Gibby v The Finlaysons It Pty Ltd - [2023] QIRC 261

QUEENSLAND INDUSTRIAL RELATIONS COMMISSION

CITATION:

PARTIES:

Gibby v The Finlaysons IT Pty Ltd [2023] QIRC 261

Gibby, Michael
(Applicant)

The Finlaysons IT Pty Ltd
(Respondent)

CASE NO:

B/2022/58

PROCEEDING:

Application for payment of proportionate long service leave

DELIVERED ON:

HEARING DATES:

5 October 2023

4, 5 and 8 May 2023 (Hearing)
9 June 2023 (Applicant written closing submissions)
3 July 2023 (Respondent written closing submissions)
10 July 2023 (Applicant written closing submissions in reply)

MEMBER:

HEARD AT:

ORDERS:

McLennan IC

Brisbane

1. Mr Gibby was entitled to proportionate payment for long service leave upon cessation of his employment with the Respondent.

2. That, within 28 days, the Respondent is to pay to Mr Gibby $13,621.16 in proportionate long service leave.

CATCHWORDS:

LEGISLATION & OTHER INSTRUMENTS:

CASES:

INDUSTRIAL LAW – RECOVERY OF PRO RATA LONG SERVICE LEAVE – whether applicant is entitled to payment of proportionate long service leave upon cessation of his employment – where employment was terminated for reasons other than conduct, capacity or performance – where dismissal was unfair – legal representation – general powers

Acts Interpretation Act 1954 (Qld) s 24AA

Industrial Relations Act 2016 (Qld) s 95,
s 316, s 320, s 451, s 475, s 484, s 530, s 545, s 921

Industrial Relations (Tribunals) Rules 2011 (Qld) r 70

Blackwood v Egan [2014] ICQ 020

Dawson v State of Queensland (Department of the Premier and Cabinet) [2021] QIRC 436

Degiorgio v Dunn (No 2) (2005) 62 NSWLR 284

Gambaro v Workers' Compensation Regulator [2017] ICQ 005

General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125

House v The King (1936) 55 CLR 499

Kanan v Australian Postal Telecommunications Union (1992) 43 IR 257

Latoudis v Casey (1990) 170 CLR 534

Lemoto v Able Technical Pty Ltd & Ors (2005) 63 NSWLR 300

MIM Holdings Limited v Automotive, Metals, Engineering, Printing and Kindred Industries Industrial Union of Employees Queensland (2000) 164 QGIG 370

Northern Territory v Sangare (2019) 265 CLR 164
Re Christina Hatchett v Bowater Tutt Industries Pty Ltd (No 3) (1991) 39 IR 31

Yousif v Workers' Compensation Regulator [2019] ICQ 10

APPEARANCES

Mr T. O'Brien of Counsel instructed by Mr D. Quinn, Holding Redlich for the Applicant

Mr R. Finlayson for the Respondent

Reasons for Decision

Mr Michael Gibby worked for Mr Ren Finlayson's IT company for 9 years.
Mr Gibby's managerial responsibilities increased over time, as Mr Finlayson expressed his intention to cut back his own involvement in the running of the business.
The pandemic hit. The financial position of the company deteriorated.
Mr Gibby floated some options with Mr Finlayson for either starting a new business or buying him out.
At first, Mr Finlayson was receptive to Mr Gibby's overtures, saying "Buy me out how much and what?" Negotiations ensued.
Though things soon soured after Mr Gibby's offered $40,000 to buy Mr Finlayson's "life's work".

Mr Finlayson told Mr Gibby that he proposed to terminate his employment - but gave him a chance to resign.…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2023] QIRC 261
Decision Date: 5 October 2023 4, 5 and 8 May 2023 (Hearing) 9 June 2023 (Applicant written closing submissions) 3 July 2023 (Respondent written closing submissions) 10 July 2023 (Applicant written closing submissions in reply)

CaseChat Overview and Summary

The case of Gibby v The Finlaysons IT Pty Ltd concerns a dispute over the recovery of pro rata long service leave following the cessation of employment. Michael Gibby, the applicant, argues that he is entitled to payment of proportionate long service leave. The Finlaysons IT Pty Ltd, the respondent, contends that Gibby is not entitled to such payment as his employment was terminated for reasons other than conduct, capacity, or performance and that he had no reasonable expectation that his employment would continue for at least 10 years. The legal issues before the court included whether Gibby was dismissed for reasons other than conduct, capacity, or performance, whether his dismissal was unfair, and whether he was entitled to proportionate payment of long service leave under the Industrial Relations Act.

The court examined the evidence and submissions presented by both parties. Gibby argued that there was no evidence of misconduct beyond mere assertions and that the reason for termination was unrelated to his conduct. The respondent, on the other hand, provided statements and text messages asserting serious misconduct and criminal conduct by Gibby, including running the business into the ground and engaging in a coordinated campaign of deception and coercion. The court also considered the actions of Ms Sonia Kumar, who sent a text message to a witness during the hearing, which was deemed inappropriate.

The court's reasoning focused on the statutory provisions of the Industrial Relations Act and relevant case law. The court noted that the test for determining whether a proceeding lacks reasonable cause involves examining whether the proceeding must fail based on the applicant's version of the facts. The court held that Gibby's employment was terminated due to reasons other than conduct, capacity, or performance, and that his dismissal was unfair. Given these findings, the court ruled that Gibby was entitled to proportionate payment of long service leave.

The final orders of the court mandated that Gibby was entitled to proportionate payment for long service leave upon cessation of his employment. The respondent was required to pay Gibby $13,621.16 within 28 days. This decision underscores the importance of the statutory provisions and the need for substantial evidence to support claims of misconduct and non-entitlement to long service leave.

Orders

Orders of the court

McLennan IC

Brisbane

1. Mr Gibby was entitled to proportionate payment for long service leave upon cessation of his employment with the Respondent.

2. That, within 28 days, the Respondent is to pay to Mr Gibby $13,621.16 in proportionate long service leave.

Background

Background to the litigation

In Kanan v Australian Postal Telecommunications Union, his Honour Justice Wilcox provided (emphasis added, citations omitted):[132]It seems to me that one way of testing whether a proceeding is instituted 'without reasonable cause' is to ask whether, upon the facts apparent to the applicant at the time of instituting the proceeding, there was no substantial prospect of success. If success depends upon the resolution in the applicant's favour of one or more arguable points of law, it is inappropriate to stigmatise the proceeding as being 'without reasonable cause'. But where it appears that, on the applicant's own version of the facts, it is clear that the proceeding must fail, it may properly be said that the proceeding lacks a reasonable cause.[132] Kanan v Australian Postal and Telecommunications Union (1992) 43 IR 257, 29. In Yousif v Workers' Compensation Regulator, his Honour Justice Martin considered s 563 of the Workers' Compensation and Rehabilitation Act 2013 (Qld). That section presents precisely the same question as s 545(2)(a) of the IR Act. In that matter, while considering the term 'without reasonable cause', his Honour said (emphasis added, citations omitted):[133]The test to be applied is not simply whether or not the application was unsuccessful. It is whether the application could not succeed at the time when it was made.[133] Yousif v Workers' Compensation Regulator [2019] ICQ 10, [31], citing MIM Holdings Limited v Automotive, Metals, Engineering, Printing and Kindred Industries Industrial Union of Employees Queensland (2000) 164 QGIG 370, 371. It has been held that the test imposed by the expression 'without reasonable cause' is comparable to the one applied by a court on an application for the exercise of summary power to stay or strike out proceedings.[134] In that regard, Chief Justice Barwick provided (emphasis added, citations omitted):[135]The test to be applied has been variously expressed; 'so obviously untenable that it cannot possibly succeed'; 'manifestly groundless'; 'so manifestly faulty that it does not admit of argument'; 'discloses a case which the Court is satisfied cannot succeed'; 'under no possibility can there be a good cause of action'; 'be manifest that to allow them' (the pleadings) 'to stand would involve useless expense'.At times the test has been put as high as saying that the case must be so plain and obvious that the court can say at once that the statement of claim, even if proved, cannot succeed; or 'so manifest on the view of the pleadings, merely reading through them, that it is a case that does not admit of reasonable argument'; 'so to speak apparent at a glance'.As I have said, some of these expressions occur in cases in which the inherent jurisdiction was invoked and others in cases founded on statutory rules of court but although the material available to the court in either type of case may be different the need for exceptional caution in exercising the power whether it be inherent or under statutory rules is the same. Dixon J. (as he then was) sums up a number of authorities in Dey v. Victorian Railways Commissioners [1949] HCA 1; (1949) 78 CLR 62 VOL CXII-9 where he says (1949) 78 CLR, at p 91; 'A case must be very clear indeed to justify the summary intervention of the court to prevent a plaintiff submitting his case for determination in the appointed manner by the court with or without a jury. The fact that a transaction is intricate may not disentitle the court to examine a cause of action alleged to grow out of it for the purpose of seeing whether the proceeding amounts to an abuse of process or is vexatious. But once it appears that there is a real question to be determined whether of fact or law and that the rights of the parties depend upon it, then it is not competent for the court to dismiss the action as frivolous and vexatious and an abuse of process.'[134] Re Christina Hatchett v Bowater Tutt Industries Pty Ltd (No 3) (1991) 39 IR 31, [8] followed in Walker v Mittagong Sands Pty Limited T/A Cowra Quartz (2011) 210 IR 370.[135] General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125, 129-130.

Evidence

Evidence Before The Court

I would also observe that Mr Finlayson was not assisted at the Hearing by the actions of his partner, Ms Sonia Kumar. Ms Kumar sent a text message to Ms Westin[26] when she was giving her evidence, that the witness affirmed she felt threatened by.[27] While Mr Finlayson confirmed that Ms Kumar was sitting beside him and talking to him at the relevant time, he denied knowing she had texted the message to Ms Westin until after the first day of the Hearing had concluded.[28] Although Mr Finlayson further offered "… still not understanding what's wrong with it anyway, to be honest with you."[29] [26] Exhibit 7. [27] Ibid. [28] T 2-2, lines 24-46; T 2-3, lines 1-15; T 2-12, lines 1-47; T 2-13, lines 1-20. [29] T 2-12, lines 46-47; That separate and distinct matter has been referred to Vice President O'Connor under s 921(1)(d)(ii) of the IR Act.Evidence and submissions In a Directions Order dated 8 May 2023, written closing submissions were directed in the order Applicant - Respondent - Applicant (in reply, on issues of law only). The Applicant's written closing submissions were filed on 9 June 2023. A further Affidavit of Mr David Quinn was filed on 12 June 2023. The Respondent's written closing submissions were filed on 3 July 2023. The Applicant's reply submissions were filed on 10 July 2023. The evidence of the witnesses and 7 Exhibits tendered at the Hearing, together with the written closing submissions of each Party, were considered in this Decision.Chronology A chronology of some significant events follows: Mr Gibby says that he is owed the money because:[81]·he was dismissed for a reason other than "conduct, capacity or performance"; or ·his dismissal was unfair. [81] Application for proportionate payment of long service leave, filed 27 July 2022, Schedule 1, [15]-[17]. The Applicant submitted that:[82]·"the Respondent has been unable to provide any evidence of misconduct by the Applicant beyond mere assertions, which are, in any case, inconsistent with the evidence of Ms Westin and the Applicant";·"Mr Finlayson gave sworn evidence that he was not aware of the Applicant creating SEQ IT until late February 2022";[83]·"the Telegram messages of 1 February 2022 annexed to the Applicant's affidavit sworn 13 January 2023 at pages 108 to 186 make clear that the Respondent held no genuine concerns about any alleged misconduct";·"the termination letter also provides the Termination was because "yourself and Ren Finlayson have not been able to come to an Employment Separation agreement";·"advice given by Ms Westin to Mr Finlayson regarding the LSL"; and·"the failure by the Respondent to produce a signed employment contract or even evidence that any proposed employment contract had ever been provided to the Applicant".[82] Applicant's closing submissions filed 9 June 2023, [10].[83] Given that date, the Applicant submitted that "It cannot have had bearing on the reason for termination. Nor can such "after acquired knowledge" provide a valid reason for termination, as preparations for a future venture, especially in the context of the negotiations then taking place for the sale of the business, are not in breach of the Applicant's relevant contractual or equitable obligations."; Applicant's submissions in reply, filed 10 July 2023, [6].

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

The Respondent submitted that:·"… Michael Gibby's employment with The Finlaysons IT was terminated, after warnings, and with no alternative, for serious misconduct and criminal conduct. In premediated collusion and aided and abetted by Jason, Paula and Clinton."[87][87] Respondent's closing submissions filed 3 July 2023, 3.·"Michael Gibby, whilst employed was running the business into the ground by not performing his duties. He would avoid doing invoicing whilst making unauthorised charges to the business. At the same time he engaged in a coordinated campaign of deception and coercion trying to blackmail me into selling my business that was paying everyone's wage …" Mr Finlayson stated that "easily qualifies as serious misconduct."[88][88] Ibid 4-5.·"… original screenshots and my text extracts clearly identifying the multiple warnings and chances not to mention opportunities at reform that I afforded Michael Gibby prior to being forced into terminating his employment due to his reluctance in doing anything that could remotely be conceived as beneficial for the business and his insistence on not resigning even after creating a directly competing business with Jason with the express intent to steal and engage in fraudulent activities …"[89][89] Respondent's closing submissions filed 3 July 2023, 5.·On Thursday 3 February 2022 4:09 pm, Mr Finlayson sent Mr Gibby a 'without prejudice' email setting out terms for a proposed Employment Separation Deed. Then at 5:06 pm, "Mr Gibby suddenly wants to resign without notice CLEARLY waiving his rights to LSL now that he realised he had been given his warnings and an abundance of other opportunities to change course and actually do some work."[90][90] Ibid 6.·Mr Finlayson stated that "Two days later – Whilst still employed", Mr Gibby contacted Ms Westin to ask if she "would be interested in helping them eventually" on or about 5 February.[91][91] Ibid 7.·"Determining that … Mr Gibby is somehow entitled to proportionate long service leave would set a dangerous precedent and example to other employers the catastrophic risks faced when trying to give people a job and a livelihood."[92][92] Ibid 3.·Mr Gibby was "given multiple opportunities, to desist his sabotaging the business and to perform his duties as instructed, to work together as a cohesive team with the best interests of The Finlaysons IT in mind."[93][93] Ibid 2.Whilst no references to a particular Exhibit or transcript were made in the submission, Mr Finlayson asserted his contention was supported by various statements he had made to Mr Gibby such as:"If you do your job there is no need to fire you. If you want to start a new business then you resign."[94]"I know that I've already given you two warnings that we need to be a cohesive team and do our jobs. That's not firing you that is a warning."[95] ·"… I in fact did not terminate Mr Gibby's employment so I could destroy my own business, and go about spending a year and a half fighting for survival just to avoid LSL claim in the QIRC."[96]·written employment contracts exist and have since been found.Mr Finlayson stated that he "went to lengths to source the originals from Aitken Legal" and provided them so there "could NOT be in delusion or confusion about its existence."[97]"The employment contracts were recovered from the accounts mailbox which can be independently forensically verified." Mr Finlayson asserted that "…there is evidence of tampering in regards to the mailboxes which Mr Gibby had access to including deleting emails in the hope it would destroy evidence. The Account Manager Paula who was managing the accounts mailbox also claimed there was no contract to be found after her search. Which was a lie."[98] Mr Finlayson concluded "Why would The Finlaysons IT go to the considerable effort and expense to procure employment contracts for no reason?"[99]·Mr Gibby had no intention of continuing work with The Finlaysons IT Pty Ltd for 10 years because he had registered a competing business.Mr Finlayson stated that the Telegram messages revealed that Mr Gibby wanted to take over The Finlaysons IT Pty Ltd.Therefore Mr Finlayson asserted that Mr Gibby was not entitled to proportionate payment of long service leave under s 95(4)(d) of the IR Act because there was "no reasonable expectation that their employment with the employer would be continuing at least 10 years", in circumstances where he had just registered a competing business "with another employee in collaboration with the accounts manager and the accountant."[100][94] 3:43 pm, 1 February 2022; Exhibit 1, 174; Respondent's closing submissions filed 3 July 2023, 2.[95] 3:47 pm, 1 February 2022; Exhibit 1, 175; Respondent's closing submissions filed 3 July 2023, 2.[96] Respondent's closing submissions filed 3 July 2023, 3.[97] Respondent's closing submissions filed 3 July 2023, 1.[98] Ibid.[99] Ibid.[100] Ibid 2.Consideration