Matthew Rosenthal v MSA Pty Limited - [2025] FWC 1032

[2025] FWC 1032

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.394 - Application for unfair dismissal remedy

Matthew Rosenthal

MSA Pty Limited

(U2024/10634)

DEPUTY PRESIDENT WRIGHT

SYDNEY, 11 APRIL 2025

Application for an unfair dismissal remedy – jurisdictional objection – whether applicant dismissed – applicant found to be dismissed – dismissal found to be unfair – compensation to be awarded

Introduction and outcome

On 10 September 2024, Mr Matthew Rosenthal lodged an application with the Fair Work Commission (the Commission) under s. 394 of the Fair Work Act 2009 (Cth) (FW Act) for a remedy, alleging that he had been unfairly dismissed from his employment with Toonthaw Pty Ltd trading as Maag & Stucki Automotive (MSA).

MSA is a mechanical workshop predominantly servicing luxury vehicles such as BMWs and Mercedes-Benz. Mr Rosenthal commenced employment with MSA in June 2016 as a full-time mechanic. He alleged that his employment was terminated on 9 September 2024, following a workplace dispute concerning allegations of soliciting clients and misuse of company resources.[1]

MSA disputed the claim, asserting that Mr Rosenthal was not dismissed but instead abandoned his employment after being confronted about serious misconduct.[2] MSA further submitted that the allegations against Mr Rosenthal constituted valid reasons for termination, had it occurred.[3]

I have found that Mr Rosenthal was dismissed by MSA and that there was no valid reason for the dismissal. On the basis of this and other findings, I have determined that Mr Rosenthal’s dismissal was harsh, unjust and unreasonable and that an order for compensation is appropriate.

The hearing

As there are contested facts involved, the Commission is obliged by s.397 of the FW Act to conduct a conference or hold a hearing.

After taking into account the views of Mr Rosenthal and MSA, and whether a hearing would be the most effective and efficient way to resolve the matter, I considered it appropriate to hold a hearing pursuant to s.399 of the FW Act.

At the hearing, Mr Rosenthal represented himself. MSA was represented by Mr Andrew Wilson of Counsel. I granted permission to MSA to be legally represented pursuant to s.596(2) of the FW Act, as I was satisfied that it would enable the matter to be dealt with more efficiently, taking into account the complexity of the matter.

Mr Rosenthal gave evidence on his own behalf and was cross-examined by Mr Wilson. The following witnesses also gave evidence on behalf of Mr Rosenthal:

a. Mr Jason Bywater, cousin of Mr Rosenthal who was cross-examined by Mr Wilson; and
b. Mr Gary Speechley, client of Mr Rosenthal.

Mr Speechley’s witness statement was admitted without objection, and he was not required for cross-examination.

The following witnesses gave evidence on behalf of MSA:

a.   Mr Adan Cummings, Sole Director and Shareholder of MSA;
b.   Mrs Anastasia Cummings, wife of Mr Cummings and employee of MSA;
c.   Mr Raiyan Sarar, ‘helping hand’ at MSA; and
d.   Mr Dhruba Das, Bookkeeper at MSA.

Mr Rosenthal filed submissions in the Commission on 23 October 2024, 6 November 2024 and 3 January 2025. MSA filed submissions in the Commission on 31 October 2024 and 17 December 2024. I have considered the submissions made by the parties and all of the evidence before me in my determination of this matter and the conclusions I have reached.

Background facts

The business of MSA has been established since 1977.[4] MSA operates a mechanical workshop in Woolloomooloo, New South Wales, which specialises in Mercedes-Benz and BMW.[5] At the time that Mr Rosenthal had ceased employment, MSA employed a small team of four, comprising of Mr Cummings, Mrs Cummings, Mr Rosenthal and another mechanic.[6] Mr Cummings has been a Director of MSA since 16 December 1996.[7]

MSA engaged Mr Sarar and Mr Das as independent contractors. Mr Cummings explained that Mr Sarar and Mr Das are from Bangladesh.[8] Mr Das has worked for MSA as a bookkeeper since August 2021. Mr Sarar has worked for MSA since about June 2024, as a ‘helping hand’ which involves washing cars, emptying bins and other cleaning duties.[9]

Mr Cummings explained that MSA has an established and loyal client base. MSA maintains detailed records of the names, phone numbers, email addresses, motor vehicle make and model, motor vehicle registration and Vehicle Identification Number (VIN) for all clients and their vehicles. This information is both private and confidential in that this information is not publicly available. It is provided by clients solely for the purpose of providing mechanical services to them. It is sensitive information in that it may be misused (for example by criminal groups who steal high end motor vehicles). This confidential information is maintained on a computer program called Auto Care. Auto Care is installed on the computers in the workshop. This information is protected by 2-factor authentication, if it is accessed from outside the workshop. Mr Cummings said that Mr Rosenthal had access to this information on the computers within the workshop.[10]

Mr Cummings said that in relation to servicing, Auto Care records information that includes:
a. the date of service undertaken by MSA;
b. what work was done in each service;
c. the parts used;
d. the odometer reading on the car;
e. the amount paid for the service; and
f. the invoice number.[11]
Mr Cummings gave evidence that the workshop holds many pieces of high end plant and equipment that are used to service vehicles.[12]

Mr Cummings explained that MSA operates from Monday to Friday. He is often at the workshop on Saturdays attending to paperwork. It is unusual for cars to be repaired on Saturday.[13]

Mr Cummings said that Mr Rosenthal has worked for MSA since mid-2015, initially as an independent contractor, then from 1 June 2016 as an employee.[14]

Mr Cummings said that mechanics working for MSA were given access to the workshop to do work for friends and family (private work). However, the following strict rules applied to private work:

a.no private work could ever be performed for any existing or past clients of MSA;
b.if private work was performed on a vehicle and the owner of that vehicle subsequently became a client of MSA, no further private work could be performed on any vehicles belonging to that client as they were now considered a MSA client;
c.staff could not meet their clients for private work in or around the MSA workshop;
d.no service stamps, service stickers, or any other MSA related branding could be used for private work;
e.no digital service log entry for private work could be registered using MSA access; and
f.all parts used from stock for private work would be recorded and emailed to MSA by the relevant staff member and they would subsequently be invoiced to that staff member.[15]

Mr Cummings said that these rules were communicated verbally to staff three to four times per year. Mr Rosenthal was present when these rules were discussed and clearly understood that he was not allowed to undertake private work for clients of MSA. Mr Cummings said that these rules were important in maintaining the customer relationships which are key to the business of MSA.[16]

During the hearing, Mr Rosenthal explained that he worked for MSA full-time Monday to Friday from 8am to 5pm, and that he had access to the workshop on Saturday to do private work.[17]

During cross-examination, Mr Rosenthal said that Mr Cummings actively encouraged him to work on the weekends for private work because it was part of Mr Rosenthal’s package that he had the use of the workshop, so that any income that he earned from his private work, was a bonus to him and, therefore, was part of his package.[18] Mr Rosenthal said that he would be charged a nominal fee by Mr Cummings to use certain equipment such as a wheel aligner.[19]

Mrs Cummings currently employed by MSA.[20] Mrs Cummings described an incident earlier in 2024 where Mr Rosenthal threw a box cutter at her. Mrs Cummings said to Mr Rosenthal:

‘That’s really dangerous’.[21]

Mrs Cummings said that Mr Rosenthal proceeded to laugh and kick boxes at her and described this as ‘crazy behaviour’. Mrs Cummings said that she noticed a change in Mr Rosenthal earlier in 2024 and that he had been aggressive and argumentative towards Mr Cummings.[22]

Mr Rosenthal said that he now realised that his actions in under-arm tossing the box cutter was a poor decision on his part. He said that he had never been reprimanded previously regarding the tossing of any tools, which was a consistent habit of all staff in the workshop. If it had ever been mentioned previously, he would have immediately modified his behaviour. It occurred when he was extremely busy, and he rushed in without thinking. He underarm tossed the closed and locked boxcutter, which is the size and weight of a cigarette lighter, and it was common practice to underarm toss it by all members of staff. Mr Cummings did not mention this incident to Mr Rosenthal until weeks later.[23]

Events of 10 August 2024

Mr Cummings said that on 10 August 2024, Mr Rosenthal sent him an email referencing a quotation for the parts that he used on a car that he had worked on that day using plant and equipment in the workshop. Mr Cummings said that such an email is typical when an employee does work on the car of a friend or family member, as they are expected to pay for the parts. The quotation was entered into the Auto Care system and the VIN for the vehicle was referenced.[24]

Mr Cummings said that the vehicle in the quotation was owned by an existing client of MSA and that MSA had previously undertaken work on the vehicle on 15 March 2023.[25] Mr Cummings said that the works undertaken by Mr Rosenthal would have ordinarily cost $1,125, inclusive of GST, parts and labour, if MSA rendered the invoice. Mr Cummings said that he regarded Mr Rosenthal’s actions in working on the car of an existing client of MSA as serious misconduct.[26]

Mr Rosenthal provided a statement of Mr Speechley in relation to this incident. Mr Speechley explained that he has known Mr Rosenthal since the late 1990s when he used to bring his 1973 BMW 2002tii into BMW Sydney (where Mr Rosenthal used to work) for services and for registration checks.[27]

Mr Speechley said that his relationship with BMW Sydney, now Sydney BMW, has endured to this day but dates back to when the dealership was Capitol Motors, as he purchased his BMW 2002tii in December 1980.[28]

Mr Speechley said his relationship with BMW Sydney endured primarily because he relied on Mr Rosenthal to understand the services required of his vehicles and the quality of the

work that he was getting through Mr Rosenthal and the dealership. These vehicles have included two E36s - 118i and 323i, an E46 328Ci, an E39 530i, and F10 535d.[29]

Mr Speechley said that in 2013, he and his wife were looking to replace the E39 and he spoke with Mr Rosenthal about buying an M5. Mr Rosenthal’s recommendation to Mr Speechley was that the F10 535d was a better option for them to consider. Mr Speechley said that as a direct result of that conversation with Mr Rosenthal, in August 2013, he and his wife purchased their current 535d from BMW Sydney.[30]

Mr Speechley said that servicing of the 535d was carried out at BMW Sydney as part of a service package that extended for 10 years from the date of purchase. During the majority of that time, Mr Rosenthal oversaw or directly carried out that servicing while he was at BMW Sydney.[31]

Mr Speechley explained that at the end of the service package, and with Mr Rosenthal no longer at BMW Sydney, Mr Speechley called on Mr Rosenthal to carry out service and registration checks in line with the 535d Service Interval Indicator. Mr Rosenthal carried out that work at the MSA workshop, picking up the car from Mr Speechley’s home in Alexandria and returning it to him after service or inspection had been completed.[32]

In 2020, Mr Speechley purchased a 2012 F20 BMW 118i. Mr Speechley’s private relationship with Mr Rosenthal continued as he requested servicing and registration checks for the 118i as they fell due. Again, Mr Rosenthal would collect the car from Mr Speechley’s home address, carry out the service, and return the vehicle to him.[33]

Mr Speechley said that on or about 14 May 2023, he incorrectly fuelled his 535d with unleaded fuel rather than diesel. He called Mr Rosenthal, but he was unavailable, so he called Mr Rosenthal’s workshop directly. He was advised to arrange a tow truck to deliver the vehicle to MSA and was told that ‘we’ll look after you’. The vehicle was then delivered directly to MSA. Mr Speechley said that he had not had any direct interaction with MSA prior to this time.[34]

Mr Speechley said that he returned to MSA on 15 May 2023 to collect his vehicle and to pay for the clean out of unleaded fuel and the replacement with diesel. Subsequent servicing and registration checks for both the F20 118i and the F10 535d were carried out by Mr Rosenthal through Mr Speechley’s direct arrangement with him. Mr Speechley said that he has always gone to Mr Rosenthal directly, as he has had a long-standing relationship with him dating back to his 2002tii.[35]

Mr Rosenthal said that Mr Cummings never spoke to him about the fact that Mr Speechley’s car had come in to MSA and that the car was now ‘a client of Maag & Stucki’, so when Mr Speechley spoke to him about servicing the vehicle on a Saturday, it was normal for Mr Rosenthal to book Mr Speechley in privately and ensure the service parts were available as he knew he had to do that job on a weekend. Mr Rosenthal said that he did not think to check MSA’s records.[36]

During the hearing I asked Mr Cummings:

‘Before that particular vehicle had come through the workshop, was there any issue with Mr Rosenthal working on that vehicle?’[37]

Mr Cummings responded:

‘No, no, because it hadn't been through the workshop as Maag & Stucki client. Absolutely no.’[38]

In relation to Mr Rosenthal’s claims that he was unaware that the vehicle had been in the workshop, Mr Cummings said the following during the hearing:

‘That's just not true. He was aware that it had been in there, and he was fully aware of the conditions and the privilege that he was offered to work in the workshop, that once a vehicle comes through the workshop, you can't go near it again. And it wasn't because the business wanted more work. It was because – to stop any confusion between, you know, Maag & Stucki clients and any vehicles that they would be working on, regarding if they did work privately on the vehicle, at what point does Maag & Stucki become responsible for it? So it was, 'Please make sure it doesn't come through the workshop because once it does you cannot go near it, any other vehicles or any other clients associated with that vehicle, full stop.' And Matthew was fully aware of that.’[39]

Mr Rosenthal provided the registration details of 31 cars that he had worked on privately while employed by MSA.[40]

Events of 24 August 2024

Mr Cummings said that on or about 10 August 2024,[41] Mr Das informed him that Mr Rosenthal had attempted to solicit work from a friend of Mr Das and Mr Sharar.[42] Mr Cummings spoke to Mr Sharar separately who confirmed this.[43]

On Sunday 22 September 2024, Mr Das sent the following text message to Mr Cummings in response to a request by Mr Cummings to provide a statement:

‘On the morning of 10^th August,[44] I came for my scheduled work. Matt and Raiyan were in but Adan was still about to come. I started my work and usually and somewhere around 10/11am I went out for a strech [sic] in the workshop area where Matt and Raiyan were doing their respective jobs. Matt was working on a personal client and he was changing some disc/brake and which reminme [sic] of my friend Abrar’s car which went through a minor accident and one of the front wheel is out of alignment. As usually I have always asked Matt about bits and pieces of cars or what are his suggestions on cars I asked him about the wheel and told him whose car it is where I stated ‘my mate with the black Audi' so tgats [sic] easier for him to recognise. I showed photos out of Ryan’s phone and after a careful look he said the lower arm is bent and some other technical terms. Then he said is he getting it fixed here, I said its still under consideration. Then Matt said that he can fix it for Abrar if he doesn’t do it in Maag & Stucki and he charges half the labour price. And while saying this he walked into the tyre room. And he said I can send him the rego and he will give a quote. And then Matt asked if Adan knows about the issue, I said no. And I said he was here with the Audi and he sold soon after it was fixed and he now has a BMW series now, Adan knows he has a BMW. Then he said yeah its an option he can fix the car and strictly mentioned Adan must not know about it. If Adan finds out Matt said he will go down with all of us (me and Raiyan). These were all conversed in a fun and relaxed conversation but while saying about ‘Adan must not know’, Matt seemed a like tensed because soon after that a BMW customer entered the workshop to pick tge [sic] car and Matt tried to look if that was Adan in a very hurry and litlle [sic] shocked way. No conversation happened about it that day. I was shocked with what he offered to do but didn’t tell Adan till everyone left the workshop. Let me know if you need any further details for any part.[45]

On 22 September 2024, Mr Sarar sent the following text message to Mr Cummings in response to a request by Mr Cummings to provide a statement:

‘On Saturday me and Dru were having a conversation with Matt. And we were trying to seek some advice for our friend’s car that needed some restoration. I showed Matt some pictures of the damage the car took. He then enquired about the [sic] which friend it was and what car he was driving now. And he said since it was a new car, it didn’t come into the workshop. So he then told us what was the damage and asked us if we wanted to get the car fixed from him. He said he’ll give a reduced rate than other places. Just after that he said that this matter couldn’t be shared with Adan. If we wanted to get his cheaper rates we had to make sure that Adan didn’t know about it. After that he said if Adan finds out and he goes down, then he will take us down with him. At that time I tried to believe that he said all that on a joking manner but the tone quite didn’t match. I remember the conversation ending there and we went to our separate works.’[46]

Mr Sarar said that he first communicated the information in this text message to Mr Cummings on or about 15 September 2024.[47] At the hearing, I asked Mr Sarar whether anyone talked to him about this conversation before Mr Cummings asked him to send the text message. Mr Sarar said:

‘Any knowledge that I had about what was going on was on the day I think we worked, and Matt was taking out his tools and going out. Before that, I didn't know anything that was going on. And after that happened, I talked to Adan and asked, and he let me know what was going on, and it was probably – I don't remember the exact date of that day, but it was after that that he told me to send the text message.’[48]

Mr Rosenthal gave the following version of this conversation at the hearing:

‘So I was working on a car on the Saturday. I can't recall what car it was. And I believe it was Mr Das that came up to me and said, 'Can you have a look at this? This is my friend's car. Can you tell me what's wrong with it? He hit a gutter and now the steering wheel's off‑centre, and we don't know what's wrong with it'. And I said, 'Well, it sounds like he's bent something under the car. You would need to take photos at least for me to see for me to tell you what has actually occurred'. So then he came to me with photos, and this was on a Saturday where I was working on one of my private customer's cars, and they had specifically been told numerous times that when I was working on a Saturday, it was my time, and it wasn't me working for Maag & Stucki. So then he started showing me photos, interrupting me and showing me photos, and I said to him, 'The car has a bent lower control arm. If you replace that, that's probably all it's going to need apart from a wheel alignment to fix it. It might have damaged other components, but until you replace that, you cannot tell'. He then said, 'Well, how much are the parts?' And I said, 'Well, I don't know. I'd have to look them up. I don't even know the rego of the car. I don't know whose car it is', and he goes, 'It's my mate's car that had that Audi that came in here and was worked on', and I go, 'Well, I can't work on that car anyway because he's a customer', and he goes, 'But if you were to work on it, what would it cost?' And I said, 'Well, I can't tell you because I don't have the parts, and I'm trying to work on my car on a Saturday'. I said, 'Text me the rego number, and I'll tell you how much the part is'. He texted me the registration number. I think - I can't remember when it - the screenshot shows you the time and the date, I believe, as it was in his statement, and so I looked up the part and how much it was, and I texted him back with the price. I had no intention of working on the car. I didn't want to work on the car. I only gave him the price because he asked me for the price.’[49]

During the hearing, I said to Mr Rosenthal:

‘So Mr Sarar says that you said that you'd give a reduced rate than other places and that the matter couldn't be shared with Adan?’[50]

Mr Rosenthal responded:

‘What I said was - I said to him, 'I can't work on that car'. I said, 'I'm way cheaper than Maag & Stucki because I'm doing it on Saturdays, but obviously I can't work on that car because of my agreement'. I think he's taken it out of context and turned it around and misunderstood me. I never had any intention on working on the car, and the price I gave him was for the price of the part.’[51]

Mr Rosenthal went on to say:

‘Well, I actually wonder - I truly actually wonder about that because they've never asked me to work on any of their cars before. They've always come through the workshop. They've always had the same agreement with Adan. It's only their friends' cars that come through the front door. So there's - I don't believe there's any question of solicitation. I didn't approach them. I knew nothing about it. They approached me. I had no intention of working on the car. I just told them the price of the part. I don't - I don't want to work on their cars. They're not - they're not the clientele I want to deal with. My clientele - most of my clients are customers that were mine that I looked after at BMW Sydney, and I looked - they expressly sought me out every time they came into the workshop, people like Gary Speechley whose statement is in there, because they got on well with me, I got on well with them, and they liked the way that I dealt and looked after them. After I left BMW Sydney, I had a lot of customers actually contact me. I don't know how a lot of them found me. Some of them found me through LinkedIn. I think some of them found me through Facebook. I don't know how else they found me because I don't - I don't know how else - I think some of them had my mobile number for some reason, but in any case, those customers are the customers that are my clientele and I look after. I have long-term relationship and longstanding relationship with my customers and my cars – sorry, and their cars. And doing the sort of job or – and that sort of repair is not the sort of clientele or work I seek. I don't even seek out work. All my work comes to me from word of mouth and referrals and I don't actively even look – seek clients. I only – I do it – I do it for a lot of them because the labour rates in Sydney are – the dealerships charge $300 an hour, the specialists charge around $200 an hour and I am able to look after their cars a lot cheaper than that and if I wasn't able to do that a lot of them wouldn't even have BMWs and therefore I wouldn't even be working on their cars. So it's in my interests to look after their cars for them and it's in their interest for me to look after their cars. We have a very symbiotic relationship with my private customers.’[52]

In cross-examination, Mr Rosenthal admitted that he said, ‘Adan must not know about it’ and explained:

‘It was frustration. It was a joke. It was a shit stir. It was to get them off my back so I could continue working on the car that I needed to finish on that Saturday in limited time and get it out of there in a reasonable time. As I said, I had no intention of ever working on that car, nor did I want to, nor did I even want to get involved.’[53]

At 12:21pm on 26 August 2024, Ms Das sent Mr Rosenthal the following text message:

‘Hey Matt, the rego is [redacted]’[54]

At 12:38pm, Mr Rosenthal replied ‘$650’. At 1:07pm, Ms Das sent Mr Rosenthal the following text message:

‘I’ll talk to my friend and let you know, thanks!’[55]

Events of 9 September 2024

Mr Cummings said he initiated a conversation with Mr Rosenthal at 4:30pm on 9 September 2024, where he said at the end of the working day:

‘How long have you been soliciting my clients for?’[56]

Mr Cummings said that Mr Rosenthal’s face dropped and then he started collecting his things. He was running around grabbing things in a manic way and started to take a toolbox.[57]

Mr Cummings said that he told Mr Rosenthal that the toolbox is the property of MSA and said words to the effect of:

‘How could you do this? I trusted you.’[58]

Mr Cummings said that the discussion started to get heated on both sides. Mr Cummings said that he and Mr Rosenthal had arguments in the past, but those arguments had not prevented them from working together.[59]

Mr Cummings said that the following conversation then took place:

‘Mr Rosenthal: They wanted a price.
Mr Cummings: How many of my clients do you text message prices to?’[60]

Mr Cummings said that Mr Rosenthal did not respond to this question. Mr Cummings said words to the following effect:

‘It's best that you leave now.’[61]

Mr Cummings said that he said this because everyone needed to calm down. It was not intended to indicate that Mr Rosenthal was terminated. Mr Rosenthal was already packing up his tools. Mr Cummings never said that Mr Rosenthal was fired or that his employment was terminated. Mr Cummings never provided any letter of termination to Mr Rosenthal. Mr Cummings said that Mr Rosenthal left the workshop and that it was at the end of the working day.[62]

Mr Rosenthal’s version of this conversation was that Mr Cummings accused him of stealing and poaching customers. When Mr Rosenthal asked Mr Cummings what he had been stealing, Mr Cummings referred to BMW oil filters and 32 hose clamps which were missing.[63] Mr Rosenthal said that Mr Cummings said to him:

‘Take your things, pack up, you should be ashamed of yourself. I never want to see you again. If I ever come across you…’[64]

Mr Rosenthal said that Mr Cummings made false allegations against him. Mr Cummings denied the allegations were false and said that the allegations he made were based upon the reports of Mr Das and Mr Sarar, CCTV footage, and records maintained on the Auto Care system.[65]

Mr Rosenthal said that Mr Cummings made threats against Mr Rosenthal and his family.[66] Mr Cummings denied this, that he yelled and that he said ‘take your things’. Mr Cummings said that he asked Mr Rosenthal to leave after the conversation got heated.[67]

Mr Rosenthal said that in response to Mr Cummings saying ‘take your things’, Mr Rosenthal collected all his personal belongings from the lunch table and his locker, and then he went to take his toolbox. Mr Cummings stopped him and said that the toolbox did not belong to Mr Rosenthal and said:

‘You can take the tools but you're not taking the toolbox.’[68]

Mr Rosenthal said that he started to open his toolbox to take his tools and Mr Cummings said:
‘No, you're not taking your tools now. You can come back tomorrow for them.’[69]

Mr Rosenthal said that he took all of his personal belongings and put them in his car. By that time, it was about 4:55pm. Mr Rosenthal said he was very agitated, and in hindsight, he was in shock. He did not know what to do and stayed in his car outside the workshop until about 5pm and then drove home.[70]

During the hearing, I asked Mr Cummings a series of questions about the events of 9 and 10 September 2024. My questions and Mr Cummings’ answers are recorded in the transcript as follows:

‘So just referring to you saying, 'It's best that you leave now', what was your expectation about what would happen after 9 September?‑‑‑Okay. So I just want to be really clear. If I had – I did not dismiss him. I did not fire him. I didn't – at the point in time both of us are very – we can both be very loud. We can both be very passionate people. I didn't need this situation to get any – it was going nowhere at this point in time. I was saying things to him; he was denying them. Then he was saying things to me and it was just going nowhere. You know, a heated argument. I thought that the sensible thing to do was just to let it, you know, let it calm down, it's the end of the work day. Simple as that. That's how I saw it. You know, it's – I didn't see it as anything else. I just thought it was the wise thing to do, to try and deescalate arguments, and let things get out – let things get – or potentially let things get out of hand. I mean, neither one of us have ever been physical; it wasn't a concern in that regard for me. But I just – like I said, when an argument gets to a point where, you know, people are just screaming allegations at each other and whatever else, it's going nowhere. I think people just need to step back, collect their thoughts, their heads. Tomorrow's a new day. There we go. You start a new day tomorrow, see which - where it goes from there.[71]
So you thought the next day would just be a normal day?‑‑‑Okay. To be honest with you, I didn't know what the next day was going to be at all. I really didn't because Matthew was collecting his things that afternoon. I didn't know what to expect. I was pretty - I was quite in shock myself. I really didn't know what the next day would bring even if he needed a couple of days off. Maybe that would have been sufficient for - you know, for things, but Matthew just started collecting his things rapidly and walking out of the workshop. I wasn't about to stop him doing that.[72]
And, so, tell me what happened the next day?‑‑‑Okay. So the next day - not a lot to be honest with you. I think the video says a lot of it. Matthew came back, 'I'm here to collect my tools', and I went, 'That's fine. You can collect your tools, but you're not collecting the toolbox. That's owned by Maag & Stucki Automotive'. He says something to the effect that, 'It's my toolbox. I'll call the police', and I said, 'That's fine. You call the police. You show them your receipt, and I'll show them mine'. That ended that conversation pretty quickly, and then I believe he had a ute across the road ready to go, and they came in and took all the tools out of the toolbox and put it into the ute. I thought it was wise that I sort of keep my distance from the situation. I think the video shows that very clearly. My wife is there. Raiyan Sarar was there. So I just thought I'd wander in and out from time to time, you know, just to keep an eye on things, you know, but that was, effectively, the end of it. He collected his things and left.[73]
And then what did you think then was going to happen?‑‑‑Well, I think it was pretty obvious that Matthew was going to - you know, to - you know, that he's leaving, but I hadn't received anything form him. I wanted to carry out a really thorough investigation. Like I said, Matthew was a very good mechanic. I - you know, there had been some changes in him as of recent. You know, again, you sort of - once you work with people for a while, you sort of learn to accept the ups and downs of people's lives and things like that, but I really - like I said, I really did not know where it was going, and then I started sniffing around. I thought, okay, it's almost like this is geared for some sort of vexatious claim, and that's exactly where we are right now. You know, purely, this thing was geared up to - you know, for where we are, unfortunately, here today.[74]
So on 10 September, Mr Rosenthal left the workplace?‑‑‑Yes.[75]
At that stage, are you thinking, 'Well, he's left now. He's resigned'?‑‑‑I didn't know what to think at that point in time. I really didn't. And so after a while, I sort of - I didn't know, you know, whether he'd left, whether he hadn't left. I've got no idea. Like you said, you work with somebody for eight years. I was a bit perplexed by his behaviour. I really was. You know, the - I just did not know what to think, and after seeking some advice, I wanted to absolutely carry out a really thorough investigation trying to make it as transparent as independent - like I said, Deputy Director, my sole purpose here was to attempt to disprove what I knew. I did not want this to happen at all. I was hoping I was wrong. I was hoping that - you know, finding a motor mechanic in this industry is not easy. I mean, a motor mechanic can walk into a job, sneeze and get a job in five minutes. There is an incredible demand. So for me to actually end up in the situation where I am has really big financial penalties for me or for the business as such, but this wasn't driven by me. This - Matthew did this on his own. He left. He left the workshop, took his tools and went along on his way. In an attempt - because there was no communication with him, in an attempt to sort of avoid this situation, I had - my sister helped me draft a letter sending him - putting forward to him the allegations outlaid, requesting a letter of resignation, offering to - a settlement for the thing, and not long after that, I received an email from Fair Work Commission regarding his application for a unfair dismissal claim.’[76]

Mr Cummings explained during the hearing that he was only aware about the issue with Mr Das and Mr Sarar when he met with Mr Rosenthal on 9 September 2024.[77] In response to questioning by me, Mr Cummings explained that his intention in raising this matter with Mr Rosenthal was as follows:

‘I was hoping Matthew would fall on his sword, personally. I thought that this is so blindingly obvious that he's done the wrong thing. He knew that the people that were reporting to me, okay, they were solid people. They're not the sort of people that would make this thing up. They're not motor mechanics, and I was hoping that potentially, you know, should he own up to it maybe there was some legitimate reason. But he didn't. He denied it. Flat out denied it. And then after it's – the conversation started getting raised voices, he then turned and said, 'Well, they just wanted a price.' And I said, 'Well, how many of my clients – how many other of – how many of my other clients have you been text messaging quotes to when we have a dedicated software system?' There was no response to that.’[78]

Events of 10 September 2024

On 10 September 2024, Mr Rosenthal attended the workshop with his cousin, Mr Bywater at about 7:30am. Mr Rosenthal said that he was wearing his workshop equipment ready for work.[79]

Mr Cummings allowed Mr Rosenthal to take his tools from the toolbox but did not allow him to take the toolbox, as Mr Cummings maintained that it is owned by MSA.[80]

Mr Bywater claimed that Mr Cummings became very abusive and aggressive which Mr Cummings denied. Mr Cummings admitted that he said:

‘You should be ashamed of yourself. I trusted you.’[81]

Mr Rosenthal said that Mr Cummings and Mrs Cummings made snide derogatory comments to him and Mr Bywater, including words to the effect of:

‘You should be ashamed. Your family will be ashamed of you. Thief, liar, how could you do this?’[82]

Mr Cummings said that he was not close to Mr Rosenthal when he was removing the tools. Mr Cummings was on the other side of the workshop or in the office for a lot of the time.[83]

Mr Bywater said that Mr Cummings’ last parting words were ‘don't come back’ (with expletives before, between and after each word)[84] which Mr Cummings denies.[85]

Mrs Cummings was present when Mr Rosenthal attended the workshop to collect his tools. Mrs Cummings said that Mr Cummings was not abusive or aggressive on that day and he was not screaming.[86] Mrs Cummings said that Mr Rosenthal and Mr Bywater were not stressed and were both laughing.[87]

Mrs Cummings said that Mr Cummings said:

‘I can’t believe this is happening. You lied.’[88]

Mrs Cummings said that Mr Bywater said:

‘Your boss is a real dickhead. I’m going to enjoy fucking him over.’[89]

In cross-examination, Mr Bywater denied making this statement to Mrs Cummings and said that he made comments to Mr Rosenthal, but not the words alleged by Mrs Cummings.[90]

Later that day, Mr Rosenthal made an unfair dismissal application. The application stated that Mr Rosenthal had been informed of the dismissal on 9 September 2024, and that the reason for dismissal was:

‘I was accused of throwing a knife and stealing.
Neither of which occurred.
I was then told to get out.
I was not allowed to take all my possessions.
I have only been verbally dismissed and have not received any notice of dismissal.’[91]

Mr Cummings said that Mr Rosenthal subsequently did not return to work but was paid on 11 September 2024 for the period 4 - 10 September 2024 and on 18 September 2024 for the period 11 - 17 September 2024.[92]

Letter of 23 September 2024

On 23 September 2024, Mr Cummings sent Mr Rosenthal a letter[93] by email in the following terms:

‘Dear Matthew,
Re: Employment at Maag & Stucki Automotive
I am writing to you to progress our discussion of 9 September 2024, regarding your employment at Maag & Stucki Automotive.
On Monday, 9 September 2024 I raised several concerns with you, and these are summarised below:
·Solicitation of Maag & Stucki clients for your private business
·Inappropriate and defamatory comments about me to junior staff
·Inappropriate use of workplace tools and equipment for non Maag & Stucki work in breach of our employment terms

During the meeting you denied these allegations.
I have now conducted a preliminary investigation, including a forensic review of CCTV footage from the workplace and interviews with relevant people. I have collated evidence which substantiates the allegations, a sample of which is outlined below.
Solicitation of Maag & Stucki clients
When you commenced your employment with Maag and Stucki Automotive, you were offered the privilege of out of business hours access to the workshop and its diagnostic computers, equipment, tools, information and spare parts buying power for you to carry out work on friends and family vehicles (herein referred to as 'private work').
This was a benefit of your employment however there were strict conditions that applied to this benefit, and these were reiterated to you many times over the course of your employment, as were the consequences of failing to comply with the conditions.
The relevant conditions were:
1.No private work could ever be performed on any existing or past clients of Maag & Stucki Automotive.
2.If private work was performed on a vehicle and the owner of that vehicle subsequently became a client of Maag & Stucki, no further private work could be performed on any vehicles belonging to that client as this was now considered a Maag & Stucki client.
3.Staff could not meet their clients for private work in or around the Maag & Stucki workshop.
4.No service stamps, service stickers, or any other Maag & Stucki related branding could be used for private work.
5.No digital service log entry for private work could be registered using Maag & Stucki Automotive access.
6.All parts used from stock for private work would be recorded and emailed to Maag & Stucki and they would subsequently be invoiced to you as required.

Solicitation Incident - 18 August 2024[94]
On Saturday 10 August 2024 8.21am CCTV footage captures you driving a vehicle into the Maag & Stucki workshop. The vehicle registration number is [redacted].
You raised the vehicle on the workshop hoist and proceed to service the vehicle, after which you lower the hoist and drive the vehicle out of the Maag & Stucki workshop at 9.54am.
At 10.25am you sent Maag & Stucki an email referencing quote number 6385 listing the parts you used to service the vehicle.
This vehicle was owned by a client of Maag & Stucki. It had been towed to Maag & Stucki on Friday 12 May 2023 for repairs to be carried out by Maag & Stucki Automotive and you were aware of this.
As such, the work carried out on this vehicle or any of the client's vehicles was a direct breach of the conditions of your out of hours access to the workshop.
Solicitation Incident - 24 August 2024
On Saturday, 24 August 2024 CCTV footage from the Maag & Stucki workshop captured you having a conversation with Mr Dhruba Das, a part-time bookkeeper at Maag & Stucki Automotive, and Raiyan Sharar, a part time general hand employed by Maag and Stucki.

The CCTV footage shows the three of you having a discussion and looking at photographs on a mobile phone. I have been informed that the discussion was regarding some damage to their friend's vehicle who was an existing client of Maag and Stucki Automotive.
Mr Das and Mr Sharar are not automotive mechanics, and they were seeking an opinion as to some damage sustained on their friend's vehicle. In their written statements they have confirmed that you offered them a discounted rate to do the work privately however "they had make sure Adan didn't know about it" and further stated "if Adan finds out and I go down, I will take you down with me".
You then advised Mr Das that all you would require was the registration number of the vehicle to obtain the data required to quote the repairs and this was provided to you on Monday 26 August at 12:21pm.
At 12:42pm you can be seen entering the workshop office and using the Maag & Stucki computer to log on to Burson EZYparts to obtain the VIN number from the vehicle registration details and to then use this information to obtain part numbers and list prices for the parts required.
You are then seen logging on to MyHsy and Imparts B2B portals. These are the two main parts suppliers for Maag & Stucki. You have then made unsuccessful attempts to delete your searches from the search history in these portals.
At 12:48 om on 26 of August 2024 you respond to Mr Das's text message quoting $650 to complete the repairs privately.
On 30 August 2024 7.25am, I was researching parts in the MyHSY portal, and I subsequently discovered a VIN in the search history that I didn't recognise. I obtained the vehicle registration number that Mr Das and provided to you and they matched. Given that I have never had any cause to enter this VIN or registration number into this portal, I can only conclude that this was the search you conducted.
Further to the issues of soliciting Maag & Stucki clients, this incident is also evidence of your serious breach of workplace procedures.
Maag & Stucki quoting procedures do not allow any staff member to provide quotes to Maag and Stucki directly from their mobile phones. Quotes must be provided from the Maag & Stucki accounting system. This ensures that quote history is maintained, and jobs can be appropriately tracked.
These two incidents have been identified by my initial investigation however there is significantly more CCTV footage yet to be audited and I expect that further instances will be identified.
Next steps
These issues constitute serious misconduct which have caused damage to Maag & Stucki's business.
To resolve this situation, I am proposing a settlement with the terms outlined below.
Mr Matthew Rosenthal to:
1.Provide a written resignation effective Monday, 9 September 2024, with a 2 week notice period.
2.Settle the outstanding balance of $1180.57 for parts that were purchased for private work and have not been paid for.
3.Return all work shirts and work jackets regardless of their condition.
4.Provide the Maag & Stucki workshop Keepass password that you changed without authorisation.
5.Return any tools or other items that may have been removed from the Maag and Stucki workshop.

Maag & Stucki to:
1. Confirm and pay all remaining employee entitlements, noting that Maag & Stucki has paid your salary for the period 9 September 2024 to 23 September 2024 and will take this as your 2 weeks paid notice period.
2. Gift to you the toolbox that you regularly used, along with some hand tools.
This is a one-off offer made in good faith to bring this matter to a close. It will not be further negotiated, and it expires at 5pm on Wednesday, 25 September 2024.
Maag & Stucki has continued to pay your salary since 9 September 2024, despite your failure to attend the workplace or perform your employment duties. If you do not respond to this letter, I will treat this is an abandonment of your employment.
Yours sincerely,
Maag & Stucki’

Mr Rosenthal did not respond to the letter.[95] Mr Rosenthal explained at the hearing that the reason he did not respond was because he received correspondence from the Commission on the same day in relation to a conciliation date for his unfair dismissal application.[96]

Mr Cummings said that he did not pay Mr Rosenthal again as Mr Rosenthal was considered to have abandoned his employment.[97]

On 25 September 2024, MSA filed an Employer response form signed by Mr Cummings in relation to Mr Rosenthal’s unfair dismissal application. In the response, MSA claimed that Mr Rosenthal had not been dismissed and relevantly stated:

The employee has not been dismissed so I don’t think this constitutes an unfair dismissal.
A discussion took place at approximately 4.30 pm, 9^th Sept 2024.
Concerns were raised regarding applicant soliciting clients for private work which effectively damages my business.
I gave the applicant an opportunity to respond, and he denied all allegations even after he was informed of substantial evidence including CCTV footage.
The discussion became heated, and applicant was asked the leave the workshop in an attempt to diffuse the situation and to give me time to conduct further investigations.
At no time was he dismissed formally or informally from his employment.
The applicant has continued to be paid.
Prior to receiving this notice, I sent the applicant a letter with further evidence of his misconduct and made a good faith offer for him to resign and he has not responded. (a copy of this offer can be provided if required).[98]

When can the Commission order a remedy for unfair dismissal?

Section 390 of the FW Act provides that the Commission may order a remedy if:

(a) the Commission is satisfied that the person was protected from unfair dismissal at the time of being dismissed; and

(b) the person has been unfairly dismissed.

Both limbs must be satisfied. I am therefore required to consider whether Mr Rosenthal was protected from an unfair dismissal at the time of being dismissed and, if I am satisfied that Mr Rosenthal was protected, whether Mr Rosenthal has been unfairly dismissed.

When has a person been unfairly dismissed?

Section 385 of the FW Act provides that a person has been unfairly dismissed if the Commission 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.

Initial matters

Was Mr Rosenthal dismissed?

A threshold issue to determine is whether Mr Rosenthal has been dismissed from his employment.

Section 386 of the FW Act provides:
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.
(2) However, a person has not been dismissed if:
(a) the person was employed under a contract of employment for a specified period of time, for a specified task, or for the duration of a specified season, and the employment has terminated at the end of the period, on completion of the task, or at the end of the season; or
(b) the person was an employee:
(i) to whom a training arrangement applied; and
(ii) whose employment was for a specified period of time or was, for any reason, limited to the duration of the training arrangement;
and the employment has terminated at the end of the training arrangement; or
(c) the person was demoted in employment but:
(i) the demotion does not involve a significant reduction in his or her remuneration or duties; and
(ii) he or she remains employed with the employer that effected the demotion.
(3) Subsection (2) does not apply to a person employed under a contract of a kind referred to in paragraph (2)(a) if a substantial purpose of the employment of the person under a contract of that kind is, or was at the time of the person’s employment, to avoid the employer’s obligations under this Part.

The expression ‘terminated on the employer’s initiative’ in s.386(1)(a) is well understood to be a reference to a termination that is brought about by an employer, and which is not agreed to by the employee. In circumstances where the employment relationship is not left voluntarily by the employee, the focus of the inquiry is whether an action on the part of the employer was the principal contributing factor which results, directly or consequentially, in the termination of the employment.[99]

Mr Rosenthal contends that he was dismissed by MSA on 9 September 2024 when Mr Cummings said, ‘Take your things, pack up, you should be ashamed of yourself. I never want to see you again.’ Mr Cummings claimed that he said ‘It's best that you leave now’ in an attempt to diffuse the situation and to give himself time to conduct further investigations. MSA submitted that Mr Rosenthal remained employed after the meeting on 9 September 2024, which was evidenced by the fact that he continued to be paid and that his employment eventually came to an end as Mr Rosenthal abandoned his employment by not responding to Mr Cummings’ letter of 23 September 2024.

MSA made the following submissions in support of its position that there was no dismissal:

MSA never advised Mr Rosenthal that his employment was terminated;
MSA never gave Mr Rosenthal written notice of the termination of his employment;
Mr Rosenthal began packing up his tools and personal effects immediately after being confronted with evidence that he had solicited a client;
Mr Rosenthal continued to be paid by MSA after he left the workplace;
MSA wrote to Mr Rosenthal and asserted in that correspondence that he remained employed;
Mr Rosenthal failed to respond to that correspondence in any way.

The undisputed facts are that:

· On 9 September 2024, Mr Cummings initiated a meeting with Mr Rosenthal where he said:
‘How long have you been soliciting my clients for?’

· A heated discussion occurred between Mr Rosenthal and Mr Cummings which concluded with Mr Cummings saying words to the following effect (noting that there is disagreement about the exact words used by Mr Cummings):

‘It's best that you leave now.’

·     Mr Rosenthal left the workplace. The following day, on 10 September 2024, he returned to the workplace and collected his tools.
·     Later on 10 September 2024, Mr Rosenthal made an unfair dismissal application which indicated that he believed that he had been dismissed on 9 September 2024.
·     On 11 September 2024, MSA paid Mr Rosenthal one weeks pay which it says was for the period from 4-10 September 2024.
·     On 18 September 2024, MSA paid Mr Rosenthal a further one weeks pay which it says was for the period from 11-17 September 2024.
·     On 23 September 2024, Mr Cummings sent Mr Rosenthal a letter in which he asked Mr Rosenthal to resign.
·     Mr Cummings and Mr Rosenthal did not contact each other during the period from 10 September 2024 until Mr Cummings sent Mr Rosenthal the letter on 23 September 2024.

I accept that at the meeting on 9 September 2024, Mr Cummings did not say that Mr Rosenthal was terminated or dismissed, and that no termination letter was issued. These facts are relevant to my consideration of whether Mr Rosenthal was dismissed, but are not determinative of this matter.

It is relevant to my consideration that Mr Cummings planned the meeting on 9 September 2024, whereas Mr Rosenthal was given no prior notice of the meeting and was taken by surprise by the allegations. Mr Cummings had clearly formed the view by 30 August 2024, that Mr Rosenthal had solicited his clients and engaged in misconduct, although he had not yet put these allegations to Mr Rosenthal. 30 August 2024 was the date identified in the letter of 23 September 2024, when Mr Cummings discovered that Mr Rosenthal had entered the VIN for the friend of Mr Das and Mr Sarar into the MyHSY portal, which is one of the main parts suppliers for MSA. By this date, Mr Cummings had spoken to Mr Das about his conversation with Mr Rosenthal on 24 August 2024 and was aware of the text messages exchanged between them on 26 August 2024. However, according to Mr Sarar’s evidence, Mr Cummings had not yet had a conversation with Mr Sarar about the incident.

Mr Cummings said during the hearing that he expected Mr Rosenthal to ‘fall on his sword’ when confronted by the allegations and appeared not to have contemplated the possibility that Mr Rosenthal might dispute the allegations.

Having become aware that Mr Rosenthal disputed the allegations, Mr Cummings should have provided Mr Rosenthal with a proper opportunity to respond. In my view, the meeting on 9 September 2024 was not such an opportunity, as Mr Rosenthal was taken by surprise by both the meeting and the allegations. I believe that the heated nature of the discussion which ensued was not an appropriate environment for Mr Rosenthal to respond to allegations which ultimately led to the cessation of his employment.

In response to my questions during the hearing, Mr Cummings appeared to suggest that Mr Rosenthal voluntarily left the employment relationship on 9 September 2024, when he started packing up his tools. However, MSA’s position throughout the proceedings was that the employment relationship remained on foot following the events of 9 September 2024 and concluded only when Mr Rosenthal did not respond to Mr Cummings’ letter of 23 September 2024. During the hearing, Mr Cummings initially suggested that Mr Rosenthal might need a couple of days off and said that after a while, he did not know whether Mr Rosenthal had left his employment or not. He said that because there was no communication with Mr Rosenthal, in an attempt to avoid ‘this situation’, Mr Cummings organised for his sister to assist drafting the letter of 23 September 2024. I understand that Mr Cummings’ reference to ‘this situation’ to be Mr Rosenthal’s unfair dismissal application.

Mr Cummings’ evidence that he did not know whether Mr Rosenthal had left his employment or not was somewhat inconsistent with MSA’s position that Mr Rosenthal’s employment remained on foot and that this was evidenced by MSA continuing to pay Mr Rosenthal. Mr Rosenthal disputed that receiving payment from MSA established that he was still employed after 9 September 2024 and said during the hearing that he was paid as a result of an automatic payment which Mr Cummings had not stopped.[100] MSA submitted that this evidence should not only be rejected but should be considered untruthful and a matter that undermines Mr Rosenthal’s credibility. I do not accept this submission. Mr Rosenthal may have been speculating when he said that the payments were automatic, but this does not establish that he was being untruthful.

Mr Cummings disputed that the payments were automatic and explained that his bookkeeper would process the payroll, and that Mr Cummings would do the Single Touch Payroll side of it and make the bank payments.[101] Mr Cummings said at the hearing:

‘In fact, I made manual payments specifically because I wanted to make sure.’[102]

As the payment made on 11 September 2024 was for the period from 4 - 10 September 2024, most of this payment was in respect of work that Mr Rosenthal performed, so it is not evidence that the employment relationship remained on foot. The only evidence that the employment relationship may have continued after 10 September 2024, was the payment made to Mr Rosenthal by MSA on 18 September 2024. However, this payment also could have been monies owed to Mr Rosenthal following the cessation of his employment. Mr Rosenthal’s evidence was that he never received payslips from MSA,[103] however, payslips were provided by MSA to the Commission in response to a request by Mr Rosenthal. The payslip issued on 11 September 2024, indicated that Mr Rosenthal had ‘day off 9/09 to 11/09’ and was paid 15.2 hours annual leave for the period. The payslip issued on 18 September 2024, indicated that Mr Rosenthal was on annual leave for the period from 11 September 2024 to 17 September 2024.

In this regard, I note that Counsel for MSA made the following submissions in relation to the payments:

‘[a] bookkeeper that was involved with the business treated the payments which were made and are in evidence, the last two payments, as being annual leave, and that was an error.
I have advised the employer that Mr Rosenthal should be treated as being on duty and entitled to full pay, up until and including 25 September 2024, and should also be paid any annual leave that was accrued up until that date. I understand that a payment has been made and that a pay slip will be provided to Mr Rosenthal.’[104]

Regardless of whether the payment made on 18 September 2024 was in respect of salary or annual leave, no further payments were made after that day. Therefore, it was incorrect for MSA to state in the Employer response form filed on 25 September 2024 that ‘the applicant has continued to be paid’ as Mr Rosenthal received no payment beyond 17 September 2024. That MSA sought to address this at the hearing by paying Mr Rosenthal up until 25 September 2024 does not change this fact. It should be noted that these payments were made in response to Mr Rosenthal’s evidence during the hearing that MSA had not yet paid his statutory entitlements.

Further, I note that Mr Cummings’ evidence was that Mr Rosenthal was not paid again because he was considered to have abandoned his employment. However, this cannot be correct as MSA does not claim that Mr Rosenthal abandoned his employment until after the letter dated 23 September 2024 was received and submitted, he was still employed when it filed the Employer response form on 25 September 2024. During the eight-day period from 17 September to 25 September 2024, Mr Rosenthal received no payment. On this basis, there is no evidence which establishes that the employment relationship remained on foot after 17 September 2024, and I reject MSA’s contention that Mr Rosenthal remained employed until on or about 25 September 2024. It is therefore unnecessary for me to consider MSA’s contention that Mr Rosenthal abandoned his employment when he did not respond to the letter.

For completeness, I record that I do not regard the letter of 23 September 2024 as evidence that the employment relationship was ongoing. Based on Mr Cummings’ evidence at the hearing, I find that the purpose of the further investigation after 9 September 2024 and the letter was to respond to any unfair dismissal application which Mr Rosenthal might make by suggesting that Mr Rosenthal had not been dismissed and claiming that Mr Rosenthal had engaged in serious misconduct.

Counsel for MSA submitted that Mr Rosenthal’s evidence that he received the letter of 23 September 2024 three or four weeks after he made the application ‘should not only be rejected, but should be considered untruthful and a matter that undermines the applicant’s credibility.’ I do not accept this submission. The evidence given by Mr Rosenthal in relation to this issue was:

‘I did not receive any communication from [Mr Cummings] at all until I received the letter that he submitted in evidence, and that was about - I received that about five minutes before I received the notification of the Fair Work hearing and things starting. So that was, I believe, three or four weeks after I made the application, and I had not heard a thing from him prior to that.’[105]

It is clear from the use of the words ‘I believe’, that Mr Rosenthal was providing an estimate of the length of time between the date that he filed the application and the date he received the letter. That the estimate is incorrect does not establish that Mr Rosenthal was being untruthful or that he is not a credible witness. It may simply establish that he made a mistake.

What remains to be decided is whether Mr Rosenthal was dismissed at some point during the period between 9 September and 17 September 2024. On one view, MSA could be regarded as effecting Mr Rosenthal’s dismissal when it ceased paying him on 18 September 2024. However, I believe the evidence supports a finding that the employment relationship had already ceased by 18 September 2024, and that MSA dismissed Mr Rosenthal on 9 September 2024. Mr Rosenthal and Mr Cummings provided different accounts of what was said on that day; however I do not think that either of them were being deliberately untruthful and believe that the different accounts can be explained by the very stressful circumstances of the meeting which may have affected each of their memories and perceptions of what was said. MSA submitted that Mr Rosenthal’s allegations of threats and yelling by Mr Cummings appear to be part of a series of baseless allegations made by Mr Rosenthal in the course of this matter. I do not accept this as although Mr Cummings denied yelling at Mr Rosenthal,[106] he did refer to ‘an argument get[ting] to a point where...people are just ‘screaming allegations at each other’[107] at the hearing which appears to be consistent with Mr Rosenthal’s evidence.

Ultimately, I do not need to decide whose version I prefer because on Mr Cummings’ version alone, I find that a dismissal occurred. Mr Cummings said that he said to Mr Rosenthal, ‘It's best that you leave now’. Mr Cummings said that he said this because everyone needed to calm down. It was not intended to indicate that Mr Rosenthal was terminated. This may be the case, but I need to assess this matter on an objective basis, regardless of what Mr Cummings’ intentions were.

It would have been clear to a person in Mr Cummings’ position that Mr Rosenthal’s actions in attending the workplace on 10 September 2024 and collecting his tools, indicated that he believed that his employment had ended. There was simply no other rational reason that Mr Rosenthal would hire a Ute and fill up half of it with his tools if this was not the case. I do not accept that the onus was on Mr Rosenthal rather than Mr Cummings to confirm the status of Mr Rosenthal’s employment. Mr Rosenthal’s actions in removing his tools from the workplace show that he was in no doubt that his employment had ended, and therefore, there was nothing for him to clarify or to discuss with Mr Cummings. As the person who had initiated the discussion which led to Mr Rosenthal’s actions in this regard, it was Mr Cummings’ responsibility to communicate to Mr Rosenthal that he had not intended to terminate Mr Rosenthal’s employment, and that Mr Rosenthal was mistaken in his belief that he had been dismissed. While it is perhaps understandable that Mr Cummings did not take such steps immediately after the meeting on 9 September 2024 given its heated nature, Mr Cummings has provided no explanation as to why he did not seek to have further discussions with Mr Rosenthal, when Mr Rosenthal returned to the workplace to collect his tools on 10 September 2024.

Even if I was to accept Mr Cummings’ evidence that it was not immediately clear on 10 September 2024 whether Mr Rosenthal was returning to work or not, it is reasonable to expect that a person in Mr Cummings’ position would take steps to ascertain or confirm Mr Rosenthal’s employment status within a few days of this date. If Mr Cummings believed that Mr Rosenthal had resigned, it is reasonable to expect that he would have written to Mr Rosenthal confirming that this was the case and then paid out Mr Rosenthal’s entitlements. If Mr Cummings believed that Mr Rosenthal had not resigned (which appears to be the case), it is reasonable to expect that Mr Cummings would have taken some steps to communicate his expectations about the employment relationship. This could have involved a range of options including Mr Cummings directing Mr Rosenthal to return to work, asking Mr Rosenthal whether he wanted to take a period of leave or advising Mr Rosenthal that he was suspended with pay pending further investigation of the matter. Mr Cummings took none of these steps.

I find that Mr Cummings saying to Mr Rosenthal ‘It's best that you leave now’ on 9 September 2024 was the principal contributing factor resulting, directly or consequentially, in the termination of Mr Rosenthal’s employment when considered with the following facts that were established on the evidence before me:
· Mr Cummings took no steps to communicate with Mr Rosenthal when he was collecting his tools on 10 September 2024 that he remained employed by MSA; and
· Mr Cummings failed to communicate with Mr Rosenthal for a period of two weeks after the meeting on 9 September 2024.

As such, I find that Mr Rosenthal was dismissed by MSA on 9 September 2024.

Counsel for MSA made a number of submissions in relation to the events of 10 September 2024, which were said to be relevant to Mr Rosenthal’s credit. Counsel submitted that the fact that Mr Rosenthal attended the workplace on 10 September 2024 wearing his work uniform and ready to work is inconsistent with his contention that he was dismissed. I do not accept this submission. In his witness statement, Mr Cummings referred to Mr Bywater as not being suitably attired to be in a workshop when he attended the workplace on 10 September 2024, and that he indicated to Mr Bywater that he should stand outside the workshop.[108] I understand from this evidence that there are specific requirements in relation to clothing and footwear when attending a mechanical workshop (presumably for safety reasons). It is therefore reasonable to assume that Mr Rosenthal was simply adhering to these requirements when wearing his work attire to the workplace on 10 September 2024. It is also possible that he was indicating to MSA that he remained willing to work in the event that Mr Cummings had changed his mind overnight in relation to the dismissal.

Counsel for MSA also submitted that Mr Rosenthal’s allegations that Mr and Mrs Cummings kept making snide derogatory horrible comments to him and Mr Bywater, when they attended the workshop on the morning of 10 September 2024 and that Mr Cummings was yelling ‘Get out. Stay out. Take your things and go' was inconsistent with the CCTV footage and therefore should be rejected, should be considered untruthful and are matters that undermine Mr Rosenthal’s credibility.

I note that only a portion of the CCTV footage showing Mr Rosenthal and Mr Bywater attending MSA’s premises on 10 September 2024 was shown to the Commission during the hearing and tendered as evidence by MSA. This footage commenced when Mr Rosenthal and Mr Bywater arrived at MSA’s premises in a Ute, showed them packing Mr Rosenthal’s tools into the Ute, and then driving off. The footage also showed ‘Vic’ in attendance at the MSA premises. Vic owned the business across the road and hired the Ute to Mr Rosenthal. According to Mr Bywater’s evidence, Mr Cummings became very abusive and aggressive before Vic arrived at MSA’s premises and before Mr Rosenthal hired the Ute. Mr Bywater stated that he believed having Vic there de-escalated the situation.[109]

As the Commission was not shown the entirety of the CCTV footage of Mr Rosenthal’s and Mr Bywater’s attendance at MSA’s premises on 10 September 2024, I cannot accept MSA’s submission that Mr Rosenthal’s evidence was inconsistent with the CCTV, particularly in light of Mr Bywater’s evidence that Vic’s presence de-escalated Mr Cummings’ abusive and aggressive behaviour. This suggests that the alleged behaviour which Mr Rosenthal complained of occurred before Mr Rosenthal and Mr Bywater drove into MSA’s driveway in a Ute.

Finally, I note that MSA provided submissions in relation to its objection to the questioning of Mr Bywater by me during the hearing and submitted that Mr Rosenthal was afforded special treatment at the hearing. I do not accept that my questioning was in any way inappropriate or that I afforded Mr Rosenthal special treatment. In any event, it is not necessary for me to deal with these submissions as my findings above have not required any consideration of the evidence of Mr Bywater which MSA objected to.[110]

Other matters

Under s.396 of the FW Act, the Commission is obliged to decide the following matters before considering the merits of the application:

(a) whether the application was made within the period required in subsection 394(2);

(b)    whether the person was protected from unfair dismissal;
(c)    whether the dismissal was consistent with the Small Business Fair Dismissal Code;
(d)    whether the dismissal was a case of genuine redundancy.

I have decided these matters below.

Section 394(2) requires an application to be made within 21 days after the dismissal took effect.

Mr Rosenthal submitted that the termination took effect on 9 September 2024. The application was lodged on 10 September 2024. Although MSA believes the termination occurred at a later date, it accepts that the application is within the limitation period.[111] I am therefore satisfied that the application was made within the period required in s.394(2).

Section 382 of the FW Act provides that a person is protected from unfair dismissal if, at the time of being dismissed:

(a) the person is an employee who has completed a period of employment with their employer of at least the minimum employment period; and

(b) one or more of the following apply:

(i)a modern award covers the person;
(ii)an enterprise agreement applies to the person in relation to the employment;
(iii)the sum of the person’s annual rate of earnings, and such other amounts (if any) worked out in relation to the person in accordance with the regulations, is less than the high income threshold.

It was not in dispute, and I find, that at the time of dismissal, Mr Rosenthal had completed at least the minimum period of employment with MSA, and that he was covered by the Vehicle Repair, Services and Retail Award 2020.

I am therefore satisfied that, at the time of dismissal, Mr Rosenthal was a person protected from unfair dismissal.

Small Business Code

Section 388 of the FW Act provides that a person’s dismissal was consistent with the Small Business Fair Dismissal Code if:

(a) immediately before the time of the dismissal or at the time the person was given notice of the dismissal (whichever happened first), the person’s employer was a small business employer; and

(b) the employer complied with the Small Business Fair Dismissal Code in relation to the dismissal.

As MSA was a small business, the Small Business Fair Dismissal Code (the Code) applied to Mr Rosenthal’s employment. It is therefore necessary to consider whether MSA complied with the Code in relation to the dismissal. I note that MSA did not allege that it had complied with the Code, but I deal with this matter for completeness. The Code provides:

Small Business Fair Dismissal Code
Commencement
The Small Business Fair Dismissal Code comes into operation on 1 July 2009.
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.
The employee must be warned verbally or preferably in writing, that he or she risks being dismissed if there is no improvement.
The small business employer must provide the employee with an opportunity to respond to the warning and give the employee a reasonable chance to rectify the problem, having regard to the employee’s response. Rectifying the problem might involve the employer providing additional training and ensuring the employee knows the employer’s job expectations.
Procedural Matters
In discussions with an employee in circumstances where dismissal is possible, the employee can have another person present to assist. However, the other person cannot be a lawyer acting in a professional capacity.
A small business employer will be required to provide evidence of compliance with the Code if the employee makes a claim for unfair dismissal to Fair Work Australia, including evidence that a warning has been given (except in cases of summary dismissal). Evidence may include a completed checklist, copies of written warning(s), a statement of termination or signed witness statements.

The ‘Summary Dismissal’ aspect of the Code, was considered by a Full Bench in Pinawin T/A RoseVi Hair Face Body v Domingo.[112] The Full Bench stated:

[29] ... There are two steps in the process of determining whether this aspect of the Small Business Fair Dismissal Code is satisfied. First, there needs to be a consideration whether, at the time of dismissal, the employer held a belief that the employee’s conduct was sufficiently serious to justify immediate dismissal. Secondly it is necessary to consider whether that belief was based on reasonable grounds. The second element incorporates the concept that the employer has carried out a reasonable investigation into the matter. It is not necessary to determine whether the employer was correct in the belief that it held.
[30] Acting reasonably does not require a single course of action. Different employers may approach the matter differently and form different conclusions, perhaps giving more benefit of any doubt, but still be acting reasonably. The legislation requires a consideration of whether the particular employer, in determining its course of action in relation to the employee at the time of dismissal, carried out a reasonable investigation, and reached a reasonable conclusion in all the circumstances. Those circumstances include the experience and resources of the small business employer concerned.[113]

I have found that the dismissal took effect on 9 September 2024. At the time of the dismissal, I do not accept that Mr Cummings held a belief that Mr Rosenthal’s conduct was sufficiently serious to justify immediate dismissal as Mr Cummings had not yet conducted his investigation which led him to send the letter on 23 September 2024, claiming that Mr Rosenthal had engaged in serious misconduct. If I am wrong about this and Mr Cummings held a belief that Mr Rosenthal’s conduct was sufficiently serious to justify immediate dismissal based upon the incident involving Mr Das’ and Mr Sarar’s friend, I find that this belief was not based on reasonable grounds. I make this finding as Mr Cummings had not carried out a reasonable investigation into the matter as he had not interviewed Mr Sarar in relation to his account of the meeting and had not provided Mr Rosenthal with a proper opportunity to respond to the allegations. In my view, requesting Mr Rosenthal to attend a meeting without notice and asking, ‘how long have you been soliciting my clients for?’, does not constitute providing Mr Rosenthal with an opportunity to respond to the allegations. The fact that Mr Cummings was able to draft the letter dated 23 September 2024 with the help of his sister, shows that he was capable of carrying out an investigation and preparing allegations. I believe that a letter in the same terms as the letter dated 23 September 2024 (but excluding the paragraphs after ‘next steps’) should have been provided to Mr Rosenthal prior to the meeting on 9 September 2024, and that Mr Rosenthal should have been given a reasonable opportunity to respond to the allegations in the letter. If such steps had been taken, and Mr Cummings had given proper consideration to Mr Rosenthal’s response, I would have concluded that MSA had carried out a reasonable investigation in relation to the matter.

In relation to the ‘Other Matters’ aspect of the Code, I note that in cases not involving summary dismissal, a small business employer must give the employee a reason why they are at risk of being dismissed, the employee must be warned verbally or preferably in writing, that they are at risk of being dismissed if there is no improvement, and the employer must provide the employee with an opportunity to respond to the warning and give the employee a reasonable chance to rectify the problem. There is no evidence which establishes that any of these steps occurred with respect to Mr Rosenthal.

Taking all of these matters into account, I find that MSA did not comply with the Code in relation to this matter and that the dismissal was not consistent with the Code.

It was not in dispute, and I find, that Mr Rosenthal’s dismissal was not a case of genuine redundancy.

Having considered each of the initial matters, I am required to consider the merits of the application.

Was the dismissal harsh, unjust or unreasonable?

Section 387 of the FW Act provides that, in considering whether the Commission is satisfied that a dismissal was harsh, unjust or unreasonable, the Commission 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.

I am required to consider each of these criteria, to the extent they are relevant to the factual circumstances before me.[114]

I set out my consideration of each of these criteria below.

Was there a valid reason for the dismissal related to Mr Rosenthal’s capacity or conduct?

In order to be a valid reason, the reason for the dismissal should be ‘sound, defensible or well founded’[115] and should not be ‘capricious, fanciful, spiteful or prejudiced.’[116] However, the Commission will not stand in the shoes of the employer and determine what the Commission would do if it was in the position of the employer.[117]

Where a dismissal relates to an employee’s conduct, the Commission must be satisfied that the conduct occurred and justified termination.[118] The question of whether the alleged conduct took place and what it involved is to be determined by the Commission on the basis of the evidence in the proceedings before it. The test is not whether the employer believed, on reasonable grounds after sufficient enquiry, that the employee was guilty of the conduct which resulted in termination.[119]

MSA submits that there was a valid reason for Mr Rosenthal’s dismissal because he engaged in serious misconduct. The serious misconduct comprised of:

Using MSA’s workshop to conduct his own business;
Using the workshop to work on the car of an existing client of MSA, Mr Speechley; and
Soliciting the business of a friend of Mr Das and Mr Sarar who was an existing client of MSA.

Given that Mr Rosenthal worked for Mr Cummings for some time, I have difficulty understanding why Mr Cummings appeared to immediately accept Mr Das’ version of events that Mr Rosenthal was attempting to solicit a client of MSA. Mr Cummings said that Mr Rosenthal was his ‘most trusted employee who had access to [his] entire life…it was unconditional trust.’[129] Mr Cummings described being in shock and aghast. It seems unusual that a person in Mr Cummings’ position was not open to considering that Mr Das may have misunderstood the conversation or that Mr Das may not have been entirely truthful in conveying the content of the conversation to Mr Cummings. Mr Cummings’ rationale was that ‘these were not the sort of people that would make this thing up.’[130] That may have been the case, but there was no evidence before me to suggest that Mr Rosenthal had any history of wrongdoing or dishonesty which would lead Mr Cummings to conclude that the only explanation for Mr Rosenthal’s conduct was that he was trying to solicit work from one of MSA’s clients.

It is relevant that Mr Rosenthal did not initiate the alleged solicitation and that the communications between Mr Das and Mr Rosenthal on 24 and 26 August 2024 were initiated by Mr Das on both occasions. There is no indication that Mr Rosenthal would have ever been involved in a conversation about Mr Das’ friend’s car if Mr Das had not initiated the conversation with Mr Rosenthal on 24 August 2024. I therefore have some concerns about Mr Das’ motivations for initiating this conversation with Mr Rosenthal, especially as Mr Rosenthal was not working for MSA on the day of the conversation and Mr Das could have asked Mr Cummings’ advice when Mr Cummings attended work later that day. Mr Das confirmed during the hearing that the reason he sent a text message to Mr Rosenthal on 26 August 2024 was to see if Mr Rosenthal would actually give Mr Das a quote. This occurred after Mr Cummings asked Mr Das if he had sent Mr Rosenthal a text message,[131] although Mr Das said that Mr Cummings had not asked Mr Das to send the text message to Mr Rosenthal and that it was Mr Das’ idea.[132]

There was a two-week period between Mr Rosenthal responding to the text message and the meeting between Mr Rosenthal and Mr Cummings on 9 September 2024. There is no suggestion that Mr Rosenthal followed up with Mr Das during that period to inquire whether his friend wanted Mr Rosenthal to work on his car. The fact that Mr Rosenthal made no such inquiry adds weight to Mr Rosenthal’s assertion that he did not intend to perform work on the car.

Mr Das and Mr Sarar were not asked to record in writing their respective versions of the conversation on 24 August 2024 until approximately one month after it occurred. By this time, Mr Rosenthal had not been in attendance at the workplace for two weeks. During the hearing, Mr Sarar said that he had a conversation with Mr Cummings where Mr Cummings told him about his golden rule that anyone working under him cannot poach his clients, and that this technically happened because Mr Sarar’s and Mr Das’ friend had already come into the workshop with his car.[133] I cannot exclude the possibility that Mr Sarar’s recollection of the events on 24 August 2024 as conveyed by text message on 22 September 2024 was influenced by this conversation and the insinuation by Mr Cummings that Mr Rosenthal had poached clients.

It is necessary for the Commission to be satisfied on the balance of probabilities that the alleged misconduct occurred. There is no evidence that Mr Rosenthal performed work on Mr Das’ friend’s car, that Mr Rosenthal contacted Mr Das’ friend directly to offer to perform work on it, or that Mr Rosenthal made arrangements with Mr Das to perform work on his friend’s car. The allegation, at its highest, is that Mr Rosenthal made an offer to work on the car of a MSA client through Mr Das.

Mr Rosenthal’s participation in the text exchange with Mr Das on 26 August 2024 was limited to sending Mr Das the price ‘$650’ and responding with a ‘thumbs up’ to Mr Das’ advice that ‘I’ll talk to my friend and let you know, thanks!’ Mr Rosenthal said that the price in the text message referred to the price of the part and that the ‘thumbs up’ was an acknowledgement of Mr Das’ message. Mr Cummings’ evidence was that the figure of $650 represented half the price that MSA would have charged for the work and that he understood that Mr Rosenthal had offered to do the job for half price.[134] MSA submitted that the text message ‘can only be read’ as Mr Rosenthal agreeing to do the relevant work for $650.

I do not have evidence before me which verifies the price of the part and the price which MSA would have charged for the work. In the absence of this evidence, it is open to the Commission to conclude either that Mr Rosenthal was providing a price for a part, or that he was quoting for work. Because either conclusion is available, the text message exchange does not establish on the balance of probabilities that Mr Rosenthal was soliciting the business of a friend of Mr Das and Mr Sarar who was an existing client of MSA.

With respect to the conversation between Mr Das, Mr Sarar and Mr Rosenthal on 24 August 2024, I must be satisfied that Mr Das’ and Mr Sarar’s version of the conversation is more probable than Mr Rosenthal’s version.

In the face of Mr Rosenthal’s denial that he offered to work on a MSA client’s car and his assertion that he was joking when he said that Mr Das and Mr Sarar should not tell Mr Cummings about their conversation and that he would take Mr Das and Mr Sarar down with him, I am not satisfied on the balance of probabilities that Mr Das’ and Mr Sarar’s evidence accurately reflected the conversation on 24 August 2024. In reaching this conclusion I have taken into account the evidence that Mr Rosenthal did not at any time initiate any discussion about Mr Das’ and Mr Sarar’s friend’s car and that all communication was initiated by Mr Das. I have also taken into account that Mr Das’ and Mr Sarar’s written record of the conversation was made four weeks after the conversation and that Mr Sarar’s account could have been influenced by the insinuation by Mr Cummings that Mr Rosenthal had poached clients. These matters leave open the possibility that the record of the conversation is not accurate.

In conclusion, I am not satisfied that the evidence of Mr Das and Mr Sarar and the text exchange between Mr Rosenthal and Mr Das on 26 August 2024, whether considered separately or together, establishes on the balance of probabilities that Mr Rosenthal was intending to solicit a client of MSA.

Conclusion regarding valid reason

I am not satisfied that MSA has established on the balance of probabilities that Mr Rosenthal:

Used MSA’s workshop to conduct his own business in a way which was inconsistent with the requirements of MSA;
Used the workshop to work on the car of an existing client of MSA, Gary Speechley; and
Solicited the business of a friend of Mr Das and Mr Sarar who was an existing client of MSA.

As such, I find that there was no valid reason for the dismissal related to Mr Rosenthal’s capacity or conduct.

Was Mr Rosenthal notified of the valid reason?

Proper consideration of s.387(b) requires a finding to be made as to whether Mr Rosenthal ‘was notified of that reason’. Contextually, the reference to ‘that reason’ is the valid reason found to exist under s.387(a).[135]

As I am not satisfied that there was a valid reason related to dismissal, this factor is not relevant to the present circumstances.[136]

Was Mr Rosenthal given an opportunity to respond to any reason related to his capacity or conduct?

As I have not found that there was a valid reason related to dismissal, this factor is not relevant to the present circumstances.[137]

Did MSA unreasonably refuse to allow Mr Rosenthal to have a support person present to assist at discussions relating to the dismissal?

There were no discussions relating to the dismissal before it occurred so there was no opportunity for Mr Rosenthal to have a support person in relation to the dismissal.

Was Mr Rosenthal warned about unsatisfactory performance before the dismissal?

As the dismissal did not relate to unsatisfactory performance, this factor is not relevant to the present circumstances.

To what degree would the size of MSA’s enterprise be likely to impact on the procedures followed in effecting the dismissal?

I note that MSA is a small enterprise with only four employees. As Mr Cummings has been a director since 1996, I would expect MSA to have some knowledge of workplace relations matters and access to advice about these matters. However, the parties made no submissions about these matters.

To what degree would the absence of dedicated human resource management specialists or expertise in MSA’s enterprise be likely to impact on the procedures followed in effecting the dismissal?

There is no evidence in relation to this matter and the parties did not make any submissions about this matter.

What other matters are relevant?

Section 387(h) requires the Commission to take into account any other matters that the Commission considers relevant. In my view, the following matters weigh in favour of a finding of unfairness:

Mr Cummings did not provide Mr Rosenthal with notice of the meeting on 9 September 2024 and an opportunity to bring a support person;
Mr Cummings did not carry out a reasonable investigation into the matter as he had not interviewed Mr Sarar in relation to his account of the incident on 24 August 2024 prior to 9 September 2024 and did not provide Mr Rosenthal with a proper opportunity to respond to the allegations prior to the meeting on 9 September 2024;
Mr Rosenthal’s age, length of service and satisfactory employment record; and
the financial impact of the dismissal given that Mr Rosenthal was having difficulty finding alternative employment following the dismissal.

Is the Commission satisfied that the dismissal of Mr Rosenthal was harsh, unjust or unreasonable?

I have made findings in relation to each matter specified in s.387 as relevant.

I must consider and give due weight to each of these matters as a fundamental element in determining whether the termination was harsh, unjust or unreasonable.[138]

Having considered each of the matters specified in s.387 of the FW Act, I am satisfied that the dismissal of Mr Rosenthal was harsh, unjust and unreasonable because:

there was no valid reason related to Mr Rosenthal’s conduct;
there was no procedural fairness;
of Mr Rosenthal’s age, length of service and satisfactory employment record; and
of the harsh consequences of the dismissal due to the financial impact of the dismissal on Mr Rosenthal.

I am therefore satisfied that Mr Rosenthal was unfairly dismissed within the meaning of s.385 of the FW Act.

Remedy

Being satisfied that Mr Rosenthal made an application for an order granting a remedy under s.394, was a person protected from unfair dismissal, and was unfairly dismissed within the meaning of s.385 of the FW Act, I may, subject to the FW Act, order Mr Rosenthal’s reinstatement, or the payment of compensation to Mr Rosenthal.

Under s.390(3) of the FW Act, I must not order the payment of compensation to Mr Rosenthal unless:

(a) I am satisfied that reinstatement of Mr Rosenthal is inappropriate; and
(b) I consider an order for payment of compensation is appropriate in all the circumstances of the case.

Is reinstatement of Mr Rosenthal inappropriate?

Mr Rosenthal has stated that he does not seek reinstatement as the relationship between Mr Rosenthal and MSA has broken down. MSA did not make any submissions in relation to this matter. Given the very small size of MSA’s business and the workplace, and the heated discussion between Mr Rosenthal and Mr Cummings which immediately preceded the dismissal, I find that reinstatement of Mr Rosenthal is inappropriate as it is likely to lead to conflict in the workplace.

Is an order for payment of compensation appropriate in all the circumstances of the case?

Having found that reinstatement is inappropriate, it does not automatically follow that a payment for compensation is appropriate. As noted by the Full Bench, ‘[t]he question whether to order a remedy in a case where a dismissal has been found to be unfair remains a discretionary one…’[139]

Where an applicant has suffered financial loss as a result of the dismissal, this may be a relevant consideration in the exercise of this discretion.[140]

The evidence established that Mr Rosenthal has suffered financial loss as a result of the dismissal as he was not employed between the dismissal and the time of the hearing, apart from a short trial period. Having regard to these circumstances, I consider that an order for payment of compensation is appropriate.

Compensation – what must be taken into account in determining an amount?

Section 392(2) of the FW Act requires all of the circumstances of the case to be taken into account when determining an amount to be paid as compensation to Mr Rosenthal in lieu of reinstatement including:

(a)   the effect of the order on the viability of MSA’s enterprise;
(b)   the length of Mr Rosenthal’s service;
(c)   the remuneration that Mr Rosenthal would have received, or would have been likely to receive, if he had not been dismissed;
(d)   the efforts of Mr Rosenthal (if any) to mitigate the loss suffered by Mr Rosenthal because of the dismissal;
(e)   the amount of any remuneration earned by Mr Rosenthal from employment or other work during the period between the dismissal and the making of the order for compensation;
(f)    the amount of any income reasonably likely to be so earned by Mr Rosenthal during the period between the making of the order for compensation and the actual compensation; and
(g)   any other matter that the Commission considers relevant.

I consider all the circumstances of the case below.

Effect of the order on the viability of MSA’s enterprise

There is no evidence before me about this matter so I am unable to conclude that an order for compensation will have an effect on the viability of MSA’s enterprise.

Length of Mr Rosenthal’s service

Mr Rosenthal’s length of service as an employee was approximately eight years and three months. Mr Rosenthal contended that his employment actually started on 24 June 2015 when he was initially engaged as an independent contractor. I do not need to determine this matter for the purpose of these proceedings.

I consider that Mr Rosenthal’s length of service does not support reducing or increasing the amount of compensation ordered.

Remuneration that Mr Rosenthal would have received, or would have been likely to receive, if Mr Rosenthal had not been dismissed

As stated by a majority of the Full Court of the Federal Court:

‘[i]n determining the remuneration that the applicant would have received, or would have been likely to receive… the Commission must address itself to the question whether, if the actual termination had not occurred, the employment would have been likely to continue, or would have been terminated at some time by another means. It is necessary for the Commission to make a finding of fact as to the likelihood of a further termination, in order to be able to assess the amount of remuneration the employee would have received, or would have been likely to receive, if there had not been the actual termination.’[141]

Mr Rosenthal and MSA did not make submissions about this matter. In determining how long the employment would have been likely to continue, I have considered Mr Rosenthal’s period of service and his good employment record which weigh in favour of a finding that he would have been employed for a lengthy period. I have determined that the period that Mr Rosenthal would have continued to work for MSA is one year that is, until 9 September 2025.

Mr Rosenthal received gross weekly pay of $1,765.86 plus superannuation.

Therefore, I find that the remuneration that Mr Rosenthal would have received, or would have been likely to receive, if Mr Rosenthal had not been dismissed is $91,824.72, being one year’s pay, which is calculated by multiplying $1,765.86 by 52.

Efforts of Mr Rosenthal to mitigate the loss suffered by Mr Rosenthal because of the dismissal

Mr Rosenthal must provide evidence that he has taken reasonable steps to minimise the impact of the dismissal.[142] What is reasonable depends on the circumstances of the case.[143]

MSA did not make any submissions in relation to this matter.

Mr Rosenthal provided evidence that since the dismissal, he has updated his resume and sent it to several employment agencies as well as speaking to them on the telephone. Mr Rosenthal said he has given his resume to a few people, including a few European workshops in his area. He has applied for quite a few jobs and had an interview two weeks before the hearing, however, he was advised that he did not make it past the first round.

Mr Rosenthal explained that his work is very niche as he is primarily a BMW specialist. Mr Rosenthal is 54 years of age, so he is at the top pay level for a technician or a mechanic. He is also able to be a service advisor or customer service manager or a service manager, but there are very few of these positions available. Mr Rosenthal said that employers are looking for younger employees for advisor positions, so they can pay them less than more experienced employees. Mr Rosenthal said he had a trial in Gladesville for a company owned by a person who worked under him at BMW Sydney. But at the time, like now, he was really suffering from stress and was not comfortable. He did not feel he did a good job and had a small car accident the first day on the way home because he was just in such a state.[144] Mr Rosenthal said that he has since seen a doctor and has attached the Medical Certificate, which certified him as unfit for work from 23 October 2024 to 15 November 2024 inclusive.

MSA did not contest Mr Rosenthal’s evidence in relation to the steps he has taken to mitigate his loss.

Based on his evidence, I find that Mr Rosenthal has made efforts to mitigate his loss.

Amount of remuneration earned by Mr Rosenthal from employment or other work during the periods (i) between the dismissal and the making of the order for compensation and (ii) the making of the order for compensation and the actual compensation

I propose to issue an order to produce documents to Mr Rosenthal so that I can make an assessment of these matters.

Other relevant matters

The parties did not make any submissions about other relevant matters.

Is the amount of compensation to be reduced on account of misconduct?

If I am satisfied that misconduct of Mr Rosenthal contributed to the employer’s decision to dismiss, I am obliged by section 392(3) of the FW Act to reduce the amount I would otherwise order by an appropriate amount on account of the misconduct.

I am satisfied that misconduct of Mr Rosenthal did not contribute to the employer’s decision to dismiss. Therefore, the amount of the order for compensation is not to be reduced on account of misconduct.

How does the compensation cap apply?

Section 392(5) of the FW Act provides that the amount of compensation ordered by the Commission must not exceed the lesser of:

(a)the amount worked out under section 392(6); and

(b)half the amount of the high income threshold immediately before the dismissal.

The amount worked out under section 392(6) is the total of the following amounts:

(a)the total amount of the remuneration:

(i)received by Mr Rosenthal; or
(ii)to which Mr Rosenthal was entitled;

(whichever is higher) for any period of employment with the employer during the 26 weeks immediately before the dismissal; and
(iii)if Mr Rosenthal was on leave without pay or without full pay while so employed during any part of that period – the amount of remuneration taken to have been received by Mr Rosenthal for the period of leave in accordance with the regulations.

Mr Rosenthal was not on leave without pay or without full pay during the 26 weeks immediately before the dismissal.

Based on evidence provided by the parties, I find that the total amount of the remuneration received by Mr Rosenthal during the 26 weeks immediately before the dismissal was $45,912.36.

This is less than half the high-income threshold which applied immediately before the dismissal.[145] The amount of compensation ordered by the Commission must therefore not exceed $45,912.36.

How is the amount of compensation to be calculated?

As noted by the Full Bench:

‘[t]he well-established approach to the assessment of compensation under s.392 of the FW Act… is to apply the “Sprigg formula” derived from the Australian Industrial Relations Commission Full Bench decision in Sprigg v Paul’s Licensed Festival Supermarket (Sprigg).[146] This approach was articulated in the context of the FW Act in Bowden v Ottrey Homes Cobram and District Retirement Villages[147].[148]

The approach in Sprigg is as follows:

Step 1: Estimate the remuneration the employee would have received, or have been likely to have received, if the employer had not terminated the employment (remuneration lost).

Step 2: Deduct monies earned since termination. Workers’ compensation payments are deducted but not social security payments. The failure of an applicant to mitigate his or her loss may lead to a reduction in the amount of compensation ordered.

Step 3: Discount the remaining amount for contingencies.

Step 4: Calculate the impact of taxation to ensure that the employee receives the actual amount he or she would have received if they had continued in their employment.’

I have estimated the remuneration Mr Rosenthal would have received, or would have been likely to have received, if MSA had not terminated the employment to be $91,824.72 on the basis of my finding that Mr Rosenthal would likely have remained in employment until 9 September 2025. This estimate of how long Mr Rosenthal would have remained in employment is the ‘anticipated period of employment’.[149]

Only monies earned since termination for the anticipated period of employment are to be deducted.[150] I therefore propose to deduct any amounts earned by Mr Rosenthal and likely to be earned by Mr Rosenthal during the period from 9 September 2024 to 9 September 2025 from $91,824.72.

I will seek further submissions from the parties in relation to the application of the Sprigg formula to the calculation of compensation following the production of documents by Mr Rosenthal in relation to any amounts earned by Mr Rosenthal and likely to be earned by Mr Rosenthal during the period from 9 September 2024 to 9 September 2025. The compensation awarded to Mr Rosenthal will not include a component compensating for shock, distress and humiliation as this is prohibited by s.392(4).

Conclusion

I have found that Mr Rosenthal was dismissed on 9 September 2024 after Mr Cummings, on behalf of MSA, accused him of soliciting clients. I have found the evidence does not establish on the balance of probabilities that Mr Rosenthal was soliciting clients of MSA. I have concluded that there was no valid reason for Mr Rosenthal’s dismissal and that the dismissal was harsh, unjust and unreasonable.

I consider that an order for payment of compensation is appropriate and will determine that amount after receiving documents from Mr Rosenthal in relation to any amounts earned by Mr Rosenthal and likely to be earned by Mr Rosenthal during the period from 9 September 2024 to 9 September 2025 and submissions from the parties in relation to the application of the Sprigg formula.

DEPUTY PRESIDENT

Appearances:

Mr M. Rosenthal, Applicant

Mr A. Wilson, Counsel for the Respondent

Hearing details:

2024
14 November
In person, Sydney

Final written submissions:

Applicant: 3 January 2025

Respondent: 17 December 2024

[1] Applicant’s Submissions in Reply signed 6 November 2024, DHB, 101.

[2] Outline of Submissions for the Respondent signed 31 October 2024, [13], DHB 33.

[3] Ibid, [2], DHB, 27.

[4] Witness Statement of Adan Cummings dated 31 October 2024 [7], Digital Hearing Book (DHB) 34

[5] Ibid [5], DHB 34

[6] Ibid [12]-[13], DHB 35

[7] Ibid Annexure A, DHB 45-52

[8] Ibid [14], DHB 35

[9] Transcript PN434

[10] Witness Statement of Adan Cummings dated 31 October 2024 [8]-[9], DHB 34-35

[11] Ibid [10], DHB 35

[12] Ibid [11], DHB 35

[13] Ibid [15], DHB 35

[14] Ibid [16], DHB 35

[15] Ibid [19], DHB 36

[16] Ibid [20]-[21], DHB 35

[17] Transcript PN108

[18] Transcript PN212

[19] Transcript PN217

[20] Witness Statement of Anastasia Cummings dated 31 October 2024 [2], DHB 71

[21] Ibid [4], DHB 71

[22] Ibid [4]-[5], DHB 71

[23] Statement of Matthew Rosenthal dated 6 November 2024 [1], DHB 99

[24] Witness Statement of Adan Cummings dated 31 October 2024 [24]-[25], DHB 37

[25] The invoice attached to Mr Cummings’ witness statement as Annexure F at DHB 62 shows that the work was performed on 15 May 2023, not 15 March 2023.

[26] Ibid, [26]-[28]

[27] Witness statement of Gary Speechley dated 5 November 2024 [1], DHB 97

[28] Ibid [2], DHB 97

[29] Ibid [3], DHB 97

[30] Ibid [4], DHB 97

[31] Ibid [5], DHB 97

[32] Ibid [6], DHB 97

[33] Ibid [7], DHB 97

[34] Ibid [8]-[11], DHB 98

[35] Ibid [12]-[14], DHB 98

[36] Statement of Matthew Rosenthal dated 6 November 2024 [3], DHB 99

[37] Transcript PN598

[38] Ibid

[39] Transcript PN597

[40] Statement of Matthew Rosenthal dated 6 November 2024 [5], DHB 100

[41] This appears to be an incorrect date as the letter of 23 September 2024 states that the incident occurred on 24 August 2024.

[42] Witness Statement of Adan Cummings dated 31 October 2024 [29], DHB 37

[43] Ibid [31], DHB 37

[44] This appears to be an incorrect date as the incident occurred on 24 August 2024.

[45] Statement of Dhruba Das [4], DHB 74

[46] Statement of Raiyan Sarar [4], DHB 87

[47] Ibid [6], DHB 88

[48] Transcript PN448

[49]Transcript PN155

[50] PN156

[51] Ibid

[52] Transcript PN158

[53] Transcript PN263

[54] Statement of Dhruba Das Annexure B, DHB 86

[55] Ibid

[56] Witness Statement of Adan Cummings dated 31 October 2024 [33]-[35], DHB 37-38

[57] Ibid, [36], DHB 38

[58] Ibid [37]-[38], DHB 38

[59] Ibid, [39], DHB 38

[60] Ibid, [40]-[41], DHB 38

[61] Ibid, [42]-[43], DHB 38

[62] Ibid, [44]-[49], DHB 38

[63] Transcript PN117

[64] Transcript PN120

[65] Witness Statement of Adan Cummings dated 31 October 2024 [55], DHB 40

[66] Transcript PN122

[67] Witness Statement of Adan Cummings dated 31 October 2024 [57]-[59], DHB 40

[68] Transcript PN123

[69] Transcript PN124

[70] Transcript PN124

[71] Transcript PN608

[72] Transcript PN609

[73] Transcript PN610

[74] Transcript PN611

[75] Transcript PN612

[76] Transcript PN613

[77] Transcript PN600-PN602

[78] Transcript PN603

[79] Transcript PN127

[80] Witness Statement of Adan Cummings dated 31 October 2024 [71]-[72], DHB 41

[81] Witness Statement of Adan Cummings dated 31 October 2024 [74], DHB 41

[82] Transcript PN131

[83] Witness Statement of Adan Cummings dated 31 October 2024 [75], DHB 41

[84] Witness Statement of Jason Bywater dated 21 October 2024 [11], DHB 20

[85] Witness Statement of Adan Cummings dated 31 October 2024 [76]-[77], DHB 41

[86] Witness Statement of Anastasia Cummings dated 31 October 2024 [17], DHB 72

[87] Ibid [18], DHB 72

[88] Ibid [13], DHB 72

[89] Ibid [14], DHB 72

[90] Transcript PN373

[91] Unfair dismissal application, DHB 5-5

[92] Witness Statement of Adan Cummings dated 31 October 2024 [78]-[80], DHB 41

[93] Ibid [81], DHB 41

[94] This heading appears to be an incorrect date as the incident referred to below the heading occurred on 10 August 2024.

[95] Witness Statement of Adan Cummings dated 31 October 2024 [82], DHB 41

[96] Transcript PN331

[97] Witness Statement of Adan Cummings dated 31 October 2024 [83], DHB 41

[98] Form F3 – Employer response form, DHB 14

[99] Mohazab v Dick Smith Electronics Pty Ltd [1995] IRCA 625; 62 IR 200

[100] Transcript PN133

[101] Transcript PN633

[102] Transcript PN634

[103] Transcript PN133

[104] Transcript PN534-PN535

[105] Transcript PN136

[106] Witness Statement of Adan Cummings dated 31 October 2024 [59], DHB 40

[107] Transcript PN610

[108] Witness Statement of Adan Cummings dated 31 October 2024 [68]-[69], DHB 40

[109] Statement of Jason Bywater dated 21 October 2024 [12], DHB 20

[110] This evidence is at PN384 to PN391

[111] Outline of Submissions for the Respondent signed 31 October 2024, [6], DHB 27.

[112] [2012] FWAFB 1359.

[113] Ibid, [29]-[30].

[114] Sayer v Melsteel Pty Ltd[2011] FWAFB 7498, [14]; Smith v Moore Paragon Australia Ltd PR915674 (AIRCFB, Ross VP, Lacy SDP, Simmonds C, 21 March 2002), [69].

[115] Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371, 373.

[116] Ibid.

[117] Walton v Mermaid Dry Cleaners Pty Ltd(1996) 142 ALR 681, 685.

[118] Edwards v Justice Giudice [1999] FCA 1836, [7].

[119] King v Freshmore (Vic) Pty Ltd Print S4213 (AIRCFB, Ross VP, Williams SDP, Hingley C, 17 March 2000), [23]-[24].

[120] [2013] FWC 4282

[121] [2020] FWC 6143

[122] [2017] FWC 5501

[123] Ibid, [14]

[124] Ibid, [46]

[125] Transcript PN212

[126] Transcript PN217

[127] Transcript PN114

[128] Transcript PN611

[129] Transcript PN597

[130] Transcript PN603

[131] Transcript PN502

[132] Transcript PN510-PN511

[133] Transcript PN455

[134] Transcript PN597

[135] Bartlett v Ingleburn Bus Services Pty Ltd [2020] FWCFB 6429, [19]; Reseigh v Stegbar Pty Ltd [2020] FWCFB 533, [55].

[136] Chubb Security Australia Pty Ltd v Thomas Print S2679 (AIRCFB, McIntyre VP, Marsh SDP, Larkin C, 2 February 2000), [41]; Read v Cordon Square Child Care Centre [2013] FWCFB 762, [46]-[49].

[137] Chubb Security Australia Pty Ltd v Thomas Print S2679 (AIRCFB, McIntyre VP, Marsh SDP, Larkin C, 2 February 2000), [41]; Read v Cordon Square Child Care Centre [2013] FWCFB 762, [46]-[49].

[138] ALH Group Pty Ltd t/a The Royal Exchange Hotel v Mulhall (2002) 117 IR 357, [51]. See also Smith v Moore Paragon Australia Ltd PR915674 (AIRCFB, Ross VP, Lacy SDP, Simmonds C, 21 March 2002), [92]; Edwards v Justice Giudice [1999] FCA 1836, [6]–[7].

[139] Nguyen v Vietnamese Community in Australia t/a Vietnamese Community Ethnic School South Australia Chapter[2014] FWCFB 7198, [9].

[140] Vennix v Mayfield Childcare Ltd [2020] FWCFB 550, [20]; Jeffrey v IBM Australia Ltd [2015] FWCFB 4171, [5]-[7].

[141] He v Lewin [2004] FCAFC 161, [58].

[142] Biviano v Suji Kim Collection PR915963 (AIRCFB, Ross VP, O’Callaghan SDP, Foggo C, 28 March 2002), [34] citing Lockwood Security Products Pty Ltd v Sulocki and Ors PR908053 (AIRCFB, Giudice J, Lacy SDP, Blair C, 23 August 2001), [45].

[143] Biviano v Suji Kim Collection PR915963 (AIRCFB, Ross VP, O’Callaghan SDP, Foggo C, 28 March 2002), [34] citing Payzu Ltd v Saunders [1919] 2 KB 581.

[144] PN162

[145] The high income threshold which applied immediately before the dismissal was $175,000.

[146] (1998) 88 IR 21.

[147] [2013] FWCFB 431.

[148] Double N Equipment Hire Pty Ltd t/a A1 Distributions v Humphries[2016] FWCFB 7206, [16].

[149] Ellawala v Australian Postal Corporation Print S5109 (AIRCFB, Ross VP, Williams SDP, Gay C, 17 April 2000), [34].

[150] Ibid.

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