M v G Pty Ltd
[2010] FWA 6733
•30 AUGUST 2010
[2010] FWA 6733 |
|
DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
M
v
G Pty Ltd
(U2010/6455)
COMMISSIONER STEEL | ADELAIDE, 30 AUGUST 2010 |
Termination of employment.
Introduction
[1] This matter is an application under s 394 of the Fair Work Act 2009 (the Act) by M (name withheld from publication) who alleges that the termination of her employment by G Pty Ltd (name withheld from publication) was unfair with reference to the definition of unfair dismissal contained within s 385 of the Act.
[2] This application was the subject of an unsuccessful conciliation on 23 March 2010 and in discussions with the parties the tribunal decided a hearing was required to determine this matter.
[3] The parties’ names are withheld from publication as the matters discussed have gone to behaviours and activities that go beyond employment matters and include personal and private activities. The tribunal has been concerned in these proceedings with employment matters and issues that impact on such matters and has determined the public interest is not impugned by not providing the identities of the parties within this decision.
[4] The respondent is a small business employer and hence regard shall be made to the requirements of the small business unfair dismissal code.
[5] The applicant was involved in work that was predominantly clerical in description and content. The tribunal has identified her to be an award covered employee with reference to the Clerks (South Australia) Award - NAPSA and to the relevant Modern Award.
[6] This is of relevance as it is asserted the applicant was earning a substantial salary/wage with other financial benefits and hence may likely to have been an employee earning above the statutory high income threshold of remuneration as per s 382(b)(3) of the Act. Accordingly, the tribunal is satisfied as to jurisdiction in this matter.
Background
[7] The applicant in this matter claims she was unfairly dismissed from employment by the respondent as the managing director/proprietor (Mr G) had reacted against her after having been advised by his investigator/agent that she was having a personal relationship with another person.
[8] The applicant asserts that the respondent was a generous employer in many ways, however he wanted more from her than an employer/employee relationship should appropriately provide in that he had formed a personal relationship with her and had initiated affectionate physical contact with her. She also asserts this personal relationship had resulted in attempts at more intense physical contact on various occasions and that Mr G had harassed her.
[9] The applicant submits that she had rejected such advances as she was his employee and as she was not attracted to him other than as a friend. She was appreciative of his generosity and the attention he had paid her at and outside of work.
[10] The applicant asserts that her work performance was beyond reproach and that she received no warnings as to her performance or her impending termination of employment. She asserts that her employment was terminated for reasons other than for employment reasons in that the respondent had hired a private investigator/agent who had provided video evidence that she was in a relationship with another person.
[11] The respondent admits to having a personal as well as an employment relationship with the applicant. He admits to having fallen in love with her, however he maintains as her employer that he sought to have a separation of the applicant’s work duties and their personal relationship.
[12] The respondent denies he dismissed the applicant or intended to dismiss her from her employment. He was not happy at her attendance at work and her application to her job and had intended that she take a “pause in her job”. This is an enforced absence from her job with a four-week period of time being paid by the employer during which the employee can look for another job and evaluate her existing job. If she then decides to return or continue in employment she can then approach her employer and renegotiate her job provisions. The object of this “pause”, enforced by the employer, is that the respondent would be able to achieve a different employment arrangement with the applicant. That is, more hours of work or her salary arrangements reduced or altered.
The relevant facts from submissions and evidence
[13] The tribunal has had regard to all the evidence provided and the submissions of the parties. Where a conflict in evidence has arisen the tribunal has resolved the facts on evaluation of the total evidence and the probability of the events in question.
[14] The respondent is a small specialist engineering business located in the southern suburbs of Adelaide and employees between five to seven people. The applicant commenced as a casual on limited hours and progressed to a position described by her as “full-time work” on 26 January 2009. She claims that the work of three female workers was absorbed by her position. On examination her duties were mainly clerical in nature. The applicant indicates she worked within the hours of 10.00 am to 4.30 pm four days per week, the equivalent of 24 hours working time. She attended TAFE on the other week day, seemingly at the employer’s expense.
[15] Her commencing pay for such hours was $800 net per week. In addition she received on occasion various bonuses from the respondent dependant on whether the respondent was “happy” with her. The respondent also gifted her various amounts of money in connection with asserted medical bills for herself and her daughter approximating $6000.
[16] Within the employment period the respondent purchased two cars for the applicant. The first, a Holden Barina, was ultimately gifted to her and she was free to later sell it to a relative and retain the proceeds. The second car was a Nissan 300 ZX. The respondent purchased this car for her use and paid for a substantial amount of repairs in the region of $7000. The applicant retains this car and asserts that it belongs to her as she is the registered owner.
[17] The respondent also purchased a further car, a Honda, that was used by the applicant as a company or work car. This car was returned to the respondent after her employment ended.
[18] The applicant admits to a personal relationship with her employer described as a “friendship” and asserts that this was difficult at times and interfered with her employment on occasion. This friendship had involved travelling interstate with the respondent and her daughter on two occasions, paid for by the respondent. The applicant alleges that she had on those trips rejected the physical advances of the respondent and confined their relationship to that of a friend. She asserts that she was however at all times concerned for her ongoing employment but was reassured by the respondent that her employment was secure and that their relationship was nothing to do with work. 1
[19] The applicant indicates that when her employer was not happy with her personally, she experienced her pay being varied and she at other times found herself sacked from her role but ultimately later reinstated after discussions with the respondent. The applicant asserts the respondent was happy with her professional work and gave her significant positive feedback on her performance.
[20] On 16 October 2009, when the applicant was applying for a home loan, the respondent increased her salary to $1600 net per week and provided documentation to assist her. This documentation took the form of a written guarantee of “home loan assistance” and a letter headed “employment contract” that nominated an offer of “10 years employment at a salary of $1600 per week plus tax, a company car, a mobile phone and fuel card”. 2
[21] However the applicant indicates the salary of $1600 per week net was received intermittently and her pay varied dependant on the respondent’s view of her at the time. She asserts that if the respondent was happy she received amounts of $1600 or above and if not so, amounts of less than $1600. Accordingly she never received less than $800 but would receive anything above that figure up to $2000 on occasion. 3
[22] The applicant considered the respondent was a generous boss to his employees and bonuses were also paid and cars purchased for at least two other staff.
[23] Up to late October 2009 the applicant had formed a personal relationship with the respondent that she regarded as “social” where the parties would interact outside of work on one or two occasions a month. The applicant denies that this interaction was such that she had formed a physical relationship or that she was a “girlfriend” but states this relationship was a friendship. 4
[24] She also asserts that she felt pressured in keeping her employer happy and thus into the action of sending a variety of SMS messages that suggested affection towards the respondent. 5
[25] The applicant asserts that after October 2009 the respondent became more demanding of her personal time. He became offended at her socialising with others and sought that she meet with him on numerous times before work at a restaurant. She asserts he texted her many times and became obsessive and controlling.
[26] The applicant asserts she attempted to correct this behaviour and to reduce his demands upon her and thus clarify her role as an employee. By example she relates an act of jealous rage by the respondent after a Melbourne Cup function. The respondent is alleged to have told the applicant not to come to work for the week because he was offended with her actions at a private function. In this instance the applicant returned to work shortly after talking with the respondent. 6
[27] The respondent asserts he sent to the applicant, on 2 December 2009, a letter that warned her as to shortcomings in her performance. The applicant denies receiving this letter or discussing it with the respondent. 7 This letter from the respondent does refer to various issues of performance that he is not happy with, but can hardly be considered a warning letter as all issues are predicated by the statement:
“Unfortunately there are times when, I as a business owner need to make you aware of areas that need to be addressed in order to make us more productive, more versatile and more useful to our customers. This is part of my job that I exercise very reluctantly...
I prefer if the employees are self consciences (sic) and correct minor problems before I have to get involved”.
[28] The document does indicate the respondent is:
(1) Aware he is paying a significant amount of money in salary for basic clerical work from the applicant and in his view she needs to add more value to the business;
(2) Apparently concerned at her physical condition when she attends work after socialising or partying with friends;
(3) Concerned at her reaction to his criticism; and
(4) Concerned at the use of her work time for private matters, phone calls and SMS’s.
[29] However the applicant denies ever receiving this letter and it does not contain any direct or specific instructions as to performance improvements required of the applicant, no reference to time periods for improvement etc. and no requests for meetings or discussions on these matters.
[30] On 7 December 2009 the applicant received a series of emails from the respondent that the applicant considered had terminated her employment (within Ex A1). On examination the tribunal does not consider they do so, however they did reflect the respondent was again not happy with the level of intensity of their personal relationship and the amount of time he was in her personal company. The documents are a mix of personal observations and work issues. Whilst reminding her of her low work hours requirements and her substantial salary and conditions, the respondent reflects on lack of personal time together and his disappointment at the lack of direction in their personal relationship. The respondent wanted more of her time in the evenings and on weekends. The respondent regarded his efforts and hard work in the business as a sacrifice that should be rewarded by the applicant’s support and loyalty. In the circumstances and context of these documents the respondent’s view on support and loyalty go beyond the employment concepts and to more personal values and needs. 8
[31] The applicant was offended by the nature of the matters raised in the above documents and rebutted the various references to employment matters. She sought to discuss the issues raised with the respondent. 9
[32] A further letter again dated 7 December 2010 from the respondent indicates his frustration with the situation and concern as to how they were going to work together if this situation did not change. In this correspondence the respondent suggests the applicant have a career change and look for another job over the next three to six months, as he is concerned that they may not be able to continue to work together. It is obvious that the relationships, both employment and personal, are becoming an emotional issue between the parties and that the respondent is having difficulty resolving those tensions and conflicts that arise in such circumstances. 10
[33] The applicant asserted that this situation was becoming so much of an issue that she was concerned that her impending holidays from work (a two-week period) would generate further potential issues where once again the respondent may become demanding of her personal presence or availability and the relationship deteriorate. 11
[34] The parties exchanged further communications at this time and the applicant has indicated she was unhappy and confused at the respondent’s actions and statements. Discussions between the parties at this time resolved that they would endeavour to be more aware of each other’s circumstances. The applicant went on holiday and was due back on 11 January 2010.
[35] The applicant, whilst on holiday, received an email on 9 January 2010 giving effect to a “pause in employment” which she regarded as being a notice of termination. She was shocked as she had contacted the respondent twice whilst on leave offering her services to work if required. Those offers had been declined. 12
[36] The respondent denies that he sacked the applicant by this letter and asserts that he was trying to manage her performance by encouraging her to work more as he had a clear expectation that she should earn her salary. He denies terminating her employment but gave effect to a pause in employment where she was paid four weeks in advance and could decide to take a new job, contemplate what she could earn elsewhere or return to renegotiate her job. 13 The respondent expected her to come back and renegotiate her employment with him.14
[37] The parties had discussions on 11 January 2010 and the respondent asserts he was happy that the applicant was going to work more hours, i.e. more than 25 hours per week, and get more done in the business. The applicant was “reinstated” and returned to work as per those arrangements. 15
[38] The parties had some social interaction around 14 February 2010. On 16 February 2010 the respondent telephoned the applicant and confronted her with information that he now knew that she was in an intimate relationship with another person. This information had come from an investigator organised by the respondent. The respondent concluded this call by advising he thought it best that the applicant not work for him anymore.
[39] The applicant was extremely shocked and asserts that she was concerned for her safety and the security of her home as she has a young child and a disabled sister domiciled with her. On 17 February 2010 the respondent sent another letter indicating a pause in her employment was imposed again and providing her with four weeks pay to take effect from 16 February 2010. 16
[40] The respondent asserts he was offended by the applicant’s behaviour and lack of honesty in their relationship. He wanted to end the personal relationship but still expected the applicant to again discuss continued employment with him.
[41] The parties exchanged various letters via email. In an email dated 18 February 2010 the respondent indicates that the applicant was “not an ordinary employee” but “you were my dear friend for almost two years” and that the experience has “left me feeling used”. 17
[42] The respondent in this matter claims the applicant should return the Nissan vehicle as it is company property. The applicant claims the Nissan was a gift to her. This tribunal shall further comment as to the status of this vehicle.
Consideration
The applicant’s employment contract
[43] From the submissions of both parties it is not contentious that they had formed a personal social relationship at the time that “full-time employment” commenced with the respondent. It is further not contentious that the respondent was regarded as a generous employer by the applicant. She accepts that her initial salary of $800 per week net of taxation was generous for 24 hours per week work of that nature. She was allowed to study on a Wednesday at TAFE, paid for by the employer. Her salary was increased to $1600 per week net of taxation to assist her to buy a home. She was provided with three cars. The first being a gift, the second yet to be determined and the third was a company car. She was further provided with a fuel card and mobile phone resource. In addition she received various bonuses in respect to medical bills. Those provisions formed the basis of her remuneration for her job.
[44] The applicant asserts that payment of her salary varied by the respondent and she on occasion received less or more than the agreed sum of $1600 per week net. The applicant does not claim prejudice in terms of these actions.
[45] These employment provisions were determined and applied by the respondent. If they were more generous than the minimum standards required by the various industrial instruments the respondent has chosen to provide them by his own volition and discretion. The applicant in the employment context can but request such standards or negotiate her contract. The applicant did not coerce or force the respondent to accede to the above remuneration provisions which are recognised to be well above the minimum standards for such work.
Was there a dismissal?
[46] The respondent asserts that he never intended that the applicant be dismissed and that she was expected to return and negotiate with him. On the evidence provided this assertion defies logic in that it is clear by the advice on the telephone on 16 February 2010 to the applicant, that the respondent did not want her to work for him. The nature of the imposed “pause” in employment, imposed again by letter on 17 February 2010, was intended by the respondent to send the employee away from her employment. A limited payment of four weeks pay was made available. The applicant was thereafter to be without remuneration and work. In this scenario of events the tribunal therefore finds the applicant was dismissed as contemplated by s 386(1)(a) of the Act.
[47] Given the evidence in this matter the applicant was dismissed by letter/email on 17 February 2010. The applicant did not receive a warning in respect to her employment performance nor did she receive the benefit of any meeting, discussion or representation etc. She was dismissed as the respondent had identified she was in a relationship with another man and he was upset and disappointed that he had not been told by her of that relationship.
[48] This was a summary dismissal of the applicant and in these situations the respondent employer has to believe on reasonable grounds that the employee’s conduct is sufficiently serious to justify immediate dismissal. Further it is the employee’s conduct within the employment context that is relevant in that consideration by the respondent, not matters outside employment.
[49] Given the above findings the respondent’s reason for dismissal does not fall within any of the acceptable definitions of conduct that justifies summary dismissal of an employee from employment as per s 388 of the Act. The tribunal finds the applicant was dismissed for having a personal relationship with another person.
Was the dismissal unfair?
[50] For the tribunal’s purposes in this matter, since the employer is a small business as defined the Act at s 385 determines that a dismissal is unfair if the dismissal was harsh, unjust or unreasonable and not consistent with the Small Business Fair Dismissal Code (SBFDC). Primary in such a consideration is the need to identify a valid reason for dismissal based on the employee’s conduct. The tribunal has already found that the reason for the summary dismissal was not a valid reason as above. Hence the dismissal of the applicant is not consistent with the SBFDC and is therefore an unfair dismissal. The tribunal therefore finds that the summary dismissal of the applicant is unfair.
The Nissan car
[51] The respondent has pressed for the return of this vehicle from the applicant as it is company property. The applicant has consistently claimed it was a gift from the respondent. The tribunal indicated within the hearing that it would consider the status of the vehicle.
[52] On consideration of the available material it is apparent that all the documents, namely the Form 2 - Notice to Purchaser, the Contract for the Sale of a Second Hand Vehicle by a Dealer, the St George Personal Loan Offer, the Statement of the Personal loan, the Gapcover Insurance document and various repair invoices are all in the personal name of the Managing Director of the respondent employer, not in the respondent’s company name. The tribunal therefore declines to make a decision on the ownership of the vehicle as a company or respondent asset.
Remedy
[53] Pursuant to the powers of the tribunal within s 390(1), (2) and (3) of the Act, the tribunal considers that reinstatement of the applicant to the respondent’s workplace would be inappropriate. The tribunal therefore intends to order an award of compensation in lieu of reinstatement.
[54] In consideration of the criteria within s 392(2) of the Act the tribunal determines that an award of nine (9) weeks salary at $1600 per week net of taxation be awarded to the applicant. The applicant indicates that she has become a full-time carer for her disabled sister after her dismissal. The tribunal orders that the amount of compensation should have deducted from it any amount that the applicant has received by way of a Government allowance for her new role as carer for her disabled sister during the period of eight (8) weeks from 17 March 2010 to 12 May 2010.
[55] The net sum of compensation shall be liable to be paid by the respondent within 14 days of this decision to the applicant’s bank account. Appropriate documentation should be exchanged between the parties to allow determination of the quantum to be paid within this timeframe.
COMMISSIONER
Appearances:
Ms M in person
Mr G for the respondent
Hearing details:
Adelaide
2010:
5, 6 July
1 PN 857
2 Exhibit A1
3 PN 357
4 PN 392-393
5 PN 903
6 PN 404
7 Respondent’s Form F3, Annexure GZ5
8 Respondent’s Form F3, Annexure GZ7
9 Respondent’s Form F3, Annexure GZ6
10 Respondent’s Form F3, Annexure GZ7
11 PN 541-542
12 Respondent’s Form F3, Annexure GZ8
13 PN 1124-1136
14 PN 1129
15 PN 1150
16 Respondent’s Form F3, Annexure GZ9
17 Exhibit A1
Printed by authority of the Commonwealth Government Printer
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