Georgios Adalopoulos v CMC International Pty Ltd
[2015] FWCFB 2423
•7 MAY 2015
[2015] FWCFB 2423
The attached document replaces the document previously issued with the above code on 7 May 2015.
End note 5 has been amended to correct the reference.
Associate to Vice President Watson
Dated 7 May 2015
| [2015] FWCFB 2423 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.604 - Appeal of decisions
v
CMC International Pty Ltd
(C2014/6366)
VICE PRESIDENT WATSON | MELBOURNE, 7 MAY 2015 |
Appeal against decision [[2014] FWC 5862] of Commissioner Ryan at Melbourne on 25 August 2014 in matter number U2013/8792 - Permission to appeal - Whether grounds of appeal attract the public interest - Permission to appeal not granted - Fair Work Act 2009 - ss. 381, 387, 394, 400, 587 and 604.
Introduction
[1] This decision concerns an application for permission to appeal against a decision of Commissioner Ryan handed down on 25 August 2014. The decision of the Commissioner concerned an unfair dismissal application made by Georgios Adalopoulos on 22 April 2013 under s.394 of the Fair Work Act 2009 (the Act) in relation to the termination of his employment by CMC International Pty Ltd (CMC).
[2] At the hearing of the appeal matter Ms L. Giagkoulis appeared on behalf of CMC. Mr Adalopoulos, who now resides in Greece, arranged to rely on his written submissions. He was permitted to file a written reply after reviewing the transcript of the proceedings.
Background
[3] Mr Adalopoulos was employed by CMC as a technician in mid 2012 after he arrived in Australia from Greece in November 2011. Mr Adalopoulos filed an unfair dismissal application with Commission after a series of events at the workplace which took place on 5 April 2013 and resulted in his dismissal from CMC.
[4] The Commissioner’s conclusions are expressed in the following passage from his decision:
“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) - s.387(a)
[22] The reason for the dismissal found by the Commission in its earlier decision was that the Respondent accused the Applicant of being a thief.
[23] The Respondent in its written submissions does not address the issue of the allegation of theft. The Respondent’s written submissions only deal with the issue of the altercation between Mr Spiros Stouraitis and the Applicant.
[24] As noted earlier the Respondent led no evidence that it had carried out a reasonable investigation into the alleged theft before the allegation was put to the Applicant.
[25] The sworn affidavit of Mr Spiros Stouraitis supports a conclusion that Mr Spiros Stouraitis was acting intemperately in accusing the Applicant of being a thief.
[26] As Northrop J said in Selvachandran v PeteroPlastics P/L:
“In its context .... the adjective “valid” should be given the meaning of sound, defensible or well founded. A reason which is capricious, fanciful, spiteful or prejudiced could never be a valid reason.......... At the same time the reason must be valid in the context of the employee’s capacity or conduct or based upon the operational requirements of the employer’s business. Further, in considering whether a reason is valid, it must be remembered that the requirement applies in the practical sphere of the relationship between an employer and an employee where each has rights and privileges and duties and obligations conferred and imposed on them. The provisions must “be applied in a practical, commonsense way to ensure that” the employer and employee are each treated fairly,”
[27] In Rode v Burwood Mitsubishi a Full Bench said:
“… the reason for termination must be defensible or justifiable on an objective analysis of the relevant facts. It is not sufficient for an employer to simply show that he or she acted in the belief that the termination was for a valid reason.”
[28] The Respondent has presented no evidence that suggests that the reason for the termination was defensible or justifiable on an objective basis. Rather the evidence of Mr Spiros Stouraitis points to a degree of capriciousness and intemperateness in his conduct in accusing the Applicant of being a thief.
[29] The reason for dismissal was neither sound, nor defensible nor well founded.
Whether the person was notified of that reason - s.387(b)
[30] The Applicant was unambiguously notified that the Respondent consider the Applicant a thief.
Whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person - s.387(c)
[31] The timing of and manner in which Mr Spiros Stouraitis accused the Applicant of being a thief did not lend itself to the Applicant having a real opportunity to respond to the accusation.
Any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal - s.387(d)
[32] This criteria is not relevant in the present matter. Events took place so fast on 5 April 2013 that it is clear that no opportunity arose for any discussions relating to the dismissal.
If the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal - s.387(e)
[33] This criteria is not relevant in the present matter. The dismissal related to specific conduct alleged against the Applicant and not to his performance of his duties.
The degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal - s.387(f), and, 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 -s.387(g)
[34] The employer is a small family run business without any human resource management specialists or expertise and this would have had a significant impact on the procedures followed in effecting the dismissal.
Any other matters that the FWC considers relevant - s.387(h)
[35] As can be seen from the way in which the Commission has addressed the above criteria in s.387 a very narrow approach has been taken to a consideration of the reason for the dismissal. This narrow approach must be followed as it is consistent with the earlier decision given in this matter.
[36] Having said that, it is clear that contemporaneous with the conduct of Mr Spiros Stouraitis accusing the Applicant of being a thief is the altercation between Mr Spiros Stouraitis and the Applicant. This altercation cannot be ignored and must be considered at some point of time in this decision.
[37] Whilst the Respondent’s submissions urge the Commission to consider the fact of the altercation as part of the consideration of a valid reason I have declined to do so.
[38] I do consider that it is appropriate to take into account the fact of the altercation as being an “other matter that FWC considers relevant” in determining whether the dismissal was harsh unjust or unreasonable.
[39] Each of the Applicant and Mr Spiros Stouraitis accuse each other of initiating the altercation and each gives a different account of the altercation.
[40] However, what is clear is that both Mr Spiros Stouraitis and the Applicant acted most inappropriately in having a physical altercation in the workplace. The conduct of each is inexcusable. Notwithstanding that Mr Spiros Stouraitis swore an affidavit attesting to the “facts” of the events on 5 March 2013 I have real doubt as to the correctness of his account. The Applicant gave an unsworn account of events on the same day and I also have real doubts as to the correctness of his account. Rather than dealing with two grown men it very much appears as if the Commission is dealing with a primary school altercation between two small boys.
[41] Even if I start from the premise advanced by the Applicant that he did not start the altercation I nevertheless have the evidence of Ms Lena Giagkoulis, who did not witness the start of the altercation but who had a clear view of the office where the altercation occurred. Ms Lena Giagkoulis said at para 38 of her sworn affidavit dated 21 October 2013:
“when I looked up I saw George pushing Spiros.”
[42] On this evidence alone I am satisfied that the Applicant engaged in conduct which was completely incompatible with a continuation of an employment relationship. Whilst I have concluded that the dismissal was effected when Mr Spiros Stouraitis accused the Applicant of being a thief, the subsequent conduct of the Applicant in responding to that allegation must, in my view, be taken into account under s.387(h).”
Conclusion
[43] Having considered each of the relevant criteria under s.387 I determine that the
dismissal of the Applicant was not harsh, unjust or unreasonable.”
(references omitted)
Grounds of Appeal
[5] Mr Adalopoulos contends that permission to appeal should be granted because the decision is based on a number of errors which are outlined in his Notice of Appeal and written submissions. He primarily submits that it must be made clear whether a decision to terminate employment is made on facts before or after the dismissal. In particular he submits that the Commissioner was in error in relying on conduct that occurred after the dismissal. He also denies engaging in misconduct.
Permission to Appeal
[6] An appeal in relation to an unfair dismissal matter is governed by the provisions of sections 604 and 400 of the Act. Section 604 of the Act deals with appeals generally. These requirements are modified with respect to unfair dismissal appeals by section 400 of the Act which provides:
“400 Appeal rights
(1) Despite subsection 604(2), FWA must not grant permission to appeal from a decision made by FWA under this Part unless FWA considers that it is in the public interest to do so.
(2) Despite subsection 604(1), an appeal from a decision made by the FWC in relation to a matter arising under this Part can only, to the extent that it is an appeal on a question of fact, be made on the ground that the decision involved a significant error of fact.”
[7] The test for determining the public interest has been described as follows: 1
“[26] Appeals have lain on the ground that it is in the public interest that leave should be granted in the predecessors to the Act for decades. It has not been considered useful or appropriate to define the concept in other than the most general terms and we do not intend to do so. The expression ‘in the public interest’, when used in a statute, classically imports a discretionary value judgment to be made to be made by reference to undefined factual matters, confined only by the objects of the legislation in question. [Comalco v O’Connor (1995) 131 AR 657 at p.681 per Wilcox CJ & Keely J, citing O’Sullivan v Farrer (1989) 168 CLR 210]
[27] Although the public interest might be attracted where a matter raises issues of importance and general application, or where there is a diversity of decisions at first instance so that guidance from an appellate court is required, or where the decision at first instance manifests an injustice, or the result is counter intuitive, or that the legal principles applied appear disharmonious when compared with other recent decisions dealing with similar matters, it seems to us that none of those elements is present in this case.”
[8] It is important to note that the decision under appeal is of a discretionary nature. Usually, such a decision can only be successfully challenged on appeal if it is shown that the discretion was not exercised correctly. 2 It is not open to an appeal bench to substitute its view on the matters that fell for determination before the Commissioner in the absence of error of an appealable nature in the decision at first instance. As the High Court said in House v The King:3
“The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred.”
[9] It is clear that this matter involves a fundamental breakdown in the relationship between the owner of the business, Mr Stouraitis and Mr Adalopoulos. Termination followed a heated altercation on the 4th or 5th of April 2013. The evidence was conflicting, but the Commissioner was satisfied as follows: In an elevated discussion about time sheets and clothing Mr Adalopoulos asked Mr Stouraitis whether he was calling him a thief. Mr Stouraitis replied to the effect that he was. Shortly afterwards there was a physical altercation between the two during which Mr Stouraitis was injured. Mr Adalopoulos never returned to work. He later asked for a reference and apparently assumed he had been dismissed. The employer assumed that he had left his employment. Although he did not expressly state that he was dismissed, Mr Stouraitis told Mr Adalopoulos not to return to work.
[10] In an earlier decision the Commissioner found, contrary to the employer’s submissions, that the termination occurred when the employer called the employee a liar, although no words of dismissal were used. 4 In the substantive decision he judged the imputed dismissal to be defective and not consistent with the Small Business Fair Dismissal Code even though the employer did not consider the verbal exchange to be a termination. He then turned to consider the fairness of the termination and again found the imputed termination by verbal comments defective in significant respects. As indicated above, he was satisfied that the termination was not unfair because of the subsequent physical altercation, notwithstanding that it occurred after the act of the employer that he found amounted to a termination.
[11] We have reviewed the evidence in this matter. In our view, it is very doubtful that the verbal exchange amounted to a dismissal. The concept of termination of employment at the initiative of an employer has been dealt with in many cases. The principles extracted from the cases were explained in a Full Bench decision of O’Meara v Stanley Works Pty Ltd. The Full Bench said: 5
“[19] The circumstances in which a resignation, while apparently a termination of employment by the employee, nevertheless constitutes a termination at the initiative of the employer, have been considered in a number of cases. A prominent authority is the decision of a Full Court of the Federal Court of Australia in Mohazab v Dick Smith Electronics Pty Ltd 6 (Mohazab). In that case, the employer made a threat that unless the employee resigned the employer would ask the police to charge the employee with an offence. The analysis of the concept of termination at the initiative of the employer by the Court in that case has not always been quoted in full. It is desirable that we do so in this case. After referring to dictionary definitions of the term “initiative” and the convention giving rise to the statutory provisions, the Full Court said:
“These definitions reflect the ordinary meaning of the word ‘initiative’. Viewed as a whole, the Convention is plainly intended to protect workers from termination by the employer unless there is a valid reason for termination. It addresses the termination of the employment relationship by the employer. It accords with the purpose of the Convention to treat the expression ‘termination at the initiative of the employer’ as a reference to a termination that is brought about by an employer and which is not agreed to by the employee. Consistent with the ordinary meaning of the expression in the Convention, a termination of employment at the initiative of the employer may be treated as a termination in which the action of the employer is the principal contributing factor which leads to the termination of the employment relationship. We proceed on the basis that the termination of the employment relationship is what is comprehended by the expression ‘termination of employment’: Siagian v Sanel (1994) 1 IRCR 1 at 19; 54 IR 185 at 201. In many, if not most, situations the act of the employer that terminates the employment relationship is not only the act that puts in train the process leading to its termination but is, in substance, the entire process. An example would be a situation where the employer decided to dismiss an employee and did so orally or in writing with immediate effect. Other situations may be more complex as exemplified by the circumstances considered by Moore J in Grout v Gunnedah Shire Council (1994) 1 IRCR 143; 57 IR 243 where an employee had given written notice purporting to terminate the employment relationship. The notice was not reasonable but was accepted by the employer which later refused to allow the employee to withdraw the notice. A question arose as to whether that was a termination of the employment at the initiative of the employer and his Honour held it was. His Honour said at 160-161; 259:
‘I have already said that Div 3 concerns termination at the initiative of the employer. The respondent submits that “initiate” means “to begin, commence, enter upon; to introduce, set going, or initiate”: see Shorter Oxford English Dictionary. In this matter, it is submitted, it was the applicant and not the respondent that initiated the termination by writing the letter of 18 May. This, in my opinion, gives the expression “termination” in the Act, read in conjunction with Art 3 of the Convention which speaks of “termination … at the initiative of the employer”, a narrow meaning that was not intended. A principal purpose, if not the sole purpose, of Div 3 is to provide an employee with a right to seek a remedy in circumstances where the employee did not voluntarily leave the employment. An employee may do some act which is the first in a chain of events that leads to termination. An example would be an employee who engaged in misconduct at work which ultimately led to the employer dismissing the employee. However, that situation and the present are not situations where the termination was at the initiative of the employee. In both instances the step or steps that effectively terminated the employment or purported to do so were taken by the employer.’
In these proceedings it is unnecessary and undesirable to endeavour to formulate an exhaustive description of what is termination at the initiative of the employer but plainly an important feature is that the act of the employer results directly or consequentially in the termination of the employment and the employment relationship is not voluntarily left by the employee. That is, had the employer not taken the action it did, the employee would have remained in the employment relationship. This issue was addressed by Wilcox CJ in APESMA v David Graphics Pty Ltd (unreported, Industrial Relations Court of Australia, 12 July 1995, Wilcox CJ). His Honour, at p 3, referred to the situation of an employee who resigned because ‘he felt he had no other option’. His Honour described those circumstances as:
‘… a termination of employment at the instance [of] the employer rather than of the employee.’
And at p 5:
‘I agree with the proposition that termination may involve more than one action. But I think it is necessary to ask oneself what was the critical action, or what were the critical actions, that constituted a termination of the employment.’” 7
[20] Moore J, one of the members of the Full Court in Mohazab, addressed the question further in Rheinberger v Huxley Marketing Pty Limited 8 (Rheinberger). His Honour said, after referring to extracts from Mohazab:
“However it is plain from these passages that it is not sufficient to demonstrate that the employee did not voluntarily leave his or her employment to establish that there had been a termination of the employment at the initiative of the employer. Such a termination must result from some action on the part of the employer intended to bring the employment to an end and perhaps action which would, on any reasonable view, probably have that effect. I leave open the question of whether a termination of employment at the initiative of the employer requires the employer to intend by its action that the employment will conclude. I am prepared to assume, for present purposes, that there can be a termination at the initiative of the employer if the cessation of the employment relationship is the probable result of the employer's conduct.” 9
[21] In this Commission the concepts have been addressed on numerous occasions and by a number of Full Benches. In Pawel v Advanced Precast Pty Ltd 10 (Pawel) a Full Bench said:
“[13] It is plain that the Full Court in Mohazab considered that an important feature in the question of whether termination is at the initiative of the employer is whether the act of an employer results directly or consequentially in the termination of the employment and that the employment relationship is not voluntarily left by the employee. However, it is to be noted that the Full Court described it as an important feature. It plainly cannot be the only feature. An example will serve to illustrate this point. Suppose an employee wants a pay rise and makes such a request of his or her employer. If the employer declines and the employee, feeling dissatisfied resigns, can the resignation be said to be a termination at the initiative of the employer? We do not think it can and yet it can be said that the act of the employer i.e. refusing the pay rise, has at least consequentially resulted in the termination of the employment. This situation may be contrasted with the position where an employee is told to resign or he or she will be terminated. We think that all of the circumstances and not only the act of the employer must be examined. These in our view, will include the circumstances giving rise to the termination, the seriousness of the issues involved and the respective conduct of the employer and the employee. In the instant case the uncontested factual findings are that the applicant had for almost the whole of his employment performed welding duties; that there was no objective threat to his health and safety involved in the requirement that he undertake welding duties so long as it was not on a continuous basis and that the welding he was required to do was not continuous.” 11
[22] In the Full Bench decision of ABB Engineering Construction Pty Ltd v Doumit 12 (ABB Engineering) it was said:
“Often it will only be a narrow line that distinguishes conduct that leaves an employee no real choice but to resign employment, from conduct that cannot be held to cause a resultant resignation to be a termination at the initiative of the employer. But narrow though it be, it is important that that line be closely drawn and rigorously observed. Otherwise, the remedy against unfair termination of employment at the initiative of the employer may be too readily invoked in circumstances where it is the discretion of a resigning employee, rather than that of the employer, that gives rise to the termination. The remedies provided in the Act are directed to the provision of remedies against unlawful termination of employment. Where it is the immediate action of the employee that causes the employment relationship to cease, it is necessary to ensure that the employer's conduct, said to have been the principal contributing factor in the resultant termination of employment, is weighed objectively. The employer's conduct may be shown to be a sufficiently operative factor in the resignation for it to be tantamount to a reason for dismissal. In such circumstances, a resignation may fairly readily be conceived to be a termination at the initiative of the employer. The validity of any associated reason for the termination by resignation is tested. Where the conduct of the employer is ambiguous, and the bearing it has on the decision to resign is based largely on the perceptions and subjective response of the employee made unilaterally, considerable caution should be exercised in treating the resignation as other than voluntary.” 13
[23] In our view, the full statement of reasons in Mohazab which we have set out together with the further explanation by Moore J in Rheinberger and the decisions of Full Benches of this Commission in Pawel and ABB Engineering require that there to be some action on the part of the employer which is either intended to bring the employment to an end or has the probable result of bringing the employment relationship to an end. It is not simply a question of whether “the act of the employer [resulted] directly or consequentially in the termination of the employment.” 14 Decisions which adopt the shorter formulation of the reasons for decision should be treated with some caution as they may not give full weight to the decision in Mohazab. In determining whether a termination was at the initiative of the employer an objective analysis of the employer's conduct is required to determine whether it was of such a nature that resignation was the probable result or that the appellant had no effective or real choice but to resign.”
[12] Applying this approach, the conversation that preceded the physical altercation was not intended, nor did it have the probable result of bringing the employment to an end. The conversation was heated and involved allegations. That might have led to explanations and a consideration of the circumstances. Unfortunately, allegations of dishonesty are not uncommon. In order to deal with concerns about dishonesty, allegations need to be made or an investigation established with some notice of the nature of the inquiry. Termination of employment may occur subsequently as a result of investigating the allegations and considering responses thereto, but making the allegations does not, in itself, constitute a termination of employment.
[13] On the other hand telling an employee not to return to work is an act, when not withdrawn, which infers that the employee is dismissed. In our view, the employment was terminated when the employer treated it as ended after the physical altercation. In our view, the employer terminated the employment by asking Mr Adalopoulos not to return to work and not countermanding that instruction. The physical altercation was a central reason for its decision.
[14] In treating the act of making an allegation of theft as the dismissal, the Commissioner erected an artificial construct that did not reflect the true circumstances or permit a proper analysis of the reasons for dismissal against the criteria in the Act.
[15] In our view, the termination was consistent with the Small Business Fair Dismissal Code because the employer believed on reasonable grounds that the conduct was sufficiently serious to warrant instant dismissal. He was aware of the conduct because he was the victim of it. On any view it justified summary dismissal. The matter should have ended there.
[16] In any event the dismissal was a fair dismissal by reference to the factors in s.387. In particular, the physical assault that the Commissioner found had occurred was misconduct and constituted a valid reason for the termination. Other factors do not give rise to any finding of unfairness. It is unnecessary that we deal with the factors in s.387 in more detail.
[17] On a proper application of the Act the unfair dismissal application should have been dismissed. Although approaching the matter differently, the Commissioner reached the same conclusion. We are not persuaded to grant permission to appeal in these circumstances.
[18] There are many references in Commission decisions to the importance of natural justice. Another procedural obligation on the Commission which is less often mentioned (although see Ghalloub v AON Risk 15) is that of the need to be efficient and cost effective for employers and employees. Section 578 requires the Commission to take into account the objects of the Act and of any part of the Act. The object of the unfair dismissal part of the Act provides:
“381 Object of this Part
(1) The object of this Part is:
(a) to establish a framework for dealing with unfair dismissal that balances:
(i) the needs of business (including small business); and
(ii) the needs of employees; and
(b) to establish procedures for dealing with unfair dismissal that:
(i) are quick, flexible and informal; and
(ii) address the needs of employers and employees; and
(c) to provide remedies if a dismissal is found to be unfair, with an emphasis on reinstatement.
(2) The procedures and remedies referred to in paragraphs (1)(b) and (c), and the manner of deciding on and working out such remedies, are intended to ensure that a “fair go all round” is accorded to both the employer and employee concerned.
Note: The expression “fair go all round” was used by Sheldon J in in re Loty and Holloway v Australian Workers’ Union [1971] AR (NSW) 95.”
[19] The needs of business and employees include procedures that are efficient and cost effective, and procedures must be “quick”. It is not consistent with a fair go all round to require an unnecessary hearing. As it is possible to determine the outcome to this matter in the appeal rather than remitting it for a further hearing, we have opted for a course that involves no additional cost to the employer and employee.
Conclusion
[20] For the above reasons the application for permission to appeal is dismissed.
VICE PRESIDENT
Appearances:
No appearance for Mr G. Adalopoulos.
Ms L. Giagkoulis for CMC International Pty Ltd.
Hearing details:
2015.
Melbourne.
10 March.
Final written submissions:
Mr G. Adalopoulos on 5 February 2015.
CMC International Pty Ltd on 2 March 2015.
Mr G. Adalopoulos in reply on 24 March 2015.
1 GlaxoSmithKline Australia Pty Ltd v Makin [2010] FWAFB 5343.
2 House v The King (1936) 55 CLR 499 at [504]-[505] per Dixon, Evatt and McTiernan JJ.
3 Ibid.
4 [2014] FWC 3467.
5 PR973462.
6 (1995) 62 IR 200.
7 Ibid at 205-6.
8 (1966) 67 IR 154.
9 Ibid at 160-1.
10 Print S5904, 12 May 2000 per Polites SDP, Watson SDP and Gay C.
11 Ibid at paragraph 13.
12 Print N6999, 9 December 1996 per Munro J, Duncan DP and Merriman C; quoted with approval in BC Stubbs v Austar Entertainment Pty Ltd, Print Q0008, 17 December 1998 per Ross VP, Munro J and Harrison C and in Mosey v Australian Customs Service (2002) 116 IR 1.
13 Ibid at page 12.
14 Mohazab at page 205.
15 PR956665.
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