Francesco Mantovani v Industrial Automation Group Pty Ltd T/A Industrial Automation

[2015] FWC 6089

[2015] FWC 6089

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Francesco Mantovani
v
Industrial Automation Group Pty Ltd T/A Industrial Automation
(U2014/16181)

COMMISSIONER WILLIAMS PERTH, 3 SEPTEMBER 2015

Termination of employment - application to vary order.

[1] This decision concerns an application made by Industrial Automation Group Pty Ltd T/A Industrial Automation (Industrial Automation) to vary an order [PR570039] of the Commission.

Background

[2] On 4 August 2015 the Commission as currently constituted issued a decision [[2015] FWC 5242] (the Decision) and an order [PR570039] (the Order) dealing with the application by Mr Mantovani in matter U2014/16181. The Decision found that Mr Mantovani had been unfairly dismissed by Industrial Automation. The Order required Industrial Automation to pay an amount of compensation to Mr Mantovani of $9,533 gross from which tax would be deducted within 21 days.

[3] The latest date Industrial Automation could make this payment of compensation in compliance with the Order would have been 25 August 2015.

[4] On 25 August 2015 at 3.56 p.m. my chambers received an email from Mr Henk de Graaf (Mr de Graaf) a Director of Industrial Automation stating that he wished to pay the sum ordered by instalments “…in accordance with section 393 of the Fair Work Act 2009.”

[5] The parties were advised that the Commission took this letter received from Mr de Graaf as an application to vary the Order issued on 4 August 2015 under section 603 of the Fair Work Act 2009 (the Act).

[6] Both parties were invited to provide written submissions regarding this matter.

The submissions

[7] Industrial Automation advises that they have made this application because the business has been undergoing severe financial difficulties for the past two to three years and the situation continues today. Mr de Graaf in his original letter says the company has been unable to borrow the amount and the only way they can comply is by payment in instalments.

[8] Mr de Graaf’s correspondence proposes that an amount of $533 be paid within seven days and says that he has “...the intention to pay the remaining amount in instalments of $1,000.00 per month.”

[9] His correspondence says that if this application to vary the order is not approved he faces the strong possibility of placing his business into receivership.

[10] In the further submissions provided at the invitation of the Commission Mr de Graaf says the company currently does not have enough cash at hand to fully pay its employees at the end of this month.

[11] Mr de Graaf says that a working capital overdraft arranged with the bank has been fluctuating close to its limit over the past two months. He also submits that in order to have the business recover from its past losses and taking into consideration the expected upswing over the coming two years due to the receipt of the Port Hedland order, the business has been granted a payment plan with the Australian Taxation Office (ATO). The Commission assumes from the evidence in the hearing of Mr Mantovani’s application that this is a reference by Mr de Graaf to the unpaid superannuation entitlements to employees that had been referred to the ATO.

[12] Mr de Graaf closes by submitting that the immediate payment of the amount granted to Mr Mantovani will impact the ability of the company to pay its staff and its suppliers and therefore it has requested for payment in instalments. Mr de Graaf says he is confident that Industrial Automation can keep to the schedule as proposed.

[13] Mr Mantovani in reply submits that he contacted Industrial Automation and its legal advisor via email to discuss the payment terms on 13 August 2015. Industrial Automation replied on 14 August 2015 with these few words: “We are considering an appeal.” I note there is no evidence an appeal has been lodged.

[14] Mr Mantovani argues Industrial Automation made an application to vary the Order only on 25 August 2015. This was 21 days after it had received the Order and the payment due date. Furthermore Industrial Automation did not provide any evidence in support of the statements made in support of requesting instalments.

[15] Mr Mantovani believes that the reasons provided for delaying the payment may not been genuine. Mr Mantovani says that Industrial Automation has attempted to make his life “misarable” in January 2015. Therefore the delay in complying with the Order may be related to Industrial Automation’s strategy to achieve this.

[16] Mr Mantovani’s position is that immediate payment of the whole amount should be required. If any instalment may be granted Mr Mantovani suggests that no more than three instalments of equal amount be paid every 30 days and that interest is paid as well.

Consideration

[17] Industrial Automation was represented at the hearing of Mr Mantovani’s unfair dismissal remedy application. Their representative made submissions to the Commission as to the question of remedy should the Commission, as it subsequently did, conclude that Mr Mantovani had been unfairly dismissed. Obviously at that time Industrial Automation had the opportunity to make a submission that under section 393 of the Act, should the Commission issue an order that compensation be paid, payment would be in instalments. I note that no such submission was put on behalf of Industrial Automation at that time. That was the appropriate opportunity for such submissions to have been made.

[18] Instead what has transpired is that Industrial Automation has not complied with the Order to pay Mr Mantovani the amount of compensation the Commission found should be paid to him. Industrial Automation had 21 days within which to do so from the date that order was issued and Mr de Graaf on behalf of Industrial Automation has made this application to vary the order on the final day Industrial Automation had to comply with the Order.

[19] At the hearing of Mr Mantovani’s unfair dismissal remedy application it was common ground and a fact accepted by the Commission that for some extended period prior to Mr Mantovani’s dismissal the business had been experiencing some financial problems.

[20] Industrial Automation in support of its application to vary the Order has only provided broad statements as to its current financial difficulties and refers to that period during which Mr Mantovani was employed being the past two to three years.

[21] Notwithstanding the financial problems of Industrial Automation during Mr Mantovani’s employment it had continued to employ just less than 15 employees and also engaged a number of contractors. There is no new evidence before the Commission that these staff numbers have changed. It is apparent that the business has continued to trade and employ staff since that time. Industrial Automation has not provided any evidence that the financial difficulties of the business are now more severe than they were during this period.

[22] The onus is on Industrial Automation to provide evidence and submissions that will persuade the Commission that what they seek, variation of an order already issued by the Commission, should be allowed. Industrial Automation has not provided any detail as to the current financial state of the business. There is no evidence before the Commission which objectively demonstrates that payment of the amount ordered would have the dire effect Mr de Graaf says it would. The Commission only has before it the assertions of Mr de Graaf on these matters.

[23] Industrial Automation has been aware of the detail of the Order for three weeks and so has had adequate time within which to prepare evidence demonstrating the financial necessity for the Order to be varied. This would not have been particularly difficult or time-consuming because the financial situation of the business is not a new development but apparently has continued as it has been for a number of years.

[24] Mr de Graaf’s statements in support of the application to vary the order were on the one hand that immediate payment of the amount to Mr Mantovani would merely impact the ability to pay staff and suppliers but on the other hand that should the application to vary the order not be approved Mr de Graaf faces the strong possibility of placing his business into receivership. It is difficult to reconcile these conflicting views as to the impact on the business of paying the amount of less than $10,000.

[25] There is no explanation as to why the Commission should agree that the payment to Mr Mantovani should be deemed a lesser priority than Industrial Automation’s other obligations to pay its remaining employees and its suppliers. At its highest this is merely the preference of the business.

[26] In the absence of evidence which allows the Commission to form a conclusion as to the true state of the businesses finances I have not found these assertions and statements about the need to vary the Order persuasive. Far more would need to be put before the Commission to persuade it that monies that should already have been paid to a successful applicant should instead be paid over a period of more than nine months.

[27] In all the circumstances I do accept the fact that historically Industrial Automation has experience financial difficulties and in all likelihood these continue today. Whether these are greater or less than previously is unknown. In the circumstances I am not persuaded that a variation as proposed by Mr de Graaf should be granted. Such a change to the Order would unreasonably impact Mr Mantovani who is entitled to the fruits of his successful application.

[28] I decide instead that the Order issued on 4 August 2015 is revoked. A new order [PR571517] will be issued in conjunction with this decision that:

1. Industrial Automation shall pay to Mr Mantovani the amount of $6,000 gross from which tax will be deducted within seven days.

2. Industrial Automation shall pay to Mr Mantovani the amount of $3,533 gross from which tax will be deducted within a further 14 days.

3. If Industrial Automation defaults on the payment in 1. above the full amount of $9,533 gross or the remainder from which tax will be deducted is immediately due and payable.

[29] Industrial Automation will significantly benefit from this change by not having to make any payment until 37 days after it first was made aware it will be required to pay compensation and the two instalments provided will spread the financial impact of the total payments on the business.

COMMISSIONER

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<Price code A, PR571516>