Jason Martin Darke v Industrial Automation Group Pty Ltd T/A Industrial Automation

[2010] FWA 7385

Note: An appeal pursuant to s.604 (C2010/5233) was lodged against this decision - refer to Full Bench decision dated 2 December 2010 [[2010] FWAFB 8868] for result of appeal.

[2010] FWA 7385

FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Jason Martin Darke
v
Industrial Automation Group Pty Ltd T/A Industrial Automation
(U2010/7841)

COMMISSIONER WILLIAMS PERTH, 23 SEPTEMBER 2010

Termination of employment - arbitration - whether termination of employment by the employer - whether employee resigned.

[1] Mr Darke, the applicant, has applied for an unfair dismissal remedy pursuant to s.394 of the Fair Work Act 2009 (the Act). The respondent is the Industrial Automation Group Pty Ltd, T/As Industrial Automation.

[2] The application was the subject of a conciliation conference however it was not resolved and has been now referred to the tribunal for determination.

The legislation

Section 385 of the Act prescribes when a person has been unfairly dismissed:

“385 What is an unfair dismissal

A person has been unfairly dismissed if FWA is satisfied that:

(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.

Note: For the definition of consistent with the Small Business Fair Dismissal Code: see section 388.”

[3] Section 386 then defines “dismissed” as follows:

“386 Meaning of dismissed off

(1) A person has been dismissed if:

(a) the person’s employment with his or her employer has been terminated on the employer’s initiative; or

(b) the person has resigned from his or her employment, but was forced to do so because of conduct, or a course of conduct, engaged in by his or her employer.

(2) However, a person has not been dismissed if:

(a) the person was employed under a contract of employment for a specified period of time, for a specified task, or for the duration of a specified season, and the employment has terminated at the end of the period, on completion of the task, or at the end of the season; or

(b) the person was an employee:

(i) to whom a training arrangement applied; and

(ii) whose employment was for a specified period of time or was, for any reason, limited to the duration of the training arrangement;

and the employment has terminated at the end of the training arrangement; or

(c) the person was demoted in employment but:

(i) the demotion does not involve a significant reduction in his or her remuneration or duties; and

(ii) he or she remains employed with the employer that effected the demotion.

(3) Subsection (2) does not apply to a person employed under a contract of a kind referred to in paragraph (2)(a) if a substantial purpose of the employment of the person under a contract of that kind is, or was at the time of the person’s employment, to avoid the employer’s obligations under this Part.”

[4] There is a requirement for the tribunal to decided certain jurisdictional matters before considering the merit of the application as specified below:

“396 Initial matters to be considered before merits

FWA must decide the following matters relating to an application for an order under Division 4 before considering the merits of the application:

(a) whether the application was made within the period required in subsection 394(2);

(b) whether the person was protected from unfair dismissal;

(c) whether the dismissal was consistent with the Small Business Fair Dismissal Code; it will

(d) whether the dismissal was a case of genuine redundancy.”

Introduction

[5] The applicant commenced working for the respondent on Monday, 16 March 2009. The employment ended on Tuesday, 6 April 2010.

[6] The respondent says the applicant resigned and this resignation was accepted. The applicant says he did not resign but instead was terminated or in the alternative that if what occurred amounted to a resignation he was constructively dismissed and so by virtue of s.386(1)(b) he is deemed to have been terminated on the initiative of the respondent and that termination was an unfair dismissal.

[7] The applicant was self represented and the respondent was represented by Mr de Graaf the respondent’s managing director.

[8] The applicant gave evidence as did a Mr O. Brown and for the respondent Mr de Graaf gave evidence.

Evidence

[9] The evidence of the applicant was not challenged by the respondent in cross-examination.

[10] The critical parts of the applicant’s evidence that set out the factual background to the application in his own words are as follows.

“On the morning of Friday 13th March the respondent called me to ask if I could attend his office that same afternoon as he now had another appointment on the Saturday. We thus met at 4pm on Friday 13th March and our meeting lasted two hours.

The respondent explained to me that he had decided to dispense with the services of his salesman, Steve Budai, as the latter’s performance was not up to scratch. The respondent had decided that he would undertake the role of selling, as he was the person best suited for this function, knowing the products intimately. He stated that he had become too bogged down in running the office and that he needed someone to take over the office manager’s role so that he could get out in front of the customers.

During the course of the conversation, during which the respondent outlined his technical skills and the range of products offered by the Group under the names of Aeration Control Australia and Waterman Irrigation, I remarked that he ought to be on ABC’s New Investors programme.

The respondent made a verbal offer to me of $50k per annum to perform the office manager’s role, starting full-time on Monday 16th March.

He then explained that the Group, due to lack of sales, was having cashflow difficulties and asked whether I would accept a 60:40 arrangement, whereby the 40% would be paid on the first anniversary of my employment. There was absolutely no discussion on this 40% being based on my own performance or that of the Group.

He asked whether I would be able to live on a 60% salary (effectively $2500 per month gross), and I agreed that this would present no difficulty for me as I was single and I had learnt to cut down my expenses. My agreement was influenced by the vision he had outlined for the Group, emphasised by my realisation that he had a realistic opportunity of appearing on New Inventors, something I intended to pursue immediately on starting my new role.

We then shook hands on our agreement and I commenced work on the following Monday.

My job description was drawn up in February 2010 at the request of the respondent. At that time he had explained to me that a Mr Ravi Nath was considering rejoining the company at executive level, and the first thing that Ravi would require would be job descriptions of all staff.

My job description accurately reflects my role within the Group.

JOB DESCRIPTION

Title: Administration Manager, Industrial Automation Group

Reports to: Managing Director

Supervises: Bookkeeper/Receptionist and Stock Controller

External contacts: Accountant, ATO, customers, agencies

Overall function

To support the MD and all staff by ensuring that all equipment, administrative processes, systems and procedures are in place to capture and monitor the activities of the various companies within the group (including Delfia) and ensuring that customer orders and enquiries are handled in an efficient and timely manner.

Main duties

• Overseeing the work of the bookkeeper ensuring that all financial records are up-to-date and accurate, including compliance with ATO requirements

• Analysing monthly and annual accounting reports and making recommendations

• Monitoring the cashflow of the group ensuring that accounts payable and receivable, as well as invoices, are processed in a timely manner

• Liaising with the external accountant and ATO

• Overseeing the stock controller to ensure that orders are processed and adequate stock levels are maintained to meet demand

• Full involvement in staff recruitment and inducting new staff

• Employment contracts, staff records and appraisal

• Compliance with all state and federal obligations in particular with regard to OH&S

• Ensuring quality systems are adhered to, in particular the completion and processing of service reports

• Monitoring timesheets of operational staff and capturing data in relation to jobs and research

• Maintenance and continuous improvement of websites

• Records and archiving, including system backup

• General building and office maintenance, internal and external

• Liaising with broker to ensure adequate insurance cover

• Continuous improvement of all processes and procedures

• Central contact for handling complaints and grievances, both internal and external

• Maintenance of contractual arrangements with agencies, contractors and suppliers

• Generate payroll statistics

• Procurement of equipment

Other involvement

• Business development including research, marketing, and press releases

• Ad hoc instructions issued by the MD

• Software database?

It is a fact that I helped to draw up my employment contract, which makes no mention of the 60:40 arrangement, and I signed the contract. I do not dispute this. Why did I not include a clause stipulating that I would be paid the remaining 40% of my salary on completion of my first year? The answer is very simple. The 60:40 arrangement was suggested by the respondent at our meeting on March 13th 2009, discussed in depth, and we shook hands on the matter. I accepted the respondent’s word that this was the arrangement. It is as plain and simple as that.

I acknowledge in hindsight now that I was very wrong. Had I included this clause then this matter would not have arisen and we would not be here today.

During the course of my tenure I saw no reason to broach the subject until the approach of my first anniversary. Of course it was always on my mind as, not long after joining the company, several of the staff, including me, were put on a four-day week and shortly afterwards we were put on a three-day week. So, effectively, I was on 60% of 60%, making a total of $18,000 annualised. My actual earnings during that first year were, according to my calculations, $20,500 gross, allowing for the implementation of the shorter weeks. I did not see this as a problem because I was able to fund myself from my savings, from a small amount of private work writing résumés, and I was confident that, with our appearance on TV, and the nature of our products, a turnaround would soon be achieved. In essence I was ‘saving’ the 40%, and I would be able to replenish my savings on my first anniversary. I was committed to the firm on a long-term basis, I was happy in my varied role, the fact that our office was close to my home, and in conversations with the respondent, we even looked to the possibility of one day taking the Group public.

My anniversary was due on March 16th 2010.

Ravi Nath appeared in our office in the week beginning Monday 8th March 2010.

From the point of Ravi’s arrival, he went through the company from top to bottom, and was given complete access to absolutely everything.

Ravi asked me to prepare a spreadsheet which included a basic monthly budget allowing for a salary of $10,000 per month for both himself and the respondent. Also included was a list of outstanding debts and I included the 40% of my salary, including superannuation, which was about to become due. Ravi referred to this document as his ‘GPS’ (global positioning system) as it gave him an overall picture of where the Group stood.

On Thursday 11th March I sent an email to the respondent, copied to Ravi, reminding the respondent of our verbal agreement about the 60:40 arrangement. You will note the tone of this email as I indicate that I would be happy to receive the calculated amount of $13,666 gross in monthly instalments spread over the next seven months, acknowledging that our cashflow was still under pressure. I also refer to my belief that the future was bright, as we had the right products and the right people. Finally I requested that the 60:40 arrangement be abandoned for the subsequent year, bringing me into line with how everyone else in the firm was being paid.

Between 11th March and 1st April, the date on which the respondent denied all knowledge of any such 60:40 arrangement, discussions had taken place between the respondent and Ravi over the GPS, which included the amount due to me. I know this is true as, after the meeting between the respondent and Ravi, the latter asked me to make some changes to the GPS. New items had come to light, mainly amounts claimed by the respondent as owing to him. Nevertheless the amount owing to me remained. It had not been struck out. Given the attention to detail of both Ravi and the respondent, I have no hesitation in saying that the respondent’s statement on 1st April, that he had no recollection of the 60:40 arrangement, is an outright lie.

With my anniversary having passed, and with no intimation that the balance of my salary would be paid, nor with any intimation that my salary payment terms would be adjusted in line with everyone else from 1st April, I asked for a meeting with the respondent in his office and I presented him with a memo I had drafted. I simply wanted an acknowledgement of the debt. This meeting took place around 2.45. The respondent read the memo in front of me, said that he would ‘sign it by the end of the afternoon’, asked if there was anything further to discuss, which there wasn’t, and the meeting ended.

The respondent, in my opinion, based on the evidence I have already discussed, had always had full knowledge of the 60:40 arrangement and it had been on the agenda since my reminder to him dated 11th March.

At around 4.40pm that same afternoon, the respondent came to my office and said that he could not recall any such 60:40 arrangement. We had a short verbal exchange in which I said that he was effectively implying that my annual salary was only $30k. I asked him to respond but he would not. I then called him a liar, walked out of the office, asked Ravi to accompany me outside, explained the whole situation to him (Ravi) and asked him to intervene. I was extremely angry and left the premises at around 5.10pm. Ravi called me that evening and confirmed that the respondent had repeated his assertion that he could not recollect any such agreement.

On Good Friday, 2nd April, I sent an email to the respondent, copied to Ravi, detailing my recollection of our first meeting and asking a number of questions, as follows:

1. What exactly are your recollections, if any, of the meeting on 13th March, 2009?

2. Do you deny making me an offer of $50k per annum to perform the role of office manager?

3. If that is the case, on what basis do you consider that a salary of $30k per annum is fair and reasonable for performing such a role, given that this amount is less than that paid to both Laura Simon (bookkeeper/receptionist) and Hayden Tangyuk (stock controller)?

4. In your opinion, do you consider that I accepted a total salary of $30k per annum?

5. What value do you place on your appearance on New Inventors, both from a personal point of view and from the perspective of the Group?

6. Given your lack of response to my earlier email, I presume you wish me to continue working for $1396 per month nett from 1st April? Please confirm.

Finally I pointed out that, without any substantive response to my claims on his part, there was no basis for further discussion at this point. I invited his response in writing, copied to Ravi, and said that any subsequent discussions would not take place without a third party being present. I referred to Clause 23 (Dispute Resolution) of our standard employment terms and conditions in this respect. The clause reads:

Quote

23.1 The objective of the parties is to avoid and settle disputes by direct consultation and negotiation in order to avoid interruption, loss of service to customers and consequential loss of production and pay.

23.2 The parties are committed to the following consultative procedures to support that objective;

• You shall notify the company (in writing or otherwise) as to the substance of the dispute or grievance, request a meeting with the company and start the remedy sought

• The company shall notify you (in writing or otherwise) as to the substance of the dispute or grievance, request a meeting with you and start the remedy sought.

• Negotiations shall take place within 7 days of the notification of the dispute or grievance.

23.3 If the matter remains unresolved, the dispute shall be referred to a mutually acceptable third party for resolution.

Unquote

On Saturday 3rd April I sent another email, also copied to Ravi, withdrawing my memo dated 1st April. It was clear to me by this stage, given that the respondent had lied to me, that I would have to reconsider my options.

I returned to the office on Tuesday 6th April following the Easter break.

The respondent summoned me to his office around 8.20am and we held a short meeting. At the start of this meeting I informed the respondent that I would be taking notes on what was said during the meeting.

I would add that, during this meeting, the respondent said that he never entered into written correspondence with employees. He said that he believed that everything could be resolved by face-to-face discussion.

For my part, since the respondent had already broken his word and lied to me, there was no point in having face-to-face discussions without a third party present. Hence my referral to Clause 23.3 concerning dispute resolution.

Following that meeting I compiled my notes and sent an email to Ravi outlining what was discussed. I repeat the contents of this email.

The respondent claimed that he had not read my emails over the weekend and I asked him to do so before any discussions could take place.

The respondent refused my request and demanded that we talk. I asked him to do the talking.

He then again denied that we had ever had an agreement.

The respondent said that there was no way that I could continue to be employed and that we would have to come to some financial arrangement. The meeting ended without any further discussion.

The respondent called another meeting at 2.40pm in his office and I recorded the details of this meeting by again sending an email to Ravi immediately afterwards.

I repeat the contents of this email.

The respondent asked me if I wanted to remain working with IAG. I said no.

He said that, in that case, there was no room for mediation. 1

He again said that he did not recall any such 60:40 arrangement as outlined by me, confirming that he had now read my emails.

He then said he would put together a proposal.

I said that if I did not receive all monies which I consider outstanding then I would take all necessary steps open to me to recover the outstanding amounts.

The meeting then closed.

The most pertinent point arising from this meeting was my response to the question as to whether I wanted to remain with the company. I simply replied with one word – no.

Why did I say no? It was instinctive. I was looking into the face of someone whom I now regarded as a liar, someone for whom I no longer had any respect, someone who had caused me great stress and anguish over the previous few days, and someone for whom I no longer wished to work.

At no stage during any of these events was the word ‘resign’ or ‘resignation’ mentioned in any of these conversations. The respondent did not ask for my resignation and I certainly did not offer it. I was not going to resign unless I was certain that I would get the amounts owing to me.

The second most pertinent point arising from that meeting was that the respondent said that he would give me a proposal. I have yet to receive any proposal.

At around 4pm the respondent appeared in my office, and, saying the word ‘Voila’, and with a smile on his face, handed me a letter which includes the expression ‘……………….I have decided to accept your resignation’.

I repeat that at no point during the sequence of events did I resign my position.

Having received the above letter, I then wrote my own letter. If I could write this letter again I would include a statement along the lines that I had not resigned. I would also have included a statement along the lines that the respondent had made my position untenable and that I had no option but to depart that afternoon.

Under a great deal of pressure and with no one to turn to I wrote my letter and handed it, along with my key to the office, to the respondent at around 5pm, and departed. No words were spoken.

I made the error, if it can be called an error, of taking a man’s word and not getting an agreement completely in writing.

A salary of $50,000 per annum was a reasonable offer for such a role. I have gone well beyond what was expected, being involved in every single aspect of the operations as well as opening up new opportunities. I helped to put the company on the map. I gave the respondent the highlight of his life through his appearance on national television.

I had anticipated a long-term career. We had spoken about taking the Group public within five years. I was totally committed to the future and foresaw a much broader role as we expanded overseas, for instance in finding and appointing overseas agents for the Aeration Manager.

I have lost not only a certain amount of money but also a job and career. At the age of 57 it is not easy to find a job.”

Mr Brown’s evidence

[11] Mr Brown’s evidence was limited to confirming that the role of Mr Ravi Nath with the respondent was that of its Manager.

Mr de Graaf’s evidence

[12] Mr de Graaf’s evidence was that at the time he employed Mr Darke there was no vacancy within the organisation. At the time the organisation was not very profitable and they agreed that there would be a very basic salary to start off with which may be reviewed at a later stage.

[13] Sometime after Mr Darke had begun employment the financial situation worsened and Mr Darke as well as some other employees were reduced to being employed on a part-time basis.

[14] The figure of approximately $13,000 that was claimed by Mr Darke at the end of his employment never existed and is a figure of Mr Darke’s imagination and there was no such 60:40 arrangement.

[15] Mr Nath was employed approximately 10 years ago and returned for a brief period in February of 2010 but it was not feasible to keep him on because of the financial condition of the respondent.

[16] Mr de Graaf says that whilst preparing some documentation outlining the financial situation of the respondent Mr Nath mentioned to him that Mr Darke was looking for another $13,000. Mr de Graaf’s response was to ask where had this come from?

[17] Mr de Graaf says that this issue caused Mr Darke to call him a liar and he had a conversation with Mr Darke where he wanted to know whether Mr Darke actually wanted to carry on working for the respondent and Mr Darke responded “No, I don't.”.

[18] Mr de Graaf says he took that as a resignation and paid Mr Darke two weeks wages.

[19] In cross-examination Mr de Graaf maintained that the role of Mr Darke was properly characterised as a clerk and a salary of $30,000 p.a. was therefore appropriate. He resisted suggestions that some of Mr Darkes responsibilities, such as being the respondent’s designated person for dealings with the Australian Tax Office, his role in paying staff salaries and having full access to the respondent’s bank accounts were not roles that a mere clerk would undertake.

The Facts

[20] In determining the facts of this matter it is notable that the evidence of Mr Darke, the applicant, is comprehensive and detailed as to all of the relevant events over the whole period of his employment. The applicant’s version of a number of the important events, particularly leading up to the end of his employment, is supported by a number of e-mails that the applicant says were sent to Mr de Graaf and Mr Nath at various times.

[21] The respondent, having been provided with Mr Darke’s detailed witness statement in advance of the hearing of this application, did not cross-examine Mr Darke on his evidence.

[22] The only evidence before the Tribunal that is contrary to the evidence of Mr Darke is the evidence given by Mr de Graaf. This evidence was not provided to the applicant in advance of the hearing in the form of a written statement notwithstanding the respondent had the benefit of having received Mr Darke’s detailed witness statement. By comparison with the evidence of Mr Darke the oral evidence of Mr de Graaf was very limited, was lacking in detail and was not supported by any documentation.

[23] The relevant evidence of Mr de Graaf as explained above was limited to a denial that there was any 60:40 agreement as Mr Darke says was the case and so rejecting that there was any salary amount owing to Mr Darke, explaining there was a conversation wherein Mr Darke said he did not want to continue working for the respondent and that the respondent took this as a resignation and finally that Mr Darke’s duties were those of a clerk and denying that any more complex duties he undertook were at odds with this characterisation of his role as that of a clerk.

[24] In cases such as this where there is a disagreement between two witnesses about the central factual matters the Tribunal is to make findings of fact on the balance of probabilities. In this instance where there is a conflict of evidence between Mr Darke and Mr de Graaf I have concluded that on the balance of probabilities the evidence of Mr Darke is correct. Mr Darke’s evidence was detailed, comprehensive, supported by various documents and given in an open and at times self-critical manner and is to be preferred over the very limited evidence of Mr de Graaf.

[25] Consequently then I find that when Mr Darke was first employed there was an agreement between him and Mr de Graaf that 40% of his salary of $50,000 would be paid at a later date, being the anniversary of his commencement.

[26] Some time after the employment began Mr Darke’s working days were reduced to three per week with a proportional reduction in his weekly salary.

[27] I further find that in a discussions between Mr Darke and Mr de Graaf on 6 April 2010 at around 8.20 a.m. Mr de Graaf said that there was no way Mr Darke could continue to be employed and that they would have to come to some financial arrangement.

[28] At a second meeting around 2.40 p.m. the same day Mr de Graaf did ask Mr Darke whether he wished to continue working for the respondent to which he replied “No”. Mr de Graaf then said that that there was then no room for mediation and he would put together a proposal, however, no proposal was ever provided to Mr Darke by the respondent.

[29] I find that the applicant did not at any stage say that he was leaving his employment or was resigning.

[30] I find that after this discussion Mr Darke returned to his office. Later that afternoon Mr de Graaf came to Mr Darke’s office and handed him the letter dated 6 April 2010 which says that Mr de Graaf has accepted Mr Darke’s resignation effective immediately.

Was there a dismissal?

[31] The respondent submits that in this instance there was no termination on the initiative of the employer.

[32] In the respondent’s Form F3 in reply to the application it is asserted that the applicant, in response to a direct question, had said he no longer wanted to keep working for the company and so he was let go.

[33] Further it is asserted that there was never a verbal agreement for extra pay beyond the documented amount.

[34] The respondent submits that the applicant was not dismissed, he resigned, and so there is no jurisdiction for the Tribunal to hear this application.

[35] Given the facts that I have found above, is it correct to conclude as the respondent submits that the applicant resigned?

[36] The critical events are those of 6 April 2010 in particular the second meeting that day around approximately 2.40 p.m. between Mr Darke and Mr de Graaf. Whilst I accept Mr Darke’s detailed evidence of this meeting it seems there is not a dispute in any event between the parties about what was asked of him and what his response was.

[37] During the meeting between Mr de Graaf and the applicant, Mr Darke did agree that he no longer wished to continue working for the respondent. Mr Darke had not raised this issue - Mr de Graaf did. Mr Darke was replying to a direct question asked by Mr de Graaf in the context of Mr de Graaf having said in the earlier meeting that day that there was no way that Mr Darke could continue to be employed and that they would have to come to some financial arrangement.

[38] Mr Darke did not say he was ending his employment. Mr Darke’s negative response to the question by Mr de Graaf could rightly be taken as an indication that Mr Darke was not intending to remain in employment indefinitely but was going to leave in the future, but that is not the same as concluding that Mr Darke was tendering his resignation.

[39] Mr de Graaf’s letter to Mr Darke dated 6 April 2010 includes the following statement, “Although disappointed by that decision I have decided to accept your resignation effective immediately .”

[40] This statement shows that the respondent was acting to end the applicant’s employment at a time of its choosing, that being immediately. It was this letter from the respondent to Mr Darke that terminated the employment. I conclude then that the respondent did by giving this letter to Mr Darke on its initiative terminate the applicant’s employment. This conclusion is supported by the further statement in the respondent’s letter that the respondent will pay the applicant a two week separation payment. This is consistent with the respondent ending the employment of the applicant by making such a payment rather than giving notice. If the applicant had resigned the respondent would not be required to make this payment.

[41] In the alternative if I am wrong on this and the respondent did not terminate the employment then given there was an agreement made at the time the employment commenced that the respondent would pay to Mr Darke 40% of his $50,000 salary on the first anniversary of his employment but that Mr de Graaf repeatedly denied there was any such amount owing to Mr Darke and refused to participate in mediation of the disagreement, I accept this left the applicant with no choice but to resign. The respondent was not only refusing to pay the amount of outstanding salary but was also obviously only willing to continue the employment on the basis of paying 60% of the agreed salary for the three days per week. In these circumstances and having unsuccessfully attempted to resolve the matter directly with the managing director there was no other real choice but for the applicant to leave the employment.

[42] I point out that in this application it is not the Tribunal’s role to determine the contractual rights of the parties but rather whether the facts that have been identified do demonstrate that there was conduct or a course of conduct of the respondent that forced the applicant to resign. 2

[43] If there was a resignation by the applicant then I am satisfied that the facts of this matter are such that the applicant was forced to resign because of the conduct or a course of conduct engaged in the by the employer and so the applicant has been dismissed within the meaning of s.386(1)(b).

[44] In this case then I reject the jurisdictional objection pursued by the respondent. The applicant was dismissed within the meaning of s.386 of the Act.

Was the dismissal harsh, unjust unreasonable?

[45] Section 387 sets out what the Tribunal must take into account when considering whether a dismissal was harsh, unjust or unreasonable:

“387 Criteria for considering harshness etc.

In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, FWA 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 FWA considers relevant.”

[46] In this case the respondent has denied that it dismissed the applicant. The reasons for the respondent’s actions that caused what I have found to be a dismissal of the applicant by the respondent were the applicant’s demand that the respondent pay an amount of outstanding salary and the applicant’s response in the negative to a question as to whether he wished to continue working with the respondent.

[47] As I have found the applicant’s demand for payment of outstanding salary was consistent with an agreement entered into between the applicant and the respondent at the time the employment commenced. The applicant’s response to the question as to whether he wished to continue with the respondent was honest and unsurprising in the circumstances of the events leading up to respondent’s managing director asking that question of the applicant.

[48] These actions of the applicant simply do not amount to a valid reason for the respondent to have dismissed the applicant.

[49] There was no notification to the applicant of the reason for his dismissal and no opportunity to respond to those reasons before the dismissal. The issue of a support person is not relevant nor is the issue of warnings given the reasons did not involve unsatisfactory performance.

[50] The small size of the respondent’s enterprise and the absence of human resource management specialists is not relevant because this is not a case concerned about procedural unfairness.

[51] There are no other relevant matters for the tribunal to consider.

[52] Taking into account the above criteria I do find that the dismissal of the applicant was unjust and unreasonable in particular because there was no valid reason for the dismissal.

Small Business Code

[53] In this case the evidence demonstrates that the respondent was a small business.

[54] No submissions were made by either party regarding whether or not the dismissal was consistent with the Small Business Fair Dismissal Code. As a result of the respondent viewing the situation as a resignation by the applicant none of the required steps therein were followed by the respondent.

[55] Consequently the dismissal was not consistent with the Small Business Fair Dismissal Code.

Conclusion

[56] I have determined above that the applicant had been dismissed and that his dismissal was unjust and unreasonable. The applicant’s dismissal was not consistent with the Small Business Fair Dismissal Code and was not a case of genuine redundancy.

[57] Consequently within the meaning of s.385 I find that the applicant has been unfairly dismissed.

Remedy

[58] In terms of remedy it is apparent that the conflict between the applicant and the respondent’s managing director is such that it is not appropriate in this case to consider reinstatement of the applicant to his former position with the respondent.

[59] Considering then an order for the payment of compensation to the applicant in lieu of reinstatement, I note that there is evidence that the financial state of the respondent is poor and so the Tribunal needs to ensure that the effect of any order will not damage the viability of the enterprise.

[60] I note that the length of service of the applicant was a little over 12 months and the evidence is that he intended to continue in his employment indefinably.

[61] The remuneration the applicant would have received had he not been dismissed, whilst disputed, was at least the amounts that the respondent had been regularly paying the applicant.

[62] There is no evidence from the applicant as to what efforts he has made to mitigate his loss nor of any remuneration he has earnt since his dismissal.

[63] Taking the above matters into account and the other circumstances of this case I have decided that an appropriate amount of compensation is three months salary.

[64] This amount will be calculated on the basis of the equivalent of the salary that was being paid to the applicant for a three day week at the time of the dismissal, namely $18,000 per annum. The amount of compensation to be ordered therefore is $4,500.00 gross from which tax will be deducted. An order to this effect will accompany this decision.

Appearances:

M. Darke on his own behalf.

H. de Graaf for Industrial Automation Group Pty Ltd.

Hearing details:

2010.

Perth:

September 14.

COMMISSIONER

 1   Note the witness statement differs from the contemporaneous email in this regard and I have taken the email to be correct.

 2   See McNiece v Big Punt Pty Ltd t/as Flat Out Car & Truck Sales, PR974172, 6 October 2006 per Lewin C at para 23.

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