Liwei Zuo v Freshable Pty Ltd

[2020] FWC 6691

[2020] FWC 6691

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s 394—Unfair dismissal

Liwei Zuo
v
Freshable Pty Ltd
(U2020/10297)

DEPUTY PRESIDENT SAMS SYDNEY, 23 DECEMBER 2020

Application for an unfair dismissal remedy – jurisdictional objection – whether applicant was dismissed or abandoned his employment – serious concerns with applicant’s performance – applicant leaves work and did not return – applicant not dismissed – Commission has no jurisdiction – application dismissed.

BACKGROUND

[1] Mr Liwei Zuo (the ‘applicant’) was employed by Freshable Pty Ltd (‘Freshable’, the ‘Company’ or the ‘respondent’), as the Financial Analyst from 18 May 2016, until he was allegedly dismissed on 27 July 2020. The respondent is an entity of the Farm Fresh Foods store in Paddington, NSW, providing deli and butchery goods and services. At the time of his alleged dismissal, the applicant was on a salary of $121,680. A letter dated 27 July 2020, confirming the cessation of his employment, reads as follows:

‘Dear Sean,

Re: Your Employment and Commencement of Forensic Investigation

I refer to your employment here as group accountant/financial controller for the following entities within the Wilson Group:

Farm Fresh Foods Pty Limited [ABN 14 002 887 041]
React Holding Pty Limited [ABN 14 064 073 310]
Redactive Pty Limited [ABN 62 051 503 872]
Freshable Pty Limited [ABN 30 166 679 367]

Over the past 4 weeks I have attempted to gain the true picture of the financial position of the Wilson Group (“the Group”) due to my mounting concerns over cashflow, lack of reporting, the inability to produce reports and the mounting statutory and trade liabilities being incurred within the Group.

Your actions during this time to conceal, refuse to hand over critical information, delete and re-configure transactions has given rise for me to appoint a Forensic Accounting Firm to review all entities and the financial activities from the commencement of your employment to date.

As Director and Company Secretary for all the entities within the Group I have contacted all Government Agencies including the Australian Taxation Office and Centrelink as well as all external Employee Superannuation Companies in order to gain an understand of what has been lodged, paid and reported by you. The Australian Taxation Office has assisted in my request and appointed a designated contact to assist in resolving these matters.

In regards to your employment. On the 15 July 2020 I confronted you on the inability to produce reconciliations and employee summaries for Freshable Pty Limited that had been submitted to the Australian Taxation Office with my details contained therein, even though I had not approved, reviewed or signed off on this information. I reviewed all bank transactions on the 15 July 2020 and 16 July 2020 where you were evasive and blatantly refused to furnish critical financial information submitted in my name as authoriser.

On the evening of Thursday 16th July 2020, you left the Paddington offices of the Group and you have not returned, given sufficient evidence as to your absence or notification of your return to work to assist in furnishing this critical information.

I have taken this act as you have resigned from your position without notice thus leaving me no choice but to take this matter further.

The entitlements owed to you against your profile within the company accounting systems are materially incorrect due to your inability to maintain proper records during the course of your employment. On preliminary review of what you have authorised as your salary and entitlements taken, we cannot estimate what is owed to you against what you have paid yourself without proper authorisation.

As a result of the above and in my capacity of Director of all entities within the Group, I have appointed the services of a Forensic Accounting Firm. I will be taking their advice and instructions on the next course of action in regards to your conduct during the course of your employment.

This letter is not under 'without prejudice' and will be submitted in evidence in the event it is warranted. Should any evidence of intended fraudulent misrepresentation be discovered during the course of the Forensic Investigation, I reserve the right to contact the appropriate authorities and take the appropriate measures on behalf of the companies within the Group.

In addition, I also reserve the right to produce, as evidence the text message correspondence of ‘veiled threats’ made to me from you since you walked-out on your employment without providing the requested information.

During this time of Forensic Audit, I urge you not to contact any staff member employed within the Group on any financial or employment matters and refrain from sending any further threatening messages to me.

Regards,
Bill Wilson’

[2] On 28 July 2020, the applicant filed an application, pursuant to s 394 of the Fair Work Act 2009 (the ‘Act’) seeking, inter alia, compensation by way of alleged unpaid wages, notice, redundancy pay and an Employment Separation Certificate for his alleged unfair dismissal. The respondent did not file a Form F3 – Employer response – in the matter. However, it did not indicate that it had any jurisdictional objections to the applicant’s application, although it later became clear that Mr Wilson claimed the applicant had not been dismissed.

[3] In accordance with my usual practice, the application was listed for conciliation on 31 August 2020, but was unable to be resolved. Directions earlier issued were confirmed and a hearing date listed for 13 October 2020. The hearing was conducted remotely given the restrictions on ‘in person’ hearings due to the COVID-19 pandemic. At the hearing, the applicant represented himself and Mr W Wilson and Mr P Beard appeared on behalf of the respondent.

THE EVIDENCE

[4] Statement and oral evidence was provided by:

•  Mr William ‘Bill’ John Wilson – owner of the respondent;

•  Mr Terence John Diviney – former employee of the respondent (not required for cross examination); and

•  the applicant.

Case for the respondent

Mr Wilson

[5] Mr Wilson filed a document entitled ‘Defendant Notes for Conference’, originally intended as speaking notes for the conference on 31 August 2020. Understandably, it contained a potpourri of evidence, opinion, submission and commentary about the circumstances surrounding the applicant’s alleged dismissal. I will treat the document as incorporating Mr Wilson’s written submissions, as no additional written submissions were filed.

[6] Mr Wilson is the owner of a group of companies, including Freshable Pty Ltd. He said that the applicant was actually employed under another group entity named Farm Fresh Foods Pty Ltd. He is a butcher by trade, and has seen the ‘Farm Fresh Foods’ store grow from a butcher shop into a larger fresh foods store offering meat, fruit and vegetables, ready made meals and cooked deli style foods. Given his background, he had a need to employ the applicant to manage the accounting side of the Group. The applicant was put forward as the best candidate for the role by a recruitment consultant, and Mr Wilson relied on the recruiter to engage in vetting and a background check of the applicant.

[7] Mr Wilson outlined a series of events over the past 12 months, ultimately leading to the applicant’s applicant leaving work on 16 July 2020 and not returning, where the financial position of the Group remains largely unclear. As part of the applicant’s role, he was required to produce financial reports. However, Mr Wilson alleged that the applicant has been reluctant to offer any guidance or assistance to the Group, other than making basic supplier payments and lodging Activity Statements regarding the operations of the business. He said that there are no working papers prepared by the applicant to verify the figures lodged with the Australian Tax Office (‘ATO’). This regrettably led to Mr Wilson engaging an external accountant at the end of June 2020 to assist in understanding the financial position of the Group.

[8] During the review, it was brought to Mr Wilson’s attention that a number of basic accounting and financial functions required to be performed by the applicant had not been completed. He was advised that the Freshable Entity did not have:

•  an accounting file;

•  employment contracts or employee files;

•  workers’ compensation insurance;

•  a list of bank reconciliations performed;

•  accurate recorded costs against sales; or

•  a separate list of employees from that of the Farm Fresh Pty Ltd entity.

Mr Wilson claimed that the applicant changed his employing entity from Farm Fresh Foods Pty Ltd to Freshable. However, he was unsure when this occurred, as the applicant had been paying himself from both entities. Mr Wilson further claimed that other entities within the Group were in a similar state of non-compliance, which has resulted in significant costs to the business, and has now required the engagement of a Forensic Accounting Firm. This has resulted in significant personal stress on him, as he is unsure of the financial position of the Group, due to a lack of reporting by the applicant, spanning over four years. Mr Wilson said that he has ‘deep concerns of fraud within my business’.

[9] Mr Wilson set out a sequence of events outlining his interactions with the applicant during late July 2020 as follows:

•  14 July 2020 – Mr Wilson informed the applicant that his sole focus was to sit with the applicant and review each transaction on the bank statement, and discuss them line by line. His approach was to start from 1 July 2019 and work to 30 June 2020. Mr Wilson cleared his work schedule for the week and informed the applicant he would work on this task with him until it was completed. Mr Wilson also advised the applicant that if he had any Group information, that he was to bring it into the office.

•  15 July 2020 – the applicant arrived at the Paddington office of the Group at around 10am. Mr Wilson commenced listing each transaction in Excel, and printed all transactions, bank statements and narrations for each payment. Mr Wilson said that the applicant was reluctant to provide any assistance, saying words to the effect of ‘let me reconcile this and I will get back to you’. As it was apparent that no systems were in place, Mr Wilson demanded explanations from the applicant, and that he would not move on until he was satisfied with the applicant’s response.

•  16 July 2020 – Mr Wilson and the applicant continued the task. Mr Wilson was asking questions of the applicant of what was being paid and why, why cash was being transferred to other bank accounts, and where sales were being recorded. That evening, Mr Wilson confronted the applicant and said that he was refusing to assist him. The applicant left the office at around 5pm and did not return.

•  17 July 2020 – the applicant did not attend the office and did not provide any reason for his absence.

•  20 July 2020 – Mr Wilson received a text from the applicant at 10:12am advising that he had been sick, and that staff were being underpaid wages. Mr Wilson replied at 4:15pm stating that he did not know the applicant was sick.

•  21 July 2020 – Mr Wilson texted the applicant at 8:44 asking when he would return to the office to complete the project.

•  22-23 July 2020 – the applicant did not attend the office.

•  24 July 2020 – the applicant threatened Mr Wilson to report him to ‘Fair Work’, despite him not having been dismissed.

•  27 July 2020 – Mr Wilson wrote to the applicant, saying that as there had not been any attempt to contact him, or provide medical certification as to his repeated absences, he took this as the applicant having resigned from his employment; see: [1] above.

Mr Wilson said that he only received one doctor’s certificate from the applicant, covering the period between 21-23 July 2020 inclusive.

[10] Mr Wilson submitted that the applicant had misled the Group, including by personally increasing his own remuneration without authority, taking annual leve without authority, and being negligent in lodging financial information, including using Mr Wilson’s name as Director when lodging documentation with Government authorities. Mr Wilson also said that the applicant accessed Farm Fresh Foods’ MYOB file using the Administration password, and intentionally rolled forward years that had not been completed, to ensure general ledgers and audit trails had been purged.

[11] In cross examination, the applicant alleged that Mr Wilson had not paid his wages for the two weeks prior to 24 July 2020. Mr Wilson denied this allegation. He said that on 17 July 2020, the applicant went into the MYOB account and logged in using Mr Wilson’s details, and rolled the files forward, resulting in the Group having no information as to its employees. When the applicant accused Mr Wilson of not paying all of his wages, he responded as follows:

‘I paid you the wages for the week before. I looked at the part with the MYOB as you getting online and damaging my business, and I had no idea what entitlements you were owed. I wrote it in a letter to you. I wrote it in a letter. I didn't terminate you, Sean. I needed your help and I needed you back at the office, and I never heard from you. on 27 July, you know, I wrote you a letter, you know. I don't know what more you want me to do.’

[12] Regarding the letter dated 27 July 2020, Mr Wilson confirmed this was not a dismissal letter; rather, it was to outline that he had not heard from the applicant for some days, and that he still required the assistance of the applicant. For security purposes, on 17 July 2020, Mr Wilson deleted the applicant’s MYOB password. After this, the applicant then tried to log onto the system five more times. Mr Wilson expressed concern that if the applicant logged on, he would delete the Group’s records.

[13] Mr Wilson said that although the applicant did produce some financial records, they were not good enough for the bank or for the Group. Mr Wilson was still concerned that there were no Business Activity Statement (‘BAS’) records, MYOB accounts or a workers’ compensation policy. Mr Wilson went on to say that the Group was nearly wound up for not having a workers’ compensation policy.

Case for the applicant

Mr Terence Diviney

[14] In a witness statement dated 25 September 2020, Mr Diviney described himself as a former employee of the respondent. As Mr Diviney’s statement is relatively short, and as he was not required for cross examination, I set it out in full below:

‘I was employed as a full-time butcher by Farm Fresh Foods Pty Ltd (Bill Wilson’s company) from 12 Mar 2010 to 24 Dec 2019. Bill is notorious for his refusing to pay employees’ entitlements like sick leave, annual leave, and superannuation. Below are some examples I had experienced and seen during my employment in the company.

(i) 2012 I injured right arm at work, told to work on as to near to Christmas company would pay for treatment at hand specialist, worked in pain six months till recovered.

(ii) 2014 I cut tendon in finger, told by surgeon three months off work, was called back to work one month after accident not allowed to be on workers compensation, but company still claimed payments while I worked.

(iii) 2019 I had cellulitis in left leg told Bill how much pain I was in and having trouble working, on two occasions he went to the farm and I had to work ten & twelve days straight in pain. He told me I could not expect the other staff to do the job.

(iv) On two occasions Peter MIDDLETON (current employee) has been called back to work from his holidays.

(v) Maria Corazon TAYAG (current employee) had flu rang in sick, told she must come in fill fruit & veg and go home early.

(vi) Zac ASSAF (former employee) called in sick told he must come in fill fruit & veg and go home early.

(vii) Bill always refuses to pay workers superannuation. If you question him, he just says it will all be paid.’

The applicant

[15] In the applicant’s unsigned witness statement dated 25 September 2020 (titled ‘Outline of Submission’), he confirmed that he was employed as a Financial Analyst for the respondent. His role was to assist Mr Wilson in the financial analysis and performance of the Group.

[16] The applicant set out his version of events leading up to the cessation of his employment as follows:

‘1. Starting from Fri 17 July I became severely sick and informed Bill of my sick leave and received his acknowledgement. In the text message sent on Mon 20 July, I also asked Bill why he underpaid my wage in the prior week but I got no answer. I didn’t get a medical certificate until Tuesday because I couldn’t even pull myself out of bed on days before. Besides, it’s the norm that you submit your medical certificate when you get back to workplace after illness. You don’t need to be that harsh on the employees while still in suffering. See attached copy of Medical Certificate marked ‘A’.

2. On Tue 21 July, Bill messaged back saying ‘contact me when you are not sick and I will put some time aside to continue we’re left off’, still not addressing my question of not being paid correctly. Nevertheless, I replied to him saying ‘Sure Bill’ meaning I will sure go back to work after sick leave; I never said I wanted to quit the job. There was no further communication from Bill on Wed 22 July. See attached copy of Text Message marked ‘B’.

3. One Thu 23 July Bill entirely stopped paying my wage by giving no explanation. On Fri 24 July I texted him asking why he again unpaid my wage and still there was no response back, until Mon 27 July when I suddenly received a dismissal letter by Bill through email. See attached copy of Dismissal Letter marked ‘C’.

4. During above ten days’ period, I messaged Bill on several occasions asking why he kept underpaying/unpaying my wages (including other employees) but didn’t get any direct answer from him. Bill never attempted to contact me to discuss the reason of my dismissal before he sent the dismissal letter while I was still on leave. I had never been given an opportunity to discuss the unsubstantiated allegations against me in the letter before the decision to dismiss was made.’

The applicant said that Mr Wilson ‘does not like staff taking paid sick leave’, and that his taking of sick leave from 17 July 2020 was an example of this.

[17] The applicant stated that during his employment, the Group had seen five store managers, two accounts and two bookkeepers working under the direction of Mr Wilson. Mr Wilson also has an accounting firm who acted as the first point of contact for all tax or legal issues relating to government agencies or creditors. It was the accounting firm, namely Mr Martel Wheatley, whose role it was to prepare the consolidated financial statements and tax returns of the Group. It was in fact Mr Wheatley who failed to do so since 2018. The applicant said that the reason this did not occur was because Mr Wheatley was ‘not happy’ with Mr Wilson as the Group’s service fees had not been paid as far back as 2018.

[18] The applicant submitted that he prepared a complete financial package for Mr Wilson during the first wave of COVID-19, to assist with his overdue taxes, superannuation and loans which had been ‘defaulted for years’, including Mr Wilson being issued a garnishee order by the NSW Supreme Court. Mr Wilson submitted the reports to the Bank, but told the applicant that they were not accepted as he was not properly accredited to make the reports. It was at this point that Mr Wilson contacted Mr Wheatley to handle the financial reports.

[19] The applicant then went on to claim that Mr Wilson and Mr Wheatley attempted to ‘defraud’ government agencies by fabricating the GST and Payroll figures of Farm Fresh Foods and Freshable for the 2020 Financial Year, so as to avoid paying taxes. The applicant also claimed that the Freshable entity is new, and many staff do not know about it. Neither Mr Wilson, nor the five managers ever asked the staff to split, track or record stock transfers between the two entities.

[20] The applicant said that Mr Wilson counted the daily cash receipts from both shops, and put them together into one Farm Fresh Foods bank account. Therefore, Freshable was only used as a Special Purpose Vehicle to share payroll and sales, to lower the payroll burden for the shops.

[21] Regarding the contracts, the applicant stated that only Mr Wilson and the store managers have the authority to recruit staff. He claimed that he did not conduct interviews or determine wages. He claimed that each year, the workers’ compensation policy for the Group was updated, and has been in place all the time. He also claimed that Mr Wilson simply resubmitted the updated workers’ compensation forms and tried to claim credit for it.

[22] Further, the applicant said that each week, Mr Wilson was given a payroll spreadsheet which calculated how the staff were rostered and paid. Mr Wilson would need to check and approve the payroll to allow it to be processed for the Bank’s authorisation, and he would then log in to the Bank account to authorise the payments.

[23] The applicant claimed that Mr Wilson had been ‘fully aware of the dire financial situation’, but tried to keep the Group trading whilst insolvent. When things would go wrong, he would blame others for his faults as the director of the Group. When the applicant commenced employment, Mr Wilson gave him a financial report of Farm Fresh Foods showing $818,000 of aged payables and overdue superannuation, which he attached to his statement.

[24] The applicant said that what made matters go from ‘bad to worse’ was that Mr Wilson ended his farm’s share farming partnership in early 2019 due to a breach of contract with the share farmer. From 2019, the applicant also claimed that ‘Bill managed to stop repaying nearly all the bank loans, leases, overdue taxes, Super payment plan instalments and became months in arrears with the rents for shops.’

[25] Finally, the applicant submitted that:

‘All in all, it’s not a surprise for us to see that with a series of missteps particularly in the past two years Bill has come to the brink of another meltdown. Bill experienced this sort of crisis several times before in his career. It’s not that I was not willing to assit (sic) him this time as he said in his note. It’s all because of that shocking, insulting and ungrateful dismissal letter. A couple of weeks prior, in Bill’s words, I was a nice guy who had been helping him through many difficult times, helping him defend the businesses from lawsuits and lessors, and trying very best to keep the companies afloat (despite they are clearly insolvent). Now as the lenders and authorities putting a question mark on his business of continuing as a going concern, I don’t think Bill should continue his old practice of borrowing new money to temporarily get over the cash crunch; it simply doesn’t work.’

[26] In cross examination, the applicant said that it was ‘normal’ for employees to not submit medical certificates in the Group. He claimed that the only Group information he had was the document provided to him by Mr Wilson in 2016. He also claimed that it was Mr Wilson’s responsibility to have workers’ compensation policies for the Group entities as he was the director, and that he was not Mr Wilson’s accountant at the time that Freshable was set up. He said that Mr Wilson ‘cannot blame other people’ for not having workers’ compensation policies for all the business entities, as it was assumed that it covered all of the Group entities.

[27] Regarding the MYOB login details, the applicant said that he was only given one login method in four years to access the MYOB account. This was the one that the applicant tried to login with after the password was changed.

[28] In closing submissions, the applicant said that his pay was salary-based, not hourly-based. His hours were never changed from 38 hours per week to 45 hours, and it had been that way throughout his employment with the Group. He said that it was Mr Wilson’s accountant that changed his annual salary. He said that the pay adjustment was agreed upon to offset the Superannuation Guarantee, which he claims Mr Wilson never wanted to pay to employees. He said that Mr Wilson agreed to all of the approvals for his wages.

[29] The applicant said that when Mr Beard joined the Group, he had ‘little hands-on experience and never used MYOB’. He said that Mr Beard struggled with processing payments, and ‘screwed up the payrolls’ of the Group’s employees. He said Mr Beard he had been ‘severely ill-advised’ and misled by Mr Wilson. The applicant also said that he had unpaid annual leave of $5,583.98.

[30] The applicant referred to the MYOB system of the Group. He said that MYOB is now cloud-based, and that once the bank balance is matched with the account balance, you can consider it as being reconciled. He said that Mr Wilson could not claim that statutory financial reports could not be prepared and lodged if the Group’s accounts were not reconciled.

[31] Finally, the applicant closed his submissions by stating that:

‘it's all demonstrated that even the pointless materials from Respondent may have to some extent backed up my claims in this Matter. Having been served with legal notice, Mr Wilson launched his defense by issuing a laundry list of baseless accusations and then scrambled to find piece by piece evidence that never stood up under scrutiny. In addition, he made little response to my Submissions, purposely avoiding my questions/cross-examination. By contrast, I have tried to make full response to his unsubstantiated allegations and meaningless evidence one item by one item, though at times I felt I was more like commenting on irrelevant subjects than clarifying the facts for this Matter. Despite all these difficulties, I believe the Fair Work Commission, in due course will make a fair judgement that is based on the facts presented in the Submissions.’

CONSIDERATION

[32] Section 385 of the Act defines an unfair dismissal based on the four criteria there set out; each of which must be satisfied if the person seeking a remedy from unfair dismissal is to succeed. The section reads:

385 What is an unfair dismissal

A person has been unfairly dismissed if the FWC 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.”

[33] Relevant in this case, as a preliminary matter, is whether the applicant was dismissed. The meaning of dismissal is found at s 386(1) of the Act and reads:

(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.

[34] Simply stated, if the applicant has not been dismissed at the initiative of the employer or forced to resign by the conduct of the employer, then s 385(1)(a) of the Act is not enlivened and there can be no unfair dismissal. Discussion as to the principles of dismissal at the employer can be found in Mohazab v Dick Smith Electronics Pty Ltd (1995) 62 IR 200.

[35] Understandably, given neither party was represented, no reliance was based on any authorities or the statutory provisions relevant to this matter. This case was very messy and the materials were filed in dribs and drabs, filed multiple times and were confusing and not properly explained in context. Neither party had any idea of how to prepare for, present or conduct their case. Much of the applicant’s defence was in respect to his challenge to Mr Wilson’s concerns as to his management of the Group’s accounts, finances and reporting. These matters are not relevant at this point in the proceedings as they say nothing about whether the applicant abandoned his employment or whether Mr Wilson had dismissed the applicant on 27 July 2020.

[36] It is not permissible, for the purposes of this decision, for the Commission to make any comment, let alone findings on the applicant’s serious allegations in his Form F2 application for an unfair dismissal remedy, and other allegations made in his submissions. I further note the remedies sought by the applicant relate almost entirely to claims of underpayments. These are not matters which the Commission has jurisdiction to deal with. If the applicant wishes to pursue such claims, he should do so with the Fair Work Ombudsman or in a Court of competent jurisdiction.

[37] I also do not accept the statement of Mr Diviney in circumstances where he left his employment as a butcher with the respondent in December 2019, and would have little or no knowledge of the Group’s finances. Moreover, it is clear Mr Diviney has residual resentment of Mr Wilson and his evidence purportedly speaking on behalf of other employees cannot be accepted.

[38] I have some doubt that Mr Zuo did not return to the office after 17 July 2020, because he was sick from that day until 27 July 2020, when Mr Wilson, in frustration, was left with little option but to accept the applicant was not returning. There was of course text messages from the applicant on 20 and 24 July 2020, but they seem to be entirely focused on claims of underpayments to himself and other employees. The applicant did say on 20 July 2020 that he had been sick since 17 July 2020, but the only medical evidence was non-specific medical certificates from Dr Rasheed from the period between 21-23 July 2020 stating he was ‘Unfit to continue his usual occupation’. I accept Mr Wilson’s evidence that he did not receive this certificate or any others.

[39] Doing the best I can, it appears plain enough that the employment relationship was fractured, if not broken, by mid-July 2020. I accept Mr Wilson’s evidence that he had real and serious concerns with the applicant’s oversight of, management and reporting the Group’s accounts and financial transactions. A preliminary report from JMB Partners of 7 July 2020 found the following:

‘OVERALL FINDINGS:

1. Preliminary finds only. Assessment of risk not yet classified.

2. Going Concern issue combined with prima facie insolvent trading without immediate bank restructuring, owner's immediate contribution of further funding.

3. Complete lack of internal controls, reporting systems, misleading financial statements as to material balances such as employee entitlements, statutory liabilities and balance sheet items.

4. No formal budgeting processes, monthly reports and monitoring.

ENTITY: FARM FRESH FOODS PTY LTD

CODE: FFF01

a. General

1. SGC Statements not lodged by the due date resulting in over $16k in penalties after adjustments lowering this amount.

2. No lodgment of Workers Compensation Declarations for over 3 years resulting in upward variations by the required 30% resulting in overpayments for these periods.

3. Amended BAS's resulting in increased GST liabilities subsequent to lodgment of 2018 accounts and tax returns. No calculations on file nor correspondence on the reasons why and debt management mitigation.

4. No evidence of the following on file or completed:

4.1 Employee contracts.

4.2 Weekly cashflow reports and internal controls over cash payments

4.3 Monthly budgets and cashflow forecasts against budget.

4.4 Payroll matters - staff in entities with no explanation, payroll tax matters, employee entitlements and general controls lacking.

5. 2019 Accounts and Income Tax Return not lodged.

b. Income Statement (P+L)

1. Income per actual operations disclosed incorrectly (intercompany sales have distorted position)

2. 2. lntercompany costs and expenses disclosed incorrectly (intercompany expenses have distorted position)

3. 3. COGS and employment costs cannot be relied upon due to point 2 above.

4. 4. Accruals for material balances not taken up.

c. Balance Sheet

1. Mounting statutory liabilities with no formal reporting on actual quantum actually owed.

2. No balance sheet reconciliations.

3. No bank reconciliations within MYOB.

4. No BAS reconciliations or sign-off.

5. No stock control and reporting correct COGS within MYOB.

6. Employee entitlements not accounted for.

ENTITY: FRESHABLE PTY LTD

CODE: FRE01

a. General

1. No MYOB General ledger prepared.

2. No Tax Returns lodged since incorporation date.

3. SGC Statements not lodged by the due date will result in severe penalties which as the date of this report has not been calculated or accrued.

4. No Workers Compensation policy.

5. No evidence of the following on file or completed:

5.1 Employee contracts.

5.2 Weekly cashflow reports and internal controls over cash payments

5.3 Monthly budgets and cashflow forecasts against budget.

5.4 Payroll matters - staff in entities with no explanation, payroll tax matters, employee entitlements and general controls lacking.

b. Income Statement (P+L)

5. Income per actual operations disclosed incorrectly (intercompany sales have distorted position)

6. lntercompany costs and expenses disclosed incorrectly (intercompany expenses have distorted position)

7. COGS and employment costs cannot be relied upon due to point 2 above.

8. Accruals for material balances not taken up.

c. Balance Sheet

7. Mounting statutory liabilities with no formal reporting on actual quantum actually owed.

8. No balance sheet reconciliations.

9. No bank reconciliations within MYOB.

10. No BAS reconciliations or sign-off.

11. No stock control and reporting correct COGS within MYOB.

12. Employee entitlements not accounted for.’

[40] On 15 July 2020, Mr Wilson confronted the applicant about reconciliations and returns to the ATO. The applicant left the office on 16 July 2020 and did not return. Mr Wilson subsequently engaged the services of a forensic accounting firm to examine the financial records and establish the true position of the Group. It also may be that the applicant improperly accessed and retained Group information.

[41] However, returning to the jurisdictional question, I am satisfied that the applicant was not dismissed at the initiative of the employer. There was no dismissal and axiomatically, no unfair dismissal. The Commission has no jurisdiction to determine the merits of this application. Accordingly, application U2020/10297 must be dismissed. I so order.

[42] Although I have found that the applicant was not dismissed at the initiative of the employer, from the materials filed in the case, I have a preliminary view that Mr Wilson had a valid reason for dismissing the applicant because of his poor performance, pursuant to s 387 of the Act.

DEPUTY PRESIDENT

Appearances:

The applicant appeared for himself.

Mr W Wilson and Mr P Beard appeared on behalf of the respondent.

Hearing details:

2020.

Sydney (via Microsoft Teams):

13 October.

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