Ferenc Farkas v Opal Packaging Pty Ltd T/A Opal Fibre Packaging
[2023] FWC 3266
•6 DECEMBER 2023
| [2023] FWC 3266 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Ferenc Farkas
v
Opal Packaging Pty Ltd T/A Opal Fibre Packaging
(U2023/5508)
| COMMISSIONER SIMPSON | BRISBANE, 6 DECEMBER 2023 |
Application for an unfair dismissal remedy
On 20 June 2023, Mr Ferenc Farkas (Mr Farkas /the Applicant) applied to the Fair Work Commission (the Commission) under s.394 of the Fair Work Act 2009 (the Act) for an unfair dismissal remedy, alleging he was unfairly dismissed from his employment with Opal Packaging Pty Ltd T/A Opal Fibre Packaging (the Respondent).
I listed the matter for a directions hearing by telephone on 8 August 2023. The matter was listed for Hearing by Microsoft Teams on 25 September 2023. At the Hearing it was agreed between the parties that they would attempt to engage in further settlement discussions and the hearing was adjourned on a consent basis. On 31 October 2023, my chambers was advised that the parties had been unable to resolve the matter and sought that the matter be relisted. I listed the matter for a further directions hearing on 4 October 2023. The hearing took place by Microsoft Teams Video on 26 October 2023.
At the Hearing the Applicant was represented by Mr Mitchell Perry of the "Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union (AMWU), and permission was granted for the Respondent to be represented by Mr David Miller, National Manager, Workplace Legal Services of Ai Group.
The Applicant relied on two witness statements of Ms Ilona Farkas (Exhibit 4 and Exhibit 5) and the statement of Mr Gary Moore (Exhibit 3), in addition to two witness statements from the Applicant (Exhibit 1 and Exhibit 2), with one being an amendment to his original witness statement filed (Exhibit 1). The Applicant also relied on his Outline of Submissions filed on 22 August 2023, and his Outline of Submissions in Reply filed on 13 September 2023 and closing oral submissions.
The Respondent relied on the witness statements of Mr Michail Gilroy (Exhibit 6), and Mr Mathew Whyte (Exhibit 7). The Respondent also relied on its Outline of Submissions filed on 6 September 2023 and its closing oral submissions.
The Applicant was dismissed from his employment on the Respondent’s initiative on 30 May 2023. The application was filed on 20 June 2023, within 21 days of the date of the dismissal. The Respondent is not a small business employer, and there is no jurisdictional objection to the Applicant’s application.
SUBMISSIONS AND EVIDENCE
Background
The Applicant was employed by the Respondent, and its predecessor before the Respondent took over the business, for a period of approximately 35 years, with his employment commencing in 1988, and his dismissal taking effect on 30 May 2023. At the time of the dismissal, the Applicant was employed as a Forklift Driver and Machine Operator at the Respondent’s Rocklea site in Queensland.
In 2021, the Applicant was involved in an at fault motor vehicle accident. He was indicted for dangerous driving in October 2021. He was hospitalised for his injuries and took sick leave to recover. In January 2022 he returned to work with no issues of capacity. The Applicant submitted that when Mr Michail Gilroy, Floor Manager, and Ms Marzina Turner, Scheduling/Team Leader had visited him in hospital, he had enquired about accessing leave to be able to maintain his employment, should he be imprisoned for a length of time. The Applicant submitted that they both dismissed his concerns and did not provide support for accessing leave to cover any sentence.
On 21 March 2023, the Applicant was sentenced to 5 years’ imprisonment, to be suspended after he had served 6 months’ imprisonment, commencing on the date of sentencing. The Applicant did not communicate directly with any representatives of the Respondent after his incarceration on this date. He was on approved annual leave on 20 and 21 March 2023 for the sentencing hearing and was paid annual leave for the remainder of that week.
When the Applicant was terminated from employment he was paid out his accrued annual leave, long service leave and paid five weeks’ notice pay.
It is common ground that the Respondent agreed to re-employ the Applicant on as a permanent employee from 16 October 2023 and he recommenced employment with the Respondent on that date in the same position he had been performing at the time of his termination. The Applicant agreed in his oral evidence that for the entire period of his employment with the Respondent and its predecessor company he had worked with Mr Gilroy and that they were friends. The Applicant accepted that Mr Gilroy remains the Applicant’s day supervisor since he has been re-employed by the Respondent since being incarcerated, that they had reestablished their working relationship and there is nothing different about the job. The Applicant agreed with the proposition that there was no reason he could not continue in that position until he decides to stop working. Mr Gilroy confirmed in his evidence that he had worked with the Applicant for 35 years, and had contacted the Applicant about resuming his employment when he was released from prison and the Applicant is now back at work in his former position, and their working relationship had resumed and “everything was good”.
Annual leave application to cover period of incarceration
Formal notification of requirement for leave
The Applicant set out that he had attempted to communicate the likely incarceration for the indictment to Mr Gilroy, and Ms Turner prior to the sentencing hearing in March 2023, however stated that they brushed it off as not being serious and reassuring him he wouldn’t be incarcerated. His evidence was that he recalled stating to his sister and others (including Ms Turner) that he would be taking leave if he was incarcerated and was under the impression that the Respondent would reach out regarding some follow up of the leave, which did not occur. Ms Ilona Farkas, the Applicant’s sister, corroborated that he had stated his intention to utilise his leave during his incarceration multiple times.
The Respondent submitted that it only formally became aware of the Applicant’s likely incarceration on 14 March 2023 via email from Mr Gilroy. The Respondent’s submission was that on this date it became aware of the conviction from October 2021 and at no time prior to this date had there been notification of this event. Further, they relied on there being no ‘formal’ request for leave until the letter dated 1 April 2023, received 11 April 2023, 3 weeks after the Applicant had ceased attending work due to his incarceration. The Respondent submitted that due to the lack of formal application for leave, they were unprepared for his absence and therefore refused his leave request.
However, Mr Gilroy’s evidence was that he was aware of the Applicant’s charge, having visited him in hospital in 2021 and subsequently providing a character reference for the Applicant’s trial. Mr Gilroy stated that the Applicant continued to work unobstructed, with no mention of the requirement for leave, up until sentencing on 21 March 2023. His evidence was that he only became aware that leave may be required on 11 March 2023 during a conversation with the Applicant and that the Applicant had not directly sought leave at this point. He gave evidence that when he had asked the Applicant directly if he wanted to speak to Human Resources about a leave of absence, the Applicant had replied in the negative. Mr Gilroy’s oral evidence was consistent with his version of the conversation, repeating the claim that he asked the Applicant if he wanted Mr Gilroy to speak to HR and he said no. The Applicant accepted that in early March he had a discussion with Mr Gilroy about the likely impact of a sentence on his ongoing employment, however vehemently refuted that this exchange took place as described by Mr Gilroy. The Applicant accepted he did not have a discussion with HR, however he claimed that he had a conversation with Mr Gilroy where he said that if he was sentenced, he intended to apply for leave. The Applicant said that this was the same conversation that Mr Gilroy was referring to. He agreed he had a discussion with his solicitors about the prospect that he may have to go prison for a period of time.
The Applicant submitted that the Respondent ought also to have been aware of the likely requirement for leave and of the charges against him, as he was granted annual leave to attend the sentencing hearing in March 2023, and likely in 2021/2022 during his absence for recovery and for the substantive indictment hearing. The Applicant said in his oral evidence he was not given any assistance from HR.
Mr Gilroy’s evidence was that he was informed by Ms Turner, via the Applicant’s sister, that the length of the sentence was to be 6 months and that the Applicant had immediately been taken into custody. He submitted that he then advised Mr Johnstone of the sentence in order to begin coverage considerations. The AMWU submitted that it was fanciful for the Respondent to state that they were not already on notice of a period of leave being required, even though the exact duration would only have become apparent at the sentencing on 21 March 2023. Ms Turner, was named in the conversations by the Applicant about potential incarceration and required leave, and was not called by the Respondent as a witness. The AMWU submitted that on this basis, a Jones v Dunkel[1] inference could be drawn to conclude that her evidence would not have assisted the Respondent’s case.
The AMWU submitted that it is unclear what further steps the Applicant could have taken prior to the sentencing hearing, (while he was still unsure of the exact duration of incarceration that might be imposed), to meet the Respondent’s requirement to ‘formally’ notify them. The Applicant’s evidence was that he was hesitant to put in a formal leave request until he knew exactly the length of leave required, so that he didn’t waste anyone’s time with amending applications if he estimated the incorrect amount of leave. He submitted that based on his conversations with Ms Turner and Mr Gilroy that he thought the Respondent had enough awareness to be sufficient, leading up to the sentencing hearing. The AMWU further submitted that it was not the fault of the Applicant that the conversation between the Applicant and Ms Turner in approximately 2021 regarding the potential need for leave were not appropriately escalated to make them ‘formal.’ The Respondent would also have been aware of the Applicant’s intention to appeal the sentence from the meeting with Ms Farkas on 29 March 2023 and the letter on 11 April 2023, notifying the Respondent that the duration of the sentence could potentially have been reduced to 3 months instead of 6 months.
Incarceration and frustration of contract
The Respondent submitted that once the leave request was formally made, including the detail of the sentence being 6 months, the duration and impact that approving the leave request without prior notice and planning would have on the company’s operations, was too great. The Respondent submitted that it decided that it was not able to approve a period of paid leave sufficient notice to cover the Applicant's absence. The Respondent submitted that due to the unapproved leave, the Applicant is unable to dispute that he would not be able to present himself for work and therefore the Respondent considered this an incapacity to attend work.
In the case of Riley v WorkCover/Allianz Australia (Robinvale Transport Group (SA) Pty Ltd)[2], Olsson J considered the principle of frustration and noted the following in relation to incarceration:
“[96] …By way of contrast, the passing of a sentence of imprisonment on an employee does not automatically put an end to the contract of employment from the date of sentence, but it is capable of doing so (FC Shepherd & Co v Jerrom [1987] 1 QB 301).
[97] This is so not because a crystallised situation of frustration does not automatically put an end to the contract but, rather, because a very real factual question often arises as to when the stage is reached at which frustration can be said to occur. In the context of imprisonment, very much depends on the length of enforced absence from work, or the need (or otherwise) to obtain a replacement (Chakki v United Yeast Co Ltd [1982] 2 All ER 446).
[98] So it is that it has been said that, whilst a lengthy sentence of imprisonment would clearly frustrate a contract of employment, nevertheless, one which could be served within an available period of leave would not, of itself (Re Long Service Leave (Coal Miners) Award (1962) 4 AILR 74); nor would one which could be served by periodic weekend detention (see Macken, O'Grady, Sappideen, The Law of Employment (4th ed, Lawbook Co) at p 234).”
The AMWU relied on this discussion and the case law cited within it,[3] and submitted that the Applicant’s circumstances did not amount to frustration of contract as he had several options open to him to take extended leave to cover the period of incarceration. Of these options he selected utilising his entitlement of accrued annual and long service leave which was more than sufficient to cover the period. The AMWU submitted that the Respondent’s choice not to grant the leave or look at other alternatives including unpaid leave demonstrated their intention to terminate the Applicant’s employment for incapacity due to the circumstances they had created. The Respondent submitted that these considerations regarding imprisonment are not relevant as the Respondent’s concern was not the imprisonment itself but that the Applicant was no longer able to fulfil his employment obligations of being ready willing and able to work.
The Respondent submitted that Mr Gilroy admits to having discussion with the Applicant between the accident in 2021 and the sentencing in March 2023, concerning the accident and its ‘consequences’ but submits that he was not made aware of the implications of the charge or the likely consequences until the sentencing. This is discordant with the Applicant’s evidence that he had raised the seriousness of the charge and the potential for imprisonment with Mr Gilroy several times and been brushed off. The Applicant’s evidence was that he had made leave requests to Ms Turner for approval in the past as his day supervisor, and therefore had assumed that per his conversations with Ms Turner and Mr Gilroy, that the Respondent was aware of his circumstances.
The Respondent referred to an email from Mr Gilroy to Mr Whyte on 14 March 2023, as the date the Respondent formally became aware of the charge and potential requirement for leave, noting that “even though [the Applicant] now faced the prospect of a custodial sentence, the Applicant chose not to discuss this issue in terms of his employment. It was Mr Gilroy who was concerned to take the matter up with the Respondent.”
Unreasonable refusal of leave application
It is not in dispute that the Applicant had approximately 30 weeks (about 7.5 months) combined accrued leave. The Applicant also submitted that the denial of his request to use his accrued entitlements to cover the period of his incarceration, where an excess of leave was available, was unreasonable. The AMWU’s submission was that the Respondent did so, knowing it would empower it to terminate the Applicant’s employment for incapacity. Mention was also made of clause 9.14 of the Opal Fibre Packaging National Enterprise Agreement 2022 (the Agreement), which set out that employees with more than 12 months’ service are entitled to apply for an unpaid career break which must not be unreasonably refused. The Applicant submitted that though he did not make application under this section of the Agreement, there is a demonstrated requirement for the Respondent to appropriately consider and not unreasonably refuse a long-term leave request, and it was demonstrative of the other options open to the Respondent which were not contemplated.
The AMWU also made reference to clause 9.5 of the Agreement with regard to ‘emergency or special circumstances’ which preclude an employee from being able to provide the required 4 weeks’ notice of any annual leave they apply to take. It was submitted that it was, or ought to have been, clear to the Respondent that the Applicant did not know how long he would be incarcerated for and therefore was not in a position to request a discrete period of leave until it was urgently required, after he had been taken into custody. The AMWU submitted that by an ordinary reading of those words they would encompass the Applicant’s circumstances of immediately being taken into custody without opportunity to reapply for further annual leave.
The primary argument advanced by the Respondent is that it is not open to the Commission to make a finding on the Respondent’s entitlement to refuse the leave, nor to upset this decision having now been made. Nevertheless, the Respondent submitted that the decision was reasonable due to the lack of notice of the requirement for leave, in addition to the practical difficulty and expense in replacing the Applicant during the lengthy period. The evidence of Mr Whyte was that the leave had been given consideration once the length of the sentence was known, and before the official request on 11 April 2023 was received. Mr Whyte noted that the length of leave would have required substantial rearrangement of day shift rosters, overtime and backfilling, which would limit the feasibility of approving other leave requests. The AMWU noted that no actual evidence in support of this statement was provided nor comparison costing for permanently replacing someone of the Applicant’s skill and knowledge of the business. Despite this, Mr Whyte’s evidence was also that it was not uncommon for staffing at the Applicant’s site to be uncertain, indicating the Respondent should have had some ability to and knowledge of responding to adhoc leave requests by its employees.
Mr Whyte accepted that he does not normally have input into operational decisions such as granting or refusal of leave or rostering or scheduling. Mr Whyte also confirmed he is not the decision maker in relation to hiring and firing and was not the decision maker in the Applicant’s case. Mr Whyte confirmed that Mr Johnstone was the decision maker in this case. Mr Johnstone was not called to give evidence.
Show Cause and Termination
Show Cause Process
Ms Farkas’ evidence was that on 28 March 2023, she was invited by Ms Marzina Turner, Scheduling/Team Leader to attend a meeting to discuss the Applicant’s situation. The meeting took place on 29 March 2023. The Respondent submitted that Ms Farkas had sought the meeting of her own initiative, however Ms Turner, who Ms Farkas submitted had invited her was not called as a witness by the Respondent. In reply submissions, the AMWU provided additional statements of Ms Farkas and her partner Mr Moore to provide further evidence of the invitation being at the behest of the Respondent. In attendance at the meeting was:
· Mr Peter Johnstone, Plant Manager – Rocklea Opal;
· Mr Mathew Whyte, HR Manager – Opal Packaging & OPS;
· Mr Michail Gilroy, Floor Manager;
· Ms Ilona Farkas, Applicant’s sister;
· Mr Gary Moore, partner of Applicant’s sister.
Mr Moore’s and Ms Farkas’ evidence was that Mr Whyte had enquired about the length of the Applicant’s incarceration and indicated that he considered that the Applicant had abandoned his employment. Mr Gilroy’s evidence was that Mr Whyte had explained that the company was not able to hold the position open for as long as 6 months. Ms Farkas’ evidence was that based on Mr Whyte’s statements, she believed that the Applicant’s employment would be terminated, and there was no response from the Applicant that could change that. Mr Moore corroborated this. Mr Whyte and Mr Gilroy’s evidence was that Ms Farkas had indicated that she had worked in HR and understood the circumstances. Ms Farkas refuted making such as statement.
Mr Moore agreed that the Respondent asked Ms Farkas if she might assist the Respondent to communicate with her brother in prison. Mr Moore said that Ms Farkas did not agree to do this. Mr Moore said he and Ms Farkas were asked to take a letter to the Applicant in prison and he said the letter would be upsetting and they asked if the Respondent could take the letter to the Applicant and they agreed to. It was put to Mr Moore that the tenor of the meeting was generally good natured. Mr Moore said it started as a good-natured meeting but it deteriorated when the Respondent advised that they were going to give the Applicant a letter stating that there was no reply and his job would be terminated. Mr Moore said the employer wanted them to take the letter to the Applicant and they said no.
Ms Farkas said she did not know that the Respondent wanted to use her to communicate with the Applicant. Ms Farkas was asked about the letters attached to her statement.
Ms Farkas submitted that she enquired about the leave balances available to her brother, which Mr Gilroy corroborated, but he noted that the Applicant had previously advised him that he would not be making any application and there had been no written application from the Applicant regarding this by the time of the meeting. The Applicant adamantly refuted this assertion that he had indicated no intention to apply for leave, referring again to his many conversations with Mr Gilroy and Ms Turner regarding the potential need for leave. Ms Farkas stated that she had suggested to the Respondent’s representatives that they should contact the Applicant directly about the potential termination of his employment. She stated she provided the Respondent’s representatives the following details:
· Phone numbers to contact the correctional facility holding the Applicant at the time;
· The Applicant’s prisoner number;
· Email contacts for the correctional facility; and
· What to do to apply for a visit.
The Applicant’s evidence was that the information she provided should have been sufficient for the Respondent’s representatives to be able to contact him directly, rather than via his sister. Mr Whyte’s evidence was that it had been suggested at the meeting that the Respondent could communicate with the Applicant through Ms Farkas, and that she had accepted. Ms Farkas evidence was that she did not agree to receive correspondence on behalf of her brother, as instead she believed that based on Mr Gilroy’s assurances that he would arrange to visit and contact the Applicant directly, that it would not be required of her. Mr Gilroy’s evidence was silent on this point.
Mr Whyte said in his oral evidence that prior to the meeting on 29 March he had understood the Applicant had been with the company for a long period of time. Mr Whyte was referred to the very positive comments made by Mr Gilroy about the Applicant in the email sent to Mr Whyte and Mr Johnstone on 14 March 2023 including that “….He has been with the Business since 1988. He started at Westend Site. I couldn’t ask for a better Employee doesn’t feature in the sick leave, punctual never had any dispensary (sic) issues or any other concerns….” Mr Whyte agreed he was aware of these comments before going into the meeting on 29 March. Mr Whyte accepted he did not know the Applicant. Mr Whyte was referred to his evidence at paragraph 7 of his statement where he said as follows:
“7. Once it was confirmed on 21 March 2023 that the Applicant’s sentence was five years imprisonment, wholly suspended after six months, we considered the issue of leave (in the event that the Applicant might subsequently request that of the company), but considered that in the circumstances, six months was too long a period to keep the position open and it was impractical to fill his position for that length of time without replacing the Applicant. In those circumstances, and not having heard from the Applicant concerning his absence, we considered that there was no alternative but to terminate his employment. It was necessary however, to engage with the Applicant about these matters.”
It was put to Mr Whyte given this evidence that it had already been decided that the Applicant would be terminated before the meeting on 29 March. He rejected this suggestion. Mr Whyte said termination was one possibility. Mr Whyte was asked what other options were available other than termination. Mr Whyte said that in the circumstances they needed to take advice which they did. Mr Whyte accepted this was not in his statement. He said he sought advice from his internal legal team. He continued to maintain that no final decision had been made at that time, however it was apparent from his evidence that it was at least his view there was no alternative but to terminate the Applicant.
Mr Whyte said that the purpose of the meeting on 29 March 2023 was to establish whether Ms Farkas would agree to be an intermediatory. Mr Whyte rejected the proposition that Ms Farkas did not agree to this. Mr Whyte said that the reason Mr Gilroy agreed at the meeting to visit the Applicant was his personal relationship. Mr Whyte was referred to the evidence of Mr Gilroy where Mr Gilroy said in his statement as follows:
“15. I informed Ilona that I would make an immediate application for visiting rights with a view to speaking directly with Frank to explain the company’s position.”
Mr Whyte maintained that Ms Farkas had agreed to be an intermediary between the Applicant and the Respondent and separate to that Mr Gilroy agreed to apply for visitation rights to see the Applicant.
On 1 April 2023, Ms Farkas prepared correspondence to Mr Whyte on behalf of the Applicant, based on her discussions with the Applicant, informing the Respondent that he was incarcerated for 6 months and requested to utilise annual leave for the period. The correspondence also notified the Respondent of his intention to return to work when he was released. The Applicant signed this letter and Ms Farkas emailed the letter to Mr Whyte on 11 April 2023. Mr Whyte was asked whether he was aware of the outcome of the appeal process as at 11 April when he received the 11 April email. Mr Whyte said he did not recall, however he was aware of an appeal in process at the time. It appears not to be in dispute that a decision in relation to the appeal was handed down by the Supreme Court of Queensland on 2 May 2023.
In correspondence dated 20 April 2023 (provided to Ms Farkas on 23 April 2023), Mr Johnstone notified the Applicant via letter, care of his sister that the request for annual leave was denied after being considered by the business. The letter contained the following short substantive content:
“I refer to your letter dated 1st April 2023 requesting to apply for Annual Leave for the period of your incarceration.
Your request to use Annual Leave for the period of your incarceration has been considered by the business and is respectfully denied.”
The Applicant indicated in his oral evidence he did not recall receiving the letter from his sister. Ms Farkas said that she did not give the letter to the Applicant and she referred it to the Union. Ms Farkas said she did speak to the Applicant about that correspondence. Mr Whyte confirmed in his oral evidence that the content of this letter was based on his advice. Mr Whyte accepted that there is no reference to the outcome of the Supreme Court appeal against the length of the Applicant’s sentence or the timeframe of the appeal in his witness statement. Mr Whyte initially indicated he believed that the outcome of the appeal was known at the time of the sending of the letter however he later conceded his evidence could be incorrect on this point. Mr Whyte claimed that there were general conversations around the time with Mr Gilroy and Mr Johnstone about the potential outcome if the sentence were reduced in terms of what that would mean in this process. Mr Whyte said that the firmest information the Respondent had was that the sentence was 6 months.
In correspondence dated 27 April 2023, Mr Johnstone again wrote to the Applicant, care of his sister, setting out the Respondent’s understanding of the matter, noting it was considering terminating his employment on the grounds of incapacity and inviting him to respond:
“In light of the above, the Company is considering terminating your employment on the grounds of incapacity, in that you are unable to attend work to perform your duties.
The Company is now providing you with an opportunity to provide any further information you believe is relevant prior to the Company reaching a final decision in relation to your employment. We invite you to provide a written response back to me by no later than 12th May 2023 in light of your inability to attend a formal meeting.
If you fail to provide a response, a decision will be made based on the information currently available to the Company.”
The Applicant again said that he did not recall receiving the letter dated 27 April 2023. The Applicant said he did not want the company to communicate with his sister and he wanted the communication to be with himself. Ms Farkas said she did not give the letter of 27 April to the Applicant but gave it to the Union.
On 10 May 2023, the AMWU wrote to the Respondent on behalf of the Applicant reiterating that the Applicant had expressed his intention to continue employment, was 62 years old with 35 years’ service and that the Applicant had accrued unused 439.72 hours of annual leave and 755.34 hours of long service leave and was willing to utilise it to continue the employment relationship. The Applicant said in his oral evidence that it was his idea to ask the AMWU to correspond with the Respondent.
Communication with the Applicant during incarceration
The Applicant submitted that it was difficult for him to make contact with people while incarcerated as everything required prior approval. He stated he was aware that his sister was in contact with Mr Gilroy and Ms Turner, and he was visited by Mr Perry from the AMWU, his sister and Mr Moore, his sisters’ partner. The evidence of Mr Gilroy was that he made an attempt to obtain visiting rights but was stymied in his attempt by the length of time taken to get a response to his initial request. His evidence is that he was still unable to be offered a visit by the beginning of June 2023, by which time the ongoing correspondence through the agency of Ms Farkas had been completed. The Applicant’s evidence was that his sister had informed him that Mr Gilroy’s application to visit him had been delayed, but that he considered this excuse difficult to believe based on the swiftness his other visitor’s applications being reviewed and approved. No evidence of Mr Gilroy’s application to visit the Applicant was presented by the Respondent to substantiate this attempt.
The AMWU submitted that an enterprise the size of the Respondent’s should have done more and tried harder to make direct contact with the Applicant instead of relying on Ms Farkas to relay information. The Respondent refuted this, referring to Mr Gilroy’s attempt to obtain an in person visit to the Applicant. The Respondent made no reference to attempting to contact the Applicant by phone or direct letter, which on the Applicant’s evidence, would have been possible from the information provided by Ms Farkas at the meeting.
The Respondent submitted that it was not unreasonable for representatives to only make contact with the Applicant care of his sister, in light of the fact that the Applicant chose not to have any formal discussions with the Respondent about the matter of his leave or the consequences of his absence until the sentencing hearing when he was taken into custody. The Respondent submitted that the circumstances of the Applicant’s difficulty to be contacted due to incarceration were of his own making and that there was no evidence, aside from the Applicant’s statement that there were conversations prior to the letter of 11 April 2023 to indicate that the Respondent had formal knowledge of the upcoming requirement for leave.
The Respondent submitted that it determined that communication would be more efficient if it was through Ms Farkas and the evidence of Mr Whyte was that she had readily agreed to this. The evidence of Ms Farkas and Mr Moore refuted this again. Ms Farkas’ evidence was that she had refused this at the meeting on 29 March 2023 when she had provided sufficient contact details for the Respondent to have arranged contact with the Applicant directly. Further, Ms Farkas’ evidence was that she did not like being the bearer of correspondence from the Respondent as it infringed on the limited time she was able to visit the Applicant, and after discussing the matter, the Applicant would be difficult to pull back to other topics. In her oral evidence Ms Farkas was clear in saying she did not deliver the letters the Respondent had sent to the Applicant but gave them to the Union. Ms Farkas said she spoke to the Applicant about them but that the Applicant wanted the Union to be involved. Ms Farkas said she did not tell the Applicant what was in the letters.
Mr Whyte’s evidence was that the decision to communicate with the Applicant through his sister, was made without having consulted the Applicant, and was partially due to not having been contacted by the Applicant directly about his wanting to take leave. There would seem to be some incongruity between the assertion that it was acceptable for the Respondent not to contact the Applicant directly about significant matters concerning his employment, while at the same time expecting that the Applicant should have made direct contact with the Respondent about seeking leave.
The AMWU also noted that due to the indirect nature of the Respondent’s communication with the Applicant, that it may not constitute valid notification of termination or have afforded him a fair opportunity to, or process by which, to respond to the show cause notice. The Respondent disagreed with this, again noting the efficiency of communicating care of Ms Farkas rather than directly. They submitted that though the reason for termination was sufficiently clear, the method of unsealed letter demonstrated a lack of care as to whether the Applicant was ultimately informed by Ms Farkas or via the correspondence. Further, the AMWU submitted that it was clear on Mr Whyte’s evidence that the decision to terminate the Applicant’s employment had already been made prior to him being given the opportunity to respond. The AMWU submitted that based on the following passage from Mr Whyte’s witness statement, the Respondent was merely going through the motions to provide an ostensibly fair process:[4]
“…we considered the issue of leave (in the event that the Applicant might subsequently request that of the company), but considered that in the circumstances, six months was too long a period to keep the position open and it was impractical to fill his position for that length of time without replacing the Applicant. In those circumstances, and not having heard from the Applicant concerning his absence, we considered that there was no alternative but to terminate his employment. It was necessary however, to engage with the Applicant about these matters.”
The AMWU also noted that due to the Applicant’s limited ability to communicate with the outside world, though the period provided by the Respondent to respond to the show cause letter was not unreasonable, it was a mere technicality, as the reality was that the Applicant was not in a position to respond before the Respondent decided on his employment.
Termination of employment
The evidence of Mr Whyte was that the decision to terminate the Applicant’s employment was made on learning of the length of the incarceration sentence. On 30 May 2023, the Respondent provided written correspondence, care of the Applicant’s sister, terminating his employment. The Termination letter contains the following:
“The reason for the termination of your employment is incapacity. Specifically, as set out in the letter dated 27th April 2023 you are currently incarcerated and unable to attend work until after your release on 20 September 2023.
You were provided with an opportunity to respond in writing. The Company has carefully considered the matters raised in letter from Rohan Webb dated 10 May 2023 sent on your behalf prior to making its decision.
The Company has carefully considered whether its operational requirements could sustain an extended period of annual or long service leave for you through to 20 September 2023, and has concluded that unfortunately the Company cannot sustain such a lengthy absence without incurring significant cost and expense in coverage.”
The Applicant was informed of the dismissal by his sister during a visit on 3 June 2023. The Respondent did not serve the termination letter on the AMWU despite being in receipt of their correspondence on 10 May 2023 stating that the AMWU represented the Applicant.
It was put to Mr Whyte that there was no evidence concerning operational information and he was putting it forward as heresy and a self-serving assertion to support his view that the leave could not be granted. Mr Whyte said the work would have to be covered by casual labour which comes at an additional costs or overtime which comes at an additional cost and these factors were considered. It was put to Mr Whyte that the alleged difficulties the Respondent would experience in covering the leave did not reflect the operational reality. He did not agree.
I specifically asked Mr Whyte if he could provide any further evidence concerning the reasons the Respondent decided it could not grant the leave for the Applicant. Mr Whyte said not further to what he had already put in his statement.
CONSIDERATION
(a) Whether there was a valid reason for dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees);
A valid reason was described in Selvachandran v Petron Plastics Pty Ltd[5] as one which is “…sound defensible or well founded. A reason which is capricious, fanciful, spiteful or prejudiced could never be a valid reason for the purposes of s 170DE(1). At the same time the reason must be valid in the context of the employee’s capacity or conduct or based on the operational requirements of the employer’s business.” The onus rests with the Respondent in cases such as this to establish that it had a valid reason for dismissal.
It is common ground that there is no issue in relation to the conduct or performance of the Applicant and the only issue related to his capacity given his imprisonment.
The AMWU’s asserted that the Respondent’s failure to call Ms Turner (who had direct knowledge of communication regarding leave) and Mr Peter Johnstone (who was the ultimate decision maker on the matter of the Applicant’s dismissal) lead to an inference that their evidence is not in favour of the Respondent’s case that there was no notification of the requirement for long term leave. I am not inclined to draw a Jones v Dunkel inference against the Respondent for the failure to call either of these two witnesses, although it certainly may have assisted in resolving the factual dispute as to whether the Respondent was on notice about the Applicant intending to seek leave if he was incarcerated had Ms Turner given evidence.
I do not accept the Respondent’s argument that consideration of the Applicant’s imprisonment and the case law cited by the AMWU is not relevant. These cases are highly relevant to the current circumstances. It is also apparent that consistent with the principles established in the often cited decision in Rose v Telstra Corporation Limited [1988] AIRC 1592 the conviction was not work related. Of particular assistance however in relation to the issue of whether the Respondent had a valid reason for dismissal is the decision of the Full Bench in Kevin Cooper v Australian Taxation Office [2015] FWCFB 868. Paragraph 20 of that Full Bench decision included the following:
“[20] …
It seems to us, putting to one side the question whether the appellant’s conduct breached the APS Code of Conduct, there was a valid reason for the appellant’s dismissal by reason of his continued incarceration. This is because with effect from close of business on 14 October 2013 the appellant’s suspension from duty ceased. From that time the appellant could not be said to be ready, willing and able to perform his duties for the respondent. He could not carry out the duties for which he was employed by reason of his incarceration. The appellant was not due for release from prison for over 14 months, namely on 20 December 2014. Contrary to the submissions of the appellant advanced during the hearing of the permission to appeal application, it is in our view fanciful in the circumstances of this case, to suggest that the respondent might have favourably considered an application by the appellant to take a period of unpaid leave during his incarceration. It is equally fanciful, given the nature of the respondent’s functions and the duties of the appellant whilst employed by the respondent, to suggest as the appellant did, that the appellant might have been permitted to carry out his duties whilst incarcerated.”
As was the case in that matter, from the point of sentencing and immediate incarceration on 21 March 2023 the Applicant was not ready, willing, and able to perform his duties for a period of six months. It seems consistent with the conclusion in Cooper v ATO the fact of the Applicant not being ready, willing and able to perform his duties for six months is a valid reason for dismissal. Having drawn that conclusion, that the fact of the Applicant having sufficient accrued leave to cover the period of incarceration, and that there were other options available to the Respondent such as the granting of unpaid leave can be addressed as considerations under subsection 387(h).
(b) Whether the person was notified of the reason
The show cause letter sets out that the Applicant was considered incapacitated and unable to perform his role while incarcerated. I am satisfied that the Applicant was on notice of the reasons the Respondent was considering dismissing him and was notified of the reasons for his dismissal being on the grounds of incapacity in correspondence dated 30 May 2023.
(c) Whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person
Whilst there was a contest in the evidence about whether Ms Farkas had or had not agreed to act as an intermediary, it is clear from the evidence Ms Farkas was forwarding the correspondence she was receiving from the Respondent to the AMWU, and the AMWU did provide a response to the show cause letter setting out the reasons why the Applicant should be granted leave for the relevant period. However I am inclined to the view, particularly based on the evidence of Mr Whyte at paragraph 7 of his witness statement, and his oral evidence, that it is more likely than not that the Respondent had already closed its mind to the issue of granting the Applicant a period of leave for six months, prior to the Applicant being given an opportunity to respond, and on that basis the Respondent was in truth engaging in a process of going through the motions of procedural steps without genuinely considering anything further that the Applicant might have said from that point forward by way of an opportunity to respond. This tends to favour the view that the dismissal was unfair.
(d) Any unreasonable refusal by the employer to allow the person to have a support person present to assist in any discussions relating to dismissal
The Respondent did not refuse to allow the Applicant to have a support person. This is a neutral consideration.
(e) Was the Applicant warned about unsatisfactory performance before dismissal
The termination was not related to the Applicant’s performance. This is a neutral consideration.
(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
The Respondent is a large employer and the AMWU’s contentions regarding the unequal expectations of direct contact between the Respondent and the Applicant are noted. However, there is not sufficient evidence that the Respondent’s choice to communicate via Ms Farkas impacted the fairness of the process undertaken. This is a neutral consideration.
(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
The Respondent has dedicated human resources staff. This is a neutral consideration.
(h) Any other matters that the FWC considers relevant
The Respondent has argued that the Applicant never made an application for leave either paid or unpaid before his incarceration. However, this issue is not quite so straightforward. To the extent that there is a conflict in the evidence between the Applicant and Mr Gilroy about Mr Gilroy proposing to approach HR on his behalf about the issue in the course a conversation between them, on 11 March 2023, I am inclined to accept the evidence of Mr Gilroy that he did make such an offer to the Applicant to approach HR, however I am also inclined to accept the evidence of the Applicant that it was always his intention to seek to apply for leave but he was in a difficult position as he did not know until the sentencing hearing how much leave to apply for, and on the day of the sentencing hearing he was led away and unable to speak directly with his employer immediately. He subsequently requested the leave on a document dated 1 April 2023 but not provided to the Respondent until 11 April 2023.
I am inclined to the view that the Applicant had in the course of conversations with Ms Turner and Mr Gilroy at an earlier stage raised the issue of his potentially requiring leave if he was incarcerated for a time, and it as not unreasonable for him to have held the view that through these conversations the issue would need to be addressed at and when he was sentenced. Whilst it would obviously have been preferable to have taken a more formal approach to the issue, given his lengthy period of employment, and his stated previous arrangements for leave with Ms Turner, his approach is understandable.
There was a lack of evidence from the Respondent about the operational matters that it claimed to rely on as a basis to say it could not grant a six-month period of leave. I specifically provided Mr Whyte an opportunity to expand on the operational reasons said to be the basis of the decision to refuse the request for leave. He declined to say anything further than what had already been put in his statement. Mr Whyte’s role is not operational in nature as he conceded in his evidence, and while it would have been open to the Respondent to have provided more specific evidence about why it claimed it would be too costly or inconvenient to grant the period a period of leave, it did not do so. The evidence has disclosed that the Respondent reappointed the Applicant on 16 October 2023 to the same position that he held prior to his termination. The fact that the Respondent decided to do so is not a relevant consideration as to whether the dismissal was unfair because it was not something which was known at the time of termination, or alternatively is not conduct engaged in at the time of termination that the Respondent became aware of after termination.
However, the act of the Respondent reemploying the Applicant on 16 October 2023 in the same role he was employed prior to termination, sits uncomfortably with the notion that it was operationally too onerous to hold his position open for a period of six months, rather than terminate him, because what has actually occurred is almost identical in effect to what the Applicant proposed. The only difference of any significance is that the Respondent’s decision to not grant the Applicant’s request to access his accrued paid annual and long service leave, which was more than sufficient to cover the relevant period, or alternatively not granting a six month period of unpaid leave, is that the Applicant’s continuity of 35 years of employment was broken by the decision to terminate his employment.
The position the Applicant has been reemployed in, would have had to have been covered for the period of time from his incarceration to his reemployment, however the Respondent led no evidence about what the cost of this was, as opposed to what it would have been had the Applicant been granted paid or unpaid leave.
In my view, having considered all of the evidence including that the Applicant had an unbroken period of 35 years of unblemished performance, and the Applicant had more than sufficient accrued leave to cover the not unreasonably lengthy period of six months, the decision not to grant the period of leave as either paid or unpaid leave in all of the circumstances was harsh. With the benefit of hindsight we are now aware that the Respondent has agreed to reemploy the Applicant. Whether this has occurred because the Respondent was always intending to reemploy the Applicant if it was able, or as a response to pressure applied through the bringing of this application is speculative and I do not intend to express a conclusion about that. However, at the time of termination the Applicant was a 62 year old male who had worked as a forklift driver and machine operator at the same business for 35 years and was in prison. At the time of termination, the prospects of the Applicant obtaining employment other than with the Respondent, in the event that the Respondent had chosen not to offer a new employment contract to the Applicant after his release from prison, would seem to be limited. The likely difficulty to the Applicant obtaining employment with a different employer given his circumstances tends to favour a conclusion that the decision to dismiss was unfair.
CONCLUSION
I have weighed each of the considerations under section 387 of the Act. Whilst I have concluded that the Respondent had a valid reason for the termination of the Applicant’s employment, I have concluded that the Respondent did not provide the Applicant a genuine opportunity to respond in the show cause process because it had already closed its mind to the notion of granting the Applicant a period of leave before the show cause process occurred, and it was also harsh for the Respondent not to grant a period of six months paid or unpaid leave in all of the circumstances. On that basis I have determined that the termination of the Applicant’s employment was harsh, and for that reason unfair. Having made that conclusion it is necessary to determine what is the appropriate remedy.
REMEDY
In accordance with the directions, submissions were also provided in relation to circumstances where a remedy was awarded. The Act sets out the following in consideration of a remedy:
“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.”
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.”
The Applicant sought reinstatement, continuity and payment for lost wages under section 391 of the Act.
The Respondent submitted that any harshness of the decision to terminate the Applicant’s employment was undercut by the Respondent’s communication to Ms Farkas and the AMWU that the Applicant was welcome and encouraged to apply for roles when they arose with the Respondent. The Respondent submitted that there was nothing in the Applicant’s work history of concern, and that they welcomed him back, should he be successful in his application for an alternate role. Mr Whyte submitted that such an opportunity arose and Ms Farkas and the AMWU were notified of it on 22 August 2023. The AMWU submitted that this was not a suitable alternative. The evidence of Mr Whyte was that it was usual for the Rocklea site, where the Applicant had been based, to have uncertainty in staffing. As stated above the fact of the Respondent reemploying the Applicant in the same position that he held as it has, tends not to support its submission that it was not operationally practical to hold his position open for a period of six months.
As has been set out above the Applicant was re-employed on 16 October 2023 on a permanent basis in his former role. Despite the Applicant having been reemployed, given the operation of section 391 and for reasons related to my conclusion in relation to section 391(2)), it is appropriate to grant an order for reinstatement. I have decided it is appropriate to make an order for reinstatement, as to not do so would deny the Applicant the protections afforded by reestablishing his continuity of employment, including protection from unfair dismissal, and recognition of his accrued personal leave.
As alluded to in the paragraph above, the power to make an order under section 392(2) is contingent upon determining to make an order under section 392(1). Having decided to make an order under section 392(1), in the exercise of my discretion in relation to the maintenance of continuity of service (section 391(2)) I consider that is appropriate to make an order for the continuity of service as per section 391(2) of the Act. At the time of termination, the Respondent paid out all of the Applicant’s accrued annual leave, accrued long service leave and also paid him five weeks’ notice pay. Given I have concluded to issue orders under section 392(1) and 392(2) reinstating the Applicant with continuity, it will be necessary for the parties to confer and reconcile the effect of these orders with the statutory entitlements under the Act, and payout of entitlements to the Applicant which he is not entitled to as his employment is restored with continuity.
I have also considered the period of time since the dismissal and the relevant considerations in section 391(3) concerning the potential for an order to restore lost pay. In recognition of the range of matters, I decline to make an order restoring lost remuneration. Given it cannot be disputed that the Applicant was incapable of earning income from the Respondent for the six-month period that he was incarcerated, then it cannot be said that he has suffered a loss of income because of the termination for that period. The Respondent submitted that as things stood at the time of the hearing, on the basis of the payments made to the Applicant at the time of termination the Applicant was about six and half weeks to the good and now back in work. As already stated, the parties will need to confer about this issue to ensure that it is in compliance with statutory obligations given the orders to be issued.
Orders as described above will be issued separately and concurrently with this decision.
COMMISSIONER
Appearances:
Mr Mitchell Perry of the "Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union (AMWU) for the Applicant.
Mr David Miller of Ai Group for the Respondent.
Hearing details:
2023
By Microsoft Teams Video
26 October
[1] (1959) 101 CLR 298 at [14].
[2] [2002] SAWCT 79; cited in Hilton Hotels of Australia Pty Ltd v Pasovska (2003) 122 IR 428 at [51].
[3] FC Shepherd & Co v Jerrom [1987] QB 301; cited in Hilton Hotels of Australia Pty Ltd v Pasovska (2003) 122 IR 428 at [51]; cited in Rose v Telstra [1988] AIRC 1592 (Ross VP, 4 December 1998).
[4] Wadey v YMCA Canberra [1996] IRCA 568, 14.
[5] (1995) 62 IR 371 at 373.
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