Kirwan v Fortrend Securities Pty Ltd

[2019] FCCA 3119

FEDERAL CIRCUIT COURT OF AUSTRALIA

KIRWAN v FORTREND SECURITIES PTY LTD [2019] FCCA 3119

Catchwords:
INDUSTRIAL LAW – SMALL CLAIMS – Banking, Finance and Insurance Award 2010 – underpayment of wages and in lieu of notice – consideration of National Employment Standards.

Legislation:

Fair Work Act 2009 (Cth), ss.12, 61(2), 139(1), 457, 542, 548.

Banking, Finance and Insurance Award 2010 (Cth), cls. 4.2, 8.2, 8.3.

Applicant: CAMPBELL KIRWAN

Respondent: FORTREND SECURITIES PTY LTD

File Number: MLG 1651 of 2019

Judgment of: Judge Mercuri

Hearing date: 14 October 2019

Date of Last Submission: 14 October 2019

Delivered at: Melbourne

Delivered on: 1 November 2019

REPRESENTATION

Advocate for the applicant: In person

Solicitors for the applicant: None

Advocate for the respondent: In person

Solicitors for the respondent: None

ORDERS

1. Within 21 days, the respondent pay to the applicant:

   (a)the sum of $2,283.11 in lieu of notice prescribed by the National Employment Standards; and

   (b)the sum of $6,392.70 in respect of unpaid wages for work performed from 1 January 2019 to 12 February 2019.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

MLG 1651 of 2019

CAMPBELL KIRWAN

Applicant

And

FORTREND SECURITIES PTY LTD

Respondent

REASONS FOR JUDGMENT

Introduction and claims

1. This is an application in the court’s small claims jurisdiction under the Fair Work Act 2009 (Cth) (“the FW Act”).

2. The applicant alleged that he had not been paid wages for all hours worked, nor was he paid in lieu of notice.  The applicant asserted that his employment was subject to the Banking, Finance and Insurance Award 2010 (“the Award”).  The respondent does not seem to have taken issue with the claim that this Award applies.

3. The respondent denied the applicant was entitled to any payment and sought that the applicant’s application be dismissed. 

4. The applicant appeared on his own behalf.  The respondent was represented by Mr Joe Forster, the respondent’s managing director.

Background

1. The facts in this matter are not largely in dispute, although the legal effect of those facts is in dispute.   

2. The applicant was employed by the respondent from 1 February 2018 to 12 February 2019. 

3. On 11 February 2019, the applicant was issued with a formal written warning regarding his work performance.[1]  The applicant sent an email to Mr Forster (and others) that afternoon advising that he was unwell and would take the rest of the day off.[2]  Mr Forster responded asking that the applicant provide a medical certificate.[3]

   [1] Respondent’s response filed 14 June 2019 at Appendix 6.

   [2] Respondent’s response filed 14 June 2019 at Appendix 7.

   [3] Respondent’s response filed 14 June 2019 at Appendix 8.

4. On the morning of 12 February 2019, the applicant emailed a medical certificate indicating he was unfit for duties on 11 and 12 February 2019, inclusive.[4] 

   [4] Respondent’s response filed 14 June 2019 at Appendix 9, 10.

5. The following morning, on 13 February 2019, the applicant attended for work and tendered his resignation to Mr Forster.[5]  There is some dispute about exactly what was said at this time, which I deal with further below, but in any event, the applicant left the premises shortly thereafter.

   [5] Respondent’s response filed 14 June 2019 at Appendix 11.

6. The applicant asserted he provided a month’s notice of termination but was told he was not required to work out the notice period and would not be paid for that notice period.[6]  He says that he left work and immediately asked for payment of his outstanding entitlements.

   [6] Applicant’s small claim application filed 27 May 2019 at Appendix F, G.

7. It is common ground that the applicant has not been paid either for the notice period or for the work performed in January or February 2019 prior to the ending of his employment.

8. The applicant gave evidence and was subject to cross examination by the respondent.  Mr Forster gave evidence on behalf of the respondent and was also subject to cross examination.

Issues

1. The issues in this case are:

   a)the circumstances in which the applicant’s employment came to an end; and

   b)whether the respondent is entitled to offset any amount it owes the applicant against compensation to which it claims to be entitled arising from the manner in which the applicant’s employment came to an end.

Small claims jurisdiction

1. Before turning to deal with the substance of the applicant’s claims in these proceedings, the issue arises as to whether the court has the jurisdiction to deal with these claims within the small claims jurisdiction.

2. This claim is brought in the court’s small claims jurisdiction pursuant to section 548 of the FW Act.  Small claims proceedings can only be dealt with if:

   a)an applicant indicates they wish to have their matter dealt with as a small claim; and

   b)importantly, the claim relates to an amount referred to in section 548(1A) of the FW Act that an employer was required to pay to or on behalf of an employee:

   i)under the FW Act or a fair work instrument;

   ii)because of a safety net contractual entitlement; or

   iii)because of an entitlement of the employee arising under section 542(1) of the FW Act.

3. Section 542(1) of the FW Act relevantly provides:

   For the purposes of this Part, a safety net contractual entitlement of a national system employer or a national system employee, as in force for time to time, also has effect as an entitlement of the employer or employee under this Act.

4. A “safety net contractual entitlement” is defined to mean:

   An entitlement under a contract between an employee and an employer that relates to any of the subject matters described in:

   (a)Subsection 61(2) (which deals with the National Employment Standards); or

   (b)Subsection 139(1) (which deals with modern awards).[7]

   [7] Fair Work Act 2009 (Vic), s. 12.

5. Section 61(2) of the FW Act does not apply. Relevantly however, section 139(1) identifies ‘minimum wages’ as one of the subject matters applicable under the small claims jurisdiction.

6. The Award applies to employers who are engaged in the banking, finance and insurance industry.  In turn, that industry is defined to include the industries of ‘finance’ and ‘all forms of ‘financial intermediaries’ and ‘services to the above industries such as broking, trading … financial consulting, telephone enquiries and transaction processing’.[8] 

   [8] Banking, Finance and Insurance Award 2010, cl. 4.2.

7. The applicant stated that his duties included stockbroking.[9]  The respondent took issue with this and in the course of cross examination put to the applicant that he was not employed as a stockbroker.  The applicant gave evidence, which I accept, that he was employed as a financial advisor.[10]  I am satisfied that a financial advisor falls within the scope of the Award.

   [9] Applicant’s application filed 27 May 2019 Part 5 at paragraph [18].

   [10] Applicant’s application filed 27 May 2019 Part 5 at paragraph [16].

8. I now turn to consider each of the applicant’s claims and the issues which arise.

Termination of the applicant’s employment

1. The first issue is how the applicant’s employment came to an end.

2. The applicant’s employment contract relevantly deals with termination of employment at clause 8.  Clause 8.1 entitles the respondent to terminate the applicant’s employment without notice.  It is not relevant here.

3. Clause 8.2 provides that:

   a)the respondent may terminate the applicant’s employment at any time by giving four weeks’ notice; and

   b)the respondent may require that the applicant not attend work for any of that period.[11] 

   [11] Banking, Finance and Insurance Award 2010, cl. 8.2.

4. The respondent did not seek to rely upon this clause.

5. Clause 8.3 then relevantly states:

   You may resign from your employment at any time by providing one month’s written notice to Fortrend, allowing you time to train your replacement.  In the event of such resignation, Fortrend may relieve or suspend you form duties for all or part of the notice period.  You will be responsible for training your replacement should you decide to leave.[12]

   [12] Banking, Finance and Insurance Award 2010, cl. 8.3.

6. As stated above, the applicant gave evidence that on 13 February 2019, after having returned to work from two days’ sick leave, he tendered his letter of resignation to Mr Forster.  In that letter, the applicant said:

   I am hereby giving written notice, under clause 8.3 of my employment contract, of my resignation from my employment at Fortrend Securities Pty Ltd.[13]

   [13] Respondent’s response filed 14 June 2019 at Appendix 11.

7. The reference to clause 8.3 imports the giving of a month’s notice as required by clause 8.3.

8. The applicant gave evidence that:

   a)after he handed Mr Forster his letter of resignation, Mr Forster said he was too busy to deal with it and directed him to go to another room and to discuss the terms of his leaving with a fellow employee, Mr Corcoran;

   b)from that point on, Mr Corcoran relayed to him what the applicant understood Mr Corcoran had been told by Mr Forster;

   c)he was told by Mr Corcoran that he was not to work out his notice period and he would not be paid for that notice period;

   d)he then left as directed [14]; and

   e)he sent an email to his father at 1:21pm on 13 February 2019 as a contemporaneous record of what occurred.[15] 

   [14] Applicant’s application filed 27 May 2019 at Part I; transcript pages 8 to 9.

   [15] Applicant’s application filed 27 May 2019 at Appendix C.

9. In that email, the applicant noted:

   I gave my resignation letter to Joe this morning and he said ‘good’ and then he yelled out to Andrew to come in and said that I quit.  He said to Andrew ‘you handle it, I’m too busy’, so Andrew and I went to the other room to talk.

   We discussed the pay and notice periods and then Andrew went back to Joe with questions …Andrew then came to me and said that I would get paid up until yesterday and on the normal pay cycle of arrears…

   I then told Andrew to go back and ask Joe whether he wanted me to stay and work for the 4 weeks notice period or not because of what happened to Fraser, and if not, whether I would get paid out for it.  Andrew came back after speaking to Joe and said that I am not required to work any longer and to leave immediately, and also that I would not be paid for the notice period ‘for sitting on my ass and doing nothing’.  I then left.[16]

   [16] Applicant’s application filed 27 May 2019 at Appendix C.

10. At 3:18pm on 13 February 2019, the applicant sent an email to Mr Forster referring to his obligations to pay out the notice period once resignation has been given.  Mr Forster replied at 3:44pm that same day in the following terms:

    We dispute your version of events

    We expect you to work out your notice period, but you walked out.

    We hope you comply with your contract and attend work tomorrow and work hard every day for notice period.

    Ode of your KPI’s is to get 30 qualified investors to our next seminars. 

    You are Herby  given a formal warning today the that you did not work today when you were required to and you are in breach of your contract.  If this failure to perform continues we will consider our position.

    Sent from my iPhone. (sic)[17]

    [17] Applicant’s application filed 27 May 2019 at Appendix F.

11. The parties then exchanged various further emails in which they put forward their respective versions of what they say occurred that morning. 

12. The applicant sought to rely on a ‘statement’ annexed to his application in which he says Mr Corcoran adopted his version of events.[18]  Mr Corcoran remains an employee of the respondent.  Neither party called Mr Corcoran to give evidence about what happened. 

    [18] Applicant’s application filed 27 May 2019 at Appendix D.

13. The applicant conceded in cross examination that Mr Corcoran was his peer and that he did not report to Mr Corcoran.  He maintained however, that Mr Corcoran was asked to relay Mr Forster’s comments to him in the meeting held on the morning of 13 February 2019.[19]

    [19] Transcript page 10 at lines 37 to 42.

14. The applicant maintained his version of events notwithstanding somewhat vigorous cross examination by Mr Forster.

15. Indeed, the respondent’s evidence in relation to this was as follows:

    He negotiated his exit with a co-worker and was told he could leave without working his notice period but would not be paid for that time.[20]

    [20] Respondent’s response filed 14 June 2019 at paragraph [4].

16. This appears to be consistent with the applicant’s version of what occurred.  When this was put to Mr Forster in cross examination, he said:

    That was an error in my response, and what I was saying is that’s what your claim was.  …it should say that you claimed that.

    …

    So that should just be deleted.  That is incorrect.  That is his version of the events not ours.[21]

    [21] Transcript page 18 at line 26 to page 19 at line 10.

17. In response to a question from me as to what he says occurred on that day, Mr Forster said:

    Well [the applicant] came in to resign and I said, ‘I’m busy.’ I said, ‘Go to the meeting room’. I called Andrew into my office and I said, ‘Andrew, he’s going to have to work out his notice period, go schedule things out, get the client list, transition the work’.[22]

    [22] Transcript page 19 at lines 18 to 21.

18. The following exchange then followed:

    Mr Kirwan:…can I just ask, would you not object to me walking out that day, which I did early in the morning, if you had told me to stay?

    Mr Forster:Would I in the future based on past events? I don’t think that’s a fair question.

    … And, no, I did not.

    Mr Kirwan:Why didn’t you …if I was directed …to work…?

    Mr Forster:Because you walked out the door.  …You came into my office, you had the resignation.  I said, ‘Go to the meeting room’.  I said, “Andrew, come in.’ I said, ‘Andrew, go talk to him about working out his notice period’ and you were gone.[23]

    [23] Transcript page 19 at lines 25 to 44.

19. On balance, I prefer the applicant’s evidence in relation to what occurred on the morning of 13 February 2019.  His evidence has been consistent throughout. 

20. Moreover, I find it unlikely that if Mr Forster had directed the applicant to remain and work out his notice, he would not have immediately taken action in response to the applicant having walked out in contravention of that direction.  It was only after he received the applicant’s demand by email on the afternoon of 13 February 2019 that he asked the applicant to return to work.

21. By that stage, I accept that the following had occurred:

    a)the applicant had tendered his resignation to Mr Forster in accordance with clause 8.3;

    b)by referring to clause 8.3 in the letter of resignation, he indicated that he was giving one month’s notice of resignation;

    c)Mr Forster told him he was too busy to deal with that and asked Mr Corcoran to discuss the applicant’s exit from the organisation; and

    d)on Mr Forster’s instructions, the applicant was told he was not required to work out his notice period and he would not be paid for the notice period.

22. The legal effect of these findings is as follows:

    a)on giving notice of resignation, the applicant had done all that was necessary on his part to bring the employment contract to an end;

    b)subject to the employer’s rights to terminate summarily, or to allow the employee to withdraw his resignation, the applicant’s employment would come to an end at the end of that notice period;

    c)as stated in the employment contract, the employer had the right to relieve or suspend the applicant from his duties during the notice period, however in doing so, the applicant remained entitled to be paid for the notice period; and

    d)the respondent did not have the right to simply direct the employee not to return to work during the notice period and not pay him for that notice period.

23. Moreover, I am satisfied that by telling the applicant to leave and that he would not be paid for the notice period, the respondent in effect, terminated the applicant’s employment.  In doing so, it became liable to pay him in lieu of notice. 

24. The applicant claimed an entitlement to two weeks’ notice pursuant to the National Employment Standards (“NES”) which provides that an employer must not terminate an employee’s employment unless the employee is giving the minimum period of notice specified.  For an employee in the applicant’s position of having worked for more than one year but less than three years, the employee is entitled to a minimum of two weeks’ notice.  The employer did not provide such notice.

25. It is no answer to this claim that after having brought the employment to an end, the respondent sought to direct the applicant to return to work and work out his contractual notice period.  By then, the employment relationship had already been brought to an end by the respondent.  The respondent no longer had the right to direct the applicant in this manner.

26. I therefore find that the employer is required to pay the applicant the sum of $2,283 in lieu of notice prescribed by the NES.

Set off claim

1. The respondent did not take issue with the applicant’s claim that he was not paid for work performed in January and February 2019. Rather, the respondent said:

   a)the applicant’s employment contract permits it to offset any losses suffered against any outstanding amounts owing to the applicant; and

   b)as a result of the manner in which the applicant’s employment came to an end, the respondent suffered loss and damage which exceeds the amount it owes to the applicant.[24]

   [24] Respondent’s response filed 14 June 2019 at paragraph [11].

2. The applicant claimed the sum of $6,392.70 for work performed from 1 January 2019 to 12 February 2019. 

3. The respondent referred to clause 8.5 of the applicant’s employment contract which relevantly provides:

   On the termination of your employment, Fortrend may set-off any debt, obligation or liability you owe to Fortrend against your entitlements on termination.  You will have an ongoing liability for any costs related to any claims or complaints made by clients, including any costs, fines or judgements made by an External Complaint Resolution scheme.[25]

   [25] Respondent’s response filed 14 June 2019 at Appendix 1.

4. The respondent annexed a series of emails between itself and the applicant following the termination of his employment.  This included an email on 13 February 2019 in which Mr Forster wrote:

   Campbell,

   Under your contract you are required to work through a notice period.

   If you do not comply with your contract and work through your notice period you will be in breach of your contract and you will cause damages to Fortrend, for which we will seek compensation.

   I hope you comply with your contract and we will see you tomorrow at 8am.  You will be required to do hard work, transition your knowledge of work in progress and meet your KPI’s.

   We will do the right thing, we hope you do to (sic).[26]

   [26] Respondent’s response filed 14 June 2019 at Appendix 14.

5. That is the only reference in the respondent’s material to any claim for compensation which might be offset against any amounts owing to the applicant.  The respondent has not quantified what the alleged losses are. 

6. Indeed at the hearing before me, the respondent conceded that he had not submitted any evidence of the losses he claimed. In response to a series of questions from me about what evidence there was as to the alleged losses claimed, Mr Forster said:

   I haven’t provided that, but we had to divert Andrew Corcoran to picking up his book, and it took Andrew about two months to fill in the gaps and try and recover some stuff, but most of it was just lost for good.  But the cost of having Andrew work on that was substantially more than what Mr Kirwan would be entitled to in wages for prior work done.[27]

   [27] Transcript page 17 at lines 35 to 39.

1. The respondent has failed to establish that it incurred any losses which could properly be the subject of clause 8.3.  Not only has the respondent failed to properly quantify any such amount, but it has also failed to establish that any such amount claimed would constitute a debt, obligation or liability owed by the applicant to the respondent. 

2. The respondent otherwise does not deny that it has failed to pay the applicant for work performed between 1 January 2019 and 12 February 2019.  For each of these reasons, I order that the respondent pay the applicant for work performed during that period.

Conclusion

1. For each of these reasons, I order that within 21 days, the respondent pay to the applicant:

   a)the sum of $2,283.11 in lieu of notice prescribed by the NES; and

   b)the sum of $6,392.70 in respect of unpaid wages for work performed from 1 January 2019 to 12 February 2019.

2. Finally, the applicant also seeks payment of the costs of this application in the sum of $235 and interest in the sum of $315.44. Interest is payable pursuant to section 457 of the FW Act in certain circumstances. However, that provision does not apply to the court exercising its power under the small claims procedures.

3. As noted above, the orders which can be made by the court in its small claims jurisdiction are those set out in section 548(1A). This does not include costs or interests. I do not propose to make an order for costs in those circumstances.

I certify that the preceding fifty-eight (58) paragraphs are a true copy of the reasons for judgment of Judge Mercuri

Associate: 

Date:              1 November 2019