Mikel Hamilton v Bwanolar Pty Ltd T/A GFR Group

[2014] FWC 7056

[2014] FWC 7056

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Mikel Hamilton
v
Bwanolar Pty Ltd T/A GFR Group
(U2014/4909)

COMMISSIONER WILLIAMS PERTH, 15 OCTOBER 2014

Termination of employment.

[1] This decision concerns an application made by Mr Mikel Andrew Hamilton (Mr Hamilton or the applicant) under section 394 of the Fair Work Act 2009 (the Act) for an unfair dismissal remedy. The respondent is Bwanolar Pty Ltd T/A GFR Group (GFR or the respondent).

[2] In response to the notice of listing advising of the hearing of this matter by letter dated 14 May 2014 FTI Consulting (Australia) Pty Limited (FTI) advised the Fair Work Commission (the Commission) that administrators had been appointed on 17 March 2014 by the board of directors of the respondent pursuant to section 436A of the Corporations Act 2001. The letter advised that accordingly the respondent will not be attending the hearing on 1 October 2014.

[3] In reply to this correspondence on 15 May 2014 the Commission wrote to FTI as follows,

“I note that you have not explained why Bwanolar Pty Ltd will not be appearing at the hearing. I wish to make you aware that the Fair Work Commission has previously considered circumstances where respondents have moved into voluntary administration and specifically whether as a consequence Section 440D of the Corporations Act represents a bar to unfair dismissal remedy applications. Those decisions have concluded that the Corporations Act does not prevent the Commission from proceeding to hear and determine an unfair dismissal remedy application. Examples of such decisions are reported at [2013] FWC 235 and [2012] FWA 9609.

In the absence of any further submissions from yourselves on this matter please be advised it is my intention that the application will proceed to be heard and determined on 1 October 2014 as previously notified to the parties. Should the respondent Bwanolar Pty Ltd not be represented in those proceedings Mr Hamilton’s application will be determined on the basis of his case alone.”

[4] Nothing in reply has been received from FTI.

[5] Neither the respondent nor the administrators have filed any response in reply to Mr Hamilton’s application.

[6] At the hearing of this matter on 1 October 2014 Mr Hamilton represented himself and there was no representative from the respondent nor from FTI.

The evidence of Mr Hamilton

[7] Mr Hamilton presented as a forthright and open witness to the point of being reflective and at times self-critical about his own actions in the lead up to his dismissal.

[8] I accept the evidence of Mr Hamilton in full. That evidence has not been contested by the respondent.

[9] From that evidence I find that Mr Hamilton had commenced employment in the position of Human Resource Adviser with GFR in March 2013.

[10] On 20 January 2014 in a meeting with GFR’s Chief Financial Officer Mr Jega Bhharathhan (Mr Bhharathhan) he was handed a termination of employment letter 1.

[11] That letter signed by Mr Bhharathhan refers to Mr Hamilton’s explanations for his conduct on 9 and 10 January 2014 and says he is to be terminated.

[12] The letter says that the conduct was unacceptable and destructive of the working relationship given that Mr Bhharathhan oversees the activities of the HR department.

[13] The letter says that at a meeting of the HR team on 9 January 2014 Mr Hamilton abruptly left a meeting saying he was close to resigning. It is said this was insulting to Mr Hamilton’s colleagues, was unprofessional and caused Mr Hamilton to lose credibility in the eyes of those present.

[14] The letter says that secondly Mr Hamilton chose to bypass the normal official communication channels and reported directly to the Managing Director. It is said this was an attempt to circumvent Mr Bhharathhan’s authority as Mr Hamilton’s Manager and that Mr Hamilton deliberately failed to carry out instructions given to him by Mr Bhharathhan.

[15] Thirdly it is said that when Mr Hamilton and Mr Bhharathhan discussed this conduct on 10 January 2014 Mr Hamilton told Mr Bhharathhan he was a liar. It is said that response was totally destructive of any positive working relationship.

[16] For these reasons the letter explains Mr Bhharathhan has decided to terminate Mr Hamilton’s employment.

[17] The letter provided one month notice of the termination of Mr Hamilton’s employment.

[18] The evidence of Mr Hamilton regarding these events is that at a meeting on 9 January 2014 he became frustrated and said he was upset and asked if he could leave and as he got up out of his chair Mr Bhharathhan responded “yes” and nodded his agreement. Mr Hamilton categorically denies that he ever threatened to resign.

[19] Mr Hamilton agrees he did have a meeting with the Managing Director and that this was a private meeting and what was discussed was of a confidential nature and that he did so in the context where the Managing Director, Mr Gavin Rutherford (Mr Rutherford), had always said that Mr Hamilton should feel free to speak with him at any time about any matters of concern.

[20] With respect to having called Mr Bhharathhan a liar Mr Hamilton’s evidence is that this was in regard to a meeting on 12 January 2014 not 10 January 2014 as erroneously stated in the termination of employment letter. Mr Hamilton says that at a meeting on 12 January 2014 Mr Bhharathhan was referring to the events of 9 January 2014 and had said that Mr Hamilton had that day walked out of the meeting without saying anything. Mr Hamilton had responded to this statement by saying to Mr Bhharathhan that this was untrue and Mr Bhharathhan knew that this was untrue.

[21] Mr Hamilton explains that he had provided Mr Bhharathhan with a full written explanation regarding these and other matters 2.

[22] Mr Hamilton further explains that he also sent a letter 3 to Mr Rutherford having arranged to meet with him on the morning of 20 January 2014 at 9.00 a.m. That letter detailed a complaint Mr Hamilton was making regarding his Manager Mr Bhharathhan. The letter explained that Mr Hamilton believed he was being victimised because of a personality clash which was now affecting his ability to do his job effectively.

[23] The letter complained amongst other things of a lack of leadership from Mr Bhharathhan and a lack of understanding of HR practices by him. Mr Hamilton expressed his view that Mr Bhharathhan was not acting in the best interests of GFR.

[24] Mr Hamilton’s letter suggested either a restructure of the reporting arrangements to overcome these problems or observed that if GFR wanted to part ways with him then he would continue to act professionally in the best interests of GFR whilst the parties came to an amicable exit strategy for him to be transitioned out of the company.

[25] Mr Hamilton’s evidence was that at the meeting with Mr Rutherford on the morning of 20 January 2014 Mr Rutherford did not discuss any of the concerns that Mr Hamilton had written to him about but only stated that he thought Mr Hamilton was taking HR “personally” and continued on to make some unrelated and inexplicable statements. Mr Hamilton left the meeting confused as to what point Mr Rutherford was trying to make.

[26] Later that morning Mr Bhharathhan met with him and handed him the termination letter. There was no discussion about the content of that letter.

[27] Since the dismissal took effect on 20 February 2014 Mr Hamilton’s evidence was that he has actively sought other employment replying to dozens of advertisements and pursuing opportunities through all his contacts in the industry. Mr Hamilton obtained another job on 7 April 2014 and this job lasted for three months. After this he was unemployed for a further one month until he obtained his next job.

[28] Mr Hamilton is aware that GFR has entered into voluntary administration and is generally aware, but without any specific knowledge, that there have been a significant number of redundancies and this has included staff in the HR area.

Consideration

[29] The question for the Commission to determine is whether the dismissal of Mr Hamilton was harsh, unjust or unreasonable. The criteria the Commission must take into account in considering this are specified in section 387 of the Act which are set out below.

“387 Criteria for considering harshness etc.

In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the FWC 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.”

Valid reason

[30] The only evidence before the Commission regarding the events of 9, 10 (or 12), 16 and 20 January 2014 is that of Mr Hamilton.

[31] Accepting that evidence, as I have, there is nothing in the conduct of Mr Hamilton during this period that amounts to a valid reason for his dismissal.

Notification of the reason

[32] Mr Hamilton was notified of the reasons for his dismissal in the letter of termination that was handed to him.

Opportunity to respond

[33] The reasons for the dismissal relied on by the respondent as set out in the termination of employment letter were generally canvassed with Mr Hamilton in the days prior to the dismissal on 20 January 2014 and he has had the opportunity to respond to those and did so in writing.

Support person

[34] GFR did not refuse to allow Mr Hamilton to have the support person present at any of the meetings.

Performance warnings

[35] No warnings were given to Mr Hamilton about any perceived unsatisfactory performance prior to his dismissal.

Size of the enterprise

[36] The respondent was a large enterprise and the procedure adopted in this case, particularly the absence of a valid reason for the dismissal, falls short of what would be expected in all the circumstances.

Human resource specialists

[37] The respondent did have dedicated human resource specialists and there is no reason therefore to excuse the shortcomings in procedure adopted by the respondent particularly in circumstances where Mr Bhharathhan himself had overall responsibility for human resource management within GFR.

Conclusion

[38] Self-evidently Mr Bhharathhan’s ability to objectively consider Mr Hamilton’s employment future was compromised given the conflict between himself and Mr Hamilton. This deficiency could have been recognised and resolved by the Managing Director Mr Rutherford were it not for his apparent disinterest in Mr Hamilton’s concerns regarding Mr Bhharathhan’s capacity and performance. This combination led GFR to dismiss Mr Hamilton without a valid reason.

[39] In all the circumstances I am satisfied that Mr Hamilton’s dismissal was unjust and unreasonable. The dismissal of Mr Hamilton by GFR was unfair.

Remedy

[40] Considering the roles played by Mr Bhharathhan in the dismissal and Mr Rutherford in the events leading up to the dismissal and the fact that GFR is under administration it is not appropriate to reinstate Mr Hamilton. It is however appropriate for an order of compensation to be made by the Commission.

[41] The criteria for deciding the amount of compensation to be ordered are provided for in section 392 which is set out below.

“392 Remedy—compensation

Compensation

(1) An order for the payment of compensation to a person must be an order that the person’s employer at the time of the dismissal pay compensation to the person in lieu of reinstatement.

Criteria for deciding amounts

(2) In determining an amount for the purposes of an order under subsection (1), the FWC must take into account all the circumstances of the case including:

(a) the effect of the order on the viability of the employer’s enterprise; and

(b) the length of the person’s service with the employer; and

(c) the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed; and

(d) the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal; and

(e) the amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for compensation; and

(f) the amount of any income reasonably likely to be so earned by the person during the period between the making of the order for compensation and the actual compensation; and

(g) any other matter that the FWC considers relevant.

Misconduct reduces amount

(3) If the FWC is satisfied that misconduct of a person contributed to the employer’s decision to dismiss the person, the FWC must reduce the amount it would otherwise order under subsection (1) by an appropriate amount on account of the misconduct.

Shock, distress etc. disregarded

(4) The amount ordered by the FWC to be paid to a person under subsection (1) must not include a component by way of compensation for shock, distress or humiliation, or other analogous hurt, caused to the person by the manner of the person’s dismissal.

Compensation cap

(5) The amount ordered by the FWC to be paid to a person under subsection (1) must not exceed the lesser of:

(a) the amount worked out under subsection (6); and

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

(6) The amount is the total of the following amounts:

(a) the total amount of remuneration:

(i) received by the person; or

(ii) to which the person was entitled;

(whichever is higher) for any period of employment with the employer during the 26 weeks immediately before the dismissal; and

(b) if the employee 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 the employee for the period of leave in accordance with the regulations.”

[42] Whilst it is likely that GFR remains under administration the effect of an order for compensation on the viability of the employer’s enterprise is unknown given the decision by the respondent and the administrators not to participate in these proceedings.

[43] At the time of the dismissal Mr Hamilton had been employed for less than one year.

[44] This is not a case where it could be said that were it not for him being dismissed Mr Hamilton would have expected to remain in employment indefinitely. There are a number of reasons for this conclusion including the fact that the conflict between himself and Mr Bhharathhan would have remained, Mr Hamilton in his letter to Mr Rutherford himself identified the likelihood that GFR may no longer wish to keep him in employment and separately it is apparent that after his dismissal GFR made a number of employees redundant assumedly due to its poor financial situation.

[45] Weighing these factors up my assessment is that if Mr Hamilton had not been dismissed he could expect to have been employed for no more than a further four months. Consequently the remuneration that Mr Hamilton would have received if he had not been dismissed is the equivalent of four months’ salary.

[46] Mr Hamilton has made significant efforts to mitigate the loss he suffered having been dismissed by seeking other employment.

[47] Mr Hamilton gained employment one and a half months after he was dismissed. Taking this into account, and the remuneration he would have received had he not been dismissed, my conclusion is that an order for compensation equivalent to one and a half months salary should be made.

[48] Mr Hamilton’s gross monthly salary was $7 500.

[49] An order for compensation of will $11 250 gross be issued in conjunction with this decision.

COMMISSIONER

Appearances:

M. Hamilton on his own behalf

Hearing details:

2014.

Perth:

October 1.

 1   Exhibit A3

 2   Exhibit A1

 3   Exhibit A2

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