Hardev Cheema v Venture DMG Pty Ltd

[2013] FWC 1795

[2013] FWC 1795

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Hardev Cheema
v
Venture DMG Pty Ltd
(U2012/15051)

COMMISSIONER GOOLEY MELBOURNE, 26 MARCH 2013

Application for unfair dismissal remedy.

[1] Mr Hardev Cheema (the Applicant) was employed by Venture DMG Pty Ltd (the Respondent) from 23 September 2009. The Applicant alleges he was dismissed on 7 November 2012.

[2] The Applicant lodged an application for relief pursuant to section 394 of the Fair Work Act 2009 (FW Act) alleging that he was unfairly dismissed.

[3] The Respondent disputed that the Applicant had been dismissed from his employment and, in its response to the application, said that the Applicant had resigned his employment on 21 September 2012. The Respondent objected to the Applicant’s claim on the basis that there was no dismissal and, if there was a dismissal, the application was not lodged within 14 days of the 21 September 2012.

[4] The application was set down for a jurisdictional hearing. On 26 February 2013 the solicitors for the Respondent asked that, the merits of the application and the jurisdictional objections should be considered simultaneously. The Respondent advised that it would not need to adduce additional evidence. The Applicant consented to this course but advised that additional evidence going to mitigation would need to be put before the Commission. The matter proceeded on that basis.

[5] The issues to be determined in this matter are as follows:

(1) Did the Applicant resign his employment or was his employment terminated by the Respondent?

(2) If the Applicant’s employment was terminated by the Respondent on what date did that occur?

(3) If the application was lodged within time, was the termination of the Applicant’s employment harsh, unjust or unreasonable?

[6] It is not disputed that the Applicant was a regular and systematic casual employee who had a reasonable expectation of continuing employment.

[7] It is not disputed that on 25 September 2012 the Applicant went to India as his mother was sick. 1

[8] He returned to Australia on 2 November 2012 and contacted his supervisor, Mr Hai Feng to tell him he was back and available for work. 2 He was told either there was no work available for him3 or that he needed to contact a labour hire company.4

[9] On 7 November 2012 the Applicant contacted Mr Murali Surya, the Production Manager, to ask about his job and was told that the Respondent no longer employed casual employees directly but sourced them from a labour hire company. The Applicant objected to being treated as though he was a new employee as he understood that casual employees who had been directly employed by the Respondent were still directly employed. Mr Surya told him he needed to contact the labour hire company. He was also told that there were currently no casual vacancies. 5

Disputed facts

[10] The Applicant gave evidence that about one month before he went to India he told Mr Feng that his mother was ill and that he needed to take leave. He told Mr Feng that he would be away until 2 November 2012. The Applicant said that Mr Feng said that this was OK and the Applicant should call him or text him when he returned.  6

[11] Mr Feng gave evidence that the Applicant approached him on or around 13 September 2012 and asked for five weeks’ leave because his mother was sick. It was his evidence that the Applicant did not know how long he would be away. It was his evidence that he told the Applicant that he could not take authorised leave. The Applicant told Mr Feng that he would go anyway and Mr Feng told the Applicant that he would not be guaranteed work upon his return. 7

[12] Mr Feng said that the Applicant was rostered for work on 21 September 2012 but he did not attend work and as a consequence his employment ceased on that day. 8

[13] In his evidence in chief, Mr Feng explained that in order to replace the Applicant with another casual, he had to terminate the Applicant’s employment. He was required to hand in a termination form. 9 It was his evidence that the told the Applicant that he was required to terminate his employment. This evidence was not included in Mr Feng’s witness statement.

[14] I accept the Applicant’s evidence about his conversations with Mr Feng. I accept his evidence that he sought leave in advance. I accept Mr Feng’s evidence that he told the Applicant to contact him upon his return. While I accept Mr Feng’s evidence that he was required to provide a termination form in order to engage another casual, I do not accept his evidence that he told the Applicant that his employment was terminated. Given the importance of this evidence, if he had told the Applicant this in September 2012 it would have been included in his original witness statement and it was not. Further Mr Feng gave evidence that he handed the Applicant a termination form but no such form was produced. 10 Such a document would have been critical for the Respondent’s case. I can only assume given it was not put in evidence that no such document existed.

[15] While Mr Feng gave evidence that the Applicant did not attend work on 21 September 2012 the Applicant gave evidence that his last day of work was 22 September 2012. It is not necessary to resolve this evidentiary dispute as the Respondent did not submit that the Applicant’s employment ended because he did not attend work on 21 September 2012.

[16] The Respondent submitted that by failing to make himself available from 21 September until late October 2012 the Applicant had abandoned his employment. 11

[17] It was said that the Applicant did not have the Respondent’s consent to absent himself from work or provide a reasonable explanation for his absence. The Respondent relied upon clause 17 of Venture DMG Pty Ltd and National Union of Workers Enterprise Agreement 2010-2012 12 (the Agreement), the operative agreement as at September 2012, which provided as follows:

“17 ABANDONMENT OF EMPLOYMENT

17.1 The absence of an employee from work for a continuous period exceeding three working days without theconsent of the employer and without notification to the employer in accordance with sub clause 21.9.1 and 21.9.2 hereof shall be prima facie evidence that the employee has abandoned their employment.

17.2 If within a period of fourteen days from their last attendance at work or the date of their last absence in respect of which notification has been given or consent has been granted, an employee has not established to the satisfaction of their employer that they were absent forreasonable cause, they shall be deemed to have abandoned their employment

17.3 Termination of employment by abandonment in accordance with this sub clause shall operate as from the date of the last attendance at work or the last day’s absence in respect of which consent wasgranted, or the date of the last absence in respect of which notification was given to the employer, whichever is the later.”

[18] The Applicant had reasonable cause to be absent. It was not contested by the Respondent that the Applicant’s mother was ill in India and he needed to return to India because of that illness. Further, it was not contested that an employee who had an entitlement to paid annual leave would have been given leave in those circumstances.

[19] The Respondent was aware that the Applicant was taking leave and the reasons for the leave. Mr Feng, while saying he couldn’t give the Applicant leave, did tell the Applicant that “if you want to go, you can go.”

[20] I do not accept the Respondent’s submissions that the Applicant abandoned his employment.

[21] As the Full Bench said in GlaxoSmithKline Australia Pty Ltd v Gauci 13 “there is a difference between prima facie evidence and proof. Prima facie evidence can be rebutted by other evidence.”14

[22] In this case there is no evidence, even on the Respondent’s evidence, to support a conclusion that the Applicant no longer intended to be bound by his contract of employment. The Respondent and the Applicant understood that the Applicant was intending to return to work upon his return from overseas.

[23] I do not accept that the Applicant resigned or abandoned his employment. I accept that he understood that he needed to contact the Respondent upon his return however I accept that, but for the decision to outsource casual employment to a labour hire company in his absence, he would have resumed his casual employment with the Respondent upon his return. The decision of the Respondent not to offer the Applicant any further shifts upon his return to Australia was a decision to terminate the Applicant’s employment.

[24] I therefore accept that the Applicant first became aware that his employment was terminated when he spoke to Mr Feng on 2 November 2012.

[25] The application for an unfair dismissal remedy lodged on 13 November 2012 was therefore lodged within time and the Fair Work Commission has the jurisdiction to determine the application.

Was the termination of employment harsh, unjust or unreasonable?

[26] In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the Commission must take into account the following:

s387(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);

[27] It was the Respondent’s uncontested evidence that it had made a decision in the Applicant’s absence to outsource its casual workforce, but it did not immediately terminate its existing casual workforce. 15 Mr Surya gave evidence that they intended transferring all casual employees to the labour hire company. It was Mr Feng’s evidence that some of the casual employees had been converted to ongoing employees. This was being finalised at the time of the hearing.16

[28] The Respondent accepted that it did not consult with the Applicant about its decision to outsource its casual labour. However it says it was unable to consult with the Applicant as he was overseas.

[29] The Agreement provided that:

“13 INTRODUCTION OF CHANGE

13.1 Employer’s duty to notify

13.1.1 Where an employer has made a definite decision to introduce major changes in production, program, organisation, structure or technology that are likely to have significant effects on employees, the employer shall notify the employees who may be affected by the proposed changes and the union and any other nominated employee representative.

13.1.2 Significant effects means more than 10 employees being affected and includes termination of employment major changes in the composition, operation or size of the employee’s work-force or in the skills required; the elimination or diminution of job opportunities, promotion opportunities or job tenure; the alteration of hours of work; the need for retraining or transfer of employees to other work or locations and the restructuring of jobs.

Provided that where the agreement makes provision for alteration of any of the matters referred to herein, an alteration shall be deemed not to have significant effect.

13.2 Employer’s duty to discuss change

13.2.1 The employer shall discuss with the employees affected and the Union or other representative, inter alia, the introduction of the changes referred to in sub clause 13.1 hereof, the effects the changes are likely to have on employees, measures to avert or mitigate the adverse effects of such changes on employees and shall give prompt consideration to matters raised by the employees and/or their Union or other representative In relation to the changes.

13.2.2 The discussions shall commence as early as practicable after a definite decision has been made by the employer to make the changes referred to in sub clause 13.1 hereof.

13.2.3 For the purposes of such discussion, the employer shall provide in writing to the employees concerned and the Union or other representative, all relevant information about the changes, including the nature of the changes proposed, the expected effects of the changeson employees and any other matters likely to affect employees provided that any employer shall not be required to disclose confidential information the disclosure of which would be inimical to the employer’s interests.

13.2.4 Nothing in this clauseshall prevent an employee on an individual basis ensuring their right to proper consultation shall be dealt with under clause 14.”

[30] While the Applicant submitted that there had been a failure to consult, the Applicant did not take the Commission to the Agreement clause and there was no evidence about the number of casual employees who were affected by the decision to contract out the work. While it was accepted that there was no consultation with the Applicant, it is not possible on the evidence before the Commission for there to be any finding that the Respondent did or did not comply with its obligations to consult under the Agreement. It is incumbent on the Respondent if it seeks to submit that this was a genuine redundancy to produce evidence that it complied with its obligations under the Agreement and it did not provide that evidence.

[31] The Applicant submitted that the decision to outsource the work did not necessarily result in the termination of the Applicant’s employment. It was suggested that all that occurred was that the Respondent decided to use the labour hire company to pay casual employees and that they remained Respondent’s employees. The evidence does not support this submission. While Mr Surya accepted that the labour hire employees would still work under the control of supervisors and managers of the Respondent, this is no different to most labour hire arrangements. There is no evidence on which I could conclude that the arrangement between the Respondent and the labour hire company was a sham and that the employees of the labour hire company were in fact employees of the Respondent.

[32] Even if the Applicant was correct, the submissions do not advance the Applicant’s case as the Applicant did not work for the Respondent again and was never engaged by the labour hire company to work in the Respondent’s business.

[33] The Respondent submitted that it had a valid reason to terminate the Applicant’s employment because it no longer had any work for the Applicant to perform. It was submitted that the Applicant’s position was redundant but as he was a casual employee he had no entitlement to redundancy pay. However the Respondent did not put forward any evidence to support a finding that, at the time the Applicant’s employment was terminated, the Applicant’s position was redundant. It did not for example give any evidence that the Applicant’s job, at November 2012 was no longer being performed by an employee of the Respondent.

[34] There is no evidence that the Respondent had any regard to the fact that the Applicant would be returning to work in November 2012 and whether he should be considered for conversion from a casual employee to an ongoing employee.

[35] The evidence before the Commission that, upon the Applicant’s return to Australia, the Respondent did not have work for the Applicant is equivocal. Mr Surya gave evidence that the Respondent didn’t have any vacancies. 17 There was some evidence that the Applicant may have been engaged by the labour hire company. It was Mr Surya’s evidence that had the Applicant approached the agency “he would have a high chance to get in.” However the evidence establishes that other directly employed casuals continued to work for the Respondent in this period. The direct employment of casuals only stopped around the time of the hearing.

[36] It was unfortunate for the Applicant that, in his absence the Respondent decided to alter the way it employed casuals. Had he been at work at the time, he may have been offered ongoing work, or with his agreement, he may have been transitioned to the labour hire company. 18

[37] Because of the decision of the Respondent that the Applicant’s employment had ended in September 2012, no consideration was given to any of these alternatives.

[38] I find that the Respondent did not have a valid reason to terminate the Applicant’s employment at the time it made the decision to terminate his employment. The Applicant was entitled to be treated as other directly employed casual employees were treated.

s387(b) whether the Applicant was notified of that reason;

[39] The Applicant was not notified of the reason for the termination of his employment before the decision to terminate his employment was made.

s387(c) whether the Applicant was given an opportunity to respond to any reason related to the capacity or conduct of the person;

[40] The Applicant was not given any opportunity to respond to the reasons for the termination.

s387(d) any unreasonable refusal by the employer to allow the Applicant to have a support person present to assist at any discussions relating to dismissal;

[41] The Applicant did not request a support person be present.

s387(e) if the dismissal related to unsatisfactory performance by the person—whether the Applicant had been warned about that unsatisfactory performance before the dismissal;

[42] The Applicant’s employment was not terminated for unsatisfactory performance.

s387(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;

[43] No evidence was called about the size of the employer’s enterprise. This criterion is therefore neutral.

s387(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;

[44] No evidence was called about the level of human resource management or expertise. The Respondent submitted that Mr Surya was not a trained HR professional and the Respondent did not have a dedicated HR department. However, I agree with the Applicant that the absence of professional human resources personnel does not justify the unfair treatment of employees.

s387(h) any other matters that FWA considers relevant.

There are no other matters that I consider to be relevant.

Conclusion

[45] The Respondent did not have valid reason for the termination of the Applicant’s employment. The Applicant was denied any procedural fairness.

[46] It is clear from the evidence that in November 2012 the Respondent still employed casual employees.

[47] The Respondent failed to consider the Applicant’s position when it decided to contract out its casual workforce and offer some of its casual workers ongoing employment. Given this process had not been completed when the Applicant returned, the Respondent gave no explanation other than its mistaken presumption that the Applicant had abandoned his employment of why it did not, at this stage, consider offering the Applicant casual work so that he could transition to the labour hire company or to ongoing employment. The Applicant should have been afforded the same consideration as other casual employees.

[48] For these reasons I have determined that the termination of the Applicant’s employment was harsh, unjust and unreasonable and therefore he was unfairly dismissed.

Remedy

[49] The Applicant is seeking reinstatement of his employment. However in circumstances where the Respondent had determined not to engage casual employees directly, reinstatement is not a viable option as there is no position to reinstate him to.

[50] In assessing any amount in lieu of reinstatement, the Commission is required to have regard to the following:

(a) the effect of the order on the viability of the employer’s enterprise;

[51] There were no submissions that any order would affect the viability of the employer’s enterprise. This criterion is therefore a neutral consideration.

(b) the length of the person’s service with the employer;

[52] The Applicant was employed for over three years. The Respondent submitted that this should not impact on the amount. I accept that this service does not warrant any adjustment to the amount of compensation.

(c) the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed;

[53] I consider that the Applicant would have worked for the Respondent until March 2013 when the Respondent ceased to directly employ casual employees. There is no evidence to support a finding that the Applicant would have been offered ongoing employment. He would therefore have worked another 15 weeks. I have deducted three weeks for the annual Christmas shut down leaving a period of 12 weeks.

[54] In the period until 16 September 2012 the Applicant earned $15182.88 which is an average of $1380.26 per week. Therefore had he worked another 12 weeks, he would have earned $16563.14 had his pattern of work remained unchanged.

[55] I have considered whether there should be a reduction in this amount based on the possibility that, even had the Applicant remained as a casual employee for the 12 weeks, he would have had reduced hours due to the decision of the Respondent to outsource casual work to a labour hire company. This issue was not addressed by the Respondent in its evidence. Consequently there was no evidence before the Commission about the hours worked by those casuals who remained in employment until they were either transitioned to the labour hire company or became ongoing employees. There was no evidence about the amount of overtime worked by casual employees in this period. The Respondent was on notice about the amount the Applicant was paid by the Respondent in the 2012-2013 financial year. It did not put on any evidence that that amount would on average have been less in the period November 2012 to March 2013. I have therefore not reduced the amount for this contingency.

(d) the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal;

[56] The Applicant has obtained casual work through a labour hire company. As at 22 February 2013 the Applicant had earned $10180.05. The Respondent submitted that the Applicant’s failure to approach the labour hire company it was using was a failure on his part to mitigate his loss. However there was no clear evidence that had he done so, he would have been successful as Mr Feng gave evidence that he did not have any vacancies and presumably the labour hire company could only supply labour as required by the Respondent. I do not accept that the Applicant was required to seek work through the labour hire company used by the Respondent. He did seek work with another labour hire company and was successful in obtaining casual work. I find that the Applicant has mitigated his loss.

(e) the amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for compensation;

[57] Given my decision on how long the Applicant would have remained in employment, this criterion is not relevant.

(f) the amount of any income reasonably likely to be so earned by the person during the period between the making of the order for compensation and the actual compensation;

[58] Given my decision on how long the Applicant would have remained in employment, this criterion is not relevant.

(g) any other matter that FWA considers relevant.

[59] There are no other relevant matters.

Conclusion

[60] In light of the above I will make an order that the Respondent pay to the Applicant $6383.09 less applicable tax such amount to be paid to the Applicant within 14 days of this decision. An order [PR535079] to that effect will be issued at the same time as this decision.

COMMISSIONER

Appearances:

G Dircks for the Applicant.

A Maher for the Respondent.

Hearing details:

2013.

Melbourne:

1 March.

 1   Exhibit A1 at [9]

 2   Ibid at [18]-[19]

 3   Exhibit R1 at [13]

 4   Exhibit A1 at [21]

 5   Ibid [22]-[30]

 6   Ibid at [10]-[15]

 7   Exhibit R1 [6]-[11]

 8   Ibid at [12]

 9   Transcript PN 151-153

 10   Transcript PN 272-276

 11   Exhibit R3 at [15]

 12   PR505780

 13   [2008] AIRCFB 439

 14   Ibid at [18]

 15   Transcript PN 337

 16   Ibid PN 235

 17   Transcript PN 371

 18   Ibid PN 246

Printed by authority of the Commonwealth Government Printer

<Price code C, PR535078>