Flavio Sepe v Ezygas Conversions Aust. Pty Ltd T/A Ezygas

[2010] FWA 8891

[2010] FWA 8891

FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Flavio Sepe
v
Ezygas Conversions Aust. Pty Ltd T/A Ezygas
(U2010/11443)

COMMISSIONER GOOLEY MELBOURNE, 22 NOVEMBER 2010

[1] Flavio Sepe filed an application alleging that he was unfairly dismissed on 4 August 2010 by Ezygas Conversions Aust. Pty Ltd trading as Ezygas (Ezygas).

[2] The matter was conciliated on 6 September 2010 but the matter was not resolved.

[3] Directions were issued for the filing and serving of material.

[4] Mr Sepe filed an outline of submissions and his witness statement on 12 October 2010.

[5] Ezygas was due to file material by 25 October 2010 and on 22 October 2010 Mr Keith of Grant Thornton advised that Matthew Byrnes and he had been appointed as Voluntary Administrators of Ezygas on 13 September 2010, as liquidators at the second meeting of creditors held on 15 October 2010 and that the liquidators would not be appearing at the hearing. They advised that the claim would be referred to the General Employee Entitlements & Redundancy Scheme (GEERS) and that “should any claim for termination of employment be made against the Company GEERS will determine whether payment will be made.”

[6] At the hearing of the matter Mr Dircks was given permission to appear and Mr Sepe gave evidence on his own behalf.

Jurisdiction of Fair Work Australia

[7] At the commencement of the hearing I asked Mr Dircks to address me on section 471B of the corporations Act 2001 (the Corporations Law).

[8] Section 471B provides as follows:

“471B Stay of proceedings and suspension of enforcement process

While a company is being wound up in insolvency or by the Court, or a provisional liquidator of a company is acting, a person cannot begin or proceed with:

(a) a proceeding in a court against the company or in relation to property of the company; or

(b) enforcement process in relation to such property;

except with the leave of the Court and in accordance with such terms (if any) as the Court imposes.”

[9] Mr Dircks relied upon a decision of a Full Bench of the Australian Industrial Relations Commission (AIRC) 1 which held that, as the AIRC was not a court within the meaning of section 58AA of the Corporations Law, the AIRC could hear and determine applications for unfair dismissal when the respondent employer is in liquidation.

[10] Consistent with that decision I determine the Fair Work Australia has the jurisdiction to hear and determine this application notwithstanding the appointment of liquidators.

[11] Mr Sepe was employed by Ezygas as a full time employee on 25 August 2008 until the termination of his employment on 4 August 2010. Consequently he was entitled to bring this application.

The Evidence

[12] The only evidence before me is the unchallenged evidence of Mr Sepe.

[13] The material before me establishes that Ezygas summarily terminated Mr Sepe’s employment for theft. 2 Ezygas alleged that Mr Sepe took scrap batteries from the factory on 3 August 2010 after being told not to take them.

[14] Mr Sepe gave evidence that on 30 July 2010 there were scrap batteries at the back of the workshop. He had been cleaning up the yard as things were quiet. His evidence was that the service manager Mr Donatucci told him that the batteries were to be cleaned up. Another employee took a radiator for scrap rather than place it in the bin. Mr Sepe said that Mr Donatucci was present at the time and expressly approved the employee taking the radiator.

[15] Mr Sepe asked Mr Donatucci if the batteries were to be thrown in a bin but was told that would happen on another day as the bin was for metals only. Mr Sepe then, with the help of another employee, loaded the batteries into his car to take them to a scrap dealer. Mr Sepe said that while he was doing this he was aware that Mr Donatucci was watching him.

[16] Mr Sepe was approached by Mr Donatucci and he said the following conversation took place:

Mr Donatucci “What are you doing?”

Mr Sepe: “I am taking the batteries to clean up to go scrap them. I drive past Hart scrap every day and I will scrap them when I get a chance.”

Mr Donatucci: “You can’t do that. That’s stealing.”

Mr Sepe: “No I am not stealing them I was going to scrap them and give you the money. I will take them out now and you can do it when you like.”

Mr Donatucci: “No Just make sure you give the money to Di.”

[17] As Mr Sepe did not leave work until 5.15 pm he did not go to the scrap dealer that night and he did not go on Monday or Tuesday being the next working days. On 4 August 2010 Mr Sepe was called to a meeting with Mr Boemo. Mr Boemo asked Mr Sepe if he wanted a witness.

[18] Mr Boemo put to Mr Sepe that he had stolen the batteries and Mr Sepe denied the theft. It was also alleged that Mr Sepe had been smoking in the workshop. Mr Sepe admitted to smoking but he said he was in the doorway and was smoking with other employees. Mr Sepe was sent back to work.

[19] Mr Boemo then recalled Mr Sepe and asked him if he had anything to say. Mr Boemo then advised that Mr Sepe’s employment was terminated. Prior to leaving the premises Mr Sepe returned the batteries.

[20] Mr Sepe expressly denied the allegations raised in the letter of termination and gave evidence that any monies received from the sale of the batteries would have been given to his employer.

[21] Mr Sepe contends that the real reason for the termination of his employment was the down turn in work and that the employer was trying to avoid making him redundant.

Was the termination of Sepe’s employment harsh, unjust or unreasonable?

[22] In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, Fair Work Australia must take into account the following:

s387(a) whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees);

[23] Mr Sepe submits that the conduct that Ezygas complains of did not occur.

[24] The uncontested evidence of Mr Sepe establishes that he removed the batteries with the approval of his manager for the purpose of taking the batteries to a scrap dealer. His uncontested evidence was that he was going to give the money he received to the company and that his manager knew this was his intention.

[25] As there was no evidence before me to support the allegations set out in the letter of termination I find that grounds relied upon in the letter have not been substantiated and therefore there was no valid reason for the termination of Mr Sepe’s employment.

s387(b) whether Sepe was notified of that reason

[26] Mr Sepe accepts that he was notified of the allegations.

s387(c) whether Mr Sepe was given an opportunity to respond to any reason related to the capacity or conduct of the person;

[27] Mr Sepe accepts that he was given an opportunity to respond.

s387(d) any unreasonable refusal by the employer to allow Sepe to have a support person present to assist at any discussions relating to dismissal;

[28] Mr Sepe accepts he was given the opportunity to have a representative present.

s387(e) if the dismissal related to unsatisfactory performance by the person—whether Sepe had been warned about that unsatisfactory performance before the dismissal;

[29] The termination of Mr Sepe’s employment was not connected with the performance of his duties.

s387(f) the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

s387(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;

[30] Mr Sepe submitted that the company did have a human resources manager but that person was not involved in the dismissal. Mr Sepe submitted that employees are entitled to a “fair go” regardless of the size of the employer’s undertaking.

[31] There were no submissions that this was a small business and therefore the dismissal was subject to the Small Business Fair Dismissal Code (the Code). However even if it was, on the evidence before me, the employer’s belief that there were reasonable grounds to justify immediate dismissal was not reasonable.

s387(h) any other matters that FWA considers relevant.

[32] The applicant did not receive notice of termination or pay in lieu of notice of termination.

Conclusion

[33] Having regard to the factors set out above, in particular the absence of any valid reason for the termination of Mr Sepe’s employment, I find that the dismissal was harsh unjust and unreasonable. As the dismissal was not for a genuine redundancy nor, if the Code was applicable, was the dismissal consistent with the Code, I find that Mr Sepe was unfairly dismissed.

Remedy

[34] Mr Sepe seeks reinstatement and compensation. He gave evidence that he was out of work for ten weeks and subsequently gained work. At the date of his termination he was earning $923.78 gross per week. It was submitted that he would have earned $8314.02 gross in the period between 4 August 2010 and 15 October 2010 which was the date the liquidators were appointed.

[35] It is clear from the correspondence from the liquidators that Ezygas is not currently employing any staff.

[36] Section 390 of the Fair Work Act 2009 (FW Act) empowers Fair Work Australia to order a remedy if an employee is unfairly dismissed:

“390 When FWA may order remedy for unfair dismissal

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

(a) FWA 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) FWA may make the order only if the person has made an application under section 394.

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

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

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

[37] Mr Sepe submitted that reinstatement was the appropriate remedy. He submitted that despite the fact that the respondent was in liquidation, reinstatement would enable him to access the General Employee Entitlements & Redundancy Scheme (GEERS).

[38] Mr Sepe relied on the decisions of Senior Deputy President Williams in Shadfar v Domino River Pty Ltd 3 and Commissioner Spencer in Greaves v South Burnett Beef Trading Pty Ltd (in receivership)4to support his submissions.

[39] Having regard to the submissions and the evidence, I consider that reinstatement with continuity of employment and the payment of an amount of $8314.02, by way of remuneration lost, is the appropriate remedy. An order giving effect to this decision is being issued at the same times as this decision. 5

COMMISSIONER

Appearances:

G Dircks for the Applicant.

Hearing details:

2010.

Melbourne:

November 8.

 1   PR940508

 2   Exhibit A1 at FS1

 3   PR922147

 4   [2007] AIRC 688

 5   PR504078

Printed by authority of the Commonwealth Government Printer

<Price code C, PR504074>