Isidro Austria v MCPBB Pty Ltd T/A Modern Joinery

[2016] FWC 8612

[2016] FWC 8612

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Isidro Austria
v
MCPBB Pty Ltd T/A Modern Joinery
(U2016/10351)

COMMISSIONER WILLIAMS PERTH, 5 DECEMBER 2016

Termination of employment.

[1] This decision concerns an unfair dismissal remedy application by Mr Isidro Maranan Austria (Mr Austria or the Applicant) made under section 394 of the Fair Work Act 2009 (the Act). The Respondent’s is MCPBB Pty Ltd T/A Modern Joinery (Modern Joinery or the Respondent).

[2] Mr Austria was employed for approximately four years on a section 457 visa. Mr Austria was dismissed on 1 August 2016. The Respondent submits that the reason for dismissing Mr Austria was that the Respondent could not legally employ Mr Austria beyond 13 September 2016 when his visa expired.

[3] At the hearing of this matter Mr Austria gave evidence on his own behalf and Ms Tracy Joughin (Ms Joughin) Modern Joinery’s Chief Financial Officer also gave evidence.

Factual findings

[4] Having considered the evidence of both witnesses I find as follows.

[5] By letter dated 3 September 2012 Modern Joinery offered Mr Austria a position as a Carpenter subject to his acceptance of the company standard terms and conditions of employment. On 6 September 2012 Mr Austria signed and accepted an employment agreement with Modern Joinery.

[6] Relevantly that employment agreement includes the following clauses,

“2.2 This Agreement comes into effect on the day the Employee commences work in Australia and subject to clauses 2.3 and 7.1, ends with the expiration of 48 calendar months. Employment is subject to visa approval and visa validity.

...

7.6 At the Expiration of Employee visa or in the event the Employee’s employment is terminated the company will provide the Employee with a ticket to the Employee’ s city and country of origin.”

[7] Whilst the employment agreement does provide at clause 7 that the company may terminate the agreement immediately in the event of conduct by Mr Austria which was serious or wilful misconduct, which injures the business reputation of the company, or any act which places the company in breach of contract with third parties or if he did not possess the relevant skills represented to the company none of these applied to the circumstances in this matter.

[8] The employment agreement does not provide for termination of employment with notice or pay in lieu of that notice.

[9] Modern Joinery gained a 457 visa for Mr Austria which was approved on 13 September 2012. Mr Austria’s evidence is that that this visa expired on 13 September 2016.

[10] Mr Austria travelled to Perth in early November 2012 and commenced employment on 5 November 2012.

[11] For much of his employment he worked under a Supervisor, Mr Watson. Mr Austria’s evidence was that he suffered some abuse from Mr Watson. He would sometimes yell at Mr Austria and try to embarrass or belittle him in front of his colleagues. On one occasion in 2015 Mr Austria says Mr Watson tried to slap his face.

[12] On another occasion in November 2015 after Mr Watson yelled at him during the day he left work early. Mr Austria rang the Respondent’s Director and told him what had happened. Following that Mr Watson became angry at him and told him he was going to terminate him.

[13] After this he was moved to work under another Supervisor who showed him respect and valued his skills however in March 2016 he returned to working under Mr Watson’s supervision.

[14] On 23 July 2016 Mr Austria returned to the Philippines with his pregnant wife who was due to give birth in September. Approximately a week before leaving Perth he asked Ms Joughin if his 457 visa would be extended. Mr Austria’s evidence was that at no time did she indicate that his employment would not be extended. The evidence of Ms Joughin confirmed that around this time Mr Austria asked whether the Respondent would be seeking to extend his visa beyond its September 2016 expiry. Her evidence, which I accept, is that she was noncommittal in her response making it clear to Mr Austria that it was a decision for the Respondent’s Directors whether they sought an extension of his visa or not.

[15] I am satisfied that Ms Joughin in response to Mr Austria’s enquiry as to whether the Respondent would be seeking an extension of his visa was a neutral response. Mr Austria was not given any positive indication that the Respondent would be applying to extend his visa.

[16] Whilst Mr Austria was away in the Philippines on his period of annual leave Ms Joughin inquired of the Respondent’s Directors whether they wanted her to apply for an extension of Mr Austria’s 457 visa because she was aware it expired on 13 September 2016.

[17] Mr Carl Basso advised her that the Directors did not intend to apply for an extension of Mr Austria’s visa.

[18] Ms Joughin’s evidence was that if the Respondent had wanted to apply for an extension of Mr Austria’s visa they would have been required to provide statements about the shortage of local carpenters. Ms Joughin’s evidence was that she supported the Respondent’s decision not to apply for an extension of Mr Austria’s visa because she was aware that the demand for construction workers had fallen. Her evidence was that earlier in the year the Respondent had advertised for other types of classifications, specifically joinery and cabinetmaking vacancies, and in response had received multiple applications from people who were formwork carpenters (the same job code as Mr Austria) who were Australian residents. She estimated the Respondent had received almost 100 applications from formwork carpenters that year although not all of those would have been Australian residents.

[19] Mr Austria returned to Perth from the Philippines on 31 July 2016 and resumed work on 1 August 2016. At the end of that day he went to see Ms Joughin. Ms Joughin advised Mr Austria that the Respondent would not be making an application for any extension of his visa and that they were terminating his employment that day with pay in lieu of notice.

[20] The letter handed to Mr Austria that day advised the company had decided not to support a renewal of his visa and that his employment had come to an end that day, 1 August 2016. The letter stated that he would not be required to work out his notice period of three weeks as his termination was effective immediately.

[21] Ms Joughin’s evidence was that they had decided to pay Mr Austria in lieu of notice as they were concerned about his safety if he returned to work because they knew he would be upset about the decision. Her view also was that he had more annual leave booked so there was not much point sending him back to site for just a few weeks and she thought paying him in lieu of notice also gave him the best opportunity to search for work.

[22] Subsequently there was some correspondence between the parties but none of these matters are relevant to the question of the fairness or otherwise of the dismissal.

[23] If the Respondent had agreed to make an application seeking the extension of Mr Austria’s visa than the outcome of this application was for the Government Department to decide.

[24] Mr Austria’s evidence was that he strongly believes he was terminated because Mr Watson had an issue with him being more skilled than he was and the fact that he did not accept his poor treatment by Mr Watson.

[25] There is no evidence before the Commission that Mr Watson had any influence over or involvement in the Respondent’s decision to dismiss Mr Austria. I do not accept that the concerns Mr Austria had about Mr Watson’s behaviour or his interactions with Mr Watson were considerations in the Respondent’s decision to dismiss him.

Submissions

The Applicant

[26] Mr Austria submits that upon employment he signed the employment agreement which states that the contract is for 48 months.

[27] On 1 August 2016 he was terminated. It was not discussed with him why he was terminated but the letter simply said the company would not be renewing his visa.

[28] Mr Austria’s visa expired on 13 September 2016.

[29] There was no reason why he could not have worked beyond 1 August 2016 up until the expiry date of 13 September 2016.

[30] Clause 7.1 of the employment agreement does not apply to his termination. Clause 7.5 of the employment agreement refers to termination for redundancy which does not apply.

[31] Mr Austria submits that if the Respondent did not wish to renew his employment visa they should have given him adequate notice and allowed him to continue working until his visa expired. He would then have had the opportunity of applying for permanent residency. Mr Austria submits that the dismissal was in all the circumstances unfair.

The Respondent

[32] The Respondent submits that Mr Austria’s visa was a Temporary Work (Skilled subclass 457) visa which is designed to enable employers to address labour shortages by bringing in skilled workers from overseas where the employer cannot find an appropriately skilled Australian.

[33] Prior to the making of this application the Respondent was not aware of the concerns Mr Austria has raised in this matter regarding the actions of Mr Watson.

[34] The decision the Respondent made not to apply for an extension of Mr Austria’s visa was appropriate in the circumstances because it was unlikely they would be able to meet the labour market testing requirements associated with an application for an extension of a temporary work visa. It was no longer the case that the Respondent would be able to attest that they were unable to fill the position with local labour.

[35] This was clear because during 2016 the Respondent had received multiple applications from local carpenters seeking work as a result of the general downturn in the construction industry in Western Australia.

[36] There was no obligation upon the Respondent to apply for an extension of Mr Austria’s visa. The Respondent had never indicated to Mr Austria that would be applying for an extension of his visa.

[37] There was a valid reason for Mr Austria’s dismissal being the fact that the Respondent could not employee him beyond the expiry date of his visa on 13 September 2016.

[38] Mr Austria had no legal capacity to be an employee of the Respondent beyond the expiry date of his temporary work visa.

[39] Mr Austria was notified of the reason for the termination by Ms Joughin in person, which was confirmed in the letter of termination dated 1 August 2016.

[40] The Applicant did not request a support person and there was no denial of this request.

[41] There was no criticism of Mr Austria’s performance in the Respondent’s decision to dismiss him. Mr Austria had not received any prior warnings which in the circumstances is not a relevant consideration in any event.

[42] At the time of Mr Austria’s dismissal the Respondent had approximately 120 employees but had no human resource specialists.

[43] In the circumstances the dismissal was not harsh, unjust or unreasonable. Mr Austria has not been unfairly dismissed.

The legislation

[44] Set out below is section 387 of the Act which sets out those matters which the Commission must have regard for in considering this application.

“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.”

Consideration

[45] The Respondent dismissed Mr Austria because he was not legally allowed to work in Australia after 13 September 2016 and consequently nor was the Respondent allowed to employ him beyond this date. This reason was sound, defensible and well founded. This was a valid reason for Mr Austria’s dismissal.

[46] The Respondent did notify Mr Austria of the reason for his dismissal. This was explained to him by Ms Joughin on 1 August 2016 and confirmed in the letter of termination of the same date. However Mr Austria was not given an opportunity to respond to the reason for which he was dismissed. Rather he was notified he was dismissed and notified of the reason this was occurring at the same point in time.

[47] There was no denial of a request for a support person.

[48] There was no criticism of Mr Austria’s performance. Consequently the question of any warnings is not relevant in this case.

[49] The Respondent’s enterprise is of sufficient size that it is large enough to have in place appropriate procedures for effecting dismissals.

[50] The Respondent however does not have dedicated human resource specialists nor expertise within the enterprise which may explain the procedural deficiencies noted above, but given the Respondent’s size this absence of expertise is a business choice and so does not excuse those deficiencies.

[51] In terms of other matters it is the case that Mr Austria has an unblemished record of four years with the Respondent however given the reason for the dismissal involves no criticism of Mr Austria this is not relevant.

[52] A relevant matter is the fact that the Respondent is obliged to comply with Australia’s laws which govern the employment of persons who are not Australian permanent residents.

[53] The Respondent was not required to, nor should Mr Austria have expected it to, apply for an extension of his visa. The Respondent had good reasons why this was neither necessary nor was it likely to be successful even if they had made such an application for an extension of his visa.

[54] Mr Austria had no capacity to be employed by the Respondent after his visa expired on 13 September 2016. The Respondent was not able to employ Mr Austria after that date.

[55] Consistent with this the employment agreement Mr Austria and the Respondent made states in clause 2.2 that “Employment is subject to visa approval and visa validity.” (Underlining added).

[56] For reasons that are not at all clear however the Respondent chose to dismiss Mr Austria on 1 August 2016 with three weeks’ pay in lieu of notice. This meant Mr Austria was paid up to and including 22 August 2016.

[57] However Mr Austria could have remained in employment with the Respondent through to 13 September 2016 when his visa expired. The Respondent’s actions in dismissing him when it did denied him this opportunity. The Respondent has not provided any explanation as to why it did not wait a further three weeks to give Mr Austria his notice, in which case he would have had the opportunity to work or at least be paid through to his visa’s expiry date.

[58] This premature ending of the employment by the Respondent denied Mr Austria three weeks’ wages and only to that extent his dismissal was harsh. I am satisfied that Mr Austria’s dismissal was unfair.

Remedy

[59] Given the circumstances I am satisfied here that reinstatement is not appropriate.

[60] I will now consider the requirements of section 392 of the Act concerning an order for the payment of compensation.

[61] There is no evidence that an order of compensation is going to affect the Respondent’s viability.

[62] Mr Austria was employed for just under four years.

[63] If Mr Austria had not been dismissed when he was the remuneration he would have been likely to receive was three weeks’ wages, being for the period between 22 August 2016 and 13 September 2016.

[64] There is no evidence as to what efforts Mr Austria has made to mitigate his loss although he has stated that he is still unemployed.

[65] There is no evidence that Mr Austria has earned any remuneration since his dismissal.

[66] A matter that should be taken into account for the benefit of the Respondent is that it elected to pay him three weeks’ wages but did not require him to work for this amount.

[67] Consequently my decision is that Mr Austria should receive an order of compensation in the amount of three weeks’ wages at 38 hours per week. The evidence of Mr Austria is that at the time of being dismissed he was being paid an hourly rate of $ 27.2932.

[68] Consequently an order will be issued that within 21 days the Respondent pay to Mr Austria the amount of $3,111.43 less the applicable taxation.

COMMISSIONER

Appearances:

I. Austria on his own behalf.

J. Mackie of ME Solutions on behalf of the respondent.

Hearing details:

2016.

Perth and Philippines (telephone hearing):

November 22.

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<Price code C, PR588083>