Grunsell v Ceerose
[2021] FCCA 1209
•1 June 2021
FEDERAL CIRCUIT COURT OF AUSTRALIA
Grunsell v Ceerose [2021] FCCA 1209
File number: SYG 2322 of 2020 Judgment of: JUDGE STREET Date of judgment: 1 June 2021 Catchwords: INDUSTRIAL LAW – Application for pecuniary penalties under s 546 of the Fair Work Act 2009 (Cth) – whether the respondents breached ss 44 and 119 of the Act – whether applicant entitled to redundancy and superannuation pay – no contraventions made out – application dismissed without costs. Legislation: Fair Work Act 2009 (Cth) ss 44, 119, 546, 570 Number of paragraphs: 23 Date of hearing: 1 June 2021 Place: Sydney Counsel for the Applicant: Ms R Kumar Solicitor for the Applicant: Solve Legal Pty Ltd Solicitor for the First, Second and Third Respondents: Mr C Fesel, WilliamsonBarwick Lawyers ORDERS
SYG 2322 of 2020 BETWEEN: SIMON GRUNSELL
Applicant
AND: CEEROSE PTY LTD
First Respondent
EDWARD DOUEIHI
Second Respondent
BRADLEY SMITH
Third Respondent
ORDER MADE BY:
JUDGE STREET
DATE OF ORDER:
1 JUNE 2021
THE COURT ORDERS THAT:
1.The application is dismissed.
2.There be no order as to costs under s 570 of the Fair Work Act 2009 (Cth).
REASONS FOR JUDGMENT
JUDGE STREET:
These are proceedings commenced within the Court’s jurisdiction under s 546 of the Fair Work Act 2009 (Cth) (“the Act”), in which the applicant alleges a breach of s 119 of the Act. The first respondent was the employer of the applicant initially as a site manager from 11 January 2016, being promoted to senior site manager until 31 August 2020. During that employment the second respondent was a director of the first respondent and the third respondent was the general manager of the first respondent.
The relevant chronology of events are as follows, as set out in the respondents’ chronology:
Date
Event
11 Jan 2016
3 Simon Grunsell commenced employment with Ceerose Pty Ltd (Ceerose) as a Site Manager.
15 Mar 2018
Mr Grunsell is promoted to Senior Site Manager.
16 Jul 2020
Mr Grunsell attends a meeting to discuss defective rectification works with Bradley Smith, Roy Massoud and Jason Cameron.
28 Jul 2020
Mr Grunsell is sent a warning notice/letter concerning unsatisfactory performance that required improvement.
25 Aug 2020
4 Mr Grunsell attends a meeting with Mr Smith and Mr Massoud for the provision of a notice being given to him concerning a Jobkeeper enabling stand down directions (which resulted in the termination of Mr Grunsell's employment).
28 Aug 2020
5 Mr Grunsell sends an email to Mr Massoud which, inter alia, advised of the return of Ceerose's property.
August 2020
6 Mr David Arkins, Senior Project Manager of Ceerose was allocated the responsibility of attending to Mr Grunsell's former duties.
1 Sep 2020
7 Anna Sioukas on behalf of Ceerose emails Mr Grunsell concerning his final payslip.
2 Sep 2020
8 Ms Sioukas sends an email Mr Grunsell concerning his final payslip.
3 Sep 2020
9 Mr Grunsell sends an email to Ms Sioukas querying about his entitlements.
3 Sep 2020
10 Ms Sioukas sends an email Mr Grunsell concerning his final payslip.
3 Sep 2020
11 Mr Grunsell sends an email to Ms Sioukas advising that his employment was "terminated'.
4 Sep 2020
12 Mr Grunsell sends an email to Ms Sioukas querying when his final pay will be finalised.
8 Sep 2020
13 Ms Sioukas sends an email to Mr Grunsell attaching a deed of release.
15 Sep 2020
14 Mr Grunsell files an application in the Fair Work Commission seeking relief from unfair dismissal.
16 Sep 2020
15 Ms Sioukas sends an email to Mr Grunsell concerning the deed of release previously sent to him.
21 Sep 2020
16 Ceerose pays Mr Grunsell his final pay.
29 Sep 2020
17 A response is filed by Ceerose in respect of Mr Grunsell's application in the Fair Work Commission seeking relief from unfair dismissal.
8 Oct 2020
18 Mr Grunsell discontinued an application in the Fair Work Commission seeking relief from unfair dismissal.
The pleading alleges that the applicant was terminated without notice and that the applicant was notified orally by the second respondent that his employment was being terminated for redundancy. The statement of claim alleges a failure to pay redundancy under s 119 of the Act and related superannuation benefits, and alleges two contraventions of s 44 of the Act by reference to contravention of s 119 of the Act and Part 3 of the Superannuation Guarantee (Administration) Act 1992 (Cth). The core issues on the pleading by the applicant are that the applicant was terminated without notice and that the applicant was made redundant. The respondents’ defence alleges that the applicant resigned and was not dismissed or made redundant.
For the reasons that follow, the Court accepts the respondents’ evidence and finds that the applicant resigned at the meeting on 25 August 2020 and was not dismissed or made redundant. Accordingly none of the contraventions pleaded are made out. The Court finds that the applicant was paid his entitlements as a result of his resignation.
The applicant has given evidence, as have two officers of the first respondent who attended the meeting with the applicant on 25 August 2020, being the third respondent, and Roy Massoud, a construction manager who issued the applicant with a warning letter on 28 July 2020.
The applicant’s version of the conversation at the meeting on 25 August 2020, as found in his affidavit, is as follows:
BS I don't have good news for you.
SG I guessed that.
BS Because of COVID-19 and we only have the one job going at the moment,
and the other job (Aqualuna) is finishing, and the new job in Alexandria
doesn't look like its going to start until next year, so we're going to have to
stand you down immediately with zero hours. We just can't sustain the labour costs ... You will receive the JobKeeper payment of$1,500 per
fortnight, which the company will pay you directly. We will pay your normal
pay to the end of the week. I have the JobKeeper direction notice here. [He
pulled put a sealed white envelope and left it on the end of the table]
SG This is bullshit. How am I supposed to live on $1500 a fortnight and not be
able to get another job?
BS We can keep you on JobKeeper until March next year. It's a guaranteed
income.
SG I've been a loyal employee to you for nearly 5 years now. You know this is
wrong ... I would expect you to do the honourable thing and pay out all my
entitlements and notice period instead of this stand down bullshit so that I
can go and get another job.
BS Would you be happy if we did that?
SG Yes, I'd prefer that than being stuck on Job Keeper ... Come on, do the right
thing, guys. It's a small industry. We all know everyone. The day will come
when I bump into you guys again working for other companies.
RM We will pay you to the end of the fortnightly pay run and pay out your
entitlements.
SG OK I'll return the ute, phone and laptop with the keys for the other jobs by
the end of the week.
BS OK Done. Just finish up now.
The second respondent did not give evidence and did not attend the meeting on 25 August 2020. Mr Massoud the construction manager gave his version of the conversation in his affidavit dated 3 May 2020, as follows:
Mr Smith said: "Unfortunately, the business is not doing well and because of that we need to stand you down with the JobKeeper scheme."
Mr Grunsell said: "That is fucking bullshit. I cannot survive on Jobkeeper. I'd rather resign and leave with dignity, pay me my 4 weeks' notice and entitlements and we can all move on.
Mr Smith said: "Are you sure that is what you want?".
I said: "If this is what you prefer then we can accommodate this for you."
Mr Grunsell said: "Yes this is what I'd prefer."
Mr Smith said: "Ok. You can have the rest of the week off which you will be paid for. You will need to return the ute and other property to the office and provide your letter of resignation by Friday, 28 August. You will then be paid all monies owed to you. "
Mr Grunsell said: Yes, I will sort it out. I will need to take some of my own tools out from the ute before I return it.
The third respondent gave his version of the conversation at the meeting on 25 August 2020, in his affidavit, as follows:
I said: "The current financial position of Ceerose's business is not good because of the lack of work and as a result of which its need to regrettably temporarily standdown some current employees including you. It is the business' intention to temporarily standdown your employment in accordance with the Job keeper provisions.”
Mr Grunsell said: "I am not coping that. I understand what a 5: 00pm meeting means. Just finish me up and I will be on my way. I am not interested in a Job keeper payment. Just pay me out and I will walk. Just show me some dignity and respect and pay me my 4 weeks and I will resign.”
I said: "Simon, I can appreciate what you are saying, however, it is our intention to proceed with a temporary stand down and get you back as soon as we can. The Job keeper scheme provided an income during the period.”
Mr Grunsell said: "I'm not interested in Job keeper. I can pick up a job easily enough. Please pay me out.”
Mr Massoud said: "It is not the intention of the business to let you go, however we understand your wish to leave. If that is what you want we are happy to do this for you."
I said: "Simon, I take it that you are electing to resign as opposed to a Job keeper stand down."
Mr Grunsell said: "Yes."
I said: "Okay, are you happy to take the rest of the week off as normal pay, return the company ute and other property and provide a letter of resignation by Friday, 28 August 2020, with Monday, 31 August 2020 being the effective date at which time the notice period and entitlements would be paid out?"
Mr Grunsell said: "Yes I will."
It was not until 1 September 2020 that the applicant asserted in an email that he had not resigned and the contemporaneous response at 11.54am on that day that the applicant had resigned corroborates the respondents’ case. The applicant’s change of position from the meeting to the assertion of no resignation in emails does not advance the applicant’s case. The draft deed sent to the applicant on 8 September 2020 is, however, the Court finds, a record that corroborates the respondents’ case that the applicant resigned as referred to in proposed clause 2.1 of that deed.
The applicant, in his pleading, asserted a verbal conversation with the second respondent to the effect that he was made redundant. There was no evidence of such a verbal conversation. No such conversation with the second respondent or any other officer of the first respondent took place. The second respondent was not present at the meeting on 25 August 2020. The applicant asserted the same thing in that he was told verbally that he was being made redundant in another document being an application for relief form for unfair dismissal filed in the Fair Work Commission that was clearly not correct. In oral evidence, the applicant indicated that his only basis for asserting he was made redundant was the reference to being given his entitlements. This was not a proper basis, as a matter of credibility of the applicant, to assert an oral conversation that the applicant was to be made redundant or that it was inferred that he was being made redundant. The willingness of the applicant to assert that he was verbally told he was being made redundant, when that did not occur, means that the applicant is not a reliable witness.
The Court found the respondents’ witnesses to be credible, and accepts their evidence that there was no such conversation that the applicant was to be made redundant. The temporary stand down decision, by its very temporary nature, was not a redundancy. The Court accepts the respondents’ evidence that the positon was not made redundant. The Court accepts the respondents’ evidence, including that given by Mr Massoud in cross examination that the applicant stated he wants to resign and that he verbally resigned at that meeting on 25 August 2020. The Court accepts the third respondent’s evidence in cross examination that the applicant resigned at that meeting and that the stand down direction was not issued to the applicant because of his resignation. The Court accepts the third respondent’s evidence in cross examination that the termination was not his initiative. The applicant was willing to advance, in his pleading and in the document filed in the Fair Work Commission, an allegation of an oral redundancy that was not supported and which was the core issue in his case. This undermines the applicant’s credit. In these circumstances, the Court finds that the applicant is not a reliable and credible witness and prefers the evidence of the respondents as to what was said at the meeting as referred to above, and that the applicant resigned at the meeting at which he was told he would be temporarily stood down. The Court prefers the accuracy of the respondents’ versions of the conversation at the meeting on 25 August 2020, albeit there was no affidavit challenge to the substance of what was said by the applicant at the meeting.
The Court does not accept that the temporary standing down constituted a dismissal or, even if it had been pleaded, which it was not, a constructive dismissal. The applicant was not forced to resign, nor was that the only reasonable choice. Nor were there statements of concluded intention on behalf of the first respondent to no longer be bound by the contract of employment. There was also a request at the meeting on 25 August 2020 for the applicant to reconsider his decision that is inconsistent with a constructive dismissal. The offering of a temporary arrangement is inconsistent with an endeavour to terminate or repudiate the contract of employment. The Court is not satisfied that there was any attempt or threat to constructively dismiss the applicant. The COVID crisis was a reasonable and fair basis to temporarily stand down the applicant. The Court accepts the respondents’ evidence that the temporary stand down was due to the financial difficulties and temporary lack of work. That decision was made to issue a temporary Jobkeeper stand down to the applicant and an attempt was made to give the applicant written notice of that decision on 25 August 2020. The decision was not one that would probably bring an end to the employment relationship. The decision was not one likely to destroy or seriously damage the employment relationship of confidence and trust. The Court rejects the applicant’s submission that this was an opportunity to terminate the applicant seized upon with glee. The evidence of the respondents, which the Court accepts, does not support that suggestion. Objectively there was no repudiation of the contract of employment by the respondents.
Nor was the applicant being asked to take a permanent pay cut of 70% and the Court rejects the applicant’s submission that the respondents’ conduct or the temporary stand down decision was plainly inimical to the continuance of the contract of employment. The temporary stand down, enabling the applicant to be paid through Jobkeeper, did not obstruct or harm the continuance of the employment contract. This is because the temporary nature of the decision was clear and patent and the applicant was not being terminated from his employment.
Nothing was said at that meeting that gave rise to a proper basis to support the assertion that the applicant was made redundant. The assertion in response to the applicant’s resignation, that he would be paid his entitlements, was not communicating facts of the kind identified under s 119 (1)(a) of the Act. The reference to entitlements upon resignation did not mean the applicant was made redundant. At no stage in the meeting was the applicant told he would be made redundant.
The Court finds that no steps were taken to convey to the applicant that the employer no longer required the job done by the applicant to be done by anyone. Nor was anything said in the meeting that communicated that proposition to the applicant. The applicant did not even assert facts to that effect in his substantive affidavit. There was a clear disconnect between the affidavit and the statement of claim in relation to the alleged redundancy. The applicant was not made redundant at the meeting with the officers of the first respondent or at any other time. The applicant has failed to prove that he was made redundant. The Court finds that the applicant resigned at the meeting on 25 August 2020. That resignation was at the voluntary initiative of the applicant and not at the initiative of the respondents.
No contravention of s 119 of the Act is made out.
No contravention in respect of the alleged breach of Part III of the Superannuation Guarantee (Administration) Act 1992 (Cth) is made out which was interdependent upon the alleged contravention of s 119 of the Act.
No contravention of s 44 of the Act is made out which was also interdependent upon the alleged contravention of s 119 of the Act.
The applicant is not entitled to any relief. The applicant also, on the evidence before the Court, has failed in the claim in respect of the knowing participation because there was no contravention by the first respondent. Further, the Court does not accept that the conduct of the two individual respondents amounted to any knowing participation in the alleged contraventions. There was no evidence to support knowing participation against the second respondent. Further, given the inferential basis of the applicant’s case, there was no evidence to persuade the Court that the third respondent knowingly participated in any alleged contravention. The case against all respondents has not been made out. Accordingly, the application is dismissed.
Costs
The respondents have asked for a costs order under s 570(2) of the Act, both on the grounds of the proceedings not having a reasonable prospect for success and on the basis of a settlement offer made on 15 February 2021.
The first respondent should have more promptly paid entitlements following the resignation, regardless of the communications concerning a release or failure to provide a resignation letter. Further, Ms Kumar, counsel on behalf of the applicant, did endeavour to put an arguable case based on the circumstances said to fall within s 119 of the Act, which the Court ultimately rejected. The submissions of Ms Kumar, both in writing and oral, albeit not accepted by the Court, were clear, succinct and helpful.
The proceedings were run competently and diligently by counsel. The facts identified in the statement of claim could have been articulated with a greater clarity to reflect the argument developed by Ms Kumar. Whilst on one view, going beyond the pleaded case the submissions were lucid and confined. The respondents did persuade the Court that the applicant’s arguments should be rejected but that does not mean that the arguments were hopeless. This is not a case where the Court can be satisfied the proceedings were instituted vexatiously or without reasonable cause. Nor is the Court satisfied that the rejection of the offer, which was, with all respect, on the minimal side of any endeavour to compromise, is one in which it was an unreasonable act to reject the offer in respect of proceedings in which ordinarily no order as to costs is made.
Accordingly, the Court is not satisfied that the requirements of s 570(2) of the Act have been made out so as to warrant the making of a costs order, and that the ordinary principle under s 570 of the Act should be applied, that there should be no costs order.
I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the transcript of the published oral reasons for judgment of Judge Street delivered in open Court on 1 June 2021 and the parties were sent a sealed copy of the Court’s orders. Associate:
Dated: 30 July 2021