Lewis Matich v Precision Mechatronics Pty Ltd

[2014] FWC 1125

[2014] FWC 1125

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Lewis Matich
v
Precision Mechatronics Pty Ltd
(U2013/12882)

COMMISSIONER MCKENNA SYDNEY, 11 MARCH 2014

Application for relief from unfair dismissal.

[1] Lewis Matich (“the applicant”) has lodged an application for an unfair dismissal remedy concerning the termination of his employment with Precision Mechatronics Pty Ltd (“the respondent”). The application has been made pursuant to s.394 of the Fair Work Act 2009 (“the Act”).

[2] The applicant was initially employed in February 2008 as Test Technician by another company identified only as “Silverbrook Research”, which, as the applicant put it, “split” from the respondent in 2010. From about February 2013, the respondent began not paying the applicant correctly. When the employment relationship terminated, the respondent was encountering business difficulties and the applicant had not been paid wages for periods totalling about 15 weeks. In this regard, there was, among other matters, evidence of accounting analysis of the respondent’s finances around the end of 2013 and of various updates to staff concerning payment of remuneration. The applicant resigned, effective 12 August 2013.

[3] The respondent was initially represented by solicitors in the matter of this application. In its Form F3 employer’s response, prepared by the respondent’s solicitors, objection was taken to the application on the basis the respondent had not dismissed the applicant and that the applicant had resigned of his own initiative. The employer’s response contended the applicant was attempting to recover unpaid wages and the application for an unfair dismissal remedy was a jurisdictionally-inappropriate vehicle to recover unpaid wages. The employer’s response further contended that the termination of employment was not a dismissal within the meaning of s.386 of the Act and the respondent thereby objected to the application on jurisdictional grounds.

[4] As the conciliation before a Fair Work Commission conciliator did not result in a settlement of the matter, directions were subsequently issued by the Unfair Dismissals Case Management Unit in anticipation of proceedings listed for a “Jurisdiction (No Dismissal; Resignation) and Arbitration Conference/Hearing”. Some materials were filed by the parties pursuant to the directions, including, on 9 December 2013, the respondent’s outline of submissions on the jurisdictional objection, albeit the respondent’s final round of submissions pursuant to the directions were not filed.

[5] A number of days before the listing of the Arbitration Conference/Hearing, the respondent’s solicitors lodged a Notice of Representative Ceasing to Act. Endeavours by my office to contact the respondent after the respondent’s solicitors had ceased to act were unsuccessful. Further attempts to contact the respondent on the day of the listing, in circumstances where there was no appearance by or on behalf of the respondent, were similarly unsuccessful. I noted in the proceedings that the prior day, in another matter also involving the respondent in relation to a different unfair dismissal applicant, the endeavours by my office to contact the respondent had also been unsuccessful.

[6] In all the circumstances, I decided to proceed to hear the application in the absence of the respondent.

[7] No communication was subsequently received by my office from the respondent in relation to the non-appearance at the Arbitration Conference/Hearing following the scheduled listing.

Consideration

[8] In the proceedings, the applicant tendered materials he had lodged pursuant to the directions. Those materials addressed some of the matters in the respondent’s materials which had been lodged, albeit (in circumstances where there was no appearance by or on behalf of the respondent) not tendered.

[9] Relevantly, in response to the respondent’s jurisdictional objection, the applicant acknowledged he had resigned. The applicant’s materials and oral evidence explained he had resigned because he had not been paid (in combinations of various periods) some 15 weeks’ wages and, thereby, the applicant’s case was that he was forced to resign due to non-payment of wages. In this respect, the applicant in his materials filed pursuant to the directions wrote that, in effect, he had been promised payment “so many times” and that the money would be coming in two weeks - “but it never came”. In this regard, for example, there was evidence of updates to staff concerning such matters.

[10] The applicant’s materials also addressed, and sought payment for, alleged underpayments in relation to a range of claimed entitlements. As I informed the applicant in the proceedings, the only matter before me was an application for an unfair dismissal remedy; and any alleged underpayments would need to be addressed through other channels. It appears from the materials the applicant lodged pursuant to the directions that he has, in any event, been addressing the alleged underpayments through, among other channels, the Fair Work Ombudsman.

[11] The applicant’s evidence was that over a period of months commencing from about February 2013, the respondent’s payment of remuneration to him was irregular and the subject of delay beyond the intervals at which payment was supposed to be made; and payments for some periods were not made. The applicant continued working for the respondent notwithstanding the delays in payment or non-payment, or both. The applicant made at least one written demand to the respondent that payment be made to him.

[12] On the material before me, I am satisfied the application was made within time and the applicant was a person protected from unfair dismissal. Issues concerning consistency with the Small Business Fair Dismissal Code do not arise, as the employer’s response indicated the respondent employed “15+” employees. Given the circumstances of the case, there were no issues about whether the dismissal concerned a case of genuine redundancy.

[13] Section 386(1)(a) of the Act provides that a person has been dismissed if 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. In this case, the circumstances of the termination of employment formally comprised a resignation by the applicant. It may be accepted, nonetheless, considering the history of matters of non-payment of wages that led to that resignation, that the termination of employment was a dismissal within the meaning of the Act. That is, the termination of employment might be characterised, for instance, as a constructive dismissal or that the termination of employment was brought about by the applicant’s acceptance of the respondent’s repudiation of the contract of employment. Whichever type of characterisation is adopted, I accept that the applicant, within the meaning of s.386(1)(a) of the Act, was forced to resign by the respondent’s conduct or course of conduct.

[14] I take note of the written submissions for the respondent on its jurisdictional objection (although it did not lodge other materials pursuant to the directions). I have considered for myself the cases to which reference was made in those submissions, including Bruce v Fingal Glen Pty Ltd (in liq)[2013] FWCFB 5279 (a case which turned on comparatively short delays in payment of wages).

[15] The circumstances of the applicant’s case and Fingal Glen are distinguishable and, on the facts of this matter, the applicant’s resignation in my view constituted a dismissal within the meaning of the Act. I do not accept the respondent’s submissions on the jurisdictional objection that as the applicant continued to work without payment the applicant had waived his right to rely on the breach of the employment contract as terminating the employment relationship.

[16] I turn now to the question of whether the dismissal was harsh, unjust or unreasonable. In that respect, s.387 of the Act requires consideration of certain matters, albeit few have direct relevance to the circumstances of this particular application. Nonetheless, to the extent those matters require consideration, they are addressed in the Act. In this regard, s.387 reads:

“387 Criteria for considering harshness etc.

In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the FWC must take into account:

(a) whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees); and

(b) whether the person was notified of that reason; and

(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and

(d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and

(e) if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal; and

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

(g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(h) any other matters that the FWC considers relevant.”

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)

[17] The respondent did not have a valid reason to dismiss the applicant for reasons related to the applicant’s capacity or conduct, including effects on safety and welfare.

Whether the person was notified of that reason

[18] This provision does not relevantly arise for consideration in relation to this application, as the dismissal did not stem from reasons related to the applicant’s capacity or conduct, including effects on safety and welfare.

Whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person

[19] Again, this provision as to opportunity to respond does not relevantly arise for consideration because the dismissal was not related to the applicant’s capacity or conduct.

Any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal

[20] To the extent this provision may relevantly arise, there was no evidence of any unreasonable refusal by the respondent to allow the applicant to have a support person present to assist at any discussions relating to dismissal.

If the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal

[21] The circumstances of the dismissal did not relate to unsatisfactory performance.

The degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal; 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

[22] There was no evidence before the Commission as to these matters.

[23] Having considered the evidence, I am satisfied the applicant has been unfairly dismissed; the dismissal, within the meaning of the Act, arising from an effectively forced resignation brought about by the respondent’s failure to pay the applicant’s entitlements, was harsh, unjust or unreasonable.

[24] I am satisfied that an order for reinstatement would be inappropriate in this matter and I am otherwise satisfied an order for payment of compensation is appropriate in all the circumstances of the case.

[25] In lieu of reinstatement, I have decided the applicant should have an order for compensation. Section 392 of the Act reads as follows as to orders for compensation:

“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.”

[26] I now consider the matters required to be considered concerning an order for compensation.

The effect of the order on the viability of the employer’s enterprise

[27] The documents concerning the respondent’s finances annexed to the applicant’s materials indicated the respondent was in financial difficulty. The materials also noted that the employment of other employees had been terminated and they had not been paid monies allegedly owing to them. It appears that to the extent an order for compensation would have any effect on the viability of the respondent’s enterprise, it would be of cumulative effect in relation to other employment-related liabilities of the respondent to the applicant (and other employees).

The length of the person’s service with the employer

[28] The applicant was employed by the respondent from February 2008 and, before that, appears to have been employed by some form of related corporate entity of the respondent since September 2007.

The remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed

[29] The remuneration the applicant would have received, or would have been likely to receive, but for the dismissal, would have, or, perhaps more accurately, should have, accorded with his proper entitlements to remuneration in his employment with the respondent.

The efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal

[30] The applicant, who is aged 64, made efforts to mitigate the loss, by seeking and obtaining alternative employment.

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; 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

[31] There was evidence of the remuneration earned by the applicant from his alternative employment and I have taken that into account pursuant to s.392(2)(e) and s.392(2)(f) of the Act. The applicant found alternative employment around late-October 2013 and now earns about the same amount of remuneration in his new job to which he would have been paid in his employment with the respondent (that is, had payment been properly made by the respondent).

[32] There was no misconduct by the applicant in this matter, and the order otherwise does not include any component by way of shock, distress or humiliation, or other analogous hurt, caused to the applicant.

Conclusion

[33] The applicant sought an order for compensation in the amount of 12 weeks’ wages, at a gross rate of $2,019.24 (two thousand, nineteen dollars, and twenty-four cents) a week. I am satisfied the applicant has established a case for an unfair dismissal remedy by way of an order for compensation in the amount sought. An order to that effect has been issued in conjunction with this decision.

COMMISSIONER

Appearances:

L. Matich in person.

No appearance by or on behalf of the respondent.

Hearing details:

2014.

Sydney:

February, 4.

Printed by authority of the Commonwealth Government Printer

<Price code C, PR547798>