Expedit (Stan) Carvalho v J-Corp Pty Ltd T/A Perceptions the 2 Storey Builder

[2013] FWC 4677

[2013] FWC 4677

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Expedit (Stan) Carvalho
v
J-Corp Pty Ltd T/A Perceptions The 2 Storey Builder
(U2012/17273)

COMMISSIONER WILLIAMS PERTH, 19 JULY 2013

Termination of employment.

Background

[1] This matter involves an application made by Mr Expedit (Stan) Carvalho (Mr Carvalho or the applicant) under section 394 of the Fair Work Act 2009 (the Act). The respondent to this application is J-Corp Pty Ltd T/A Perceptions The 2 Storey Builder (the respondent).

[2] The applicant was employed by the respondent as a Sales Consultant from 1999.

[3] In December 2012 the respondent sought to have the applicant sign one of two alternative new contracts that were offered to him. One of these was entitled Contractor Agreement Home Building Sales Consultant (the Contractor Agreement) and the other was entitled Sales Representative Employee Agreement (the Sales Representative Agreement).

[4] The applicant did not agree to sign either of the new contracts proposed by the respondent.

[5] The applicant says that he was dismissed by the respondent on 18 December 2012.

[6] The respondent denies this and says the applicant resigned on that date and there was no termination at the initiative of the employer.

[7] The critical question in this case is whether there was a termination at the initiative of the employer.

The evidence

[8] Much of the evidence on this matter is not controversial however as will be seen at some critical points there is disagreement between the applicant and the respondent’s witnesses on what was said between them.

[9] The respondent is a homebuilder specialising in two-storey homes and the applicant, Mr Carvalho, was employed as a Sales Consultant whose job was to secure clients to sign contracts for a house to be constructed. Mr Carvalho’s remuneration was primarily commission based.

[10] On commencing employment in 1999 Mr Carvalho signed a contract which was entitled Agreement for Home Building Sales Consultants.

[11] In 2011 the respondent’s then General Manager Mr Oldfield and his replacement Mr De Santos commenced a process to clarify the status of the respondent’s sales consultants and update their arrangements.

[12] In around April of 2011 Mr Oldfield approached Mr Carvalho and another Sales Consultant Mr Rogers wanting to change their status from that of an employee to that of a contractor working for the respondent through a corporate structure. Both Mr Carvalho and Mr Rogers told him they did not want to do that.

[13] Similar approaches were made in early 2012 by Mr De Santos to both sales consultants. Mr De Santos told them that senior management wanted to make changes so that they would be employed as a contractor and no longer as an employee. Again both Mr Carvalho and Mr Rogers rejected the proposal.

[14] In around May of 2012 Mr De Santos was replaced by Mr Laurie Baker. Around the same time Mr Clayton Dias was appointed as the Sales Manager to whom Mr Carvalho reported.

[15] Mr Dias agrees that the instructions Mr Baker gave him regarding the situation prior to meeting with Mr Carvalho on 6 December 2012 was that the arrangements for Mr Carvalho and Mr Rogers had to be changed 1.

[16] On 6 December 2012 Mr Dias met with Mr Carvalho and told him that the whole situation with his and Mr Rogers’ contracts had come to a head and could no longer be put off. He said that they were the only two consultants remaining on the old contract.

[17] Mr Dias explained that there were two contracts, one was for employees and the other was for Mr Carvalho to form a company. He said to Mr Carvalho that he should sign the company contract.

[18] The company contract referred to the Contract Agreement.

[19] Mr Carvalho indicated he needed to get some advice on the issue and Mr Dias did not object to that.

[20] Mr Carvalho’s evidence was that he asked Mr Dias to put something in writing regarding the situation. Mr Carvalho says Mr Dias was saying that he, Mr Carvalho, had to sign a contract and that there was no option for him and that this had come all the way from the top 2.

[21] Mr Carvalho was given copies of both contracts. There is a disagreement between Mr Carvalho and Mr Dias as to whether the contracts were given to him on 6 or 7 December 2013 however nothing turns on this.

[22] It is necessary at this point to deal with the evidence of Mr Rogers. As can be seen from the above Mr Rogers was in a similar position to Mr Carvalho. Mr Rogers was generally being approached by Mr Dias, and it will be seen shortly Mr Baker, on the same basis as was the case for Mr Carvalho. The respondent was seeking to have both Mr Carvalho and Mr Rogers accept one of the new contracts.

[23] The respondent objects to the majority of Mr Rogers’ evidence in his witness statement on the basis that it is not relevant to this application. The witness statement of Mr Rogers indicates that Mr Carvalho was not party to the majority of the events about which Mr Rogers gives evidence.

[24] Whilst I agree with the respondent that Mr Carvalho was not party to all the events that Mr Rogers’ evidence deals with, what is clear from the evidence of Mr Baker is that the respondent was dealing with Mr Carvalho and Mr Rogers together because they were both in the same situation, each being one of the two remaining sales representatives who were engaged on a legacy agreement which the respondent wanted to change. The evidence is that both Mr Rogers and Mr Carvalho were addressed by Mr Baker jointly in the meeting on 10 December 2012. Mr Baker set the same deadlines initially for both Mr Carvalho and Mr Rogers to respond and Mr Carvalho and Mr Rogers were both being presented with the same two alternative contracts by the respondent. In my view the evidence Mr Rogers gave of his separate interactions with Mr Baker is evidence relevant to this application because given the context explained above inferences may be able to be drawn from Mr Rogers’ treatment by Mr Baker that are relevant to questions of how Mr Baker was on balance likely to have treated Mr Carvalho. I will admit the witness statement and the oral evidence of Mr Rogers as evidence in this application.

[25] On Monday, 10 December 2012 there was a meeting with Mr Baker, Mr Carvalho, Mr Rogers and Mr Dias. The issue of the new contracts being offered by the respondent was discussed.

[26] Both Mr Carvalho and Mr Rogers requested some time to get further advice and consider the matter and Mr Baker agreed they could do this and gave them until the close of business on Friday, 14 December 2012 to do so.

[27] What else was said during this meeting is an area of disagreement between the witnesses.

[28] Mr Carvalho says that Mr Baker told him and Mr Rogers that they had to sign a new contract. He asked Mr Baker whether the terms of the contract could be discussed or compromised on and Mr Baker said that the contracts were not negotiable.

[29] Mr Carvalho’s evidence was that he said that perhaps he should wait until the end of the financial year at the very least to which Mr Baker replied that “if the contracts were not signed by Friday then you guys no longer have a job here”.

[30] Mr Carvalho asked Mr Baker to put all of this in writing but Mr Baker said he cannot do that. He said only Julian Ambrose (the respondent’s General Manager) could give it to Mr Carvalho in writing and he then told Mr Carvalho, in what the applicant describes as a threatening manner, that Mr Baker would not ask Mr Ambrose to do this and Mr Carvalho would be skating on very thin ice if he were to do that.

[31] Mr Rogers’ evidence about the same meeting was that Mr Baker stated to them that the contract issue had to be resolved and he needed to sign that day one of the contracts which they had been given.

[32] Mr Rogers says he asked Mr Baker if there was any compromise and Mr Baker said there would be no compromise, there was no room for negotiation. Mr Rogers says that Mr Baker explained that if one of the contracts was not signed by the Friday then he would not have a job on Monday.

[33] Mr Rogers conceded that Mr Baker accepted that they should have some more time to get professional input from their advisers however in his oral evidence he says that this was not a willing acceptance by Mr Baker.

[34] It is common ground that Mr Rogers and Mr Carvalho were both allowed more time until Monday, 17 December 2012 to respond.

[35] Mr Baker denies that he gave Mr Carvalho and Mr Rogers any ultimatum during this meeting. Mr Baker denies stating that any time that if one of the contracts was not signed they would not have a job. His evidence was that he made it clear to them that the process was not about moving either of them out of the business and that he did not want them to leave, but that the respondent needed to resolve the current arrangements which were out of date and not compliant with relevant legislation and inconsistent with the current practices.

[36] Mr Baker denies speaking in a threatening manner to Mr Carvalho in response to Mr Carvalho’s request for the respondent’s position to be put in writing by the General Manager.

[37] Mr Dias in his statement regarding the meeting on 10 December 2012 says that Mr Baker did not say anything along the lines that if Mr Carvalho and Mr Rogers did not sign one of the new agreements they would not have a job.

[38] Turning now to the events of 14 December 2012, Mr Carvalho’s evidence is that on this day he spoke to Mr Baker on the phone and told him that he had not been able to get the advice he needed and that he needed to speak to a friend over the weekend. Mr Baker said to him that it was okay but whatever the advice was the contract would have to be signed by Monday, 17 December 2012.

[39] Mr Baker denies saying anything to Mr Carvalho as to the consequences of not signing one of the contracts.

[40] On Friday, 14 December 2012 Mr Rogers also says that Mr Baker spoke to him on the phone. Mr Rogers told him that one of the contracts was pathetic and deficient for him and therefore he needed to fully understand and be advised on the implications of the other contract which involves setting up a company. Mr Rogers says that Mr Baker said that they could discuss it at the Monday meeting but at the end of the day he expected Mr Rogers to sign one of the new contracts or leave.

[41] Mr Baker denies stating to Mr Rogers that he needed to sign one of the contracts or leave.

[42] On the morning of Monday, 17 December 2012 Mr Rogers’ evidence was that he met with Mr Baker after the sales meeting. Mr Baker says that if he didn’t sign a new contract he had to leave. Mr Rogers didn’t sign either of the contracts and says he was told by Mr Baker to go and see Jenny Brown the HR Manager and to vacate his office, pack up and empty everything out and leave by lunchtime the next day.

[43] Mr Carvalho’s evidence was that the same day Mr Baker came down to his office at about 5.00 p.m. and asked if he had signed a new contract. Mr Carvalho told him he wasn’t going to sign anything. Mr Carvalho said that Mr Baker replied that he should pack up his things and leave the following day. When pressed on this under cross examination Mr Carvalho was unsure of the precise words that Mr Baker used. Alternative wording he says Mr Baker may have used were “you should clean out your desk” or “take your belongings and go”. Mr Carvalho in his evidence was adamant that this is what had occurred and that words to this effect were used by Mr Baker. Mr Carvalho understood this to mean that he was no longer to be employed.

[44] In his evidence Mr Baker says he met with Mr Carvalho and Mr Rogers after the sales meeting on Monday, 17 December 2012 and asked them if they had signed one of the new agreements and they both told him they did not intend to do so.

[45] Mr Baker says he told them this was not the place he wanted to be with them that there was a need for them to reach some conclusion but that he did not want them to leave. His evidence was that he sat quietly for a few moments and then questioned where they went from that point.

[46] His evidence was that at the end of the meeting there was no conclusion to the matter.

[47] Mr Baker says he did not inform them that they had to leave, that they were fired or any words to that effect. His evidence also was that he did not tell them to pack up their things or go to see the HR Manager.

[48] The evidence of Mr Carvalho is that the following day Tuesday, 18 December 2012 he met with Ms Brown the HR Manager and she asked him to write out a letter of resignation but he told her he was not resigning he was being dismissed. The HR Manager gave him a document entitled Notice of Termination.

[49] Mr Rogers’ evidence was that on Tuesday, 18 December 2012 he rang the HR Manager Ms Brown to say he was going to be late into the office and she asked whether she would receive his letter of resignation. He told her that he was not resigning he was being sacked.

[50] Later he went into the HR Manager’s office and she gave him a Notice of Termination document.

[51] Ms Brown gave evidence that at no time did Mr Baker inform her that he had terminated or intended to terminate either Mr Carvalho or Mr Rogers.

[52] Her evidence was that on 17 December 2012 Mr Carvalho came into the office and shook her hand and said that he had come to say goodbye. Her evidence 3 was that she assumed that he was resigning and so asked him if it had to be like that and if there was a way of resolving things. Her evidence was that Mr Carvalho said that he understood Mr Baker’s position and that it was a company directive to clarify matters therefore there was no offence or ill feelings.

[53] Her evidence was that Mr Rogers and Mr Carvalho each subsequently asked if they could come to see her saying that they needed to come to see her to “...arrange to be terminated”.

[54] Her evidence was that she believed they had both decided to resign.

[55] Her evidence was that on Tuesday, 18 December 2012 she asked Mr Carvalho why he was resigning and he said that Mr Baker had given him an ultimatum. He said he was unwilling to enter into either of the new agreements and therefore he was requesting termination. Mr Carvalho told her he had no choice but to ask to be terminated 4. She in response wrote on the notice of termination form “Termination due to non-acceptance of contract terms” which was what Mr Carvalho had said to her. Ms Brown says she does not recall requesting a resignation letter from a Mr Carvalho.

[56] The same day she later met with Mr Rogers who advised her that he did not accept the new contract terms and he needed to be terminated. She asked whether he meant he was resigning. Mr Rogers she says responded no, that Mr Baker had made it very clear that he was to be terminated because he did not want to be a contractor. Her evidence was that in the absence of notification from Mr Baker she assumed it was Mr Rogers’ decision to bring his employment to an end.

Findings on the evidence

[57] Critical to the determination of this matter is the difference in the evidence between Mr Carvalho and Mr Baker. In particular whether on Monday, 17 December 2012 having been told by Mr Carvalho that he would not sign either of the two new contracts Mr Baker told Mr Carvalho to pack up his things and leave by the next day and also whether in the days prior to this Mr Baker had told Mr Carvalho that there would be no job for him or he would have to leave his employment if he didn’t sign one of the new contracts.

[58] There is a direct conflict on some points between the evidence of Mr Rogers and Mr Carvalho with that of Mr Baker and also on some points the evidence of Mr Dias.

[59] It is notable that the evidence of Ms Brown, a witness called by the respondent, confirms that immediately after meeting with Mr Baker (the same day) Mr Carvalho said goodbye to her and when she asked him if it had to be like that and if there was a way of resolving things Mr Carvalho said that he understood Mr Baker’s position, that it was a company directive to clarify matters therefore there was no offence or ill feeling 5. Ms Brown’s evidence means at this point Mr Carvalho was saying that he would not longer be working there and this was because of Mr Baker’s position.

[60] The next day Tuesday, 18 December 2012, Ms Brown confirms that Mr Carvalho said the reason he was resigning was that Mr Baker had given him an ultimatum. Mr Carvalho explained to her that he had been unwilling to enter into either of the new agreements and therefore he was “requesting termination”. Again Ms Brown’s evidence confirms that at this point in time Mr Carvalho’s explanation for resigning was that it was the direct result of Mr Baker’s ultimatum.

[61] In addition Ms Brown’s evidence of her discussions with Mr Rogers on Tuesday, 18 December 2012 similarly confirms that Mr Rogers said he was not resigning but that Mr Baker had made it clear that to him he was “to be terminated”, in her words, because he did not want to be a contractor.

[62] Ms Brown’s evidence confirms that at the time Mr Carvalho’s employment ended he believed this was brought about by the ultimatum which Mr Carvalho says he had been given by Mr Baker.

[63] Given Ms Brown’s evidence I can be confident that the evidence of Mr Carvalho and Mr Rogers, that there was an ultimatum from Mr Baker, was not something contrived after they left their employment. That of course does not determine that objectively Mr Baker’s actions amounted to an ultimatum but rather that there is no reason to doubt that Mr Carvalho was saying this was the case and on balance understood this to be the case at the time his employment ended. To this extent Ms Brown’s evidence confirms Mr Carvalho’s evidence that he believed his employment ended because that was what Mr Baker told him must occur if he didn’t sign one of the contracts.

[64] I note here however that the submissions of the respondent addresses the possibility that Mr Carvalho had wrongly assumed that he had to resign or ask to be terminated because he had not accepted either of the new agreements, when objectively this was not the case. The submission asserts the applicant had misunderstood the situation.

Monday, 10 December 2012

[65] The history of the respondent’s attempts to normalise the sales consultant’s contracts is relevant context when considering the conflict in evidence between Mr Carvalho and Mr Rogers on the one hand and Mr Baker and Mr Dias on the other regarding what was said by Mr Baker during the meeting on 10 December 2012.

[66] The history was that approximately a year earlier the then Sales Manager had attempted to persuade Mr Carvalho to move on to a new form of contract but he had refused. Also in 2012 the expectation from senior management, in all probability including the General Manager Mr Ambrose, was that the arrangements for the two remaining sales consultants whom had not accepted new contracts, Mr Carvalho being one of those, would be resolved. Given this background and knowing Mr Carvalho’s previous unwillingness to change his arrangements it would not be inconsistent that Mr Baker might make statements to Mr Carvalho to pressure him to accept one of the new contracts.

[67] The respondent pointed to the fact that Mr Baker had been accepting of the request by Mr Carvalho to get professional advice on his situation and had agreed to extend the deadline for his response to allow this to happen. It was submitted that these actions by Mr Baker were inconsistent with the suggestion that he had made an ultimatum to Mr Carvalho and pressured him.

[68] On this point firstly I note that the evidence of Mr Rogers was that in his view Mr Baker in the meeting on 10 December 2012 agreed to this extension of the deadline for them to seek further advice reluctantly rather than willing. I also think it is likely that Mr Baker was interpreting the request from Mr Carvalho to get more advice to be a positive development. Mr Baker was probably assuming he was seeking advice on which of the two new contracts he should accept, unaware that Mr Carvalho was really considering whether he should reject both contracts and sign neither.

[69] Mr Rogers’ evidence was consistent with Mr Carvalho’s evidence regarding Mr Baker giving them an ultimatum.

[70] Considering this conflict in the evidence regarding the meeting on Monday, 10 December 2012 I find that Mr Baker is more likely than not to have given an ultimatum to Mr Carvalho which made it plain that if neither of the new contracts were accepted by him there would be no job for him and that he would have to leave his employment. As to the other areas of disagreement between Mr Baker and Mr Dias versus Mr Carvalho and Mr Rogers concerning what was said by Mr Baker at this meeting I prefer the evidence of Mr Carvalho and Mr Rogers.

Monday, 17 December 2012

[71] Returning to the conflicts in evidence in terms of the events of Monday, 17 December 2012 and the discussions between Mr Carvalho and Mr Baker and Mr Rogers and Mr Baker.

[72] There is some confusion in the evidence as to the whether these were separate meetings or combined meetings. Mr Baker’s evidence seems to indicate that there was only one joint meeting 6. I consider it more likely that both Mr Rogers and Mr Carvalho are correct on this and that there were separate meetings one in the morning between Mr Baker and Mr Rogers and one later in the afternoon between Mr Baker and Mr Carvalho. That conclusion is consistent with the evidence of both Mr Carvalho and Mr Rogers.

[73] Mr Baker denies at any time telling either Mr Carvalho or Mr Rogers to clear out their desk, pack up their belongings and to leave, after they had respectively advised him that they would not agree to either of the new contracts on offer.

[74] The evidence of both Mr Carvalho and Mr Rogers is that this is what happened - albeit in separate meetings. If there was one combined meeting then I would accept the evidence of Mr Carvalho and Mr Rogers as to what Mr Baker said during that meeting given their evidence is broadly consistent on the critical issues, accepting that their evidence is contrary to Mr Baker’s.

[75] The evidence of Ms Brown demonstrates that Mr Carvalho and Mr Rogers the day after meeting with Mr Baker on 17 December 2012 had both responded in a similar manner. They had both separately come to her to finalise their separation from the respondent and had explained to her this was as a consequence of Mr Baker’s ultimatum.

[76] Mr Baker’s evidence was that the meeting on Monday, 17 December 2012 with Mr Carvalho ended with him only saying that this was not the place he wanted to be, that there was a need for them to reach some conclusion, but that he did not want them to leave and then him sitting silently for a few moments and questioning where they went from there. This explanation however is not consistent with Mr Carvalho’s reaction, which was to the next day leave his employment. Indeed Mr Carvalho the same day told Ms Brown he was leaving because of Mr Baker’s position which is also inconsistent with Mr Baker’s version of the final discussion with Mr Carvalho. Employees generally do not leave their employment without good reason. It is difficult to understand if I accept Mr Baker’s evidence why Mr Carvalho would leave at all. Further it is unlikely that both Mr Carvalho and Mr Rogers both invented stories that they had received ultimatums or had been terminated by Mr Baker which was what they both explained to Ms Brown the very next day.

[77] If Mr Baker’s response to Mr Carvalho rejecting both agreements was as he says, it is also difficult to understand why later upon receiving what he said was the shocking news that both Mr Carvalho and Mr Rogers where leaving he did nothing 7. Mr Baker says he had a sense they were going to resign but there is no explanation for why they would resign if his dealings with them had been as neutral and benign as he says was the case. For the General Manager to lose two apparently valued staff as a result of this process and do nothing about it is however consistent with Mr Carvalho’s version of how Mr Baker had been approaching these matters rather than Mr Baker’s version.

[78] On balance then I find that rather than Mr Carvalho and Mr Rogers both misunderstanding in the same way their situation and their discussion with Mr Baker or both lying about this, that in fact on Monday, 17 December 2012 Mr Baker’s response to Mr Carvalho’s refusal to accept either of the new contracts was to say to Mr Carvalho words to the effect that he was to pack up his desk and leave the following day.

The applicant’s submissions

[79] In December 2012 the respondent sought to have the applicant sign one of two alternative new contracts that were offered to him. One of these was the Contractor Agreement and the other was the Sales Representative Agreement.

[80] It is submitted the new contracts were presented on the basis of being signed by the Friday, 14December 2012 or the applicant would not have a job on the Monday. This deadline was extended until Monday, 17 December 2012.

[81] The Contractor Agreement contemplated and intended that the applicant would incorporate a company to enter the agreement with the respondent.

[82] There was no legal obligation upon the applicant to enter into a new contract of employment with the respondent and accordingly the applicant did not sign either of the new contracts. As both the applicant and Mr Rogers refused to sign they were told to leave the employment as that was the consequence which was made plain to them by Mr Baker.

[83] Furthermore the respondent completed notices of termination and these were each in turn signed off by Mr Baker.

[84] The applicant’s evidence is that he was subjected to a great deal of pressure about the new contracts. Specifically:

1. Mr Baker made it clear that the only choice he had was between the two new contracts;

2. If either contract was not signed he had no job with the respondent;

3. The terms and conditions of either contract were not negotiable; and

4. There would be no negotiations about past entitlements.

[85] It is common ground that the employment ended on 18 December 2012. The applicant submits there is overwhelming evidence that the pressure exerted by Mr Baker was such that section 386(1) (b) of the Act is enlivened and “the person has resigned from his or her employment, but was forced to do so because of conduct, or course of conduct, engaged in by his or her employer,” clearly applies to the applicant.

[86] The applicant contends that on any view of the dismissal (constructive or otherwise) it was harsh, unjust and unreasonable because:

• There was no valid reason for the dismissals.



• The reason given for the dismissals namely the failure to agree to new conditions of employment has no basis in law.



• The applicant was denied natural justice.



• The respondent is a large corporation with a dedicated human resource management department with specialists or expertise in employment law.



• The applicant was a long serving employee.



• The applicant is of a mature age.

The respondent’s submissions

[87] The applicant claimed he was unfairly dismissed from his position of sales consultant with the respondent. The respondent however submits that the applicant resigned on 18 December 2012 and that there was no termination at the initiative of the respondent.

[88] Section 386(1) of the Act provides that a person has been dismissed if the person’s employment has been terminated on the employer’s initiative.

[89] For a termination to be “...on the employer’s initiative” the actions of the employer must have been the “principle contributing factor” in bringing about the termination 8.

[90] The respondent submits that the actions or words of the respondent were not the principle contributing factor to the applicant’s termination but that the applicant took active steps to bring about his own termination.

[91] The evidence which supports this includes:

• The applicant requested a meeting with the respondent group HR Manager, Ms Brown to arrange for termination.



• The termination process is at odds with the respondent’s usual dismissal process.



• The applicant asked Ms Brown to write “Termination due to non-acceptance of contract terms” on the notice of termination form and Ms Brown acted on the applicant’s representations.

[92] To establish the termination was on the employer’s initiative it must have resulted “...from some action on the part of the employer... intended to bring the employment to an end...” or from action which “...would on any reasonable view probably have that effect... 9”.

[93] The evidence of Mr Baker and Ms Brown is that neither of them intended at any stage for the applicant’s employment to end.

[94] Mr Baker’s evidence was that no words of dismissal were used by him during his meetings with the applicant and the applicant was not told that he would no longer have a job if he did not sign one of the new agreements nor was he told that he should pack up his things and leave. In fact Mr Baker advised the applicant that he did not want him to leave his employment with the respondent.

[95] Whilst Mr Baker did ask the applicant to sign one of the contracts offered to him by 17 December 2012, he did not state what the consequence of the applicant’s failure to sign would be. Nor it is submitted can it be ascertained from any of the words used by Mr Baker when the applicant’s employment would come to an end. His evidence is that the meeting on 17 December 2012 was left up in the air.

[96] Further the respondent submits that the applicant has claimed he was forced to resign because of pressure exerted on him by Mr Baker however the evidence of Mr Baker is that he did not say or do anything which would have forced the applicant to resign or to think he had no real choice but to resign 10.

[97] The respondent submits it cannot be said that the request of an employee to sign an updated contract left the applicant in a position that he had no real choice but to resign.

[98] Whilst it is accepted the evidence is Mr Carvalho told Ms Brown that his reason for leaving was that he did not accept the contractual terms that were presented to him the conclusion Mr Carvalho says he had come to, that he had no choice but to ask to be terminated, was an assumption on his part and a subjective opinion on his part.

[99] The respondent submits Mr Carvalho may have come to the view that he had to ask to be terminated, or resign, because he did not accept the terms of either of the contracts however the question is not whether he held that view but whether it would be objectively correct and reasonable for him to hold that view. The respondent submits this was simply an assumption on his part and a wrong assumption, it was a misunderstanding that was not objectively reasonable to hold.

[100] It is submitted that it was the applicant’s conduct which brought about the end to his employment and it is submitted that the applicant did not behave in a manner conducive to someone who had been forced to resign by reason of his employer’s conduct. The respondent contends that the applicant had prior to his meetings with Mr Baker already resolved to resign and so brought the termination of his employment to an end himself.

[101] The respondent says the termination was not at the employer’s initiative, Mr Carvalho was not dismissed by the respondent and so this application should be dismissed.

Consideration

[102] Section 386 of the Act below provides that an employee has been dismissed if their employment has been terminated on their employer’s initiative but in addition an employee who has resigned is taken to have been dismissed if the employee was forced to resign because of the conduct, or a course of conduct, engaged in by their employer.

“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...”

[103] In this case, given the facts I have found above, I am satisfied that Mr Baker dismissed Mr Carvalho on 17 December 2012 when he told him that he should pack up his desk and leave the following day. Mr Carvalho followed this direction from Mr Baker and accordingly approached Ms Brown the next day for his employment separation to be processed or as he expressed it “to be terminated”. The employment terminated on Mr Baker’s initiative.

[104] If I am wrong in that and Mr Carvalho rather resigned his employment on 18 December 2012 then I agree that he did so because of the course of conduct engaged in by Mr Baker from 10 December 2012 onwards. Specifically on 10 December 2012 I have found that Mr Baker made it plain that a failure to accept one of the two contracts offered would mean that Mr Carvalho would have no job and would have to leave, in addition Mr Baker’s reaction to requests to have the respondent’s position put in writing was to respond in an aggressive manner and his statements that there would be no negotiation and no compromise over the issue did pressure Mr Carvalho to accept one of the contracts and created the understanding that the only alternative was for him to leave his employment.

[105] Given this course of conduct by Mr Baker it was objectively reasonable for Mr Carvalho to hold the view that not accepting either of the contracts offered by the respondent meant he had to resign his employment. As such I am satisfied that this resignation amounts to a constructive dismissal.

[106] Having determined that the respondent dismissed the applicant the further question to be decided is whether the dismissal was unfair.

[107] Section 387 of the Act sets out the criteria the Commission must take into account as follows.

“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.”

[108] In this case I have found that Mr Carvalho was dismissed by the respondent because he would not agree to accept either of the two new contracts offered. There was no obligation on Mr Carvalho to agree to a variation to his arrangements and as such there was no valid reason for his dismissal related to his capacity or conduct.

[109] Given the facts of this matter the issues to be considered under section 387(b) through to and including (e) of the Act are not relevant.

[110] The respondent is a large business with approximately 260 employees at the time the applicant was dismissed. The respondent does have dedicated human resource management specialists within its business. Considering this the manner in which the respondent dealt with the issue of Mr Carvalho’s arrangements in December of 2012 was quite unsatisfactory.

[111] Mr Carvalho had been employed for more than 13 years at the time of his dismissal.

[112] In the circumstances I am satisfied that Mr Carvalho was unfairly dismissed by the respondent.

Remedy

[113] Section 309 of the Act explains the remedies available where the Commission is satisfied an applicant has been unfairly dismissed.

“390 When the FWC may order remedy for unfair dismissal

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

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

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

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

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

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

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

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

[114] In this case I am satisfied that the applicant was protected from unfair dismissal at the time of being dismissed and has been unfairly dismissed.

[115] The dismissal of Mr Carvalho came about through no criticism of his conduct or capacity. Mr Carvalho, Mr Baker and Mr Dias each to their credit gave their evidence regarding the relevant events in a relatively calm and dispassionate manner and so I have no reason to believe that the employment relationship cannot sensibly be restored.

[116] Accordingly I am satisfied that reinstatement of the applicant is appropriate in this instance.

[117] The provisions of the legislation dealing with the Commission’s particular powers to order reinstatement are set out below.

“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.”

[118] It is my intention to issue an order that Mr Carvalho is reappointed to the position in which he was employed immediately before his dismissal.

[119] I consider it appropriate to also issue an order maintaining the continuity of the applicant’s employment and the period of the applicant’s continuous service with the employer.

[120] I also consider it is appropriate in the circumstances to issue an order that the respondent pay to Mr Carvalho an amount for the remuneration lost, or likely to have been lost, by him because of the dismissal.

[121] Mr Carvalho was remunerated on the basis of commissions earned from contracts he arranged with clients to have houses built by the respondent. The terms of the applicable Agreement for Home Building Sales Consultants specified that consultants shall only be entitled to commissions on contracts which become unconditional. With regard to any order to restore pay Mr Carvalho lost because of his dismissal both parties have corresponded with the Commission following the hearing and there is disagreement about the contracts which Mr Carvalho had negotiated before dismissal and whether if he had remained in employment he would have been entitled to commissions from these contracts and further if he had remained in employment how many other contracts he would have been likely to settle which would have resulted in additional commissions being payable.

[122] These matters are relevant for the Commission to determine the amount of remuneration lost or likely to have been lost by the applicant because of his dismissal.

[123] In the circumstances I direct the parties to confer on the question of the amount of remuneration lost or likely to have been lost because of Mr Carvalho’s dismissal and advise the Commission within 14 days whether they have agreed on this amount and if so how this was calculated. If after 14 days there is no agreement between the parties on this quantum I will list the matter for a further hearing to take evidence and submissions relevant to determining these issues for the purposes of an order to restore lost pay under section 391(3) of the Act.

COMMISSIONER

Appearances:

P Mullally of Workclaims Australia for the applicant.

A Power of Counsel for the respondent.

Hearing details:

2013.

Perth:

June 11,12.

 1   Transcript at PN846 and PN847.

 2   Ibid. at PN133.

 3   Exhibit R2 at paragraph 30 to 35.

 4   Transcript at PN754.

 5   Exhibit R2 at paragraph 30.

 6   Ibid. at PN595.

 7   Ibid. at PN609, PN610, PN614 -PN619.

 8   Mohazab v Dick Smith Electronics Pty Ltd (No 2) (1995) 62IR 200.

 9   Rheinberger v Huxley Marketing Pty Ltd (1996) 60 IR 154 at 160.

 10   O’Meara v Stanley Works Pty Ltd 2006 58 AILR.

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