FARAH v AHN & ANOR - [2012] FMCA 44

FEDERAL MAGISTRATES COURT OF AUSTRALIA

FARAH v AHN & ANOR

[2012] FMCA 44

INDUSTRIAL LAW – Dismissal from employment as shop manager – whether breach of fixed term contract – whether because of age – contraventions of Fair Work Act – failure to provide Fair Work Information Statement – failure to pay untaken annual leave – liability of manager of employer corporation – damages and penalties ordered.

Evidence Act 1995 (Cth), s.140(2)
Fair Work Act 2009 (Cth), ss.44, 87, 90(2), 117, 123(1), 125, 342, 351, 360, 361, 369, 545(2)(b) 546, 550, 570
Federal Magistrates Act 1999 (Cth), s.76

Australian Ophthalmic Supplies Pty Ltd v McAlary‑Smith (2008) 165 FCR 560, [2008] FCAFC 8 at [54]
Barclay v The Board of Bendigo Regional Institute of Technical and Further Education (2011) 274 ALR 570; [2011] FCAFC 14
Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153
Fletcher v Minister for the Environment and Heritage [1999] SASC 223
Fox v Percy (2003) 214 CLR 118
Guthrie v News Ltd [2010] VSC 196
Ikin v Danish Club Dannebrog (2001) 140 IR 101
Macdonald v Australian Wool Innovation Ltd [2005] FCA 105
Qantas Airways Ltd v Gama (2008) 167 FCR 537
Reynolds v Southcorp Wines Pty ltd (2002) 115 IR 152
Stephens v Australian Postal Corporation (No.2) [2011] FMCA 448
Stevenson, Jaques & Co v McLean (1880) 5 QBD 346

Applicant:

HABIB FARAH

First Respondent:

RICKY AHN

Second Respondent:

PAVILION SPACE PTY LTD T/AS AERO CAFÉ & BAR

File Number:

SYG 955 of 2011

Judgment of:

Smith FM

Hearing dates:

22 & 23 November 2011

Delivered at:

Sydney

Delivered on:

3 February 2012

REPRESENTATION

Counsel for the Applicant:

Mr M Moir

Solicitors for the Applicant:

Macquarie Lawyers Burwood

Counsel for the Respondents:

Mr P Moorhouse

Solicitors for the Respondents:

Unsworth Legal

THE COURT DECLARES THAT:

The second respondent, Pavilion Space Pty Ltd, contravened section 44 of the Fair Work Act 2009 (Cth) (‘the Act’) on or about 17 December 2010 in relation to the National Employment Standard provided in s.125 of the Act, requiring it to give to the applicant “before, or as soon as practicable after, the employee starts employment” the ‘Fair Work Information Statement’ published by the Fair Work Ombudsman in the Gazette
The second respondent, Pavilion Space Pty Ltd, contravened section 44 of the Act on or about 3 February 2011, in relation to the National Employment Standard provided in s.90(2) of the Act, requiring it to pay to the applicant an amount for untaken paid annual leave accruing under s.87 “when the employment of an employee ends”.
The first respondent, Ricky Ahn, was a person involved in each of those contraventions pursuant to s.550 of the Act and is taken to have contravened the same provisions.

THE COURT ORDERS THAT:

The second respondent, Pavilion Space Pty Ltd must pay a penalty of $1000 in relation to each of its contraventions, pursuant to s.546(1) of the Act.
The first respondent, Ricky Ahn, must pay a penalty of $200 in relation to each of the contraventions, pursuant to s.546(1) of the Act.
The above penalties, totalling $2000 payable by Pavilion Space Pty Ltd and $400 by Ricky Ahn, must be paid to the applicant, Habib Farah, within 28 days after the making of this order.
The second respondent, Pavilion Space Pty Ltd, must pay damages for breach of contract to the applicant, Habib Farah, in the amount of $38,000.
There be included in the sum payable under order 7 interest under s.76(3) of the Federal Magistrates Act 1999 (Cth) at the rate indicated in Federal Court Practice Note CM16, upon each amount of $2000 weekly wages due to the applicant on and after 11 February 2011 and until 17 June 2011, calculated from the date upon which each amount became payable under the contract of employment of the applicant until the date of this order. The parties have liberty to apply in the event that they are unable to agree upon the calculation of the total amount of interest to be included in a judgment entered under this order.
Any application for costs must be made by application in a case supported by affidavits and written submissions, which must be filed and served no later than 28 days after this judgment is delivered. The other parties may file and serve affidavits and submissions in response no later than 28 days after that date. The application for costs will then be decided in Chambers.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT SYDNEY

SYG 955 of 2011

HABIB FARAH

Applicant

And

RICKY AHN & ANOR

First Respondent

PAVILION SPACE BAR PTY LTD T/AS AERO CAFÉ & BAR

Second Respondent

REASONS FOR JUDGMENT

This judgment explains how informality in the engagement of a shop manager for a small business can lead to expensive confusion as to the terms of the employment and the manner of its early termination, and to penalties for breaches of industrial legislation. For the reasons which follow, I have concluded that Mr Farah was engaged on a six month fixed term contract of employment with Pavilion Space Pty Ltd (‘Pavilion’), and is entitled to recover as damages the full amount of his agreed remuneration notwithstanding that his services were dispensed with after about six weeks. I have found that he was not unlawfully dismissed, and was not required to be given statutory notice of termination or payment in lieu thereof. Pavilion has admitted that it was in breach of obligations under the Fair Work Act 2009 (Cth) to provide the ‘Fair work Information Statement’ on the commencement of Mr Farah’s employment, and to pay his annual leave entitlements which accrued until his employment ended. I have decided to order Pavilion to pay Mr Farah $38,000 for breach of contract, and to impose total penalties of $2000 on Pavilion and $400 on its responsible manager, Mr Ahn.

The uncontentious background

Pavilion is a company owned by Ms Claudia Wong and has been managed on her behalf by her husband Mr Ricky Ahn. He is an experienced businessman with Australian tertiary degrees in accountancy and business management, and with interests, inter alia, in two Japanese restaurants, a hairdressing school for overseas students, and a business management consultancy conducted from offices in the MLC centre. In late 2010, Pavilion acquired the lease and business of a café on the corner of Bathurst and George St, Sydney, known as Aero Café & Bar. The cafe was closed for refurbishing, but the lessor was pressing Mr Ahn to re-open before the busy Christmas and New Year period. Mr Ahn wished to take the café ‘up-market’ as a restaurant and bar, and looked for an experienced manager to assist him to set up and open the new business.
Mr Farah is aged 47, and had acquired relevant experience over 17 years. He was out of work at that time, following the failure of a group of restaurants operated by his family. Mr Ahn was familiar with some of his restaurants, and was referred to Mr Farah by a mutual acquaintance. Following a meeting, a formal letter of offer, an exchange of emails, and some conversations, Mr Farah commenced very full-time duties as ‘Shop Manager’, supervising all aspects of the daily operations of the business from its opening. This included devising and trialling menus, ordering supplies, training and supervising staff, and accounting to Mr Ahn and his wife for daily income and outgoings, etc. He commenced work on 17 December 2010, and the café opened on 22 December 2010. Every Thursday or Friday, Mr Farah was paid $2,000 in cash by Mr Ahn.
Mr Farah worked very hard over the Christmas and New Year period break, missing out on a family vacation. He wrote a series of written reports on the progress of the new venture, which he gave to Mr Ahn. In particular, these discussed the development of an appropriate menu and beverage list, and explained various staffing difficulties. His last report ‘for week 4/5’, contains concerns that some staff were ‘sabotaging the manager’ and that Mr Ahn was taking conflicting advice from a ‘network of informers’. His report concluded:
After the first 4 weeks of operation we have come a long way … with a lot more work to do. The objective will be achieved once we are focused and united in our vision for the business so that we can carry the rest of the team with us.
I look forward to hearing your thoughts on this report and on your views of the weeks of operation and going forward.
Mr Ahn himself visited the premises regularly, and supplied some of the staff from his hairdressing school. He and his wife received the takings and paid the bills, but no formal accounts were kept and shown to Mr Farah during the period of his employment. Indeed no accounts yet exist. However, Mr Ahn became unhappy with the losses on revenue in the start-up period, and began to doubt the wisdom of taking the café ‘up-market’. He decided that he could dispense with the full-time services of Mr Farah. He told Mr Farah on 29 January 2011 that he might make this decision, and on 1 February 2011 told him that he should cease work on 3 February 2011. Pavilion continued to operate the cafe, and it is still open.
Mr Farah received no termination payments, and no further remuneration after that date, although he was told that he was “on call”. Mr Farah sought to bring this uncertain situation to a head, and on 28 February 2011 emailed a letter to Mr Ahn “regarding my position and the cessation of work at Aero café”. Neither party has tendered the letter as evidence. There then followed on 1 March 2011 an email exchange, which made clear that Mr Farah’s employment had come to an end.
The email exchange developed into mutual recriminations about the management of the business, in which Mr Farah’s asserted, and Mr Ahn’s denied, breach of contract and unlawful termination. These issues are now before the Court in the present litigation. However, the first five emails commenced in a relatively moderate tone, and I have concluded that they provide a relatively contemporaneous key to understanding the personalities involved and the real reasons for the termination of Mr Farah’s employment:
Dear Ricky and Claudia,
Please find attached a letter regarding my position and the cessation of work at Aero café.
Regards
Habib (Jack) Farah
>>>>>
Dear Jack,
I wish everything is ok with you.
For 6 weeks, you blowup my money $69,000.00.
I found out many things you had done wrong including suppliers and spent a lot of time to fix them.
I will pass my message to Keith and you take with him first.
Best regards,
Ricky Ahn
>>>>>
Dear Ricky,
I sorry you feel like that but you should have said something to me or showed your budgets … and how you came up with this figure…!
Why then did you tell me I was ‘on call’ and we agreed on a rate … and that you were going to bring me back …! In your own words.
Come on stay honourable that’s the best way … I only wanted the café to succeed and that’s all.
Kind regards
Habib (Jack) Farah
>>>>>
Dear Jack,
I appreciate your warm consideration on the café.
I thought I need your help for the café so I asked on call.
But I found out no need your help.
Jack, this is my situation at the café –
A couple of suppliers are still looking for Jack and chasing outstanding invoices. I said you’re no longer here and I will pay them shortly. Some suppliers stopped to supply…
I provided you an opportunity but you couldn’t utilize it.
I think it’s a café – that’s only the reason it didn’t work.
Best regards,
Ricky Ahn
>>>>>
Dear Ricky,
Thank you for your e-mail below, I will respond to it point by point:
If you had decided that you did not need my help when were you going to tell me…!? I believed you when you promised me that ‘I was on call’, also in your own works “… I like you now more than before you worked with me… when business improves I will bring you back…” you have kept me waiting for almost 4 weeks without any form of communication or any consideration what effect your abrupt and snap decisions have had on my livelihood. I believed your promise made to me in at Aero café and in your email below.
…[omitting a lengthy further response, and the subsequent emails]
Kind regards,
Habib Farah

Mr Farah’s claims in this proceeding

The proceeding was commenced by application filed in the Fair Work Division on 12 May 2011. The claims were clarified in an amended statement of claim filed on 16 September 2011, which was unhelpfully responded to in a brief defence filed on 20 October 2011. The parties’ cases were then presented in affidavits from Mr Farah and Mr Ahn, and they were both cross-examined in the course of a two day hearing held on 22-23 November 2011. No other witnesses were called. Counsel for both parties assisted the court with well focused opening and closing submissions notwithstanding the complexity of issues raised by the pleadings, and I was invited to give judgment addressing all issues including penalty.
Regrettably, the parties missed an opportunity to mediate their disputes with the assistance of a Registrar, due to a blow-out in the time-table appointed at the first court date. They also missed an earlier opportunity for conciliation in Fair Work Australia because, according to the certificate under s.369 of the Fair Work Act, “Fair Work Australia was advised that Ricky Ahn, of Pavilion Space Pty Ltd T/A AERO Café and Bar, would not attend any conference.”
In essence, Mr Farah principally claims that he suffered a loss of unpaid net remuneration of $2000 per week for the period of a six month term of employment commencing from 17 December 2010 which had not expired at 3 February 2011. The statement of claim asserts ‘loss of income of $42,000’, but, as I shall explain below, he has established a total loss of only $38,000. He seeks recovery of this loss alternatively as:
i)Damages for breach of a contractual term that his employment was for that fixed term and was not terminable at an earlier time except, implicitly, for serious misconduct (which has not been alleged), or
ii)Damages for breach of implied terms of contract concerning trust and confidence, acting in good faith, and non-interference with performance, or
iii)Compensation for contraventions of ss.51A, and 53B of the Trade Practices Act 1974 (Cth) or of the equivalent new provisions of the Competition and Consumer Act 2010 (Cth) (counsel never committed themselves to which of these was applicable), for pre-employment misrepresentations of the future term of his employment, or
iv)Compensation under s.545(2)(b) of the Fair Work Act 2009 (Cth) for contravention of s.351(1) of the Fair Work Act constituted by adverse action within s.342 item 1(a), taken “because of the person’s … age”. This unlawful reason is alleged to have been evidenced by a statement by Mr Ahn on 29 January 2011 that Mr Farah would be removed as manager since Pavilion required a younger person to manage the café.
The existence of this loss was not conceded, and Mr Farah’s activities in seeking and obtaining work and income after he ceased to be paid by Mr Ahn were explored in evidence. However, at the end of the trial, counsel for the respondents made no submissions disputing that Mr Farah had no alternative source of income between 3 February 2011 and 17 June 2011, nor contending that he failed to take reasonable steps to mitigate his loss, nor contending that the amount sought would not appropriately be calculated and awarded under, at least, the first of the above four causes of action if his employment was, in fact, for a fixed term.
In my opinion, the complexity of the pleadings on liability is best resolved by first ruling upon the contractual issue as to the duration and terminability of Mr Farah’s undoubted contract of employment. For reasons which I shall explain below, I am satisfied that the parties should be found to have agreed upon a fixed six month term with no express or implied provision for early termination without serious misconduct. Mr Farah is therefore entitled to recover his loss as damages for breach of an express term of the contract.
As counsel for Mr Farah conceded, this conclusion renders it unnecessary to explore the debatable causes of action based upon the contended implied terms. The jurisprudence in this respect is extensive. It also becomes unnecessary for me to hypothesise whether Mr Ahn’s statements prior to the commencement of the employment could give rise separately to causes of action under trade practices legislation, if the critical offer were not found to have formed part of the contract. Both of these parts of the pleading would have taken me into areas of law and fact which are far less straight forward than an analysis under principles of contractual offer and acceptance.
It also becomes unnecessary for me to address the discretionary remedy of compensation under s.345 of the Fair Work Act. Moreover, for reasons which I shall explain below, I am not satisfied that Pavilion and Mr Ahn did contravene s.351 of the Fair Work Act.
As well as lost income between February and June 2011, the amended statement of claim also claimed compensation under the above four causes of action calculated as “loss of bonus to be determined following discovery/summons for production” and, “loss of annual leave $4000”. However, the first of these claims was not pressed at the end of the trial, due to the absence of any satisfactory financial records being produced by Pavilion. I shall address the latter claim at the end of this judgment, and explain why I am not satisfied that this loss should be included as an additional component of damages or compensation.
In addition to his allegation of contravention of s.351 of the Fair Work Act, Mr Farah’s amended statement of claim alleges that the respondents were in contravention of three other ‘civil remedy’ provisions of that Act:
i)Breach of s.44 in relation to the National Employment Standards provided in s.117, requiring the employer to give written notice of termination to Mr Farah and payment in lieu of 1 week’s notice.
ii)Breach of s.44 in relation to the National Employment Standard provided for in s.125 and the Regulations Ch.2 Pt.2-2 Div.12, requiring the employer to give to Mr Farah “before, or as soon as practicable after, the employee starts employment” the ‘Fair Work Information Statement’ published by the Fair Work Ombudsman in the Gazette.
iii)Breach of s.44 in relation to the National Employment Standard provided in s.90(2), requiring an employer to pay an amount for untaken paid annual leave accruing under s.87 “when the employment of an employee ends”.
The respondents have conceded that Mr Farah was not given any written notice of termination nor payment in lieu of advance notice. However, my finding that the contract of employment was for a fixed six months term means that the provisions of s.117 are excluded. This is the effect of s.123(1), which provides that the relevant Division of the Act “does not apply to any of the following employees …(a) an employee employed for a specified period of time…”. The first of the above additional alleged contraventions cannot, therefore be found.
The respondents concede that the second and third additional alleged contraventions by Pavilion occurred. They have also not disputed that Mr Ahn was a person knowingly involved in those two contraventions within the meaning of s.550 of the Fair Work Act. I am satisfied that these concessions are correct, and find that both Pavilion and Mr Ahn are liable under s.546 for penalties for these two contraventions.
The remaining parts of my judgement therefore need to explain only my findings as to a fixed term employment, the damages for breach of contract, the absence of contravention of s.351, and the penalties for the above two admitted contraventions.

The agreed duration of the employment

This issue essentially turns upon whether the words in a formal written offer of employment dated 14 December 2010, which said: “this position is available on a contract basis for 6 (six) months from 17^th Dec, 2010 to 17^th June 2011”, formed part of the contractually binding agreement which explains Mr Farah’s employment by Pavilion. Although Pavilion accepts that a binding agreement was concluded no later than 17 December 2010, and appears to accept that some of its terms can be traced back to Mr Ahn’s written offer – including the salary of $2,000 per week net of PAYE employer instalments – it argues that subsequent to the written offer being made the parties orally agreed that the employment would be terminable at will by the employer at any time.

Resolving this controversy turns upon findings as to the critical written and oral communications constituting the agreement. When making these findings, it is appropriate to consider the surrounding matrix of facts, since they might assist the process of finding what the critical communications were, as well as assisting the construction of their ‘objectively’ imputed common intention (see the authorities cited by Allsop J in Franklins Pty Ltd v Metcash Trading Ltd (2009) 76 NSWLR 603 at 613).
The relevant extrinsic circumstances are largely found in the uncontentious background circumstances which I have sufficiently summarised above. More contentious were the attitudes of Mr Ahn and Mr Farah, and the extent to which they were communicated in the course of their negotiations.
In their evidence and submissions, each sought to portray the other as eager for agreement to be reached, and therefore as being more or less likely to maintain or forego an initially offered fixed term of six months. Unfortunately, their evidence in this respect was influenced by hindsight and perceived self interests in the litigation. Ultimately, I do not consider that the evidence of their overt words and actions before or after the written offer of 14 December 2010 sheds additional useful light on why Mr Ahn initially offered a six months term and no more, nor why Mr Farah might have been happy to take that offer or less. Nor does it clearly point in my mind to any reason why their attitude to contracting in relation to this term would have altered in a substantial way between 14^th and 17^th December 2010.
In short, there is evidence pointing to both parties being keen to reach agreement at all relevant times, and being under some pressures to do so speedily. On his side, Mr Ahn was under pressure from the landlord to re-open the café before Christmas, and was keen to do so as a more ‘up-market’ restaurant and bar. He made clear at all times before and after 14 December 2010 that he thought that he and his current staff lacked necessary expertise to implement this plan in the opening months of the venture, and that he therefore needed to find it elsewhere. These aspects appear to explain why he offered Mr Farah an unconditional six months initial term of employment, and why he might have still maintained this offer at the time that their agreement was finally reached at a meeting on 17 December 2010. This objective appears implicitly in the terms of Mr Ahn’s written offers themselves, as well as in Mr Ahn’s surrounding statements deposed to by Mr Farah in his affidavit.
On his side, Mr Farah was undoubtedly out of work, was anxious to find income to support himself and his family, and was keen to associate himself with a new restaurant venture under his own management. He gave evidence of exploring other avenues of possible employment which would engage his expert background in the restaurant industry, and some of these might have appeared to have held prospects at the time. However, the evidence did not show that he had another offer or venture squarely on the table at the end of 2010, and it is clear that ultimately he was prepared to forego his usual family Christmas break to take up a potentially significant employment opportunity offered by Mr Ahn.
On both sides, there was an appearance of friendly and honourable dealing, in which both appeared to give trust and confidence in the good intentions of the other, and to commit themselves to a successful launch of the new venture under the management of Mr Farah. It was this atmosphere which seems to explain the now regrettable informality in the recording of their agreement, and to contain the seeds of the present dispute. However, the evidence showing these matters and the urgency of reaching agreement before the start of the new venture does not provide any particular assistance to resolve the dispute.
In my opinion, the best evidence of the terms of employment which were agreed upon, is found in the parties’ written exchanges made with obvious contractual intention, and in my making findings on the balance of probabilities as to how those written exchanges were then confirmed or modified in a conversation occurring 17 December 2010, when a binding agreement was reached. I shall therefore trace and make findings as to the communications by way of written offer and acceptance which I am satisfied occurred, and which I have decided reveal and constitute the parties’ terms of agreement.
After some introductory discussions, Mr Farah met Ms Wong and Mr Ahn on Tuesday 14 December 2010, and reached an informal agreement for Mr Farah to commence employment when the new café would be ready to commence. Mr Ahn told Mr Farah that he needed his help to put a menu together, and said “I will send you letter of agreement with details and we start”.
A letter on letterhead of ‘Aero Café & Bar registered as Pavilion Space Pty Ltd’ was emailed to Mr Farah on that day from Mr Ahn at his business address at ‘Daum Consulting & Professionals’. The letter said
Mr Habib Farah
14 Dec 2010
Dear Habib,
Re: Letter of Appointment for the Shop Manager
I am writing to formalise the offer of full time Shop Manager at Aero Café & Bar.
As we discussed, you will manage the daily operations including menu developing and staff training. This position is available on a contract basis for 6 (six) months from 17^th Dec, 2010 to 17^th June, 2011.
Starting Date:       17^th Dec 2010
Your commencing salary is as follows:-
·Salary  $2,000 p.w.
·
Bonus  over $30,000 weekly turnover – 1% of the turnover

over $35,000 weekly turnover – 2% of the turnover

All salaries offered by Aero Café & Bar are confidential and not to be discussed with other staff members.
If you accept the above offer and the terms associated with this appointment, please sign this “Letter of Offer” and the duplicate copy. Please keep the original for your own personal record.
May I take this opportunity to wish you outstanding success and good luck.
Best Regards,
Ricky S. B. Ahn
The letter then proposed a form of acceptance:
I, Habib Farah, accept the position and the term associated with this appointment as a full time Shop manager with Aero Café & Bar
Signature
Habib Farah Date……..
This letter undoubtedly constituted a complete offer of employment, and dealt with essential terms as to the proposed full-time position, its six months fixed term, a start date on 17 December 2010, and the calculation of remuneration. The invitation for signature and return by Mr Farah suggests that Mr Ahn did not regard any other terms of the employment required further negotiation and agreement, and that he was willing to be bound by his formulated offer if the stated terms were accepted by Mr Farah.
Mr Farah responded on 15 December in an email sent at 8.08am, to which Mr Ahn responded at 9.14am on the same day with inserted responses (shown below in bold). The combined emails with the headings “Re letter of offer” show:
Dear Ricky,
It was great to meet with and Claudia yesterday and thank you for the the (sic) offer.
As last discussed in the food court when we were talking Friday will be a soft opening ... we need to work out exactly what food and beverage you would like on in store to sell on the day.
Also as per our quick and final discussion regarding my position and pay:
Jack, it’s new business and consider that I have to get my investment back.
·The net weekly pay was to between $2,200.00 - $ 2,500.00 ($2,000.00. I said No when you asked me at the café for $2,200.00)
·Pay cycle is weekly. (Yes)
·The turnover bounces are to be paid weekly or monthly…! I’m not sure, can you please consider 2% and 3%. (Weekly, the bonus is not negotiable)
·The term of the agreement in this e-mail is six months ...! I thought we discussed one year or more as the business expands...what happens after the 6 months !? (6 months is for us to get to know each other better)
·Also the minimum days/ hours of work (5 days and any extra hours for your job done)
·And to confirm what I mentioned about the time off I need for Christmas and New year - it’s just my family and I made plans. (Please inform me the date)
Ricky I hope you understand that I’m only trying to be clear so we don’t have any thing to question later.
I am excited and looking forward to working with yourself, Claudia and your management team and will make sure that the Aero Cafe will be one of the best in the Area and believe that the fit out is first class and every thing else including service and quality will be the same.
If you could please clarify the above points for me I would be grateful as I’m looking forward to joining your winning team and launching this new cafe.
I’m on a job today from 8 am till the afternoon, I will be able to speak during the day but will be free after 3 pm.
Looking forward to speaking with you and for the opportunity of working together.
Best regards
Habib (Jack) Farah
(non-italicised emphasis in the original)
Mr Farah then responded by email to Mr Ahn sent on 16 December 2010 at 9.30am headed “re letter of offer”:
Hi Ricky,
Thanks for getting back to me, I just needed to clarify a few things before we start as it all happened so quickly … my Christmas break with my family was booked a while ago between Friday 24^th and Sunday the 2^nd of January 2011, this is local I’m not flying any where so I can get back quickly if need be. I hope this is fine … I’m sure we will get a chance to speak about this and the rest tomorrow (Friday) and over the weekend.
I’m happy to start based on the current letter of offer which I will bring with me tomorrow (Friday) when I come down to the café
Please let me know the time your (sic) are planning the opening tomorrow and if you need me to do any thing prior.
Best of luck and prosperity to you, us and the Daum Consulting Professionals team.
Best regards,
Habib (Jack) H Farah
Counsel for Mr Ahn submitted that Mr Farah’s email of 15 December constituted a counter-offer which should be read as a total rejection of the letter of offer, so that the original offer was not later open for acceptance by Mr Farah (citing Fletcher v Minister for the Environment and Heritage [1999] SASC 223 at [30]). However, he accepted that this analysis is not always required, and that there are cases where an offer is treated as revived or remaining on foot notwithstanding the making of a counter offer or qualified response.
In these cases, the offeree’s response to the offer is not necessarily treated as a rejection of the offered terms, but as an invitation to negotiate some of the offered terms, leaving the original offer open for acceptance if the invitation is not accepted (as in Stevenson, Jaques & Co v McLean (1880) 5 QBD 346). Moreover, if a precise analysis of offer/counter-offer/acceptance is unclear, but it is clear that the correspondence has in fact led to an agreement upon which a business venture has commenced, a less doctrinaire approach to the correspondence may be appropriate. As Heydon JA concluded in Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153 at [80] – [81]:
[80] If offer and acceptance analysis is not always necessary or sufficient, principles such as the general principle that a rejection of an offer brings it to an end cannot be universal. A rejected offer could remain operative if it were repeated, or otherwise revived, or if in the circumstances it should for some other reason be treated, despite its rejection, as remaining on foot, available for acceptance, or for adoption as the basis of mutual assent manifested by conduct.
[81] In the light of the above cases, it is relevant to ask: in all the circumstances can an agreement be inferred? Has mutual assent been manifested? What would a reasonable person in the position of the Council and a reasonable person in the position of the defendant think as to whether there was a concluded bargain?
Considering the present correspondence in its context, the parties clearly did not regard Mr Farah’s email on 15 December 2010 as being a rejection of the offered terms. It asked Mr Ahn only to ‘clarify the above points’, but indicated a continuing commitment by Mr Farah to proceed with the proposed employment. It did raise queries as to some of the terms, but did not indicate that these were raised as ‘sticking points’ preventing agreement on the originally offered terms. It was not an ‘acceptance’ of the letter of offer but, in my opinion, nor did it constitute a counter-offer which should be treated as a rejection of the offer.
Nor did Mr Ahn’s emailed response on the same day show that this is how he regarded it. His inserted annotations show that he had considered departing from the offered terms in relation to the matters raised, but was maintaining and embellishing his letter of offer in its original terms. In effect, he affirmed the letter of offer, but indicated a willingness to negotiate on the topic of time off ‘for Christmas and New year’. In contractual terms, his responses emailed on 15 December showed that the letter of offer remained open for acceptance by Mr Farah, subject to the parties agreeing upon time-off over Christmas.
Mr Farah’s next email of 16 December, in my opinion, confirmed that this understanding of the exchange on the previous day is objectively the correct interpretation, and was, in fact, how the parties probably analysed it themselves. His email then constituted an unqualified acceptance of the original letter of offer, as affirmed by Mr Ahn on 16 December. In relation to the remaining issue which the parties had left for negotiation, he indicated a willingness to discuss with Mr Ahn on the next day whether he would be permitted by the employer to take off the period between Christmas and New Year.
Whether a contract for employment on the terms of the letter of offer became immediately binding on both parties as a result of Mr Farah’s email on 16 December, or whether the offer should be regarded as remaining conditional upon the parties agreeing upon Mr Farah’s Christmas break, is a matter which can be treated as academic. This is because in fact the parties did reach agreement when they met on 17 December that Mr Farah would immediately commence work and would work almost continuously between Christmas and New Year, and in fact he did so work.
Mr Farah’s evidence is that once this issue was settled in a conversation on 17 December, the parties shook hands to confirm the finality of their agreement, and he then proceeded on that day to plan the opening menu and to order some supplies. In cross-examination, Mr Ahn agreed that they shook hands at the end of the discussion on that day, to show that agreement had been reached. On all of the evidence, I consider that it is highly probable that there was an overt statement or action at the conclusion of the meeting on 17^th, which confirms objectively that they had reached binding agreement on all outstanding issues concerning the proposed employment.
Mr Farah also gave evidence that he signed the original letter of offer and gave it to Mr Ahn the next day, on 18 December. A copy of the signed letter with that date inserted is in evidence. Mr Ahn denies ever receiving it before the parties were in dispute, and he has not produced any copy held in his possession. I have some uncertainty resolving this issue, but am inclined to think that Mr Farah probably did return the letter of offer on the 18^th with his signature, but that it was overlooked or mislaid by Mr Ahn. Even if there was not a formal return of the signed letter, in my opinion the previous email exchange in combination with the oral agreement on 17 December in relation to Mr Farah’s time off over Christmas, themselves demonstrate the completion of the preceding contracting negotiations with a binding agreement.
The overt, contemporaneous, and undisputed evidence, therefore, would allow me to be satisfied that it was a term of Mr Farah’s employment that his position would be “on a contract basis for 6 (six) months from 17^th of Dec., 2010 to 17^th of June 2011”. That is, a fixed term employment, with no provision for earlier termination by either party. Moreover, as authorities cited by counsel for Mr Farah illustrate, once the provision in the letter of offer for a six months term of employment is found to be part of the contract, it would not be open to the court to imply a term for earlier termination at will by the employer (he cited Ikin v Danish Club Dannebrog (2001) 140 IR 101 at [17], Guthrie v News Ltd [2010] VSC 196 at [27], and Macdonald v Australian Wool Innovation Ltd [2005] FCA 105 at [259]).
As I have noted, Mr Ahn’s case in opposition to the above analysis invited me to interpret Mr Farah’s email of 15 December as a rejection of an offer of a six months fixed term, and not to treat Mr Ahn’s response as an affirmation of that offer. I have already explained why I would not accept that submission.
Mr Ahn also presented evidence as to events at the meeting on 17 December, which he contended showed that he had withdrawn all his written offers of a fixed term employment, and that Mr Farah orally agreed to commence employment with no fixed term and with dismissal at will of the employer without notice. He submitted that this was the effect of a conversation deposed to by Mr Ahn in his affidavit:
6.The applicant came to the café on 17 December 2011 (sic: 2010). We had a discussion to this effect:
Applicant:“Please give me a chance. I will do my best”.
Me:“I don’t think you can manage a café”.
Applicant:“If you are not happy anytime or any day I will go. I want to be a father who my son is proud of. Please give me a chance”
Mr Ahn attempted to give credence to this conversation, and to give contractual significance to the words he attributes to Mr Farah, by claiming that between 16^th and 17^th he had lost interest in employing Mr Farah, and was only prepared to do so upon Mr Farah agreeing to forgo time off, and agreeing “anytime or any day I will go”.
Mr Ahn claimed in his oral evidence, that on the 16^th he accepted advice from a friend that Mr Farah was not capable of managing the cafe, and said that he was then willing to employ Mr Farah only because he had sympathy with Mr Farah’s desire to find employment. This claim appears at odds with Mr Ahn’s previous desire for an experienced manager able to start immediately, and with his subsequent conduct in proceeding to employ Mr Farah in that role and at the substantial wage previously agreed. The person whose advice was claimed to have been decisive in bringing about a change of opinion concerning Mr Farah’s capacities, was not identified nor called as a witness. For the reasons which follow, I am unpersuaded that this aspect of his evidence was true.
In support of these claims, Mr Ahn tendered copies of some SMS messages to and from Mr Farah on his mobile phone. These show that on 16 December at 6.35pm, i.e. after receiving Mr Farah’s email explaining his a wish to take his Christmas vacation, he sent Mr Farah the message:
“Hi Habib, sorry but we will talk your position after you come back from your holiday”.
There is a dispute as to the time when this was first received and seen by Mr Farah. However, I am unable to resolve this dispute on the confused evidence before me and in the absence of expert evidence concerning the mobile telephones involved. Mr Ahn also tendered some SMS messages showing that Mr Farah was seeking to meet Mr Ahn in the food court near the café on 17^that around midday, and that he located and met Mr Ahn there at that time. Mr Ahn claimed that Mr Farah then made the above oral statement in the course of a short conversation. He submitted that these events showed that Mr Farah was desperate to obtain the employment, and that he was unwilling to do so.
As I have noted, it is common ground that, after the SMS exchange, they then did meet, and they did agreed that the employment would commence immediately and that Mr Farah would devote all his time to the new venture between Christmas and New Year.

In response to Mr Ahn’s evidence, Mr Farah denied that he said anything on the 17^th indicating that he offered or agreed to depart from the letter of offer in relation to the fixed term of his employment. He maintained that they discussed, and he agreed, only that he would give up his Christmas break and start immediately. He said that he had previously been unaware that Mr Ahn wanted to open before Christmas, and that he became willing to agree to work over that period once he saw that Mr Ahn regarded his presence as manager as being critical to a successful opening of the new venture, and because preparations for the opening were obviously incomplete. Mr Farah showed some confusion as to when he discussed this possibility with his wife, but in my opinion nothing significant turns upon this.
There are no witnesses to their conversation on 17^th, and there is no contemporaneous written record of any agreement that the employment would be terminable at will by Mr Ahn, varying the previously written offers of a six months fixed term.
The disagreement between the two men as to what was said by Mr Farah on 17 December, and whether it was said in a manner or context which showed a common intent that the proposed employment would be terminable at will, is not solved readily by examination of their credibility as witnesses.
Both of their affidavits suffer from incompleteness in their recounting of events on the 17^th. In the witness box, they both showed a significant degree of hesitation and poor recall of the precise events of that day, including the precise arrangement leading to the meeting and the words spoken. The mobile phone records did not significantly advance this situation, since they are consistent with both versions of the conversation and agreement which ensued (including, if I had admitted and had regard to, some purported additional SMS messages which Mr Ahn produced without notice at the end of his evidence, and then sought leave, in effect, substantially to re-opening his case after all cross-examination had been completed, and which I refused for reasons which are found in the transcript).
Considering the two witnesses generally, I had more reservations concerning Mr Ahn’s evidence than with Mr Farah’s evidence. I accept that there may have been some cultural factors inhibiting Mr Ahn presenting himself as a reliable witness with good recall. However, my general impression of Mr Ahn was of a witness committed to keeping closely to a script found in his affidavit, rather than one who was anxious to give honest and candid evidence. His answers were often obscure, unresponsive or evasive, and I was left most uncertain as to the true extent of his actual recall of events.
Mr Farah had more facility and volubility in English, and appeared to make a genuine effort at recollection, but also showed some confusion and argumentativeness in some of his responses. Generally, I would prefer Mr Farah’s evidence to that of Mr Ahn where they are in conflict, but I have difficulty accepting with confidence the critical evidence of either of them, where it is not confirmed by uncontroversial evidence or appears consistent with established evidence.
The parties’ later conduct is admissible evidence on the question whether a contract was formed containing an oral departure from the terms apparently agreed in the letter of offer and the subsequent email exchange (see Brambles Holdings Ltd (supra) at [24]). However, in the present case, the most obvious inference from the parties’ earlier and later conduct is that on 17^th they reached agreement that the previously discussed employment would go ahead, with an added agreement that Mr Farah would not seek time off between Christmas and New Year. All the surrounding circumstances therefore tend to confirm Mr Farah’s account of what was discussed agreed on 17^th, i.e. that the only impediment which arose in relation to his commencing employment in accordance with the agreed written terms was Mr Ahn’s need for his services between Christmas and New Year, and that once this issue was resolved, the employment could, and did, proceed in accordance with the terms of the written offers.
I do not regard the circumstances in which Mr Ahn later dispensed with Mr Farah’s services at the end of January as confirming that Mr Farah on 17 December 2010 had agreed to waive or vary the originally agreed six months term of his employment. Rather, the manner in which this occurred, including Mr Ahn’s vague suggestions of keeping Mr Farah ‘on call’, and the complete absence of any formal or overt act of termination, tends to point to an awareness by Mr Ahn that his actions were not in accordance with the terms of their employment agreement, rather than otherwise.
I do not consider that the fact that Mr Farah did not on 29 January or 1 February immediately assert that Mr Ahn would be in breach of the employment agreement, necessarily indicates an awareness that it did not give him a six months fixed term. I accept that he was initially ‘in shock’ at his abrupt exclusion from the venture, and I consider it likely that he initially thought that Mr Ahn might bring him back into the business. In the circumstances, particularly the absence of clear written notice of the repudiation of his continuing employment, and the vague agreement that he would be ‘on call’, I consider it understandable that Mr Farah only appreciated that Mr Ahn was totally repudiating his employment when Mr Ahn’s intentions in this respect became apparent in the email exchange on 1 March 2011.
That email exchange reflects the positions which the parties have maintained in the later litigation, and is inconclusive as to the originally agreed terms of employment in relation to termination. In the course of a lengthy response to the initial emails which I have extracted above, Mr Farah protested that:
If you had decided that you did not need my help when were you going to tell me …!? I believed you when you promised me that ‘I was on call’, also in your own words “… I like to now more than before you worked for me … when business improves I will bring you back…” you have kept me waiting for almost 4 weeks without any form of communication or any consideration what effect your abrupt and snap decisions have had on my livelihood.
…
Ricky I appreciate the fact that you think you ‘provided me an opportunity’ … except that opportunity was suppose to be for a minimum of six months, a fact that is clear and can be proven. I lived up to the challenge and more.
…
I worked so hard for you especially in the first three weeks to the point of 112 hrs per week believing that it will all be worth it when we achieve our goal in the proper time frame that we spoke about and agreed to, as it is still a new business. The (sic) suddenly and without any waning, an unfair and an abrupt decision was made without any consideration to your agreement and my professional commitment to my role as Café manager which that has had a direct and negative impact on my livelihood.
Mr Ahn responded shortly:
You must remember what you said to me several occasion
You can go anytime if I am not happy
What I mentioned outstanding invoices meant the face’s financial position due to the losses of $69,000
Come on Jack!
Mr Farah responded:
Of course I remember I said it to you, but you always said that you were happy and it didn’t matter what they say not worry about them … even on the Saturday when we stood in front of the café and you reassured me that the dream of rebuilding together is keeping us going even through the tough times, do you remember!!? …
In his oral evidence, Mr Farah said of his statement cited by Mr Ahn “maybe I said it on that last day when he was telling me to go”, and denied saying it “on several occasions”.
The March 1 email exchange and its background left me unpersuaded that it evidenced an oral agreement as to terminability at will, which Mr Ahn now says was reached on 17 December. Rather, in the light of all of the evidence, it seems to me more likely that Mr Ahn has, consciously or unconsciously, transposed a memory of later casual statements by Mr Farah into pre-contractual statements with contractual intent, and thereby has found a justification for his later decision to dispense with Mr Farah’s services in breach of their true agreement.
Considering all of the oral and documentary evidence, I am not satisfied on the balance of probabilities, that on 17 December 2010 Mr Farah said the words attributed to him by Mr Ahn in his affidavit, whether with or without contractual intent.
If Mr Farah did say anything on 17 December about his leaving if Mr Ahn was unhappy, which I doubt, I find that it was probably not said in a manner, nor responded to by Mr Ahn in a manner, which objectively would show to a reasonable bystander that the parties were agreeing to substitute for the previous written offers of a six months term employment a species of employment which would be immediately terminable at will. If such a statement was said casually by Mr Farah before agreement was reached, unprompted by Mr Ahn, I consider it most unlikely that Mr Ahn would have treated it as a contractual promise altering the previously agreed terms, without saying or doing more at the time to confirm such a significant departure from the previously agreed written terms, and to record the new agreement.
Central to my assessment of what was probably said on 17 December showing contractual intent, is that on my assessment of Mr Ahn, it seems to me most unlikely that he would have failed to record in some written contemporaneous confirmation, the fact that the parties had agreed to substitute a term of employment clearly much more advantageous to Pavilion, in substitution for the six months contract offered in the letter of offer and maintained in his email of 15 December. Particularly, taking into account Mr Ahn’s business experience, including as an employer of people in his other businesses, and the precision with which he had recorded and maintained this term in his offer and email. In my opinion, the “contemporary materials, objectively established facts and the apparent logic of events” point against the likelihood that the previous offer of six months employment was withdrawn or varied by oral agreement of both parties in the course of the meeting on 17 December (c.f. Fox v Percy (2003) 214 CLR 118 at [31]).
On my assessment of the witnesses and their evidence, I conclude that this did not happen. I conclude that the contract of employment which was binding upon Pavilion included all of the terms which were arrived at in the preceding written exchange, and, in particular, that the employment would last at least for a fixed six month period from 17 December 2010.
I am therefore satisfied that Mr Farah is entitled to recover his lost remuneration upon principles of breach of fixed term employment contracts which were not disputed by the respondents. No additional damages or compensation are sought for lost opportunities of an extension of the employment, and I can see no proper basis for awarding these in the evidence. Mr Farah is therefore entitled to receive as damages the unpaid balance of his agreed salary over the remainder of the period of the contract (cf. Reynolds v Southcorp Wines Pty ltd (2002) 115 IR 152 at [[37]-[38]).
The respondents have not established any reason for discounting this award. No failure to take reasonable steps to look for work is established. I am not satisfied that Mr Farah’s receipt of Newstart Allowance payments should be taken into account, since I think it likely that these will become recoverable by the Commonwealth.
I am not satisfied that any additional amount of loss or damages should be allowed for Mr Farah’s statutory entitlements for paid annual leave which had accrued prior to 3 February 2011, nor for the additional leave entitlement which would have accrued during the balance of if his employment until 17 June 2011 if the employment had continued. Such a loss is not established on the evidence, because it seems to me likely that Mr Farah would have taken at least 2 weeks paid recreation leave before that date. Particularly, since he had been required by his employer to work almost without break between Christmas and New Year. I am certainly not satisfied otherwise.
In my opinion, his proven unliquidated loss arising upon the breach of the contract constituted by Pavilion’s repudiation of the employment before the agreed date for its expiry, is established only in the amount of $2,000 per week from Friday 4 February 2011 until Friday 17 June 2011. Although the Form 2 ‘Claim’ in the present proceedings asserted loss of income ‘from 27 January 2011’, no evidence was led to as to Mr Farah not being paid for work performed prior to 4 February. His affidavit said only: “My last day of work was 3 February 2011. I was not provided with work after this date and not paid any remuneration”. On this evidence, I am satisfied only that a loss first accrued on the pay-day which would have been 11 February 2011. On my calculations, he suffered a total loss of the agreed net wages of $38,000 and not $42,000 as asserted in the statement of claim.
I consider that Mr Farah is entitled to an award of interest up to judgment under s.76 of the Federal Magistrates Court Act 1999 (Cth), which should be calculated under Federal Court Practice Note CM16 in steps from the dates of his lost $2000 weekly salary payments which would have commenced on 11 February 2011 and continued until 17 June 2011. I shall leave it to the parties to agree, or to a Registrar to calculate, the precise amount of interest for which judgment should be entered.

The alleged contravention of s.351

Section 351 of the Fair Work Act provides:
351Discrimination
(1)An employer must not take adverse action against a person who is an employee, or prospective employee, of the employer because of the person’s race, colour, sex, sexual preference, age, physical or mental disability, marital status, family or carer’s responsibilities, pregnancy, religion, political opinion, national extraction or social origin.
Note: This subsection is a civil remedy provision (see Part 4‑1).
(2)However, subsection (1) does not apply to action that is:
(a)not unlawful under any anti‑discrimination law in force in the place where the action is taken; or
(b)taken because of the inherent requirements of the particular position concerned; or
(c)if the action is taken against a staff member of an institution conducted in accordance with the doctrines, tenets, beliefs or teachings of a particular religion or creed—taken:
(i) in good faith; and
(ii) to avoid injury to the religious susceptibilities of adherents of that religion or creed.
(3)Each of the following is an anti‑discrimination law:
(aa)the Age Discrimination Act 2004;
(ab)the Disability Discrimination Act 1992;
(ac)the Racial Discrimination Act 1975;
(ad)the Sex Discrimination Act 1984;
(a)the Anti‑Discrimination Act 1977 of New South Wales;
(b)the Equal Opportunity Act 1995 of Victoria;
(c)the Anti‑Discrimination Act 1991 of Queensland;
(d)the Equal Opportunity Act 1984 of Western Australia;
(e)the Equal Opportunity Act 1984 of South Australia;
(f)the Anti‑Discrimination Act 1998 of Tasmania;
(g)the Discrimination Act 1991 of the Australian Capital Territory;
(h)the Anti‑Discrimination Act of the Northern Territory.
Under item 1 in the table to s.342(1), ‘adverse action’ is taken by an employer who ‘dismisses the employee’.
Under s.360 of the Fair Work Act, “a person takes action for a particular reason if the reasons for the action include that reason”. Under s.361(1) it is to be “presumed” that a person “took … action for a particular reason … unless the person proves otherwise”. Under s.551 the factual issues are to be determined in accordance with the rules of evidence, including the ‘balance of probabilities’ standard of satisfaction in civil proceedings, but taking into account the matters identified in s.140(2) of the Evidence Act 1995 (Cth) (see Qantas Airways Ltd v Gama (2008) 167 FCR 537 at [110], [123]-[132]).
The task of a court required to decide whether the reasons for adverse action included an unlawful reason such as those proscribed by s.351, was recently explained by a Full Court in Barclay v The Board of Bendigo Regional Institute of Technical and Further Education (2011) 274 ALR 570; [2011] FCAFC 14. In their majority judgment, Gray and Bromberg JJ agreed that the word “because” was intended to have the same meaning as “by reason of the circumstance that”, and that it was relevant to apply authorities in relation to other legislation which proscribes actions only if they occurred for a specified reason. They found assistance from a recent High Court case concerning disability discrimination, and said:
26. As Gummow, Hayne and Heydon JJ said in Purvis v State of New South Wales (Department of Education and Training) [2003] HCA 62; (2003) 217 CLR 92 at [236] of the use of “because” in a similar way to its use in s 346:
For present purposes, it is enough to say that we doubt that distinctions between motive, purpose or effect will greatly assist the resolution of any problem about whether treatment occurred or was proposed "because of" disability. Rather, the central question will always be - why was the aggrieved person treated as he or she was? If the aggrieved person was treated less favourably was it "because of", "by reason of", that person's disability? Motive, purpose, effect may all bear on that question. But it would be a mistake to treat those words as substitutes for the statutory expression "because of".
27. The central question under s 346 is why was the aggrieved person treated as he or she was? If the aggrieved person was subjected to adverse action, was it “because” the aggrieved person did or did not have the attributes, or had or had not engaged or proposed to engage in the industrial activities, specified by s 346 in conjunction with s 347?
28. The determination of those questions involves characterisation of the reason or reasons of the person who took the adverse action. The state of mind or subjective intention of that person will be centrally relevant, but it is not decisive. What is required is a determination of what Mason J in Bowling (at 617) called the “real reason” for the conduct. The real reason for a person’s conduct is not necessarily the reason that the person asserts, even where the person genuinely believes he or she was motivated by that reason. The search is for what actuated the conduct of the person, not for what the person thinks he or she was actuated by. In that regard, the real reason may be conscious or unconscious, and where unconscious or not appreciated or understood, adverse action will not be excused simply because its perpetrator held a benevolent intent. It is not open to the decision-maker to choose to ignore the objective connection between the decision he or she is making and the attribute or activity in question.
Gray and Bromberg JJ also explained the effects of ss.360 and 361 of the Fair Work Act:
30. Section 360 continues the long-standing position that, where adverse action is taken against a protected person, culpability will be established if the reasons for that conduct include a reason for conduct that is within the ambit of s 346. The reason must be an operative or immediate reason and need not be the sole or dominant reason (see the Explanatory Memorandum at para 1458). But the drawing of distinctions between proximate or immediate reasons for conduct (Greater Dandenong City Council v Australian Municipal, Administrative, Clerical and Services Union [2001] FCA 349 (2001) 112 FCR 232 at [216]), or between the cause of conduct and the reason for conduct (Greater Dandenong at [164]), is not helpful. Those distinctions fail to give sufficient attention to whether or not the reason was operative, and they also draw distinctions between a reason and a factor in a reason. As Gray J (with whom Woodward and Jenkinson JJ agreed) said in Lewis Construction Co Pty Ltd v Martin (1986) 17 IR 122 at 125:
The Act and the authorities do not distinguish between a “reason” and a “factor”; indeed, in Bowling, these terms are used interchangeably.
31. Further, that no distinction is to be drawn between the cause of conduct and the reason for conduct is supported by our earlier conclusion at [24] as to the meaning of “because” and the interchangeable use by the relevant provisions (ss 340, 346 and 360, 361) of cause and reason.
32. The onus cast by s 361 on the person taking the adverse action means that, to succeed, that person has to establish that he or she was not actuated by the attributes or industrial activity which s 346 seeks to protect. As Mason J said in Bowling at 617, that objective will not be achieved unless the evidence establishes that the real reason for the adverse action lies outside the ambit of the provision – in this case s 346. The real reason or reasons for the taking of the adverse action must be shown to be “dissociated from the circumstances” that the aggrieved person has or had the s 346 attribute or has or had engaged in or proposes to engage in the s 346 industrial activity.

As I noted in Stephens v Australian Postal Corporation (No.2) [2011] FMCA 448 at [83], their Honours in Barclay also pointed out the limited role of a test of discriminatory treatment by comparison with other employees. Subsection 351(1) raises only a test whether one of its specified attributed of the employee provided one of the ‘real reasons’ for the particular dismissal. If it did, then the employer has contravened the section, unless the action is found not to be unlawful under the anti-discrimination legislation listed in s.351(3) or one of the other defences under s.351(2) is established by the employer.
In the present case, the respondents do not seek to justify dismissing Mr Farah because of his age. Rather, they invite me to find positively that his age was not a reason for his dismissal.
Prima facie, it would seem most unlikely that an experienced restaurant manger would be dismissed because he was aged 47, or because of an age differential with subordinate staff aged in their early 30s, whether for that reason alone or in combination with other reasons. To raise a possibility otherwise, Mr Farah recounted events and conversations with Mr Ahn on Saturday 29 January 2011.
He said that “one of the casual travelling cooks that Ricky had hired didn’t show up for his breakfast shift”, but Mr Ahn decided to go ahead with a ‘breakfast special’ contrary to his advice. As a result, the kitchen staff could not cope with the demand. He discussed this with Mr Ahn, who agreed to hire ‘professional qualified chooks/chefs’, and they then interviewed prospective chefs. However, later that day Mr Ahn foreshadowed another response:
35.Later on the 29 January 2011, Ricky came back to the café that afternoon and we had a conversation to the following effect:
Ricky said:“We need to have a talk. The Korean staff can maybe relate better to a younger manager because they are not used to professional like you”
I said:“I don’t agree. I think they are not capable of producing this menu because I still have to go in the kitchen and show them how to make sandwiches. No matter who you have in the front managing you need to have professionals in the kitchen.”
Ricky said:“I think it’s best for now we make this decision.”
I said:“Who is we?”
Ricky said:“It’s ok Jack its ok I will confirm with you next week when your last day. Because it is better to make the change now to someone younger, we will talk.”
36.On Wednesday I interviewed a new supplier for Ricky and the café and I was successful in obtaining a deal for the café with competitive prices.
37.On 1 February 2011, as I completed my shift Ricky said words to the following effect: “Just letting you know we will not require you to come in after Thursday. It is better for the café with a younger manager, Mira and other Korean staff can relate better. It’s not over you are on call and maybe in a few weeks I will bring you back you are a good man you are professional, and maybe you are too good for this people.”
In his oral evidence, Mr Farah referred to the two conversations. He said that on 29 January:
He said words to the effect that he thinks that I should go because he needs to hire somebody younger that the staff can relate to, and they won’t take it so personally when they are criticised for not performing their job. And particularly, named Mira in the kitchen as one of the ones that are more sensitive to my feedback about her performance.
and he said later:
That was his opening comment when he took me aside and spoke to me inside the café on the upper level of the café.
Mr Farah avoided recounting this conversation again, appearing to appreciate that he was unable to provide a precisely consistent recollection of the significant words in which Mr Ahn referred to hiring someone ‘younger’.
Mr Farah’s claim that some such reference had been made on 29 January, was first made in his lengthy email to Mr Ahn in the email exchange on 1 March 2011. In one paragraph, among many other recriminations and assertions about his involvement in the business, Mr Farah said:
Ricky, I took on this challenge with open arms and heart and was ready to do all I can within my power and experience to make it a success. However, the final decisions were up to you implement as the owner. I would like you to be upfront and clear about your decision regarding replacing me with someone ‘younger’ and what you meant by that … and how there was no mention of any problems between us.
Mr Ahn’s short email response to this lengthy email (which I have extracted above) did not touch on this topic, but I would not draw any adverse inference from this omission in the circumstances.
In his evidence, Mr Ahn identified ‘Mira’ as coming from Korea and being ‘around 30’. Others in the staff of about 17 came from a variety of backgrounds, and there were several others who were also about that age, including another trusted Korean lady who was employed in the café while on leave from Mr Ahn’s hairdressing school, and two men with Anglo-Saxon names.
Mr Farah agreed in cross-examination that, in the second conversation on Tuesday 1 February, Mr Ahn told him that the café was losing money and couldn’t afford to carry its losses, and that this was given to him as the reason for his services being suspended after Thursday 3 February. He said:
You’ve agreed with me that there were two conversations a couple of days apart where Mr Ahn told you that you had to go? --- Yes.
And in the second of those conversations, you - - -? ---The first conversation he wasn’t sure. That’s what I said in my affidavit as well. He said, “We’ll talk later, we’ll talk later.”
Yes? --- And then the second one he confirmed that I will be going.
In his affidavit and oral evidence, Mr Ahn denied that “the termination of his employment had anything to do with the applicant’s age”, and maintained that “I decided to terminate the applicant’s employment on account of the poor performance of the café.” He said, and I accept, that he did not employ a replacement to fill the position previously performed by Mr Farah, and that the café is currently managed by himself, in his words: “mainly I do”. The general impression from his evidence was that he and his wife gave up the attempt to improve the quality of the restaurant significantly, and have reverted to conducting a café business of the type which he had acquired in 2010.
Mr Ahn was unable to produce any contemporaneous or current financial accounts of the business to verify his contention that the business lost $69,000 on revenue account in its opening weeks, or incurred any other significant loss. In the absence of that evidence, even by way of a rough income and outgoings journal, I do not believe that this assertion was accurate when it was made to Mr Farah in the March 1 emails, nor do I believe that it was made earlier to Mr Farah. In view of my general doubts about Mr Ahn’s credibility as a witness in his own case and about his ability to recall and recount conversations, I am also not persuaded that the conversations deposed to in his affidavit should be accepted.
However, weighing all the evidence, I consider that – at least – it is probable that it became apparent to Mr Ahn and his wife during the period in which Mr Farah worked at the café that the level of its outgoings was significantly exceeding revenue, and that they formed a belief that it would continue to do so. Such, indeed, was also Mr Farah’s expectation for the opening months, although he was not expected to keep – and was not shown – any financial accounts showing the level of accruing losses.
As is confirmed by Mr Farah’s contemporaneous written reports to Mr Ahn, it appears to me to be highly likely that there were good reasons for Mr Ahn to start to question whether his business plan to turn the café into a more ‘up-market’ restaurant and bar had prospects of success, in the light of the experience of the first six weeks of trading. It appears to me that, at least subjectively, Mr Ahn came to believe, contrary to Mr Farah’s continuing hopes, that his original business plan to take the café up-market should be immediately reviewed.
It also appears to me likely that the events of the ‘crisis’ on the morning of Saturday 29 January brought these questions into some focus in Mr Ahn’s mind. In that context, his subsequent exchanges with Mr Farah appear explicable to me, as showing that on 29 February he commenced to think that he might resolve the staffing concerns which had been raised by Mr Farah, particularly concerning two Korean members of staff upon whom Mr Ahn appears to have relied, and could reduce operating expenses, by suspending Mr Farah’s employment and salary, and seeing whether the café could be operated without Mr Farah’s services. I consider it likely that Mr Ahn then reflected on these issues between 29 January and 1 February, and decided on 1 February to do this. When at the end of February, Mr Farah brought the unsatisfactory (for him) situation to a head, Mr Ahn then repudiated the contract of employment and refused to negotiate informally.
In my opinion, a finding that the ending of Mr Farah’s employment was essentially the result of Mr Ahn, between 29 January 2011 and 1 March 2011, deciding to abandon his original business plan which required the employment of an experienced restaurant manager, is confirmed by some of Mr Ahn’s oral evidence which I would accept, because it has a ‘ring of truth’ about it in the context of other evidence and the manner in which it was given. Thus, the fact that his decision to repudiate the employment had evolved over the period during which Mr Farah was ‘on call’ appears to be confirmed in his explanation for not formally terminating the employment and paying accrued annual leave on 1 February:
And at that same time, were you aware of a legal requirement to pay out annual leave on termination of employment?---Yes, but I couldn’t get a chance to pay him.
What do you mean by that, “I couldn’t get a chance to pay him”? --- I expected to see him for a couple of days to start to manage the café, so I couldn’t really get the chance to pay him the annual leave.
And later, in questioning about the ‘on call’ conversation:
So you maintain that the applicant asked you about him being on call? --- I ask him, maybe, I need your help, after he refused – reduced rate or part time, and he clarify, “Is it on call?” So on-call is not familiar word to me, so I said, “It’s sort of.”
And in response to a question from me at the end of his evidence, seeking to elucidate a statement in his 1 March 2011 email extracted at the start of this judgment:
HIS HONOUR: I’m just trying to understand the words you’ve used in that sentence: “I think it’s a café – that’s only the reason it didn’t work” What did you mean? Didn’t work because it’s a café? --- He put the price too high, and every cost of operation. Like chef agent, we had to pay $12,000 for around two weeks time. So if it was a high end restaurant, we charge $100 per customer, it absorb the cost. But café, we mainly selling $3 coffee, so we can’t afford full time dishwasher. They couldn’t …---
HIS HONOUR: So you decided that the business you started to try to establish was not the appropriate business for the position of the shop. Is that what you’re telling me? You changed your business plan?--- I – it was a café, but prior, operating like high end restaurant, so I cut the expenses and cost. That is – that – that’s what I have done after he quit and minimise the losses.
Weighing up all the evidence in accordance with the ‘reverse onus’ raised by s.361 and the directions given in Barclay, I have decided that ultimately Mr Ahn – and under his management, the employer Pavilion – were motivated to dispense with Mr Farah’s services and to repudiate his employment contract for reasons which did not include Mr Farah’s age. Notwithstanding my lack of conviction as to Mr Ahn’s evidence generally, I accept such parts of it which, in combination with other surrounding evidence, show that the real reason for taking this action was essentially that Mr Ahn and his wife decided no longer to pursue a business objective of turning the café into a ‘high end restaurant’, in particular, in so far as this required the employment of an experienced restaurant manager. I consider the true explanation for Mr Farah’s dismissal was no more than that.
I have difficulty making any confident finding base on Mr Farah’s uncorroborated evidence alone, whether at the start of Mr Ahn’s deliberations in relation to the continuance of Mr Farah’s employment, Mr Ahn made a reference to wanting a ‘younger manager’. As I have noted, Mr Farah has given written and oral evidence of such a statement in terms which do not show a consistent recollection, and has not established himself as a witness whose entire testimony should be accepted as always reliable.
At most, I am prepared to accept that when Mr Ahn first mentioned the possibility that he might decide in the following week to dispense with Mr Farah’s full-time services, at least temporarily, he might have made a comment that some staff might ‘relate better’ to a different manager whom he referred to as a ‘younger manager’. However, I doubt whether this would have been said by Mr Ahn with any belief that Mr Farah’s age was itself a real impediment to the continuance of his employment. I think it more likely that, if it was said, Mr Ahn made the statement as a ‘face saving’ excuse, which avoided the need to suggest any more personal failing by Mr Farah, or the need to admit that his doubts about employing Mr Farah went to the foundations of their previous mutual plans to take the café ‘up market’.
More importantly, I have concluded that, in fact, Mr Ahn did not make a decision to dismiss Mr Farah on 29 January. Both witnesses agree that on that day he did no more than indicate that he would be considering whether or not to continue Mr Farah’s current employment, and would arrive at a decision about this and discuss it with Mr Farah in the following week. Mr Farah’s oral evidence appears to retreat from the suggestion in his affidavit that this was again mentioned on 3 February. There is no suggestion in the evidence that in the course of Mr Ahn’s later deliberations and statements, Mr Farah’s age played any part in Mr Ahn’s decision. Moreover, that decision was not to employ another manager, but to see whether he could operate the café after 3 February without employing either Mr Farah’s services or the services of any other manager. Nor is there any suggestion that Mr Farah’s age played any part in his statements on 1 March, in effect, that he had decided that he could do this.
For all the above reasons, I have concluded that Mr Farah’s age probably did not play any part in his dismissal.
I therefore conclude that the respondents have sufficiently met the presumption raised by s.361, and that contravention of s.351 has not been established in relation to either Pavilion or Mr Ahn.

Penalties for two contraventions of s.44

I have noted above, that Pavilion and Mr Ahn admit that they are both liable for the imposition of penalties under s.546 for contravention of the employer’s obligations under s.44 to satisfy minimum protections under the National Employment Standards in relation to:
i)The requirement under s.125 and the Regulations Ch.2 Pt.2-2 Div.12 to give to Mr Farah “before, or as soon as practicable after, the employee starts employment” the ‘Fair Work Information Statement’ published by the Fair Work Ombudsman in the Gazette, and
ii)The Requirement under s.90(2) to pay to Mr Farah an amount for untaken paid annual leave accruing under s.87 “when the employment of an employee ends”, i.e. in relation to the period 17 December 2010 until 3 February 2011.
Each of these contraventions carries a maximum penalty of $33,000 for Pavilian and $6,600 for Mr Ahn. When assessing the appropriate penalties within the range from nil to the maximums, I must arrive at an amount which is proportionate to the gravity of the offence committed, and also takes into account other sentencing considerations including deterrence (cf. Graham J in Australian Ophthalmic Supplies Pty Ltd v McAlary‑Smith (2008) 165 FCR 560, [2008] FCAFC 8 at [54]). The matters which become determinative in each case differ with the particular circumstances, and recent judgments of the Full Court have emphasised the discretionary nature of the power to impose civil penalties for breach of industrial legislation, and have supported a mental process of ‘instinctive synthesis’ (cf. Australian Ophthalmic Supplies Pty Ltd v McAlary‑Smith (supra) at [27]).
It is, however, appropriate to consider a non‑exhaustive list of considerations suggested in recent authorities, being:
·The nature and extent of the conduct which led to the breaches.
·The circumstances in which that relevant conduct took place.
·The nature and extent of any loss or damage sustained as a result of the breaches.
·Whether there had been similar previous conduct by the respondent.
·Whether or not the breaches were deliberate.
·Whether the respondent had exhibited contrition.
·Whether the respondent had taken corrective action.
·Whether the respondent had co‑operated with the enforcement authority.
·The need for specific and general deterrence.
In the present case, the allegations of these two contraventions were very much afterthoughts on the part of Mr Farah’s legal representatives, and received little attention in the evidence and submissions which they presented at the trial. Mr Farah’s originating application and claim did not raise either of these contraventions. Nor can they be found in a very poorly pleaded statement of claim filed on 20 July 2011. They were first raised in an amended statement of claim filed on 16 September 2011.
Mr Farah did not present any evidence suggesting that he ever felt any concern or particular loss arising from the omissions constituting the two contraventions. I also cannot discern any particular loss or detriment suffered by Mr Farah as a result of not getting the Fair Work Information Statement. As I have found above, Mr Farah’s loss of payment of accrued untaken annual leave will be appropriately compensated within my assessment of Mr Farah’s damages for breach of the fixed term of the employment contract, which has been the focus of his claims since the inception of the litigation, together with the allegation that he was dismissed because of his age.
Mr Ahn gave the evidence which I have extracted above in relation to non-payment of accrued annual leave entitlements, explaining why he never calculated and paid an amount of accrued annual leave to Mr Farah. That is, because he “couldn’t get a chance to pay him” at the time, around 1 March 2011, that he decided that he would not call upon Mr Farah’s services again. By ‘a chance’, I understood him to mean “a suitable opportunity”.
This does not provide a very good excuse for non-payment of an entitlement of a terminated employee, of which Mr Ahn admitted he was generally aware. However, I accept that it reflects Mr Ahn’s genuinely confused state of mind during February 2011 as to whether he had, in fact, terminated Mr Farah’s employment totally and finally, and, perhaps also, as to the legally binding terms of that employment. The failure of Mr Farah’s lawyers to allege contravention of s.90(2) until September 2011 probably then contributed to its belated recognition by Mr Ahn.
In circumstances where Mr Farah appears to have an Australian business background, including in relation to employment matters, which is no less extensive than Mr Ahn, it is difficult to attribute any particular blame to Mr Ahn for the informality preceding Mr Farah’s commencement of work, as well as at its cessation. More importantly, Mr Farah’s success in relation to his principal claim and the substantial award of damages is likely to send a clear message to Mr Ahn and the businesses of himself and his wife with which he is associated, emphasising the need to give attention to the legally required formalities of making and terminating employment contracts in relation to all employees, both senior and junior.

There is no evidence suggesting that Mr Ahn, Pavilion, or any other employing entity associated with Mr Ahn and his wife have a record of adopting similar informality in their employment relationships, nor that they have ever been found liable for any contraventions of workplace legislation in relation to other employees.
Taking into account all of the considerations pointed to in the authorities, and in the light of the somewhat special circumstances in which the contraventions in relation to non-payment of untaken accrued annual leave have come to light and been presented to the Court in the present proceedings, I have decided that substantial penalties are not required, whether by reason of significant culpability or a need for additional deterrence. I consider that a suitable penalty would be $1,000 on Pavilion and a proportionate $200 on Mr Ahn.
In relation to the failure to give Mr Farah the Fair Work Information Statement, Mr Ahn said that he was unaware of the legal obligation to do this in December 2010. I accept that this was so, and that his lack of awareness was regrettable on the part of a businessman involved in sundry small businesses with small numbers of employees. However, it is not particularly surprising that this obligation might have been overlooked during 2010, being the first year in which this obligation was imposed by Commonwealth legislation.
I accept that the Fair Work Information Statement serves important purposes to alert employees as to the ten minimum workplace entitlements in the National Employment Standards, and as to the sources of their workplace rights and avenues for redress. The Court should not minimise nor brush aside the importance of the entitlement of an employee to be given the Statement at the commencement of his or her employment.
However, in the peculiar circumstances of Mr Farah’s employment, the importance of giving the Statement did not have the same pertinence as it would for ‘normal’ employees of small businesses, particularly those employed for low wages or with ethnic or other personal disadvantages. Mr Ahn’s failure to observe this formality, pales into relative insignificance by comparison with his failure to appreciate Pavilion’s potential exposure to substantial damages for breach of contract, as a result of his not giving better attention to the formalising of the employment contract in December 2010, and later to his rights to exclude Mr Ahn from his employment in February 2011. Those failures have, as I have indicated, resulted in Pavilion and Mr Ahn’s becoming embroiled in the present litigation, and paying substantial damages.
In my opinion, these and considerations which I have addressed in relation to the failure to observe s.90(2), should also result in penalties of $1000 on Pavilion and $200 on Mr Ahn, in relation to their failure to comply with the statutory obligation to provide Mr Farah with the Fair Work Information Statement.
Although the two contraventions arise from the same defects of informality adopted by Mr Ahn in relation to his employment of Mr Farah, they do not involve essentially the same course of conduct, and separate penalties are appropriately imposed. I also would not, considering the totality of the cumulative penalties on each of Pavilion and Mr Ahn – and indeed on both of them, reduce any of the penalties under the ‘totality’ principle.
It is not contested by the respondents that the penalties should be payable to the applicant by order made under s.546(3), and I accept that this usual course should be followed.
The proceedings appear to come within the general prohibition on costs awards arising under s.570(1) of the Fair Work Act. However, as requested by the parties’ counsel, I shall allow an opportunity to make applications for costs awards, and I shall direct that such an application shall be decided in Chambers on written submissions.
For all of the above reasons, I propose to make the declarations and orders which are set out at the commencement of this judgment.

I certify that the preceding one hundred and fifteen (115) paragraphs are a true copy of the reasons for judgment of Smith FM

Date: 3 February 2012