Jahangir Farzady v Monochromatic Engineering Pty Ltd T/A MCE Lasers

[2015] FWC 7216

[2015] FWC 7216 [Note: An appeal pursuant to s.604 (C2015/7258) was lodged against this decision - refer to Full Bench decision dated 11 March 2016 [[2016] FWCFB 1061] for result of appeal.]

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Jahangir Farzady
v
Monochromatic Engineering Pty Ltd T/A MCE Lasers
(U2015/2882)

COMMISSIONER LEE MELBOURNE, 20 OCTOBER 2015

Application for relief from unfair dismissal.

[1] This matter involves an application made pursuant to section 394 of the Fair Work Act 2009 (the Act) for unfair dismissal remedy. Mr Jahangir Farzady (the Applicant) claims that he was unfairly dismissed from his employment with Monochromatic Engineering Pty Ltd T/A MCE Lasers (the Respondent). 

[2] The application was lodged on 6 February 2015. The matter was listed for jurisdictional determination before Deputy President Gooley to determine whether the Applicant had resigned or been dismissed and whether the Applicant had completed the minimum employment period.

[3] Her Honour handed down her decision in the matter on 1 May 2015. In that decision the Deputy President made the following findings:

“[8] Irrespective of the dispute between the parties about when Mr. Farzadys employment ended, I find that he was employed by Monochromatic for more than one year. I find that his period of employment as a casual employee was regular and systematic and he had a reasonable expectation of continuing employment.

…

[23] It is clear that Mr. Farzady was on notice in December 2014 that his employment status would change when he returned from annual leave. He was due to return to work on 19 January 2015 hence his email on 14 January 2015. Mr. Crvenkovic did not reply to that email until 22 January 2015 and it was on that date that the termination of Mr. Farzadys employment took effect.

[24] I therefore find that Mr. Farzady did not resign his employment and he was dismissed on 22 January 2015. Consequently, the jurisdictional objection to the application is dismissed.” 1

[4] The Deputy President noted that the parties were in dispute about whether the Respondent was a small business but did not determine that question as she was satisfied that the Applicant was employed for more than one year. 2

[5] The matter was listed before me for determination of the merits. I listed the matter for a telephone conference on 15 July 2015. After a short period of conciliation, I then heard from the parties as to the Applicant’s representative seeking permission to appear (the Respondent opposed permission being granted). Both parties had, prior to the telephone conference, filed written submissions as to permission to appear.

[6] Having heard from the parties, considered the written submissions and the circumstances of this particular matter, I determined to grant permission to appear to the representative of the Applicant pursuant to sections 596(2)(a) and (b).

[7] In terms of s.596(2)(a), I was satisfied that overall in this matter there were many overlapping and compounding issues which make this a complex matter, and as such, that legal representation would enable the matter to be dealt with more efficiently.

[8] In terms of s.596(2)(b), I was also satisfied that it would be unfair not to allow the Applicant to be represented because the Applicant was unable to represent himself sufficiently. I made this finding on two grounds, firstly that the Applicant is from a non-English speaking background, and secondly, that on the facts which were as yet untested, there were claims of intimidation and difficulty in the Applicant effectively participating in the proceedings by way of directly questioning his former employer.

[9] The matter was listed for substantive hearing as to merits on 20 July 2015 in Melbourne. Ms R Preston appeared, having been granted permission, for the Applicant. Mr Z Crvenkovic, Managing Director, represented the Respondent. The Applicant gave evidence on his own behalf. Mr Crvenkovic and Mr D Ramondetta gave evidence on behalf of the Respondent. Mr M Ligtvoet was ordered to attend the hearing, a request having been made for an order by the Applicant.

Background

[10] The Applicant is an Iranian National who came to Australia in 2010 to study Electronics and Communications Engineering. He completed a Diploma of Electronics and Communications Engineering from NMIT. He was employed as an Electronic Equipment Technician on a Temporary Graduate Visa for the Respondent. He was dismissed from that employment on 22 January 2015. Despite the earlier ruling of Deputy President Gooley that the Applicant was dismissed, the Respondent maintained during the hearing before me that the Applicant resigned. The Respondent also claimed that the Applicant was redundant.

[11] The Applicant asserts that his dismissal was unfair within the meaning of the Act.

The law to be applied

[12] With regard to s.385(a), s.386 of the Act sets out the meaning of ‘dismissed’. The Applicant has been found to be dismissed within the meaning of the Act by Deputy President Gooley. 3

[13] The Applicant has been found to have completed a period of employment of at least the minimum employment period (s.382(a) and s.383). 4 The application was lodged within the time period specified in s.394(2)(a).

[14] The Applicant is covered by the Manufacturing and Associated Industries Award 2010. 5 Further, the Applicant’s earnings were less than the high income threshold. Hence the requirements of s.382(b) of the Act are met. The Applicant is a person protected from unfair dismissal.

[15] The question of whether or not the Respondent is a small business was not determined by Deputy President Gooley. Therefore this needs to be determined and if the Respondent was a small business, whether the dismissal consistent with the Small Business Fair Dismissal Code (s.385(c)).

[16] With regard to s.385(d) of the Act, there is a question as to whether the Applicant’s dismissal is a case of genuine redundancy. The Applicant disputes that he was in fact made redundant. I note that the Respondent did not indicate that the dismissal was a genuine redundancy in the Form F3 – Employers response to unfair dismissal application filed on 16 February 2015. Nor does there appear to have been any consideration of the matter in the earlier hearings of before Deputy President Gooley. Nevertheless, the Respondent submitted that if the Applicant didn’t resign, that the Applicant was redundant. Section 385(d) of the Act is therefore relevant in this matter.

[17] Accordingly, the matters for determination are whether the dismissal was a genuine redundancy. If I find that the dismissal was not a genuine redundancy, I must determine whether the Small Business Fair Dismissal Code was relevant and if so, whether the dismissal was consistent with that code. If the Small Business Fair Dismissal Code was not relevant or the dismissal was not consistent with the code, I must determine if the dismissal was harsh, unjust or unreasonable. 6 

The evidence:

Background and circumstances around the termination of employment.

[18] The Applicant commenced employment with the Respondent in May 2013 as a casual employee. He was hoping to obtain sponsorship for a Temporary Work (s457) Visa and to settle in Australia. The Applicant made this desire known to Mr. Crvenkovic.

[19] Around July 2013 the Applicants hours of work increased to a full time workload. The Applicant felt that things were progressing well for him at this stage. Mr Crvenkovic gave him positive feedback on his performance, increased his hours and introduced him to friends and family. However the Respondent had not committed to sponsoring the Applicant on a 457 visa at this point and the Applicant became concerned about this fact. The Applicant advised Mr. Crvenkovic that he would take some time off work to look for new employment under a sponsorship arrangement. After a time the Respondent agreed to sponsor the Applicant on a 457 visa. 7

[20] Mr. Crvenkovic said that he was approached by a gentleman named Mr. Bear, who was acting on the Applicants behalf and who requested that he consider sponsorship. He agreed with the request and believed that his only obligation was to pay the Applicant the agreed amount of money $54,249.50 per annum as salary. with which he complied. However, Mr. Crvenkovic also claimed that it was agreed that the Applicant would be paid as a staff member with a fixed payment and that he would work more than 38 hours in order to compensate for his higher payment and accelerated training. 8

[21] The Applicant’s evidence is that Mr. Crvenkovic told him that he could only afford to pay him a base salary of $42,000.00, $12,250.00 less than the minimum required to be paid under the 457 visa. The Applicant’s evidence is that he was required to pay back to the Respondent $600.00 in cash per fortnight to make up the difference between what was payable and what the Respondent said he could afford to pay the Applicant.

[22] The Applicant kept detailed notes of when he made each of the payments. 9 Bank statements showing regular withdrawals of amounts that aligned with those amounts from an ATM were submitted into evidence.10 A document purporting to show the Respondent’s calculation handwritten on a pay advice was also tendered.11

[23] The Applicant agreed to make the payments as he claims that the Respondent said it was the only way he could afford to keep him employed and the Applicant was desperate to keep his s457 visa. The Applicant claims that the Respondent never paid any superannuation on his salary. I note that the pay slips submitted do not make any reference to payments for superannuation. 12

[24] Mr. Crvenkovic says that the Applicant was paying him $600.00 per month but that this amount was for renting accommodation that was owned by the Respondent. Mr. Crvenkovic claims there was no agreement for this payment but that the Applicant “…changed his mind on his own” and started paying $600.00 per month rent. That the Applicant would put the rent payment in cash in an envelope and leave it in the office and that the money was put in the cash box for petty cash and used for employee expenses like staff BBQ’s.

[25] Mr. Crvenkovic made reference during the hearing to records that showed this was what occurred. However no records were produced. The Applicant agrees that he was paying $600.00 a month in rent but his evidence is that this payment was in additional to the payment of $600.00 per fortnight. The Applicant agrees that initially the Respondent did not ask for the payment for rent, but that the Applicant insisted on paying it because he thought that the fact that he was not paying rent was a cause of the Respondent insisting that he work additional unpaid hours. The Applicant formed the view that paying the rent would or may change that aspect of the Respondents behavior.

[26] The Applicants evidence is to the effect that, after he began working under the terms of the contract, that the Respondent started taking advantage of him, including: reassigning him to unskilled tasks; requiring him to work long hours, including weekends without additional pay; having him chauffer friends and business associates late at night and early in the morning; and work on the respondents farm on many Sundays without pay. Copies of SMS text messages were tendered 13 which support the claims of the Applicant that he had been picking up Mr Crvenkovic and on one other occasion someone referred to as “Daniel” late in the evening from the airport on a number of occasions. Mr. Crvenkovic was evasive when questioned about the unpaid overtime but ultimately admitted that he required the Applicant to work overtime and on Saturdays without additional pay and that he directed the Applicant not to record those hours.14

[27] It was also submitted that the Applicant was not paid superannuation throughout his employment. This was denied by Mr. Crvenkovic. I note that there is no record of payments for superannuation on the pay slips of the Applicant in evidence.

[28] The Applicant claims that around October 2014, he started to raise concerns with Mr. Crvenkovic about the way he was being treated. The Applicant claims that Mr. Crvenkovic dismissed his concerns and threatened him with cancellation of his sponsorship many times. The Applicant claims Mr. Crvenkovic engaged in acts of humiliation and intimidation. In November 2014 the Applicant refused to work outside of the hours he was being paid for. At this point, the Applicant states he stopped making the $600.00 payment. He claims that Mr. Crvenkovic called him “Persian” rather than by his name and that he was the only one that Mr. Crvenkovic did not address by their real name. 15 The SMS messages in exhibit P3 certainly demonstrate that Mr. Crvenkovic referred to the Applicant as “Persian” rather than using his actual name.

[29] The Applicant claims that after he stopped the regular payments and refused to work the unpaid overtime, Mr. Crvenkovic’s treatment of him became worse. 16 The Applicant claims he became stressed and anxious and his physical and mental health was suffering. He complained of his predicament to Mr. Bear, the immigration agent. There is an email recording his complaint to Mr. Bear. Mr. Bear responded that the Applicant needed to get proper qualified advice.17 The Applicant told the Respondent that “…it wasn’t working for me and I needed to find another sponsor”.18 However the Applicant was clear that he was not resigning from his employment as he needed the position to keep his s.457 visa.19

[30] In November 2014 Mr. Crvenkovic told the Applicant that following his return from Iran, where the Applicant was going to spend the Christmas break, the Respondent no longer required him to work full time and that he would change from full time to “part time or casual” and that they would call him when they needed him to work after he returned from the Christmas break. This intent of Mr. Crvenkovic was also reflected in an email sent to Mr. Bear on 28 November. 20

[31] The Applicant was clear in his evidence that his last day at work for 2014 was 23 December. He flew out to Iran to go on holidays that night. Mr. Crvenkovic was insistent that the Applicant worked on 24 December. The diary note of the Applicant that was tendered 21 and the notice to customers that the business would be closed on 24 December and reopen on 13 January 201522 are consistent with the Applicants evidence on this point. Further the email that the Applicant sent to Mr. Bear dated 24 December23 states that he had flown to Iran the previous night. Mr. Crvenkovic ultimately conceded that his business was closed from 24 December 2014.24

[32] The Applicants evidence is that Mr. Crvenkovic rang him on 23 December to confirm the email to Mr. Bear and that he would call the Applicant when he was needed. The Applicant states that Mr. Crvenkovic said to him that if he had listened to him “it wouldn’t have to go this way”. 25

[33] On 14 January 2015 the Applicant emailed Mr. Crvenkovic seeking written confirmation that he was not required for full time work from 19 January 2015. Mr. Crvenkovic did not respond to that email. On the 22 January 2015 Mr Bear received an email attaching a letter dated 14 January 2015. 26 That letter was similar in terms to the November 28 2015 email. However, the January letter had been altered to include the additional words “and retrench some employees” to the earlier options of “repositioning” full time employees to part time and casual. Further, whereas the November email read: “suggested that he will change from full time to part time or casual when the company returns from the holiday close down on the 13^th of January 2015” this was replaced with “cease his employment at 23 December 2014”. The Applicant asserts that the changes made to the November email show that the Respondent changed its position in January 2015 to one where it purported to pre-date the termination of his employment to 23 December 2014.

[34] Mr. Bear forwarded the 22 January 2015 email the same day to the Applicant. 27 The Applicant stated that this was the first and only notice informing him that his employment with the Respondent was being terminated. As already noted this is consistent with the finding of Deputy President Gooley that the termination took effect on 22 January 2015. I have noted earlier that the Respondent continued to claim in the proceedings before me that the Applicant had resigned.28

[35] Other than the reference to the Applicant being redundant in the January letter, there is no other reference in the correspondence that evidences that the job the Applicant was performing was redundant. In contrast, Mr. Ligtvoet gave evidence that the Respondent employed other employees both shortly before and after the termination of the Applicant. 29 The Applicant was not paid any redundancy pay in accordance with the National Employment Standards. There is no evidence of consultation with him consistent with the obligations under the terms of the modern award that covers him. There is no evidence that there was contemplation of opportunities for redeployment as required by 389(2) of the Act.

[36] The Applicant claimed that he had never been spoken to about unsatisfactory performance or conduct issues and that Mr Crvenkovic, at least until the Applicant complained about how he was being treated, had previously made regular positive comments about the Applicants performance. 30 Mr. Ligtvoet a former supervisor of the Applicant stated that the Applicant took pride in his work, was respectful, hardworking and loyal; learned quickly; made a valuable contribution to the business and was amicable to everyone and never caused any conflict or offense.31 Mr. Ligtvoet had not observed the Applicant taking time away from work that was not authorized, including when his mother came to visit.32 Mr. Ligtvoet had no knowledge or opinion that the Applicant was having problems with others at work.

[37] Mr. Ramondetta claimed that the Applicant was not the easiest person to work with as the Applicant would complain that he was doing work not contained within his job description or that he was doing work he did not want to do and that in many cases the Applicant did not follow clear instructions. Mr. Ramondetta also claimed that the Applicant would tell him that he did not want to perform certain tasks that were a normal part of his work role. Mr Crvenkovic claims that after the Applicant had been visited for a time by his mother, who had travelled to see him from Iran, that the Applicant “changed”. Specifically, that the applicant “stopped paying rent” when his mother arrived. He claimed the Applicant did not fit in with his fellow workers, interfering in their work and telling them what they should be doing and that the Applicant was complaining about being given jobs that he was not required to do. Mr Crvenkovic claimed that the Applicant would cry to him after work and complain that he found it difficult to work with other people. Mr. Crvenkovic claims that the technical engineers, other than Mr. Ligtvoet rejected working with the Applicant. Both of these claims were vigorously disputed by the Applicant. 33 There was evidence that the Applicant had declined to undertake a particular training course suggested by the Respondent. The Applicant agreed he had declined to undertake the course as it involved engineering skills and he was not confident that he could undertake the course.34

[38] The Applicant believes that his employment was terminated because he made complaints about his employment, stopped working the unpaid hours and stopped the payments of $600.00 per fortnight. The Respondent continued to claim during the proceedings before me that the Applicant resigned his employment.

Consideration

Was the Applicants’ dismissal a case of genuine redundancy?

[39] A persons dismissal is a case of genuine redundancy if the persons employer no longer required the persons job to be performed by anyone because of changes in the operational requirements of the employers enterprise. 35 The onus is on the employer to prove that, on the balance of probabilities, the redundancy was due to changes in operational requirements.36

[40] In this case there is no evidence to satisfy me that the Respondent did not require the Applicant’s job to be performed by anyone. Even if I am wrong on that point, there is no evidence of a change of operational requirements to anywhere near the level that I could be satisfied on the balance of probabilities that the redundancy was due to changes in operational requirements. There was no evidence of consultation as required under the relevant modern award nor any indication that redeployment was considered as required by 389(2) of the Act. There was no apparent payment for redundancy made to the Applicant to which he would be entitled under the National Employment Standards.

[41] The position of Mr. Crvenkovic as to whether the Applicant was retrenched was at best, confused. The following exchange serves to demonstrate the situation:

“THE COMMISSIONER:  I guess the question to you is you're putting to the witness that he's retrenched but are you going to give evidence that he was retrenched?  I guess that's really what I am going to.  Is that the position that is put?

MR CRVENKOVIC:  You.  I never - I never agree that.  I have evidence and I have witness that he was not retrenched and he resigned and he change his mind.

THE COMMISSIONER:  I understand that and we've moved beyond that.

MR CRVENKOVIC:  But he change his mind again on that, or he doesn't remember then he retrenched, one of that, then he resign.  So I don't know which way is.” 37

[42] The Applicants representative submitted that the redundancy claim is a sham. I agree with that submission.

Is the Respondent a small business and if so was the dismissal consistent with the Small Business Fair Dismissal Code?

[43] It is a matter for me to determine whether the Respondent was, at the time of the dismissal, a small business within the meaning of s.23 of the Act. In this matter I have a statement from the Respondent that it now employs 9 staff members (as at 30 June 2015, the time that statement was made). 38 Mr Crvenkovic says the claim from the Applicant that the company had more than 15 employees is incorrect.

[44] The Respondent’s evidence is that they have a “core” workforce of under 15 staff and rely on specialist contractors for a range of services as required. Mr. Crvenkovic’s evidence is that the employee list that the Applicant supplied 39 contains mostly contractors.

[45] There was no evidence from Mr. Crvenkovic as to the number of employees that he employed at the time of the dismissal nor evidence as to which employees, from the list of employees tendered by the Applicant, were contractors. 40 I am not satisfied that the Respondent was a small business within the meaning of section 23 of the Act. The Respondent has not provided evidence to satisfy me. Indeed the evidence supplied by the Applicant in JF1 demonstrates it is more likely that the Respondent had more than 20 employees when he was dismissed.

[46] Irrespective of my determination above, the Respondent did not assert, nor is it apparent on the evidence, that the Applicants dismissal was consistent with the Small Business Fair Dismissal Code.

[47] There was no suggestion from the Respondent that it had a reasonable belief that the Applicant engaged in serious misconduct. In respect to dismissal other than summary dismissal, there is no evidence the Applicant was warned about the need to improve his conduct or capacity or risk dismissal. 41 Mr. Crvenkovic submitted that no warnings were given to the Applicant, for the following reason. “There was no need-not required for warning because he resign, and when he changed mind I had to retrench him. So there was no-in my opinion there was no requirement for warning”.42

[48] Where an unfair dismissal application is made and the Respondent is found to be a small business within the meaning of the Act, the employer will have to evidence that they have complied with the Small Business Fair Dismissal Code. There is no evidence to support a finding that the Respondent complied with the Small Business Fair Dismissal Code, even if it applies.

Other matters

[49] As stated above, four witnesses gave evidence in this matter. I found the Applicant to be a most credible witness. He was very consistent in his evidence throughout the proceedings and was very responsive. Mr. Crvenkovic on the other hand, was evasive and inconsistent. He makes numerous claims that were completely at odds with the documentary evidence, including evidence produced by him. For example, his strenuous claim that the Applicant attended the workplace on 24 December 2014 is directly contradicted by the document he submitted to the Commission regarding the Christmas shutdown days for the business. 43 Where there is a conflict on the evidence, I generally prefer the evidence of the Applicant.

[50] I found Mr. Litvoegt (who was ordered to attend the Commission hearing) to be a forthright and credible witness who was clear in his recollection of events and consistent with his evidence. Mr Litvoegt maintained this despite Mr. Crvenkovic indicating in his witness statement that the Applicant had “compromised” the position of Mr. Litvoegt. I consider this suggestion of Mr. Crvenkovic to be bordering on, if not an actual attempt, to intimidate Mr. Litvoegt. Indeed, Mr. Litvoegt gave evidence that Mr. Crvenkovic was no longer speaking to him.

[51] Mr. Ramondetta was vague in his evidence. I note he was clear in his evidence that that Applicant had resigned but that this claim is completely at odds with the emails in evidence between Mr. Bear and Mr Crvenkovic.

[52] There is evidence from Mr. Ramondetta that the Applicant would tell him that he did not want to perform certain tasks. However, at the hearing, Mr Ramondetta’s evidence was that “a lot of the times when he asked him to do something he would say “Okay I’ll do it” but that at other times he would say “that’s not part of my job”” 44. However, Mr. Ramondetta conceded that even on those occasions, the Applicant would perform the tasks.45 There is simply no documentary evidence that supports the claims that the Applicant was not performing at work. The Applicant was not confident to undertake the training course. That much is not in dispute. However, if that is a reason that is relied on to effect the dismissal, then I do not consider that to be a sound and defensible reason.

[53] The Applicant gave evidence that he worked hard for the Respondent throughout his time of employment. On the Respondent’s own evidence he was working extra hours of unpaid overtime and Saturday work and was directed not to record that overtime. The Respondent felt justified in requiring this because of the amount he was required to pay under the terms of the s. 457 arrangements. However, this action is not justifiable. In directing the Applicant to work in this manner, he was likely breaching the terms of the modern award, which the Respondent submitted applied to the Applicant and/or the National Employment Standards. It is not necessary in the context of this decision to make a determination as to whether the Respondent compelled the Applicant to make the $600.00 fortnightly payments. However, on the evidence presented it is more likely than not that this practice did occur.

[54] The Applicant became unhappy about the way he was being treated. He started making complaints about his employment conditions. Considering all of the evidence in this matter, he was entirely justified in making the complaints. This occurred in the last few months of his employment. The response from the Respondent was to make his working life more difficult and ultimately to, firstly advise that he was unilaterally to have his contract of employment changed from full time to part time or casual and then to ultimately dismiss him.  There is no evidence of a valid reason to terminate the employment of Applicant.

[55] As I have found that the dismissal was not a genuine redundancy, and that the dismissal was not consistent with the Small Business Fair Dismissal Code (if it applied), I must now determine whether the dismissal was harsh, unjust or unreasonable.

Was the dismissal harsh, unjust and unreasonable? (s.385(b))

[56] As set out above, the criteria for considering whether a dismissal was harsh, unjust or unreasonable is set out in s.387 of the Act.

Section 387(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);

[57] As per the consideration set out above, I do not think that there was a valid reason for the dismissal of the Applicant.

Section 387(b) - whether the person was notified of that reason.

[58] It is clear on the evidence that the Applicant was not notified of the reason that he was dismissed. He found out he was dismissed via Mr. Bear, his immigration agent.

Section 387(c) - whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person.

[59] For the Commission to have regard to whether an employee has been given an opportunity to respond to the reason for the dismissal there needs to be a finding that there is a valid reason for the dismissal. 46 In this case, I am not satisfied that there was such a reason and as such, this criterion is neutral to my consideration.

Section 387(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.

[60] There was no refusal to allow a support person as there were no discussions relating to the dismissal. This is a neutral consideration.

Section 387(e) - if the dismissal related to unsatisfactory performance by the person - whether the person had been warned about that unsatisfactory performance before the dismissal.

[61] As considered above it is not clear if poor performance is relied upon as a basis for dismissal. However, to the extent that it may be, the Respondents own evidence is that no warnings were given to the Applicant.

Section 387(f) - the degree to which the size of the employer’s enterprise would be likely to impact on procedures followed in effecting the dismissal and Section 387(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

[62] I have found that the Respondent was a business employing slightly more than 20 employees at the time of dismissal and as such is not by any means a large business.

[63] However, the terrible manner in which the Applicant has been treated cannot be excused by the size of the organisation and its evident lack of human resources expertise. Commons sense courtesies and conduct ought to exist in any workplace whatever the size. 47

Section 387(h) - any other matters FWA considers relevant.

[64] As a sponsored 457 visa worker, the Applicant was in a position where it is apparent that he was vulnerable to exploitation by virtue of his strong desire to remain in Australia and the need to maintain sponsorship to do so. The apparent actions of the Respondent to exploit the Applicants vulnerability by compelling him to work unpaid overtime; as well as likely failing to pay his superannuation entitlements and making substantial deductions from his wages is disgraceful. To then terminate the Applicant’s employment when he has taken a stand against these unreasonable actions is appalling.

Conclusion as to the nature of dismissal

[65] I am not satisfied there was a valid reason for the dismissal. There was a total lack of process followed in effecting the dismissal. The Applicant was not personally notified of the reason nor given an opportunity to respond. The Applicant was not warned about poor performance. I have taken into account the size of the business and its evident lack of human resources expertise.

[66] In all of the circumstances I find that the dismissal was most certainly harsh as the end result is that the Applicant has lost a sponsored opportunity to stay in Australia. It is unjust as there was simply no basis for the termination. It was unreasonable as it appears, on the balance of probabilities that the dismissal was ultimately a response to the Applicant making complaints about how he was being treated at work. The dismissal was harsh, unjust and unreasonable

Remedy

[67] The relevant provisions of the Act pertaining to remedy are contained in s.390 of the Act:

“390 When the FWC may order remedy for unfair dismissal

(1) Subject to subsection (3), the FWC may order a person’s reinstatement, or the payment of compensation to a person, if:

(a) the FWC is satisfied that the person was protected from unfair dismissal (see Division 2) at the time of being dismissed; and

(b) the person has been unfairly dismissed (see Division 3).

(2) The FWC may make the order only if the person has made an application under section 394.

(3) The FWC must not order the payment of compensation to the person unless:

(a) the FWC is satisfied that reinstatement of the person is inappropriate; and

(b) the FWC considers an order for payment of compensation is appropriate in all the circumstances of the case.

Note: Division 5 deals with procedural matters such as applications for remedies.”

[68] It is also necessary to consider the Objects of Part 3-2 of the Act especially s.381(c) of the Act which provides that an object of that Part of the Act is to provide remedies if a dismissal is found to be unfair, with an emphasis on reinstatement.

[69] The presumption in the legislation is that, should a dismissal be found to be unfair, that reinstatement is the primary remedy and that compensation is a secondary consideration if reinstatement is not appropriate.

[70] In this matter, the Applicant does not seek reinstatement. His representative submitted at the hearing that reinstatement was not sought because the Applicant’s visa had now been cancelled and he was required to exit the country by the Department of Immigration by 24 July 2015. It is clear that reinstatement in the circumstances of this case is not an appropriate remedy.

[71] Having determined that reinstatement is not appropriate I must consider what compensation, if any, is payable, in lieu of reinstatement.

[72] The Act provides for compensation as a remedy for unfair dismissal.

“392 Remedy—compensation

Compensation

(1) An order for the payment of compensation to a person must be an order that the person’s employer at the time of the dismissal pay compensation to the person in lieu of reinstatement.

Criteria for deciding amounts

(2) In determining an amount for the purposes of an order under subsection (1), the FWC must take into account all the circumstances of the case including:

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

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

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

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

(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; and

(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; and

(g) any other matter that the FWC considers relevant.

Misconduct reduces amount

(3) If the FWC is satisfied that misconduct of a person contributed to the employer’s decision to dismiss the person, the FWC must reduce the amount it would otherwise order under subsection (1) by an appropriate amount on account of the misconduct.

Shock, distress etc. disregarded

(4) The amount ordered by the FWC to be paid to a person under subsection (1) must not include a component by way of compensation for shock, distress or humiliation, or other analogous hurt, caused to the person by the manner of the person’s dismissal.

Compensation cap

(5) The amount ordered by the FWC to be paid to a person under subsection (1) must not exceed the lesser of:

(a) the amount worked out under subsection (6); and

(b) half the amount of the high income threshold immediately before the dismissal.

Note: subsection 392(5) indexed to $66,500 from 1 July 2014

(6) The amount is the total of the following amounts:

(a) the total amount of remuneration:

(i) received by the person; or

(ii) to which the person was entitled;

(whichever is higher) for any period of employment with the employer during the 26 weeks immediately before the dismissal; and

(b) if the employee was on leave without pay or without full pay while so employed during any part of that period—the amount of remuneration taken to have been received by the employee for the period of leave in accordance with the regulations.

393 Monetary orders may be in instalments

To avoid doubt, an order by the FWC under subsection 391(3) or 392(1) may permit the employer concerned to pay the amount required in instalments specified in the order.”

[73] In all of the circumstances, I consider that the award of some amount of compensation is appropriate in this matter.

[74] In determining the amount of compensation, I must have regard to all the circumstances of the case including each of the paragraphs in s.392(2) of the Act as set out above. No one matter is paramount but regard must still be had to each of them. 48

[75] The general approach to the calculation of compensation was well set out by the Full Bench in Tabro Meat Pty Ltd v Kevin Heffernan 49  and I will follow that approach in determining this matter.

Section 392(2)(c) - the remuneration that the person would have received or would have been likely to receive, if the person had not been dismissed.

[76] The Applicant’s annual remuneration was $54,249.52 plus 9.5% superannuation. 50 I will use this amount as the basis for calculating the amount of compensation to be awarded in this case.

[77] It is clear that the Applicant faced some difficulties within his workplace. I have found that these issues were largely a result of the Applicant making complaints about the manner of his treatment in the workplace. I have not accepted that there were problems with the conduct of the Applicant or his performance. Had the Applicant not been dismissed, it is possible that the problems in the workplace could have been resolved by him pursuing his statutory rights and the employment continuing subsequent to that. In any case, the Applicants representative submitted that the evidence showed that the Applicant, even in the depths of his despair, was not leaving the company as it threatened his ability to stay in the country. I agree with that submission. It is also the case that the Applicant had a contract of employment that did not expire until November 2017. Of course, the Applicant was actively looking for alternative employment before the dismissal occurred given how unhappy he was. However, there is clear evidence that he faced considerable difficulty in that task and was unsuccessful in securing other employment. On balance of probabilities, I do not think it likely that the Applicant would have completed the balance of the term of his contract were it not for the dismissal. However, his lack of ability to secure alternative employment combined with his tenacity to stay and tough it out in order to stay in the country have to be considered.

[78] I think it is reasonable to assume that, but for the dismissal, that in all of the circumstances the employment relationship would have continued for a further period of 9 months.

[79] Accordingly, I calculate the remuneration that the Applicant would have received or would have been likely to receive, if his employment had not been terminated, at $40,687.14 plus 9. 5% superannuation.

Section 392(2)(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 and s.392(2)(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

[80] In the circumstances of this matter, subsections 392(2)(e) and 392(2)(f) can be dealt with together. The Applicant gave evidence that he earned no income after being dismissed. 51

[81] I note there was some suggestion he was working in a mobile phone shop but I accept his evidence that he was not. 52 The Applicant was required to leave Australia within days of the hearing concluding. It is difficult to assess his likelihood or quantum of any earnings the Applicant may make in Iran in the remaining period. I have determined that the amount of any income reasonably likely to be earned by the person during the period between the making of the order for compensation and the actual compensation to be nil.

[82] In Ellawalla v Australian Postal Corporation 53 , with respect to a precursor provision, the Full Bench stated that “[o]nly monies earned during the period from termination until the end of the anticipated period of employment are deducted”.

[83] Therefore there is no deduction to be made for any income earned or likely to be earned. The provisional amount of compensation remains at $40,687.14 plus 9.5% superannuation less tax.

Section 392(2)(g) - any other matter that FWA considers relevant

[84] Ordinarily a deduction for contingencies is appropriate. 54 Contingencies only apply to the anticipated period of employment.55 The anticipated period of employment was another 3 months approximately from the date of the hearing in this matter. The Applicant has submitted that no deductions be made for contingencies. However I consider that a small deduction for the relatively short period of remaining anticipated employment be deducted. I have determined to deduct 10% for contingencies in this matter which leaves an amount of $36,618.43 plus 9.5% superannuation less tax.

[85] There are no other matters that are relevant to the determination of compensation other than ss.392(2)(a),(b) and (d), 392(3) and 392(5) of the Act. I will turn to those factors now.

Section 392(2)(a) - the effect of the order on the viability of the employer’s enterprise

[86] Evidence should be produced in order for the Commission to properly consider this issue. 56 At the conclusion of proceedings I provided an opportunity for the Respondent to provide further submissions on the issue of compensation. I was clear it was not an opportunity to adduce further evidence.57 Despite that the Respondent filed a letter purportedly from his accountant which is not able to be tested given the hearing has concluded. In any event the letter does not specifically address the impact of any order on the viability of the Respondents enterprise.

[87] The Respondent did make submissions that the company is a small business battling to stay in business and a claim that the Applicant, presumably by making the claim, has possibly destroyed an Australian manufacturer of over 30 years. However, a mere submission that difficulties for the business will occur is not sufficient. 58

[88] I am not satisfied that the order will have an effect on the viability of the Respondent’s enterprise and I make no deduction on that basis.

Section 392(2)(b) - the length of the persons service with the employer

[89] The Applicant was employed by the Respondent for approximately 20 months. This is not a particular long period of service and needs to be considered when determining the amount of compensation ordered. I was taken to the decision of Senior Deputy President Richards in Varani v Independent Advocacy in the Tropics Incorporated T/A Independent Advocacy Townsville 59 which had a similar period of employment and in that case His Honour declined to reduce the amount. However, in the context of this matter I think that the relatively short period of service should lead to a deduction of some amount. I think it is appropriate to deduct a further amount of 10% from the amount of $36,618.43. This leaves a provisional amount of compensation of $32,956.59.

Section 392(2)(d) - the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal

[90] Evidence was provided by the Applicant as to the efforts he went to in the period after the dismissal to secure alternative employment. His evidence was that he made extensive efforts to secure employment. That evidence was tendered in the proceedings as exhibit P7. I am satisfied that the Applicant made substantial efforts to mitigate the loss and there is no basis for a further deduction for this reason.

Misconduct (s.392(3))

[91] I have found that the Applicant was not dismissed for a valid reason and that no misconduct was in evidence. Therefore there is no basis to make a further deduction for misconduct.

Compensation Cap (s.392(5))

[92] The compensation cap is set in section 392(5) of the Act. The amount ordered to be paid by the Commission must not exceed the lesser of:

• the total amount of remuneration either received by the person, or to which the person is entitled, for any period of employment with the employer during the 26 weeks immediately before the dismissal, and



• half the amount of the high income threshold immediately before the dismissal.

[93] In this case, the amount of remuneration received by the person for 26 weeks is $27,124.76 plus 9.5% superannuation. Half the amount of the high income threshold is $64,650.00.

[94] The lesser amount that acts as the compensation cap in this matter is the amount of $27,124.76 plus 9.5% superannuation.

[95] As the amount of $32,956.59 plus 9.5% superannuation is higher than the legislative compensation cap and less than six months salary a further deduction for that reason is required. Therefore, the amount of compensation to be ordered is $27,124.76 plus 9.5% superannuation.

Conclusion and order as to remedy

[96] I find that reinstatement is not an appropriate remedy in this case.

[97] I find that an order for compensation is appropriate.

[98] I am satisfied that an order for payment of compensation by the Respondent of $27,124.76 plus 9.5% superannuation less tax as required by law, to the Applicant in lieu of reinstatement is appropriate in all the circumstances of the case. It accords a fair go all round to both the Respondent and the Applicant.

[99] The compensation payment, less any required deduction in taxation, is to be made within 14 days of this decision. An order 60  will be issued concurrently with this decision.

COMMISSIONER

Appearances:

R Preston was granted permission to represent the Applicant

Z Crvenkovic represented the Respondent

Hearing details:

2015

Melbourne:
July 20

Final written submissions:

Respondent, 29 July 2015

Applicant, 6 August 2015

 1   Jahangir Farzady v Monochromatic Engineering Pty Ltd T/A MCE Lasers[2015] FWC 3001

 2   Ibid, [5]

 3   Jahangir Farzady v Monochromatic Engineering Pty Ltd T/A MCE Lasers[2015] FWC 3001

 4   Ibid

 5   See Form F3 – Employer Response to Unfair Dismissal Application, q.1.1

 6   Section 385(b) of the Act

 7   Witness Statement of Jahangir Fazady dated 9 June 2015, [17] – [18]

 8   Witness Statement of Z Crvenkovic dated 30 June 2015, [2.7]

 9   Witness Statement of Jahangir Fazady dated 9 June 2015 at [29] and Exhibit P6

 10   Exhibit P9

 11   Witness Statement of Jahangir Farzady, filed 9 June 2015, annexure JF6

 12   Witness Statement of Jahangir Farzady, filed 9 June 2015, annexure JF6

 13   Exhibit P3

 14   PN936-942

 15   Witness Statement of Jahangir Fazady dated 9 June 2015 at [46]

 16   Witness Statement of Jahangir Fazady dated 9 June 2015 at [48]

 17   Witness Statement of Jahangir Fazady dated 9 June 2015, annexure JF10

 18   Witness Statement of Jahangir Fazady dated 9 June 2015 at [53]

 19   Ibid

 20   Witness Statement of Jahangir Fazady dated 9 June 2015, annexure JF9

 21   Exhibit P5

 22   Exhibit C1

 23   Witness Statement of Jahangir Fazady dated 9 June 2015, annexure JF10

 24   PN963

 25   Witness Statement of Jahangir Fazady dated 9 June 2015 at [57]

 26   Witness Statement of Jahangir Fazady dated 9 June 2015, annexure JF12

 27   Witness Statement of Jahangir Fazady dated 9 June 2015, annexure JF13

 28   Witness Statement of Z Crvenkovic dated 30 June 2015, para 2.24

 29 Witness statement of Maarten Ligtvoet dated 9 June 2015, [22] and [25]

 30 Witness Statement of Jahangir Fazady dated 9 June 2015, [11] and [64] and PN271-273

 31   Witness statement of Maarten Ligtvoet dated 9 June 2015

 32   PN731

 33   PN275-276 and PN426 and 437

 34   PN476, 480

 35 S.389(1)(a) Fair Work Act 2009

 36   Kieselbach v Amity Group Pty Ltd (unreported, AIRC, Hamilton DP, 9 October 2006) PR973864, [34]

 37   PN574-577

 38   Witness Statement of Z Crvenkovic dated 30 June 2015, [1.4]

 39   Witness Statement of Jahangir Fazady dated 9 June 2015, annexure JF1

 40   Ibid

 41   See the Small Business Fair Dismissal Code under Other Dismissal

 42   PN1255

 43   Exhibit C1

 44   PN1059

 45   PN1059-1060

 46   Chubb Security Australia Pty Ltd v Thomas (unreported, AIRCFB, McIntyre VP, Marsh SDP, Larkin C, 2 February 2000) Print S2679 [41].

 47   Sykes v Heatly Pty Ltd t/a Heatly Sports (unreported, AIRC, Grainger C, 6 February 2002) PR914149 [20]

 48   Tempo Services Limited v T.M. Klooger and Others, PR953337, [22]

 49   [2011] FWAFB 1080.

 50   Witness Statement of Jahangir Fazady dated 9 June 2015, annexure JF6

 51   PN334

 52   PN517

 53   Print S5109.

 54   Slifka v J W Sanders Pty Limited (1995) 67 IR 316 at 328.

 55   Enhance Systems Pty Ltd v Cox (unreported, AIRCFB, Williams SDP, Acton SDP, Gay C, 31 October 2001) PR910779 [39]; citing Ellawala v Australian Postal Coproration (unreported AIRC, Ross VP, Williams SDP, Gay C, 17 April 2000) Print S5109 [43]

 56   D.A. Moore v Highpace Pty Ltd (unreported, AIRCFB, Boulton J, Watson SDP, Whelan C, 18 May 1998) Print Q0871

 57   PN1314

 58   K Beames v BDRP Falconer Pty Ltd (unreported, AIRC, Hamitlon DP, 28 March 2002) PR916075

 59   [2011] FWA 1633

 60   PR573044

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