Matthew Butcher v Precision Linings (Vic) Pty Ltd

[2016] FWC 8239

[2016] FWC 8239

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Matthew Butcher
v
Precision Linings (Vic) Pty Ltd
(U2016/10183)

DEPUTY PRESIDENT HAMILTON MELBOURNE, 2 DECEMBER 2016

Application for relief from unfair dismissal.

[1] On 11 August 2016, Mr Matthew Butcher (the applicant) lodged an application under s.394 of the Fair Work Act 2009 (the Act) for an unfair dismissal remedy in relation to his employment with Precision Linings (Vic) Pty Ltd (the employer).

[2] At the time of Mr Butcher’s alleged termination of employment he worked as an apprentice plasterer.

[3] The applicant commenced employment in May 2014 and the employment relationship ended on 9 August 2016.

[4] I have had regard to all the submissions and evidence.

[5] This is a small business matter, and yet involves some four separate issues, each one of which is of some complexity. It involves approximately 33 separate legal tests, some of which require consideration having regard to Full Bench authority (see C v. Live to Dance Pty Ltd T/A Let’s Go Dance 1). It is a difficult matter for the parties and their representatives to deal with, even without the many differences in evidence.

Dismissal or not

[6] Section 385 of the Act provides that there must be a dismissal for the person to be protected from unfair dismissal.

[7] Section 385 says:

“A person has been unfairly dismissed if FWA 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.”

[8] Section 386 Meaning of dismissed:

“(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.”

[9] The first issue to be determined is whether or not there was a dismissal. The employer submits that there was no dismissal, while Mr Butcher submits that there was.

[10] There is no letter of termination. Rather there were a series of arguments that took place on 9 August 2016, culminating in Mr Butcher leaving and never returning. There were differences in the evidence about what took place. I had the opportunity to observe the witnesses giving evidence, and prefer the evidence given by Mr Saraikin to that of Mr Butcher. It appeared that a part of Mr Butcher’s witness statement was prepared in conjunction with the witness statement of his mother, who said that they worked on it together on the computer 2. In any event part of it was identical in wording3, or as good as, with the witness statement provided by his mother, Ms Henderson. Mr Butcher was unconvincing in giving evidence about how his witness statement was prepared. For example he agreed that he did not write either statement4, possibly not understanding all of the question, he appeared to look to others in the hearing room for help while being questioned5, he said that the fact that parts of his and his mother’s witness statement were identical was a ‘coincidence’6, and he denied collaborating with his mother about his witness statements7, although that was later the evidence of his mother. He did not understand what ‘sic’ meant, a word used in his witness statement8. He did not appear to be willing to give evidence which was unhelpful to his case. I therefore accept in general terms Mr Saraikin’s account of the events leading up to Mr Butcher leaving work for good9 in preference to that of Mr Butcher.

[11] It appears that Mr Saraikin believed that Mr Butcher leaving the workplace and not coming back constituted an abandonment of employment in some form.

[12] Professor Stewart commented:

“It also appears that a contract may be terminated by abandonment. This occurs where an employee walks off the job or fails to return from a period of authorised leave, in circumstances that make it reasonably apparent they no longer intend to be employed. This might well be analysed as repudiation by the employee, so that the contract is actually terminated by the employer when accepting that the employment has ended. But there are decisions to the effect that termination by abandonment does not constitute a ‘dismissal’ or ‘termination’ by the employer.” 10

[13] However in this case the period was short and Mr Butcher indicated by message 11 that he would ‘be back tomorrow’, in other words indicating that he was not quitting. It was Mr Saraikin’s insistence that he had already quit which led to the termination of employment. He had not quit but instead had left after an altercation and in response to an indication from Mr Saraikin that he could work or leave. I have refrained from repeating the foul language used by Mr Saraikin in this and other conversations.

[14] Mr Saraikin terminated Mr Butcher’s employment by treating a temporary absence as the end of the employment relationship, which was a termination at his initiative: Mohazab v. Dick Smith Electronics Pty Ltd 12. Mr.Butcher was a person protected from unfair dismissal, and other jurisdictional requirements are met and are not in question.

Small Business Code

[15] The Small Business Code provides:

“Summary Dismissal

It is fair for an employer to dismiss an employee without notice or warning when the employer believes on reasonable grounds that the employee’s conduct is sufficiently serious to justify immediate dismissal. Serious misconduct includes theft, fraud, violence and serious breaches of occupational health and safety procedures. For a dismissal to be deemed fair it is sufficient, though not essential, that an allegation of theft, fraud or violence be reported to the police. Of course, the employer must have reasonable grounds for making the report.

Other Dismissal

In other cases, the small business employer must give the employee a reason why he or she is at risk of being dismissed. The reason must be a valid reason based on the employee’s conduct or capacity to do the job.”

[16] It is agreed that this is a small business and that the Small Business Code (the Code) applies. This was a summary dismissal, because it was dismissal by Mr Saraikin without notice. An amount almost equivalent to notice, or equivalent, was later paid but this does not change the nature of what occurred on 9 August 2016.

[17] The employer submitted that Mr Butcher conducted himself on 9 August 2016 in a manner which constituted serious misconduct actually or that the employer believed on reasonable grounds was serious misconduct. The conduct includes the conduct later when Mr Saraikin returned tools to Mr Butcher’s house. In particular it is submitted that Mr Butcher left the workplace and that this constituted conduct which the employer believed on reasonable grounds was serious misconduct 13.

[18] However in my view both parties were at fault. Mr Butcher responded inappropriately to Mr Saraikin’s attempts to stop him talking on his phone, and Mr Saraikin used foul language and behaved inappropriately with a staple gun. He also invited Mr Butcher to leave the workplace, although the terms of that conversation are disputed. In the circumstances, given that invitation, and Mr Saraikin’s own conduct, which was less than ideal regarding the staple gun and bad language, the requirements of the Code are not satisfied. I prefer Mr Saraikin’s version of events in relation to the staple gun 14. Even on his version of events it is not appropriate to shoot at an apprentice with a staple gun in jest or otherwise. There was no serious misconduct, and no reasonable grounds for believing that there was.

[19] In the alternative, the employer submits that it was a termination with notice based on the lateness and poor attitude of Mr Butcher 15. There is some evidence about lateness for work, but it is imprecise in nature. For example, the messages sent between Mr Saraikin and Mr Butcher indicate that Mr Saraikin believes Mr Butcher was late (‘we’re (sic) the f… are you’), but it is not demonstrated what time Mr Butcher was supposed to be there, what the arrangement was, and the like. Similarly while there is some evidence of an unsatisfactory attitude to work on the part of Mr Butcher16, it is somewhat general in nature and not sufficient to found summary dismissal or a valid reason. There is insufficient evidence that Mr Butcher was warned verbally or in writing that he risked being dismissed if there was no improvement. The Small Business Code was not complied with.

Section 387

Section 387(a) valid reason

[20] For the reasons already given I am not satisfied that there was a valid reason for termination of employment.

Section 387(b) notice

[21] As there was no valid reason, there was no notice given of a valid reason.

Section 387(c) opportunity to respond

[22] Mr Butcher was not given an opportunity to respond to any reason related his capacity or conduct. He was simply treated as terminated by Mr Saraikin.

Section 387(d) support person

[23] There was no meeting, and Mr Butcher did not ask for a support person.

Section 387(e) unsatisfactory performance

[24] Despite Mr Butcher’s denials, I accept the evidence of Mr Saraikin 17 that he was warned about his performance.

Section 387(f), (g) HR professionals, small business

[25] This is a small business, without HR professionals, and some account must be taken of this in weighing up the factors in s.387.

Section 387(h) other

[26] I was urged to take into account a number of factors in Mr Butcher’s favour, namely inappropriate conduct by Mr Saraikin in various respects 18. However in my view both parties were at fault. Mr Saraikin should not have used such foul language on a consistent basis, even taking into account the nature of the workplace, which was a building site. There are limits and it appears that Mr Saraikin breached those limits of acceptable language. He should not have shot a staple gun as he did. This was dangerous and foolish. However Mr Butcher did not respond well to legitimate concerns that Mr Saraikin had about his use of a mobile telephone at work, and there is some evidence although imprecise that Mr Saraikin and others considered that Mr Butcher had a poor attitude to work and to timeliness.

[27] In my view the termination of employment was harsh, unjust or unreasonable. I therefore turn to the issue of remedy.

Remedy

[28] As is the way with many or most of these matters, most of the statutory tests were not addressed by the parties until I directly asked them about each of them. Firstly reinstatement was not sought. I determine that this remedy is inappropriate within s.390. I determine that an order for compensation is appropriate in all the circumstances of the case.

Section 392(2)(a) viability

[29] The employer did not claim that a compensation order would affect the viability of the enterprise 19, and I determine that it would not.

Section 392(2)(b) length of service

[30] The length of service was just over two years’ service, from July 2014-August 2016 20. I accept that it was from May not July to 9 August 201621.

Section 392(2)(c) remuneration he would have received, s.392(2)(e), s.392(2)(f), s.392(2)(h)

[31] In Haigh v Bradken Resources Pty Ltd 22 (Haigh) a Full Bench of the Commission said:

“[10] The frequently quoted case on compensation calculations is Sprigg v Paul Licensed Festival Supermarket in which a Full Bench of the Australian Industrial Relations Commission (AIRC) confirmed the following steps in determining compensation under the unfair dismissal provisions of the Workplace Relations Act:

“1. Estimate the amount the employee would have received or would have been likely to receive if the employment had not been terminated,

2. Deduct monies earned since termination,

3. Deductions for contingencies,

4. Calculate any impact of taxation,

5. Apply the legislative cap.”

[11] The legislation has been amended since that time by permitting a reduction in an amount otherwise payable if an employee’s misconduct contributed to the employers decision to dismiss. The Full Bench decision in Sprigg has also been the subject of comment by other Full benches. In Smith v Moore Paragon a Full Bench of the AIRC said:

“COMMENT IN RELATION TO THE GUIDELINES IN SPRIGG

[32] It seems to us that the amounts arrived at by the application of the guidelines in Sprigg in the present matter are on their face manifestly inadequate for employees with the length of service of the Appellants, the circumstances of their dismissal and their poor prospects for future employment. This causes us to sound a warning in relation to the application of Sprigg. The guidelines laid down in Sprigg and refined in Ellawala v Australian Postal Commission are clearly designed to serve the proper and desirable purpose of fostering uniformity and consistency in decision-making by individual members of the Commission when assessing compensation pursuant to s.170CH(6). However, those guidelines are not a substitute for the words of the Act29. By virtue of s.170CH(2), any remedy ordered by the Commission must be a remedy that the Commission considers "appropriate" having regard to all the circumstances of the case including the matters set out in s.170CH(2). Section 170CH(6) confers a general discretion "if the Commission considers it appropriate in all the circumstances of the case" to "make an order requiring the employer to pay the employee an amount ordered by Commission in lieu of reinstatement" subject to the Commission having regard "to all the circumstances of the case including" the matters listed in s.170CH(7) - the same list of matters set out in s.170CH(2) - and subject also to the `cap' provided for in s.170CH(8) and (9). If an application of the guidelines in Sprigg yields an amount which appears either clearly excessive or clearly inadequate, then the member should reassess any assumptions or intermediate conclusions made or reached in applying the guidelines so as to ensure that the level of compensation is in an amount that the member considers appropriate having regard "to all the circumstances of the case" including the matters listed in s.170CH(7) and subject to the `cap' provided for in s.170CH(8) and (9). In this context it should be borne in mind that the result yielded by an application of the Sprigg guidelines may vary greatly depending upon particular findings in relation to the various steps including, in particular, step one, which necessarily involves assessments as to future events that will often be problematic.”

[12] Full Benches of the Fair Work Commission have applied the approach in Sprigg generally in Tabro Meat Pty Ltd v Heffernan, Read v Golden Square Child Care Centre and Bowden v Ottrey Homes Cobram. It is clear from those authorities that any deduction on account of misconduct is also applied before the application of the legislative cap. One further clarification is needed. The assessment of the amount the employee would have received if the employment had not been terminated is referable to the entire circumstances including the basis on which the termination was found to be unfair. Where a procedural defect is the main reason for the termination being held to be unfair, this is a factor to be taken into account in determining the estimate of loss arising from the unfair dismissal.” [References omitted]

[32] The first step is to estimate the remuneration the employee would have received if they had not been dismissed. In my view the period of further employment would have been short, given the poor relationship between the employer and employee, and would have been in the order of four weeks’ further employment. The applicant claim that he would have been there for a longer period is highly unlikely given the evidence. This four weeks is the anticipated further period of employment. Secondly, this means that the employee would have earned an additional four weeks’ pay. Thirdly, I have to deduct from that any remuneration earned by the employee since his dismissal. According to the employee he earns more in his new job than he did in his old. His gross pay is $681.60 per week ($35,443.00 per annum), and in his old position was $616.54 per week (25,147.20 per annum) 23. The remuneration Mr Butcher would have received for a further four weeks’ work is $2,726.40. I have to deduct from that the income that Mr Butcher received for the period between 9 August 2016, the date of termination, and four weeks after that, which is 6 September 2016. His payslips show that he earnt money from 18 August 2016 until 6 September 2016 of $477.12 plus $681.60, which is $1,158.72. The difference between the two is $1,567.68.

[33] Thirdly, I will not deduct an amount for contingencies, because they are known.

[34] Fourthly, I consider the impact of taxation. Fifthly, I will assess the figure against the compensation cap, which is less.

[35] Pursuant to s.392(2)(d), the employee has mitigated his loss by gaining employment,

[36] In my view the claims against Mr Saraikin were exaggerated, and I do not accept the characterisation of them advanced by the applicant. I do not believe that bullying occurred in the general use of that phrase, and specifically a case has not been made out based on statutory definitions of bullying. Rather there was bad language, and inappropriate comments made, and inappropriate conduct with a staple gun. In am not satisfied that this is appropriately described as bullying. However I am also not satisfied with Mr Saraikin’s language and use of a staple gun, as already mentioned, and he should carefully examine how he behaves in future. Pursuant to Haigh, I have decided not to make any deductions for taxation and leave the amount as it is in all the circumstances.

[37] An order will be issued in conjunction with this Decision ordering Precision Linings (Vic) Pty Ltd pay to Mr Matthew Butcher $1,567.68, taxed according to law, within two weeks from the date of this decision.

DEPUTY PRESIDENT

Appearances:

Mr G Dircks for the Applicant.

Mr P Hull for the Respondent.

Hearing details:

2016:

Melbourne

15 November.

 1   [2013] FWC 3540

 2   Transcript PN1298

 3   Exhibit B6, paragraphs 25-34, Exhibit B1, paragraphs 43-52

 4   Transcript PN907

 5   Transcript PN908

 6   Transcript PN928

 7   Transcript PN931-933

 8   Transcript PN935-941

 9   Exhibit P1, paragraphs 6-21

 10   Stewart A, Stewart’s Guide to Employment Law, Second Edition, The Federation Press, Sydney 2009 at p. 283.

 11   Exhibit B1, Attachment MB4

 12 (1995) 62 IR 200 at 205

 13   Transcript PN168

 14   Exhibit P2, paragraph 2.8, PN1490-1496, PN1523-1531, PN1787

 15   Exhibit P3, paragraph 14

 16   For example, Exhibit P5, paragraph 6

 17   Exhibit P1, paragraph 28

 18   Exhibit B4, paragraph 42

 19   Transcript PN474

 20   Transcript PN476

 21   Transcript PN727

 22   [2014] FWCFB 236

 23   Exhibit B1, MB1, Response to order to produce from Somerville Plaster

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