account each of the matters in ss 392(2). I have decided it is appropriate to reduce the amount of compensation by three weeks, having regard to the admitted role the applicant played in respect to the misleading circumstances which ultimately led to his dismissal (s 392(3)).

[32] For completeness, the amount I propose to award does not include a component for shock, distress or humiliation or other analogous hurt caused to the applicant by reason of his dismissal (s 392(4)) and does not exceed the amount of remuneration to which the applicant was entitled in the 26 weeks immediately before his dismissal (s 392(5)). Further, I am satisfied that such an outcome represents a ‘fair go all round’ as set out in s 381(2) of the Act.

[33] Based on an amount of $550 per week (as set out in the Employer’s Original Form F3 form), I intend to order a payment of $6,600, based on $550 x 12 weeks. This amount to be paid to the applicant within 21 days of today.

[34] Orders giving effect to the above findings will be published contemporaneously with this decision.

DEPUTY PRESIDENT

Appearances:

Mr D Panovski for the respondent.

Applicant in person assisted by Ms J Francis.

Hearing details:

2015:

Sydney

25 June.

Final written submissions:

Respondent: 9 July 2015

Applicant: 20 July 2015

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<Price code C, PR570144>