Georgios Adalopoulos v CMC International Pty Ltd

[2014] FWC 5862

[2014] FWC 5862 [Note: An appeal pursuant to s.604 (C2014/6366) was lodged against this decision - refer to Full Bench decision dated 7 May 2015 [[2015] FWCFB 2423] for result of appeal.]

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Georgios Adalopoulos
v
CMC International Pty Ltd
(U2013/8792)

COMMISSIONER RYAN MELBOURNE, 25 AUGUST 2014

Application for relief from unfair dismissal.

[1] On 27 May 2014 the Commission issued a decision in relation to a jurisdictional challenge raised by the Respondent to the application in this matter. That decision, [2014] FWC 3467, decided that the Applicant was an employee, that the Applicant was dismissed and that the Applicant had served the minimum period of employment.

[2] Following that decision Directions were issued to the parties in relation to the Commission further dealing with the unfair dismissal application.

[3] On receipt of the material filed in accordance with the Directions the Commission sought an indication from the parties as to whether the application could be dealt with on the papers or whether either party wanted the matter to be dealt with at a hearing. Both parties agreed to allow the application to be dealt with on the papers.

[4] After filing their respective material both the Applicant and the Respondent filed further material. The Applicant sought to challenge the Respondent’s material and the Respondent sought both to respond to the Applicant’s challenge as well as complain that the Applicant’s material should not be considered by the Commission.

Initial Matters to be considered before merits considered

[5] Section 396 of the Act provides as follows:

396 Initial matters to be considered before merits

The FWC must decide the following matters relating to an application for an order under Division 4 before considering the merits of the application:

(a) whether the application was made within the period required in subsection 394(2);
(b) whether the person was protected from unfair dismissal;
(c) whether the dismissal was consistent with the Small Business Fair Dismissal Code;
(d) whether the dismissal was a case of genuine redundancy.

[6] The Commission is required to consider each of the relevant matters in s.396 before the Commission can consider the merits of an unfair dismissal application.

[7] The application in this matter was filed by the Applicant on 22 April 2013 and the Applicant was dismissed from his employment on 5 April 2013. The application was made within the period required in subsection 394(2).

[8] The Applicant was employed to install spray painting booths in automotive repair workshops. The nature of the work performed by the Applicant would clearly fall within the coverage of the Manufacturing and Associated Industries and Occupations Award. The Applicant was a person protected from unfair dismissal within the meaning of s.382.

[9] There is no contention from either the Applicant or the Respondent that the dismissal was a case of genuine redundancy. I am satisfied and so find that the dismissal was not a case of a genuine redundancy.

[10] The Respondent in tis written submission contends that the dismissal was consistent with the Small Business Fair Dismissal Code. The Applicant contends that the dismissal was not consistent with the Small Business Fair Dismissal Code.

[11] The Small Business Fair Dismissal Code is as follows:

Commencement

The Small Business Fair Dismissal Code comes into operation on 1 July 2009.

Summary dismissal

It is fair for an employer to dismiss an employee without notice or warning when the employer believes on reasonable grounds that the employee’s conduct is sufficiently serious to justify immediate dismissal. Serious misconduct includes theft, fraud, violence and serious breaches of occupational health and safety procedures. For a dismissal to be deemed fair it is sufficient, though not essential, that an allegation of theft, fraud or violence be reported to the police. Of course, the employer must have reasonable grounds for making the report.

Other dismissal

In other cases, the small business employer must give the employee a reason why he or she is at risk of being dismissed. The reason must be a valid reason based on the employee’s conduct or capacity to do the job.

The employee must be warned verbally or preferably in writing, that he or she risks being dismissed if there is no improvement.

The small business employer must provide the employee with an opportunity to respond to the warning and give the employee a reasonable chance to rectify the problem, having regard to the employee’s response. Rectifying the problem might involve the employer providing additional training and ensuring the employee knows the employer’s job expectations.

Procedural matters

In discussions with an employee in circumstances where dismissal is possible, the employee can have another person present to assist. However, the other person cannot be a lawyer acting in a professional capacity.

A small business employer will be required to provide evidence of compliance with the Code if the employee makes a claim for unfair dismissal to Fair Work Australia, including evidence that a warning has been given (except in cases of summary dismissal). Evidence may include a completed checklist, copies of written warning(s), a statement of termination or signed witness statements.

[12] The Respondent contends:

“13. The Respondent contends that the only finding available to the Commission is that the dismissal was in accordance with the SBFDC.

14. Breaking down the relevant part of the code, the following propositions appear:

a. It is fair for an employer to dismiss an employee without notice or warning when the employer believes on reasonable grounds that the employee’s conduct is sufficiently serious to justify immediate dismissal.
b. Serious misconduct includes theft, fraud, violence and serious breaches of occupational health and safety procedures.
c. For a dismissal to be deemed fair it is sufficient, though not essential, that an allegation of theft, fraud or violence be reported to the police. Of course, the employer must have reasonable grounds for making the report.

15. In John Pinawin t/as RoseVi Hair.Face.Body v Domingo [2012] FWAFB 1359, the
Full Bench held as follows:

There are two steps in the process of determining whether this aspect of the Small Business Fair Dismissal Code is satisfied. First, there needs to be a consideration whether, at the time of dismissal, the employer held a belief that the employee’s conduct was sufficiently serious to justify immediate dismissal. Secondly it is necessary to consider whether that belief was based on reasonable grounds. The second element incorporates the concept that the employer has carried out a reasonable investigation into the matter. It is not necessary to determine whether the employer was correct in the belief that it held.

16. In answer to the two questions posed by the Full Bench, the Respondent submits as follows:

a. The employer clearly held a belief that the employee’s conduct was sufficiently serious to justify immediate dismissal:

i. Paragraphs 32 to 34 of the Directors Affidavit sworn 20 October 2013 clearly set out the incident.
ii. Irrespective of who was right and who was wrong with respect to the issue being raised by the Director in discussion with the Applicant, an issue clearly difficult if not impossible to determine, the Commission can only conclude that the Applicant’s conduct in assaulting the Director was serious, and clearly falls into proposition (b) extracted from the code. It is difficult to conceive how an employee assaulting an employer does not lead to the conclusion that the employer would hold the belief that such actions were indeed sufficiently serious.

b. In relation to the second element, whether or not such belief was based on reasonable grounds:

i. The Commission is not required to determine whether or not the employer’s belief was correct; merely that it was held. In this case, the Respondent would nevertheless submit that it was correctly held and based on reasonable grounds.
ii. In the circumstances, assaulting an employer is clearly a reasonable basis for the employer to believe that the employees conduct was ‘sufficiently serious’ to justify an immediate dismissal. Being directly involved in such an incident, there is no cause for investigation, no cause for an employer to make further inquiries. Indeed, being involved as a key witness necessitates the view that he has no further investigations to make, as it is the very act he is involved in which gives rise to such a belief.

17. In such circumstances, the Applicant cannot persuade the Commission that his dismissal was not in accordance with the SBFDC, and therefore, cannot satisfy the mandatory consideration found ins 385(c) ofthe Act.

18. Accordingly, his application for an unfair dismissal remedy must fail (see [39] of
Domingo).”

[13] The Respondent’s contention and evidence fails the test laid down in John Pinawin t/as RoseVi Hair.Face.Body v Domingo. In relation to the second part of the test the Full Bench said:

“Secondly it is necessary to consider whether that belief was based on reasonable grounds. The second element incorporates the concept that the employer has carried out a reasonable investigation into the matter. It is not necessary to determine whether the employer was correct in the belief that it held.”

[14] In the earlier jurisdictional decision 1 the Commission said:

“[123] In the present matter it is reasonable to conclude that the employment relationship was effectively brought to an end on 5 April 2013 when Mr Spiros Stouraitis the Managing Director accused the Applicant of being a thief. The physical altercation between the Applicant and Mr Spiros Stouraitis merely confirms that the employment relationship had effectively ended before the physical altercation started. Whilst no words of dismissal were used by Mr Spiros Stouraitis or Mr John Stouraitis the employment relationship had been terminated by Mr Spiros Stouraitis in calling the Applicant a thief.”

[15] In coming to that conclusion the Commission had regard to the contentions of the Respondent that (1) the Respondent did not dismiss the Applicant and (2) that the Applicant was expected to return to work.

[16] Mr Spiros Stouraitis’s sworn evidence in his sworn affidavit of 20 October 2013 was that:

“35. At no time did I or my son tell George that he was fired / dismissed.”

[17] In the present matter the Respondent has offered no evidence that either Mr Spiros Stouraitis or Mr John Stouraitis or even Mrs Effie Stouraitis had carried out a reasonable investigation into the allegation that the Applicant was a thief. As the Commission’s earlier decision 2 made clear the dismissal was effected when Mr Spiros Stouraitis accused the Applicant of being a thief. The altercation between Mr Spiros Stouraitis and the Applicant occurred after the dismissal had been effected.

[18] The Respondent’s contention that the dismissal was in accordance with the Small Business Fair Dismissal Code is not supported by the evidence in this matter.

[19] I find that the dismissal was not consistent with the Small Business Fair Dismissal Code.

[20] Having dealt with each of the matters in s.396 I now turn to consider whether the dismissal was harsh, unjust or unreasonable. Section 387 provides as follows:

“387 Criteria for considering harshness etc.

In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the FWC must take into account:

(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); and

(b) whether the person was notified of that reason; and

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

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

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

(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

(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; and

(h) any other matters that the FWC considers relevant.”

[21] The Commission is required to consider each criteria which is relevant.

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 3 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 Peteron Plastics 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,”  4

[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.”  5

[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.

[44] If I am wrong in considering the altercation as a relevant matter under s.387(h) this would lead to the conclusion that the dismissal was harsh unjust or unreasonable. However, the fact of the altercation and the fact that the Applicant pushed Mr Spiros Stouraitis would have been a very significant factor in any consideration as to whether the Commission should exercise its discretion to order any remedy in this matter. I am very strongly of the view that the fact that the Applicant pushed Mr Spiros Stouraitis would have led me to find that it was inappropriate for the Commission to exercise its discretion to grant any remedy to the Applicant.

Further Observation

[45] In his submissions in this matter the Applicant has sought a monetary payment of compensation of $172,000.00 even though the Applicant acknowledged that there was a cap on compensation in the Act. Part of the Applicant’s claim for compensation related to a claimed underpayment of wages and other entitlements, superannuation, leave entitlements, notice entitlements on termination.

[46] Given that at all times the Respondent treated the Applicant as a contractor and not an employee and given the decision of the Commission in [2014] FWC 3467 that the Applicant was an employee of the Respondent it would appear that there will be entitlements that the Applicant has not received and is still due.

[47] The Applicant was quite misplaced in raising with the Commission these claims as to non payment of correct wages, superannuation, leave and notice to the Applicant. Such claims can and should be raised with the relevant authorities namely the Fair Work Ombudsman and the Australian Tax Office.

[48] The application in this matter is dismissed.

COMMISSIONER

 1   [2014] FWC 3467.

 2   Ibid.

 3   Ibid.

 4 [1995] IRCA 333.

 5   Print R4471 at para 19.

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