Hong Jiang v C J Express Sydney Pty Ltd

[2017] FWC 2610

[2017] FWC 2610

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394 - Application for unfair dismissal remedy

Hong Jiang
v
C J Express Sydney Pty Ltd
(U2016/15001)

COMMISSIONER CAMBRIDGE SYDNEY, 19 MAY 2017

Unfair dismissal - summary dismissal - serious misconduct - primary factual findings proven upon requisite standard - valid reason for dismissal - application dismissed.

[1] This matter involves an application for unfair dismissal remedy made pursuant to section 394 of the Fair Work Act 2009 (the Act). The application was lodged at Sydney on 16 December 2016. The application was made by Hong Jiang (the applicant) and the respondent employer is C J Express Sydney Pty Ltd (the employer). The employer is also known as Chang Jiang International Express.

[2] The application indicated that the date that the applicant’s dismissal took effect was 8 December 2016. Subsequently, it appeared that the dismissal of the applicant may have occurred on 7 December, and that confirmation of the dismissal may have been provided on 8 December 2016. In any event, the application was made within the 21 day time limit prescribed by subsection 394 (2) of the Act.

[3] The matter was not resolved at conciliation, and it has proceeded to arbitration before the Fair Work Commission (the Commission) in a Hearing conducted at Sydney on 24 April 2017.

[4] The Commission granted permission under s. 596 of the Act, for the Parties to be represented by lawyers or paid agents. Although the applicant initially indicated an intention to engage lawyers, he represented himself at the Hearing. The applicant was the only witness who provided evidence in support of the unfair dismissal claim. A statement of a Mr Xiang Dang Xu was also admitted as evidence introduced on behalf of the applicant. However, Mr Xu did not attend as a witness in order to be available for cross-examination.

[5] The employer was represented by Mr I Kammoun, solicitor, from the firm of Wang Lawyers. MrKammoun introduced evidence in the form of a witness statement of the employer’s manager, Mr Sam Huang. However, Mr Huang did not attend as a witness in order to be available for cross-examination.

Background

[6] There were some unfortunate inadequacies and difficulties with the evidence presented in this instance. The applicant was unrepresented, and he was clearly inexperienced in matters involving the preparation and presentation of material upon which an unfair dismissal claim would be determined. In addition, the applicant had only limited English skills, and he communicated both verbally and in writing, in the Mandarin language. Consequently, much of the material relied upon by the applicant has had to be translated from Mandarin to English, and there has been a need to examine this translated material with considerable care in order to ensure that no inaccuracy has emerged as a result of the language translation.

[7] Further, both the applicant and the employer sought to introduce evidence in the form of statements from particular individuals who did not attend for the purposes of cross-examination. Consequently, there can be only limited weight provided to the untested material. The Commission has treated this untested material with great caution, so that any factual findings arising from this material have only been made where supporting evidence has provided verification.

[8] The applicant had worked for the employer for about nine months. The applicant was engaged as a courier driver. The work of the applicant primarily involved the collection of parcels from various Sydney metropolitan locations, and the subsequent dispatch of these parcels for shipping to China.

[9] The employer trades under the name of Chang Jiang International Express and it operates a courier and transportation business which specialises in the collection and delivery of parcels from private addresses in Australia to private addresses in China. There appeared to be considerable demand for the door-to-door delivery services provided by the employer, and which typically involved the collection and transportation of a variety of goods including foodstuffs such as milk powder.

[10] The employer’s major operations are based in Melbourne, and it also provides parcel collection and delivery services for customers in Sydney, Brisbane and Adelaide. Although the employer initially indicated that it had only 11 employees, lawyers acting on behalf of the employer subsequently advised that it had mistakenly excluded a number of employees such that the employer had more than 15 employees. Consequently, the employer retracted any alleged reliance upon the Small Business Fair Dismissal Code.

[11] In late November, early December 2016, the employer’s manager, Mr Huang, had a number of telephone conversations with customers which alerted him to the presence of a competitor Courier Company referred to as Today’s Express. Many of the employer’s customers arranged for parcel collection via electronic communications referred to as WeChat messaging. In early December, one of the employer’s customers sent a WeChat message to Mr Huang which expressed appreciation for the service provided by Today’s Express. This customer believed that Today’s Express had been operating in conjunction with the employer, and she communicated her satisfaction with the service provided by what she believed to be the joint arrangement between Today’s Express and the employer.

[12] Mr Huang requested that the customer provide him with a copy of the WeChat messages that had involved the engagement of Today’s Express. The customer sent a copy of the relevant WeChat messages to Mr Huang, and Mr Huang noticed that the applicant had been communicating with this customer on behalf of Today’s Express.

[13] Although the evidence was not entirely clear on this point, it appeared that shortly after the customer had provided Mr Huang with the WeChat message that showed the applicant communicating as a representative of Today’s Express, Mr Huang telephoned the applicant and accused him of operating his own Company, and stealing the employer’s customers. The applicant denied that he was operating his own Company in competition with the employer, and he challenged Mr Huang to provide proof of this allegation. Mr Huang then forwarded a copy of the relevant WeChat message onto the applicant.

[14] The applicant then attended the office of Mr Huang. The applicant did not provide Mr Huang with any satisfactory explanation for his activities that were revealed in the WeChat message from the employer’s customer. The applicant told Mr Huang that he was entitled to do whatever he wanted in his non-working time, and that he had the right to decide what to do during his leisure time. Mr Huang rejected the applicant’s propositions, and he dismissed the applicant summarily.

[15] Shortly after the dismissal of the applicant, Mr Huang sent a group message to all customers who utilised the WeChat message service. In this group message, Mr Huang informed all customers that there was no commercial connection between the employer and Today’s Express. This message advised, inter alia, that the employer did not recognise the existence of Today’s Express and that it did not form part of its business.

[16] It appeared that the applicant was paid only up to the date of dismissal, and there was no evidence of any payment of accrued entitlements. The applicant was not subsequently provided with any letter of dismissal. However, he was provided with text message confirmation of his dismissal.

[17] Since the dismissal, the applicant has not made any attempts to find alternative employment as he claimed that he had physical and mental health problems as a result of the circumstances of his dismissal.

The Case for the Applicant

[18] The written material that was provided by the applicant included a number of submissions. The applicant also provided further oral submissions during the Hearing.

[19] The applicant submitted that his dismissal was unreasonable, and he now required that the employer pay him nine months compensation. The applicant also made submissions about alleged underpayment of wages, superannuation and taxation. The applicant also made complaint that he had been forced to sign an illegal employment contract.

[20] The submissions made by the applicant also challenged the reason for dismissal relating to the performance of any work for Today’s Express. The applicant said that Today’s Express was not a Company. The applicant said that it was merely a WeChat group for another company called AUFANS, and that AUFANS was an agent to the employer.

[21] The applicant submitted that the real reason for his dismissal was not connected with any activity associated with Today’s Express. The applicant said that the real reason for his dismissal involved his claim for underpayment of wages, superannuation and taxation. Further, the applicant submitted that an underlying reason for his dismissal involved his refusal to sign an illegal employment contract.

[22] In conclusion, the applicant said that the employer wanted to run its operation on a very low cost basis and it regularly changed drivers. The applicant asserted that the employer had not paid tax, and that it should be investigated because it had committed offences. Finally, the applicant said that his dismissal had been based on some excuses.

The Case for the Employer

[23] The lawyers acting on behalf of the employer provided written submissions which were supplemented by an oral address that was made by Mr Kammoun during the Hearing.

[24] The employer submitted that the applicant was dismissed on 7 or 8 December 2016, and there was valid reason for the dismissal of the applicant. According to the submissions made on behalf of the employer, the valid reason for the dismissal of the applicant was that the applicant and his work colleague, Mr Hu, had created and were operating a rival Company, Today’s Express, and they were using the employer’s commercial and intellectual property without authorisation. The employer submitted that the applicant was stealing the employer’s customers and taking business away from the employer.

[25] The submissions made on behalf of the employer contended that the employer terminated the applicant at a meeting, and that prior to and during that meeting, the applicant was provided reasonable opportunity to respond to the allegations regarding his activity with the rival Company, Today’s Express. The employer submitted that the applicant failed to satisfactorily explain why he had engaged in conduct which involved stealing the employer’s customers, and taking business away from the employer. The employer asserted that the applicant had made an admission of engaging in misconduct, whereby he expressed his view that he was entitled to engage in this conduct given that it was allegedly undertaken outside of working hours.

[26] The employer further submitted that the nature of the applicant’s conduct involving stealing the employer’s customers, and taking business away from the employer, represented serious misconduct as contemplated by the Fair Work Regulation 1.07. The employer submitted that this serious misconduct involved wilful and deliberate actions that were inconsistent with the continuation of the employment contract.

[27] The further submissions made on behalf of the employer asserted that the applicant had been provided with a reasonable opportunity to offer explanation regarding the allegations of serious misconduct. The employer submitted that the applicant’s responses to Mr Huang represented admissions, and therefore the employer had formed the reasonable belief that the applicant had engaged in serious misconduct of a nature that warranted summary dismissal. The employer submitted that summary dismissal was proportionate to the gravity of the serious misconduct engaged in by the applicant.

[28] The submissions made by the employer asserted that the Commission should be satisfied that the applicant did engage in the serious misconduct, or in the alternative, that the employer had reasonable basis for belief that the applicant engaged in that serious misconduct. Consequently, according to the submissions made by the employer, the dismissal of the applicant was not harsh, unjust or unreasonable. The employer submitted that the application for unfair dismissal remedy should be dismissed.

[29] The employer also advanced an alternative submission which contemplated that if the dismissal of the applicant was found to be unfair, the applicant could not receive any compensation, or at best, only a minimal amount of compensation. The employer submitted that the applicant gave evidence that he had not attempted to mitigate his losses, and that he had only been employed for a short period of nine months. In these circumstances, the employer submitted that any compensation would be unwarranted.

[30] In summary, the submissions made by the employer denied that the applicant was entitled to any remedy because his dismissal was not harsh, unjust or unreasonable. In an alternative submission, the employer proposed that if some aspect of the dismissal of the applicant was found to be unfair, as reinstatement was not sought, any amount of compensation should be significantly reduced.

Consideration

[31] The unfair dismissal provisions of the Act include s. 385 which stipulates that the Commission must be satisfied that four cumulative elements are met in order to establish an unfair dismissal. These elements are:

“(a) the person has been dismissed; and
(b) the dismissal was harsh, unjust or unreasonable; and
(c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and
(d) the dismissal was not a case of genuine redundancy.”

[32] In this case, there was no dispute that the matter was confined to a determination of that element contained in subsection 385 (b) of the Act, specifically whether the dismissal of the applicant was harsh, unjust or unreasonable.

[33] Section 387 of the Act contains criteria that the Commission must take into account in any determination of whether a dismissal is harsh, unjust or unreasonable. These criteria are:

“(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.”

S. 387 (a) - Valid reason for the dismissal related to capacity or conduct

[34] In this instance, the reason for the summary dismissal of the applicant involved the employer’s findings of serious misconduct in respect to the applicant’s involvement in a rival business, Today’s Express. The applicant’s engagement with Today’s Express was described to amount to stealing the employer’s customers, and taking business away from the employer. The employer concluded that the applicant had engaged in this serious misconduct on the basis that; (a) it had received evidence of the applicant’s involvement with Today’s Express via the WeChat message provided by a customer, and, (b), that when confronted with this evidence, the applicant had attempted to defend his actions by asserting that he was entitled to do whatever he wished during his leisure time.

[35] If, upon analysis, the allegations of serious misconduct which involved the applicant’s engagement in work for a rival business that was directly inimical to the employer’s business, were verified to the requisite standard of proof, there would be little cogent reason or practical purpose to further examine any of the other issues which the applicant said motivated the employer’s decision to dismiss him and his colleague, Mr Hu. Confirmation of the employer’s belief that the applicant was engaged in rival business activities which procured the employer’s customers, would provide proper, sound, defensible, valid reason for dismissal. That sound, valid reason for dismissal would be unlikely to be altered or disturbed by some element of inappropriate motivation connected with reaction to complaints allegedly made about employment entitlements and related matters.

[36] As mentioned earlier in this Decision, this matter has suffered from some inadequacies and difficulties in the evidentiary cases that were advanced by the respective Parties. These difficulties have included language translation issues which have required evidence to be closely examined so as to ensure that no misinterpretation has arisen because of potential language and/or cultural differences. Notwithstanding the various evidentiary deficiencies and language difficulties, the question as to whether the applicant was involved in the serious misconduct as alleged has required careful examination and evaluation.

[37] During the Hearing the applicant denied that any of his activities associated with Today’s Express were in any way inimical to the interests of the employer’s business. The applicant suggested that Today’s Express was nothing more than a WeChat group that was operating in conjunction with the employer via some commercial arrangement which included another company called AUFANS. Thus, the applicant asserted that his activities associated with Today’s Express had no commercial conflict with the employer’s business.

[38] However, there was no mention of the alleged absence of any commercial conflict in respect to the applicant’s activities when the applicant challenged the basis for his dismissal in his unfair dismissal application form. In answer to question 3.2 of the Form F2, Why was the dismissal unfair? The applicant stated: “1. The dismissal reason given was unreasonable, since I work at my own time rather than working time. I have right to decide what to do during my leisure time….”

[39] Further, it was clear that the applicant was under no misapprehension as to the reason for his dismissal given that he provided the following answer to question 3.1 of the Form F2: “1. Was told as I collected parcels for other companies during nonworking time.” Consequently, the applicant knew that the basis for his dismissal involved the employer’s belief that he had engaged in activities that involved commercial conflict with the employer’s business. However, in his application form he made no mention whatsoever of the alleged absence of any commercial conflict arising from some alleged connection between Today’s Express, AUFANS, and the employer. Instead, in the Form F2, the applicant sought to defend his actions by asserting that he was entitled to engage in collecting parcels for other companies outside of the hours of engagement with the employer.

[40] A thorough and balanced consideration of the totality of the evidence presented in this matter including, in particular, the translated WeChat conversations, and the contents and omissions that can be identified in the applicant’s Form F2, has provided sound basis for the Commission to confirm the employer’s belief that the applicant was engaged in commercial activities that were directly inimical to the employer’s business interests. The evidence has established that the applicant used the employer’s customer contacts to redirect business away from the employer to some business enterprise or other commercial arrangement from which he presumably would benefit directly, and which would be plainly contrary to the business interests of the employer.

[41] As earlier mentioned, there would seem to be little practical purpose served in any further examination of other aspects of the alleged reasons for the dismissal of the applicant connected with his complaints about employment entitlements and related matters. However, the evidence did provide basis for serious concern that the employer’s business operations did not appear to provide for a number of fundamental employment requirements. These are matters which should be potentially pursued by other government agencies and/or tribunals.

[42] In summary therefore, the findings of serious misconduct made by the employer against the applicant have been carefully and objectively analysed, and must be supported as representing valid reason for the dismissal of the applicant. The particular findings of serious misconduct made by the employer in respect to the applicant’s engagement in activities which were in direct conflict with and inimical to the employer’s business interests, have been verified, and represent valid reason for the summary dismissal of the applicant.

S. 387 (b) - Notification of reason for dismissal

[43] Unfortunately, the employer provided only verbal notification of the reason for the applicant's dismissal. The dismissal of the applicant was subsequently confirmed by text message. However, the lack of proper documentation surrounding the termination of the employment of the applicant represented one of various concerns regarding the apparent absence of proper employment practices and procedures.

S. 387 (c) - Opportunity to respond to any reason related to capacity or conduct

[44] The applicant was given an opportunity to respond to the allegations concerning his involvement in directly conflicting commercial activity. The applicant did not deny such involvement, but instead he sought to erroneously defend his actions by suggesting that he could engage in activities that directly damaged the employer’s business so long as that activity was conducted outside of the hours when he was engaged to work for the employer.

S. 387 (d) - Unreasonable refusal to allow a support person to assist

[45] The employer did not unreasonably refuse or otherwise avoid the presence of a support person to assist the applicant. The applicant attended a meeting together with his colleague, Mr Hu, who was also accused of engagement in directly conflicting commercial activity.

S. 387 (e) - Warning about unsatisfactory performance

[46] This factor is not relevant to the circumstances in this instance as the applicant was not dismissed for unsatisfactory performance but instead, serious misconduct.

S. 387 (f) - Size of enterprise likely to impact on procedures

[47] The employer is a medium size business operation and therefore allowance has been made for a degree of informality and some imprecision in respect to employment related matters.

S. 387 (g) - Absence of management specialists or expertise likely to impact on procedures

[48] There was evidence that the employer did not have management specialists or other expertise.

S. 387 (h) - Other relevant matters

[49] As previously mentioned, there was evidence that many of the employer’s employment practices were at best unsatisfactory, and possibly illegal. The applicant may pursue his allegations of underpayment and taxation law breaches with other government agencies and/or Tribunals. However, the allegations of substandard employment practices, even if proven, could not provide any justification or mitigation for the serious misconduct of the applicant.

[50] It is also relevant to mention that even if the applicant had established that his dismissal was unfair, there was little basis upon which the remedy of compensation sought by the applicant could be provided. The applicant had not made any efforts to obtain any alternative employment following his dismissal, and he did not provide evidence of any actual lost remuneration, or any medical evidence to support his assertions that his mental and physical health impeded his pursuit of further employment. Consequently, there was little prospect for any practical remedy even if the applicant’s unfair dismissal claim had been successful.

Conclusion

[51] The applicant was summarily dismissed for serious misconduct involving the employer’s finding that he had engaged in directly conflicting commercial activities that were inimical to the business interests of the employer. Upon careful analysis, the employer’s findings of serious misconduct have been confirmed.

[52] The employer’s finding of serious misconduct in respect to the applicant’s engagement in conflicting commercial activities has, of itself, established valid reason for the summary dismissal of the applicant. The valid reason for dismissal has been assessed and evaluated against certain procedural errors which were evident in the manner that the employer dismissed the applicant. The procedural errors are matters of insignificance when evaluated against the nature of the valid reason for dismissal. The reason for dismissal represented an elevated level of serious misconduct that has provided justification for the summary dismissal of the applicant.

[53] Therefore, the summary dismissal of the applicant was not harsh, unjust or unreasonable. Accordingly, the applicant’s claim for unfair dismissal remedy must be dismissed, and an Order dismissing the application shall be issued.

COMMISSIONER

Appearances:

Mr H Jiang appeared unrepresented.

Mr I Kammoun, solicitor from Wang Lawyers appeared for the employer.

Hearing details:

2017.

Sydney:

April, 24.

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<Price code C, PR592857>