Lina Ramirez v Gonva Group Pty Ltd

[2024] FWC 2304

[2024] FWC 2304

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.394 - Application for unfair dismissal remedy

Lina Ramirez
v

Gonva Group Pty Ltd

(U2023/10993)

COMMISSIONER THORNTON ADELAIDE, 19 SEPTEMBER 2024

Application for a variation to an order for compensation to be paid in instalments – order varied 

1. On 13 June 2024, I issued a decision in this matter concerning a jurisdictional objection made by the Respondent and the merits of the Applicant’s unfair dismissal claim.[1] I found that the Respondent had not complied with the Small Business Fair Dismissal Code and the Applicant’s dismissal was harsh, unjust and unreasonable. I issued an Order in conjunction with my decision[2], requiring the Respondent to pay to the Applicant compensation in the amount of $13,158.97 gross (less applicable taxation), equivalent to 18 weeks wages, plus 11% superannuation of $1,447.49, (the compensation sum). The compensation sum was ordered to be paid within 28 days of the publication of the decision and order, being 11 July 2024.

1. In the decision I invited the Respondent to make an application to seek a variation to the order for payment of the settlement sum in instalments if it was unable to make payment of the compensation sum as a lump sum. I set out that if the Respondent wanted to vary the order made that any application must be made within 14 days from the date of the decision and order. 

1. The Respondent did not make an application for a variation to the order within the 14 day period specified.

1. On 3 July 2024, the Respondent lodged an appeal against the decision. The Respondent also sought a stay of the decision and the matter was listed for hearing before Vice President Gibian. In a decision dated 10 July 2024, the Vice President refused the application for a stay.[3]

1. In his decision, the Vice President noted:

“If the appellant cannot pay the compensation amount, it should have taken up the opportunity afforded to seek an order for payment by instalments. It may be that, although the time afforded for the making such an application has expired, the Commissioner would consider the matter if now approached if some explanation is provided in relation to the delay in making that application. If the appellant now applies for the order to be varied to provide for payment by instalments, whether to now consider or accept such an application is a matter for the Commissioner.”[4]

1. The Respondent then contacted my chambers seeking a variation to the order of 13 June 2024. The Applicant, Ms Ramirez, was not provided with a copy of the correspondence nor the financial material submitted by the Respondent that was attached to the correspondence.

1. The Respondent requested the financial material not be provided to the Applicant on the basis it was confidential and later applied for a confidentiality order in respect of the financial documents filed.

1. The matter was listed for directions on 23 July 2024. At the directions hearing on 23 July 2024, I made an order[5] protecting the confidentiality of the material as sought by the Respondent, preventing the financial material filed by the Respondent being shared beyond the parties to the matter, other than for the purpose of either party seeking legal advice.

1. Following the directions hearing, the parties accepted an invitation to conciliate the matter to ascertain if an agreement could be reached with respect to the amount and timing of the payment by instalments. The Respondent made an offer to the Applicant in that regard. The Applicant requested time to consider the offer in light of the financial material she was to receive following the directions hearing.

1. No agreement between the parties could be reached. Once it was evident that the matter could not be resolved by a consent agreement, I issued directions for the filing of further material. Additional financial information was necessary for me to have a clearer picture of the Respondent’s financial position and the Applicant was afforded an opportunity to respond to all of the material filed by the Respondent.

1. The matter proceeded to a brief hearing on 28 August 2024.

Submissions and evidence of the parties

1. The Respondent provided a range of information to the Commission addressing its financial position as at 7 August 2024, including financial statements for the year ended 30 June 2023, a general ledger summary for the financial year ending 2024, details of transactions from its business account, information about its superannuation liabilities, records of payments made of a debt to the Australian Taxation Office (ATO) and copies of payslips for wages paid by the business to Mr Gonzalez.

1. During the hearing, Mr Gonzalez gave evidence that an initial debt owing to the ATO of approximately $50,000.00 arose from a failure of his previous business partner, also a director of the Respondent, to pay taxation correctly. Mr Gonzalez says that his former business partner had responsibility for managing the finances and staffing aspects of the business before he left the business and ceased being a director of the Respondent. Mr Gonzalez was left with the taxation liabilities once he became the sole owner and director of the Respondent in September 2023.

1. The Respondent submitted a document called “Payment Plan” from the ATO dated 31 January 2024. This document sets out dates between 9 February 2024 and 9 June 2025 when the Respondent will make monthly payments of approximately $3,000.00 to the ATO in order to pay off an overall debt that includes an amount for interest. An Activity Statement from the ATO, also filed by the Respondent, demonstrates that the Respondent has been making payments to the ATO each month in accordance with the Payment Plan including on two occasions in April and June 2024, making additional payments to pay down the debt.

1. The Respondent’s other financial material showed a relatively low cash balance in the business account and business expenses slightly exceeding revenue in the financial years ending 2023 and 2024. Mr Gonzalez also placed into evidence his payslips which show that he is paid a modest wage from the business.

1. In his submission, Mr Gonzalez asked that I take into account the viability of his enterprise in varying the order and said that “the Business is not “Viable” to pay the compensation.”[6]

1. In written submissions, the Applicant acknowledged her understanding of the materials filed by the Respondent showed that “the business is going through a difficult financial situation”[7].  

1. However, Ms Ramirez also submitted that the financial circumstances of the Respondent’s business “does not change the fact that I was unfairly dismissed without taking in[to ac]count my financial situation”[8]. Ms Ramirez set out in her submission that she was suddenly left without a job and income that her family relied on to meet their financial obligations. Ms Ramirez confirmed that her dismissal came at a time when she, her partner and small child were about to move into a home they had purchased and were left to pay both a mortgage and rent at a time when Ms Ramirez no longer had paid work. She advised the Commission that the significant period of time during which she was out of work caused her family to “go through a very difficult financial period that we are still trying to recover from.”[9]

Consideration

1. The Respondent’s explanation for the late filing of the application to vary the order was limited to his misunderstanding of the process of an appeal and his expectation that if the decision and order were appealed they would then be stayed. I acknowledge that the Respondent is not legally represented in this matter and accept his explanation regarding the late filing of his request for a variation.

1. It appears from the material filed that the Respondent’s business is not profitable and is under financial stress. Mr Gonzalez appears to be just making ends meet in paying himself and his staff their wages and meeting his financial obligations to creditors. His debt to the Australian Taxation Office paid monthly in instalments seems to be a significant burden on his business. However, he has shown capacity to pay that debt on a regular basis.

1. I concur with the view expressed by the Vice President in the decision refusing the stay when he noted: “I am persuaded that the business is in a difficult financial position and that the business represents Mr Gonzalez’ sole source of income to support himself and his family. Of course, the Commission has sympathy for Mr Gonzalez in those circumstances.”[10]

1. However, it is necessary that I balance the financial circumstances of the Respondent against the entitlement of the Applicant to receive compensation arising from her unfair dismissal. I am persuaded by the Applicant’s submissions that she too experienced financial stress after she was unfairly dismissed and that her interest in receiving compensation for what I have found to be an unfair dismissal is legitimate. Ms Ramirez told the Commission that it was not comfortable for her to live with no job after her employment was terminated and that, in her view, the Respondent did not think of her financial circumstances when he dismissed her.[11] For the majority of the period between the date the decision and order were published and the hearing of the Respondent’s application to vary the compensation order, Ms Ramirez was without paid work in a critical time for her family.

1. It has also been more than 13 weeks since my decision awarding compensation to Ms Ramirez and approximately 10 weeks since the stay application was refused. The order has remained in force since it was issued and I understand that the Respondent has not made payment of any amount of compensation to the Applicant. I accept that the Respondent sought a variation to the order in order to pay the compensation in instalments and was awaiting an outcome from this process. The Respondent has, therefore, had a number of weeks to arrange its financial affairs and take steps to prepare to make compensation payments to the Applicant. The Respondent has, to its advantage, taken a reprieve from the obligation to make compensation payments to the Applicant since the order was initially made.

1. In the hearing, the Respondent submitted that making payments of $200.00 per week to the Applicant “its going to be tough for me”[12] and the compensation payments will have to be drawn from Mr Gonzalez’s own wages and a reduction in hours of his other staff. I understand Mr Gonzalez to be submitting that I should order instalments in an amount no greater than $200.00 per week.

1. Ms Ramirez said that whilst it was her view that the Respondent should make payment of the whole compensation sum as a lump sum, she accepted that the business was unlikely to be able to afford to do so. On that basis she submitted that the payments ought to be made to her on a weekly basis in the amount she previously received as wages. That is, Ms Ramirez asked that if the amount is to be paid in instalments, that those instalments should be a weekly amount paid over 18 weeks.

1. 18 weeks is a long period of time for Ms Ramirez to wait to receive the full balance of her compensation. However, taking into account the position advanced by Ms Ramirez, the financial circumstances of the Respondent’s business and the time that has elapsed since I made the initial order, I will vary the order to require the Respondent to make payments to the Applicant of $731.05, less applicable taxation, on or before Friday of each week for a period of 18 weeks, commencing on or before 27 September 2024.

1. I will also vary the order to require the Respondent to make payment of the component ordered for superannuation of $1,447.49 into the Applicant’s nominated superannuation fund on or before 27 September 2024.

1. In the event that the Respondent does not pay the instalments on or before each of the required dates the order will specify that the full amount of $13,158.97 gross will become due and payable within 7 days.

1. An order to this effect will be issued in conjunction with the publication of this decision.[13]

COMMISSIONER

Appearances:

L Ramirez¸ Applicant on her own behalf.

J Gonzalez for the Respondent, Gonva Group Pty Ltd.

Hearing details:

Adelaide (by Video via MS Teams)
2024
28 August.

[1] [2024] FWC 1522.

[2] PR775894.

[3] [2024] FWC 1808 (‘Stay decision’).

[4] Stay decision at [24].

[5] PR777429.

[6] Email of Respondent to the Fair Work Commission dated 20 August 2024.

[7] Submissions of the Applicant dated 11 August 2024.

[8] Ibid.

[9] Ibid.

[10] Stay decision at [21].

[11] Transcript – at 25:34.

[12] Transcript – at 18:00.

[13] PR778723.

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<PR778722>