Kirk Walker v Combined Bulk Bins Pty Ltd

[2014] FWC 6508

[2014] FWC 6508

The attached document replaces the document previously issued with the above code on 17 September 2014.

● Correction to the first sentence in paragraph 48 to remove the double negative.

Renee Mooney

Associate to Commissioner Bissett

Dated 23 September 2014

[2014] FWC 6508

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Kirk Walker
v
Combined Bulk Bins Pty Ltd
(U2013/15700)

COMMISSIONER BISSETT MELBOURNE, 17 SEPTEMBER 2014

Costs application - application for unfair dismissal remedy.

[1] Mr Gary Dircks of Just Relations - Consultants represented Mr Kirk Walker in his unfair dismissal application against Combined Bulk Bins Pty Ltd (CBB). CBB was represented by HR Legal. The unfair dismissal application was discontinued on 3 June 2014 by Mr Dircks on behalf of Mr Walker, three days before it was listed to be heard. CBB have now made an application for costs against both Mr Dircks (who trades as Just Relations - Consultants) and Mr Walker.

[2] CBB was represented in the costs proceedings with permission by Mr Krins of HR Legal. Mr Krins acted for CBB in the unfair dismissal matter. Mr Dircks represented himself. Mr Walker was not represented and did not appear at the costs hearing although did make a written submission.

The application against Mr Walker

[3] The application against Mr Walker is made pursuant to s.400A of the Fair Work Act 2009 (the Act).

[4] CBB says that Mr Walker caused costs to be incurred by CBB because of an unreasonable act or omission in connection with the conduct or continuation of his unfair dismissal application.

[5] CBB say that the Mr Walker’s unreasonable acts or omissions were:

• his failure to provide the evidence CBB sought in a letter sent to his representative on 21 February 2014 when he knew he was earning (with a new employer) more than he had earned with CBB; and/or



• his decision not to provide evidence sought in a letter sent to his representative on 18 March 2014 when he knew he was earning (with a new employer) more than he had earned with CBB. 1

The application against Mr Dircks

[6] The application against Mr Dircks is made pursuant to s.401 of the Act.

[7] CBB says that Mr Dircks, by his unreasonable act or omission in connection with the conduct of the unfair dismissal application, caused costs to be incurred by CBB. In particular it says that Mr Dircks:

• on or about 21 November 2013 or thereafter advised Mr Walker to continue with proceedings or failed to advise him to discontinue proceedings in circumstances where he knew or ought to have known that Mr Walker had secured new employment and was earning remuneration with a higher rate than he earned with CBB;



• continued to act for Mr Walker on or about 21 November 2013 or thereafter on becoming aware of Mr Walker’s new employment at a higher rate of remuneration than he had earned with CBB;



• on or about the dates of 21 February 2014 or 11 March 2014 (sic) 2 he advised Mr Walker not to provide CBB evidence of his true remuneration with his new employer or failed to advise Mr Walker to provide CBB with evidence of his true remuneration with his new employer in circumstances where he should have known that Mr Walker had secured new employment and was earning a rate of remuneration higher than that he had earned with CBB;



• continued to act for Mr Walker on or about 21 February 2014 or 11 March 2014 or thereafter on viewing Mr Walker’s new employment contact and evidence of earnings. 3

[8] Distilled down, it appears that there are three key issues that must be determined first in order to decide if Mr Dircks and/or Mr Walker, through some act or omission, caused costs to be incurred by CBB. These are:

1. whether Mr Dircks and/or Mr Walker concealed or failed to disclose Mr Walker’s new employment and financial position;

2. whether, having found employment 3 weeks after his dismissal from CBB and therefore having ‘fully mitigated’ his loss, Mr Walker should have withdrawn his unfair dismissal application;

3. whether the continuation of the application was a ruse by Mr Dircks and/or Mr Walker to try and get a settlement on an underpayment issue.

Evidence

[9] It is appropriate, prior to considering each of these issues, to deal with the matter of evidence.

[10] No direct evidence in support of the grounds for the application for costs was called by Mr Krins. Mr Krins did put, however, that I could infer facts from circumstantial evidence. Mr Krins says that:

a. the misleading payslip provided in March in response to a demand from [CBB]; and

b. the continuing refusal of [Mr Walker and Mr Dircks] to provide evidence of his true employment circumstances and financial position when asked,

are circumstantial evidence of an attempt by [Mr Walker and Mr Dircks] to conceal his true employment and financial position with a view to forcing [CBB] to settle all of his alleged claims and receive a windfall gain. This conduct prevented the parties being able to have any meaningful settlement discussions about the alleged unfair dismissal.⁴

[11] I reject Mr Krins submission that the circumstantial evidence he refers to allows me to infer any facts for three reasons.

[12] First, Mr Krins has not produced any ‘circumstantial evidence.’ He has put forward assertions, claimed the assertion as circumstantial evidence, and then asks that I find the assertions proven. The reasoning is circular and is of no assistance. Circumstantial evidence has to be more than this.

[13] Second, Mr Krins has not been able to take me to any ‘misleading payslip produced in March’ or a ‘misleading payslip’ produced at any other time. Putting aside whether it is circumstantial evidence or not, the only payslip produced was in May 2014. There is nothing that provides the slightest indication that it is misleading.

[14] Third, there is no evidence to suggest that Mr Walker or Mr Dircks sought to hide the true employment and earnings of Mr Walker. When asked, Mr Dircks provided earnings information. Mr Krins indicated that he, or his client, knew who Mr Walker’s employer was. His employment was not hidden even if they did not confirm the employer. This issue is further considered below.

Did Mr Dircks and/or Mr Walker conceal or fail to disclose Mr Walker’s employment and financial position?

[15] Mr Walker was dismissed by CBB on 1 November 2013.

[16] The application for unfair dismissal was made on 1 November 2014.

[17] On about 21 November 2014 Mr Walker commenced new employment. He was employed on a six month ‘trial’ (which, from his employment contract, appears to be a probationary period).

[18] On 12 February 2014 a conciliation conference with respect to Mr Walker’s unfair dismissal application was held. In the application for costs Mr Krins says that CBB was aware just before this date that Mr Walker had a new job on conditions ‘equal to or more favourable’ than his employment with CBB. 5

[19] On the basis of a request from Mr Krins (the detail of which has not been disclosed to the Commission) Mr Dircks sent him an email on 14 February 2014 in which he advised that Mr Walker’s earnings were ‘$14,799.59 at 11 February 2014.’ 6

[20] Mr Dircks also indicated in the email that this was less then Mr Walker would have earned had he remained at CBB if he had been paid at the award rate. This is a reference to a claim that Mr Walker had been underpaid while working for CBB. Mr Walker had sought to settle this claim and the unfair dismissal claim in the conciliation.

[21] Clearly, as at 14 February 2014, CBB was aware that Mr Walker had another job and what his earnings were. There was no failure to disclose this information by either Mr Dircks or Mr Walker. When asked information was given.

[22] For reasons unknown, CBB sought to dispute with Mr Dircks the earnings advised. In a letter dated 21 February 2014 HR Legal advised that CBB ‘has reason to believe that the earnings referred to in your letter (sic) do not represent the entire earnings received’ by Mr Walker. 7 The letter goes on to say that CBB is prepared to subpoena Mr Walker’s new employer to obtain evidence of his earnings.

[23] This letter contains no demand of Mr Dirks or Mr Walker. That the letter indicates a willingness to subpoena Mr Walker’s new employer suggests that CBB (or at least its lawyers) knew who this employer was. To this extent there is no evidence as at 21 February 2014 of any attempt to conceal or not disclose Mr Walker’s employment or earnings.

[24] A further letter was sent to Mr Dircks on 18 March 2014. That letter refers to the email of 14 February 2014 from Mr Dircks and says that CBB considers ‘that this does not accurately reflect [Mr Walker’s] total earnings post his dismissal.’ 8 The letter requests that Mr Dircks provide documents showing Mr Walker’s engagement, pay slips and bank accounts and evidence of cash earnings.

[25] The letter goes on to give notice that if the information is not provided within seven days CBB will seek an order for their production.

[26] Mr Dircks and Mr Walker did not provide further information as sought in the letter of 18 March 2014. It was clear from the letter that if they did not do so they would need to respond to an order for production of the documents.

[27] Whilst an order for production of the documents was eventually sought this did not occur until 19 May 2014. The Order was issued on 21 May 2014. In compliance with the Order a pay slip and the contract of employment were produced by Mr Walker. These were provided to Mr Krins.

[28] CBB notified Mr Dircks of a process it said it would follow if the documents it sought were not provided. The return of the Order demonstrates a willingness by Mr Walker to provide the information when required. That CBB did not seek the Order sooner cannot be the fault of Mr Dircks or Mr Walker.

[29] CBB suggest that the payslip produced by Mr Walker in May 2014 in response to the Order is circumstantial evidence that proves Mr Walker attempted to conceal his true employment. Even if it is circumstantial evidence CBB has not put forward anything to show how it proved concealment of employment or earnings. The May 2014 payslip shows that Mr Walker had, for the period ending 16 May 2014, earned year to date (i.e. from 21 November 2014 when he commenced) a gross amount of $31,851. This suggests that over the 25 week period of his employment he earned on average $1274 per week. This accords with the figure produced in February 2014 where, for a 12 week period, he produced an income figure equating to approximately $1233 per week. These figures are consistent. There is nothing in the payslip that assists in reaching any of the conclusions suggested by Mr Krins.

[30] I am not satisfied that Mr Dircks and/or Mr Walker concealed or failed to disclose Mr Walker’s employment and financial position.

Having found employment three weeks after his dismissal from CBB and having fully mitigated his loss, should Mr Walker have withdrawn his unfair dismissal application?

[31] There is no question that Mr Walker gained new employment from 21 November 2013, three weeks after he was dismissed from CBB. His rate of pay with his new employer was higher than that with CBB. 9 On the basis of the information provided by Mr Dircks on 14 February 2014 Mr Walker had earned about $1233 per week, including overtime, to that time.

[32] When he worked for CBB Mr Walker was paid $798 per week. 10 In his witness statement filed on 7 April 2014 in the substantive application Mr Walker says he was paid a flat rate of $21 per hour for all hours worked (including overtime) with CBB and in the 17 weeks prior to his dismissal earned $1229.26 per week on average.

[33] In his application for unfair dismissal Mr Walker says that he believes he was underpaid by CBB. This is further detailed in his witness statement.

[34] Whilst the evidence in Mr Walker’s witness statement is not tested he raised real issues as to whether or not he was correctly paid. If he was not paid according to the relevant Award or enterprise agreement and was underpaid it may be that he had not ‘fully mitigated’ his loss in his new employment. He was entitled to have this tested in conjunction with his claim for unfair dismissal.

[35] That Mr Walker sought to settle both the unfair dismissal and the underpayment matter in conciliation for the unfair dismissal matter is not, in my experience, unusual. Had Mr Walker truly been underpaid any settlement of his unfair dismissal and underpayment could not be seen as a ‘windfall gain’ but rather a reasonable outcome.

[36] The settlement discussions (conciliation on 12 February 2014 and a further offer to Mr Dircks in the letter of 21 February 2014) do not seem to have been inhibited by the failure of Mr Walker to produce his pay slips or contract of employment.

[37] Given the uncertainty with respect to the underpayment issue, and that there is no claim that Mr Walker’s unfair dismissal claim had no reasonable prospect of success, I am not convinced that Mr Walker should have discontinued his application or that the failure to do so was an unreasonable act by him.

Was the continuation of the application a ruse by Mr Dircks and/or Mr Walker to try and get a settlement on the underpayment issue?

[38] This issue appears to be based on the Respondent’s belief that, if there had not been an alleged underpayment, the application for unfair dismissal would not have been made or pursued. Mr Krins calls no evidence to support this. He did not call his client to give evidence of the settlement discussions such that a conclusion as to how they progressed or might have progressed can be drawn.

[39] Mr Dircks is quite open that, in seeking to find some settlement to the unfair dismissal application, he also sought to settle what he considered to be the underpayment.

[40] There is no evidence that settlement negotiations continued much beyond the offer by CBB in the letter of HR Legal of 21 February 2014. If the continuation of the application was a ruse to try and settle the overpayment it clearly was a bad strategy and one that cost Mr Walker. He continued with his application and, it can be reasonably assumed, incurred costs himself in having submissions and a witness statement drawn up and filed in early April, well after the settlement discussions apparently came to an end.

[41] There is no evidence on which I could conclude that the application was a ruse to get the underpayment settled.

Conclusion

[42] Mr Walker believed he had been unfairly dismissed. He was entitled to make his application. He responded with information when sought on 14 February 2014 and responded when an Order was made for the production of documents in May 2014. He was entitled to expect that an order would be sought within seven days of the letter of 18 March 2014 from CBB’s legal representatives. It was not any action by Mr Walker that stopped that order being sought. That was in the hands of CBB.

[43] There is nothing to support a finding that Mr Walker caused costs to be incurred by any act or omission on his part in connection with the conduct of the matter. The application against Mr Walker pursuant to s.400A of the Act is dismissed.

[44] As to the specific claims against Mr Dircks, these are assertions on the part of Mr Krins. There is no evidence that Mr Dircks advised Mr Walker to continue proceedings or did not advise him to discontinue proceedings at any stage in the progress of the application. The assertions are not proven by evidence including that Mr Dircks saw Mr Walker’s pay slips and contract of employment for his new job at any stage prior to them being produced as a result of an Order of the Commission on 21 May 2014.

[45] Mr Dircks provided information on Mr Walker’s earnings on 14 February 2014 when asked. There was no demand from CBB for production of earnings and employment information on 21 February 2014. Mr Dircks was entitled to wait for an order to be issued following the letter of 18 March 2014. Once the Order was issued it appears he did what was necessary to ensure compliance with the Order.

[46] Nothing has been put by Mr Krins that suggests Mr Dircks did anything but represent the interests of Mr Walker. There is no evidence to conclude that he did not follow the instructions given to him by Mr Walker. There is also no evidence that he did not, at appropriate points in time, provide appropriate and considered advice as would be expected of him.

[47] CBB’s claim against Mr Dircks cannot be found without any evidence to support the assertions made. There is no evidence to support this claim - direct or circumstantial. The claim made by CBB is that there was some unreasonable act or omission by Mr Dircks in connection with the conduct of the case is not made out.

[48] In all of the circumstances I do not find there is evidence of any unreasonable act or omission by Mr Dircks in connection with the conduct of the matter that caused costs to be incurred by CBB. There is no basis on which I could award costs pursuant to s.401 of the Act against Mr Dircks. The Application against Mr Dircks is dismissed.

[49] The application for costs against Mr Dircks and Mr Walker is dismissed.

COMMISSIONER

Appearances:

G. Dircks representing himself.

J. Krins of HR Legal for the Respondent.

Hearing details:

2014.

Melbourne:

September 2.

 1   Form F6, paragraph 18.

 2   21 February 2014 and 11 March 2014 appear to be references to dates letters were sent by the Respondent to Mr Dircks seeking information. There is no letter dated 11 March 2014 but there is one dated 18 March 2014. It is assumed that the reference to 11 March is intended to be a reference to 18 March 2014.

 3   Form F6, paragraph 20.

4 See document 4, paragraph 11.

 5   Form F6, paragraph 7.

 6   Form F6, exhibit 1.

 7   Form F6, exhibit 2.

 8   Form F6, exhibit 3.

 9   Based on his contract of employment and payslip produced as a result of the Order issued by the Commission.

 10   Based on information contained in the settlement offer in letter from HR Legal to Mr Dircks dated 21 February 2014.

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