Mr Avinesh Chand Maharaj v Amber Aero Engineering Pty Ltd

[2022] FWC 2746

[2022] FWC 2746

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.526 - Application to deal with a dispute involving stand down

Mr Avinesh Chand Maharaj
v

Amber Aero Engineering Pty Ltd

(C2022/2974)

COMMISSIONER WILSON MELBOURNE, 18 November 2022

Application to deal with a dispute involving stand down – Application dismissed

1. The Applicant, Mr Avinesh Chand Maharaj is a Licensed Aircraft Maintenance Engineer who alleges he has been stood down by his employer, Amber Aero Engineering Pty Ltd in a manner contrary to the provisions of Part 3 – 5 (Stand Down) of the Fair Work Act 2009.

1. Mr Maharaj’s application was made to the Commission on 17 May 2022 and was the subject of conciliation before me on 15 June 2022. When conciliation did not resolve the dispute, the matter was progressed by me for determination. Each party was invited to provide written evidence and submissions and relevant documents in support of their case; the Applicant provided his material on 9 August 2022 and the Respondent on 23 August 2022. Since some of the material filed appeared to be incomplete or was ambiguous a request for further material to be filed was made. Further, a short determinative conference was held with the parties by me on 20 October 2022 at which Mr Maharaj appeared for himself and Mr Naidu appeared for the Respondent.

1. The following relevant factual matters of fact are capable of being drawn from the material each party has filed and the determinative conference.

1. Corporate structure and background

1. Amber Aero Engineering Pty Ltd is one of a number of other entities within the Amber Aviation Group.[1]  Amber Aero Engineering provides aircraft maintenance services and does so according to the standards set by the Civil Aviation Safety Authority (CASA).[2]

2. One part of CASA’s regulatory regime is a requirement that Amber Aero Engineering have a Chief Engineer who is responsible for implementation of what are known as the CASA Civil Air Regulations (CAR 30) and for ensuring the Respondent is able to demonstrate its compliance with the regulations.[3]

2. Key chronology

1. 30 April 2018 – Mr Maharaj was provided with a letter of offer from “Amber Resourcing/Amber Aero Engineering (‘the employer’)” for full-time employment “in the position of Licensed Aircraft Maintenance Engineer (LAME) progressing towards Chief Engineer”. The letter of engagement provided to Mr Maharaj refers to a commencement date of 1 June 2018 and remuneration during a 6-month probationary period of $95,000 per year, rising to $120,000 after being approved by CASA as Chief Engineer.[4] Mr Naidu argues that Mr Maharaj initially commenced employment with Amber Aero Engineering as its Chief Engineer on 1 June 2018.[5]  The Letter of Engagement does not refer to any contractual stand-down rights and states that the letter constitutes “all of the terms and conditions of your employment”.  The Letter of Engagement provides for termination of employment by the employer on two weeks’ notice or payment in lieu for a person with less than one year’s continuous service, and four weeks’ notice or payment in lieu for a person with more than one year’s continuous service. An employee giving notice is required to give four weeks written notice, which may be waived if the employer agrees after finding a suitable replacement. The Letter of Engagement does not explicitly refer to severance payment in the case of redundancy.[6]

2. 1 July 2018 – the earlier Letter of Engagement was reissued with Mr Maharaj’s remuneration to be $120,000 per year. It again set out it encompassed the parties’ entire agreement, made no reference to contractual stand-down rights, and provided for the same notice of termination and absence of redundancy provisions.[7]

3. October 2019 – Mr Maharaj resigned and took alternative employment with an unrelated employer in Wollongong.[8]

4. March 2020 – The COVID-19 pandemic commenced, about which Mr Naidu says “due to the adverse commercial impact on the entire Group, management has proactively engaged and conducted various meetings with employees’ contractors and suppliers to clearly communicate its position and maintain transparency in potential stand – downs”.[9]

5. July 2020 – Mr Maharaj was re-employed by Amber Aero Engineering Pty Ltd as a Licensed Aircraft Maintenance Engineer.[10]  While Mr Maharaj was invited to complete an updated Letter of Engagement that did not occur.

6. January 2021 – After the resignation of the incumbent Mr Maharaj was promoted again to the position of Chief Engineer.[11]

7. During 2021 the Respondent started to experience trading difficulties after being impacted by the consequences of the COVID-19 Pandemic.  In response the Group gave consideration to the stand down of various staff;

“Since March 2020, due to the adverse commercial impact on the entire Group, management has proactively engaged and conducted various meetings with employees’ contractors and suppliers to clearly communicate its position and maintain transparency in potential stand – downs.

The initial stand down request were formulated such that employees would be given the opportunity to utilise their respective annual leave accruals and any time off in Lieu or RDOs.”[12]

8. Commencing 20 July 2021 – Mr Naidu instructed 12 employees of the Group to be stood down.[13] Mr Naidu instructed that a number of other employees, working as engineering and maintenance staff were to continue working; Mr Maharaj was one of the employees required to continue working.[14]

9. 29 November 2021 – Mr Maharaj was called into a meeting where he was advised that due to the Covid 19 pandemic and subsequent economic downturn his position had been made redundant, with Amber Aero Engineering unable to continue his employment.[15] Mr Naidu contends about a meeting they had in “late November 2021” that “Since he had applied for annual leave and that he had accrued substantial time of in lieu, it would assist the business if he could use up his entire leave entitlements and any remaining time of in lieu”.[16]

10. 30 November 2021 – A leave form dated 30 November 2021 was completed, by Mr Maharaj.  The form refers to a period of leave to be taken by Mr Maharaj from the working day after 19 December 2021 with him returning to work on 10 January 2022.  The type of leave is referred to as “TOIL/RDO” with a request the Respondent “Please use outstanding unpaid overtime prior to annual leave”.

11. 8 December 2021 – Mr Maharaj enquired about his annual leave accrual and requested payment of seven weeks redundancy pay, seeking that it be paid on 15 December 2021 since he was planning to buy a vehicle.  He also asserted that at that date he had 172 hours annual leave accrued, 120 hours of RDO/TOIL and 7 weeks redundancy pay.  The email he sent Mr Naidu reads:

“Good evening Boss,

It has been a pleasure to be part of Amber Family as a Chief Engineer. I was very fortunate to be part of the team where we had lots of challenging and exciting events. Our engineering team have be very proactive and maintained the ageing fleet to the highest safety standard. Also During COVID-19 team members assisted keeping the business going by taking 30% of pay through the lock down period and working around the clock with normal hours to keep machines to highest standards.

My employment redundancy on Monday 29 November, 2021 came up with a big shock when I returned from 5 days off and was given final date to depart from my position on 20 December, 2021 . I understand this is a commercial decision.

Final days is not far now and I need to buy a ute for myself. As mentioned I am interested with a Toyota Hilux. I have to make payment of $16,000 on 15 December, 2021.

Currently I have 172hrs of annual leave sitting with 120hrs of RDO/TOIL and 7 weeks redundancy pay . I would like to get my redundancy payment on 15 December to purchase Hilux. Regarding annual leave and ROD total of 292hrs to paid in January, 2021 so I could square of rent relief which is sitting in arrears now since COVID-19.

Thank for your understanding Boss.

Kind regards,
Avi”

12. On 10 December 2021 Mr Naidu responded to Mr Maharaj with an offer of 7 –8 weeks work as an independent contractor in lieu of a redundancy payment.[17] Mr Naidu does not explicitly address this contention, however agrees discussions there was a discussion with Mr Maharaj “in the second week of December 2021” when he communicated to Mr Maharaj that “he was on standdown using up his annual leave and toil and that he wasn’t made redundant”.[18] Another employee of the Group, Muhammad Arsalan has provided an unsworn statement that he was present in a meeting between Mr Maharaj and Mr Naidu;

“Where the impact of Covid on the business was discussed and Avinesh Maharaj was requested to avail all his accrued leaves and join the company on Part-time/Contractor basis after leave, which in return he declined.”[19]

13. 13 December 2021 – Mr Maharaj stated he was not able to accept the offer of working an extra 7 – 8 weeks in lieu of the redundancy payment and made a further enquiry about his entitlement to a redundancy payment.[20]

14. 14 December 2021– Mr Maharaj made further email contact with Mr Naidu stating he was “very confident that you gave me redundancy and there was no talk for stand down due. You need to recall the conversation we had where you asked me to come back as a contractor on ABN after my redundancy”.[21]  Mr Naidu responded by email, the subject of which was “standdown”, stating that Mr Maharaj’s situation was not a redundancy and was instead of standdown due to the Covid – 19 pandemic.[22] The correspondence stated:

“Hello Avinesh,

Thank you for your email, to clarify,

1. This is not a redundancy, however a stand-down due to adverse commercial position of the business caused by the unprecedented impact of Covid-19 pandemic.

2. You will be stood down from the end of your annual leave including the toil period as per our payroll / HR system, leave commencing from the 20th of December 2021 (based on the leave application you've submitted).

Unfortunately, the stand-down is induced by the adverse impact of the Covid - 19 pandemic, the business is commercially compromised and would appreciate your support and understanding.

Regards
Mahendra Naidu
Chief Executive Officer”[23]

This correspondence appears to serve as the standdown notification to Mr Maharaj.

During the period of the stand-down Amber Aero Engineering provided Mr Maharaj with the use of spare car.[24]

15. 25 March 2022 – Mr Maharaj sent an email to Mr Naidu which amongst other things dealt with a dispute between the two about Mr Maharaj’s annual leave and TOIL accrual as well as stating that stated “[a]s of today, I’m not Amber Aero Engineering’s chief engineer”.[25] Mr Naidu says about the following about this email:

“a. Following his verbal threats and demanding emails, he said in his email that he no longer was Amber Aero Engineering Chief Engineer

b. I, responded to this email stating that this would be received as your resignation since this is a statutory key stake holder position mandated by the Civil Aviation Regulations.”[26]

Mr Naidu confirmed in the determinative conference conducted by the Commission that he took Mr Maharaj’s communication to be a resignation and verbally accepted it the same day it was given. An email Mr Naidu circulated to Mr Maharaj and other employees on 25 March 2022 stated:

“Sadly, our Chief Engineer, Avinesh Maharaj has effectively resigned from this afternoon. Graham and or Scott will stand-in as the backup/temporary supervising Chief Engineer until further notice.

@ Arsalan – please arrange with Avinesh to return all company keys assets manuals etc and to sign out any pending paperwork regarding any jobs remaining open.

@ Atish – Please disable Avi’s account in our system and forward all his emails to Arsalan, also cancel his mobile phone account with Telstra.”[27]

3. Payments to Mr Maharaj

1. The following salary and other payments have been made to Mr Maharaj since 5 July 2021:

Payment date	Paying entity	Gross payment
5/07/2021	Amber Resourcing Pty Ltd	$10,000.00 paid as wages
4/08/2021	Amber Resourcing Pty Ltd	$10,000.00 paid as wages
6/09/2021	Amber Aero Engineering Pty Ltd	$10,000.01 paid as wages
7/10/2021	Amber Aero Engineering Pty Ltd	$10,000.01 paid as wages
5/11/2021	Amber Aero Engineering Pty Ltd	$10,000.01 paid as wages
6/12/2021	Amber Aero Engineering Pty Ltd	$10,000.01 paid as wages
5/01/2022	Amber Aero Engineering Pty Ltd	$8,153.85 paid as wages $1846.15 paid either as annual leave or personal leave TOTAL $10,000.00
10/02/2022	Amber Aero Engineering Pty Ltd	$10,000.00 paid as annual leave
24/03/2022	Amber Aero Engineering Pty Ltd	$2153.85 paid as annual leave
1/06/2022	Amber Aero Engineering Pty Ltd	$7,380.00 paid as wages

SUBMISSIONS

1. Mr Maharaj advances in his submissions that in standing him down Mr Naidu reneged on an earlier agreement that he depart from the company with the departure being treated as a redundancy and him being paid redundancy pay.

1. On the subject of the stand down of employees generally, as well as Mr Maharaj specifically, Mr Naidu argues that:

“Due to the adverse impact of the Pandemic from March 2020, Amber Aero Engineering and Amber aviation Group, has actively consulted and worked with employees and other industry stakeholders to minimise the collateral effect and has also proactively engaged State Government and Commonwealth funding and assistance packages to enable employees to maintain as much of a normal existence during the various lock-downs and restrictions in place.

All our employees accepted the stand downs and few volunteered to take leave without pay and as well as actively seeking employment elsewhere to assist the business. Avinesh Maharaj for his own reasons decided to demand redundancy pay knowing very well that the business was facing enormous financial and cashflow constraints. He totally disregarded the needs of other team members and inconsiderately kept demanding and eventually resigned as the Chief Engineer knowing that if this position was vacated then the engineering department immediately had to cease technical and maintenance activities.”[28]

1. Mr Naidu also put forward that all of the employees who had been stood down by the Group as a result of the pandemic had since left its employment. Further, having treated Mr Maharaj as having resigned he stopped further payments to Mr Maharaj and put in place alternative arrangements for performance of the Chief Engineer role.

CONSIDERATION

1. An application for the Commission to deal with a stand-down dispute under Part 3 – 5 of the Act requires the Commission to be satisfied of several matters. In particular a dispute that a stand-down is authorised by s.524(1)(c) since an employee cannot be usefully employed because of “a stoppage of work for any cause for which the employer cannot be usefully employed” requires application of the following reasoning set by the Full Bench in The Peninsula School t/a Peninsula Grammar School v Independent Education Union of Australia[2021] FWCFB 844:

“[31] In order for a stand down of an employee to be authorised by s 524(1), two conditions must be satisfied:

(1) the employee cannot be usefully employed during the period of the stand down; and

(2) this must be because of one of the circumstances in paragraphs (a), (b) or (c) of s 524(1).

[32] Where s 524(1)(c) is the relevant circumstance relied upon, two elements must be
satisfied:

(a) there must have been a stoppage of work; and

(b) the employer cannot reasonably be held responsible for the stoppage.

[33] We agree with the School that, in an assessment of whether a particular employee may be stood down pursuant to s 524(1), the logical process of analysis is to begin with the question of whether the employee can usefully be employed over the relevant period. If the employee can be usefully employed, the stand down will not be authorised by s 524(1) and no further inquiry as to causation is needed.” (underlining added)

1. In this matter the evidence does not lead me to a conclusion that Mr Maharaj could not be usefully employed over the period between 14 December 2021 and 25 March 2022.  My lack of a positive finding of the subject is not that I find the evidence before me to be unpersuasive or not to be credible; rather the situation arises because of a lack of evidence in one direction or another. The evidence which is before me indicates the following:

• Amber Aero Engineering and its Group had trading difficulties from at least March 2021.  It responded to those difficulties in several ways, including standing down non-essential staff from July 2021.

• Mr Maharaj was stood down in December 2021 and at the time he was the company’s Chief Engineer.

• The Respondent’s regulatory obligations required it to have a Chief Engineer at all times.  It is unclear who performed those duties after Mr Maharaj was stood down in December 2021.  Likely it was either or both Mr Tadgell and Mr Wallace, however the evidence is not decisive on that point.

1. Beyond these matters there is no cogent evidence before me addressing the question that Mr Maharaj could not be usefully employed during the standdown period.

1. Instead, the material before the Commission simply shows that a stand-down took place and that there was a dispute over its terms.  While it may well be the case that Mr Maharaj could not be usefully employed during the stand-down period, such is not established.

1. While that is so, Mr Maharaj’s application is not able to proceed to a determination by me for a different reason; namely that since he was not an Amber Aero Engineering employee at 17 May 2022, being the date on which he commenced his application for the Commission to deal with a stand-down dispute he was not eligible to make such an application.  He also seeks through this application “to be compensated for my losses and entitlements”.[29]

1. Deputy President Colman explained the jurisdictional prerequisite for making a stand-down application and the impermissibility of a lost wages order in Adam Richards v Automotive Brands Group Pty Ltd;

“[5] Section 524(1) provides that an employer may stand down an employee during a period in which the employee cannot usefully be employed because of one of the following circumstances: industrial action; a breakdown of machinery or equipment; or a stoppage of work for any cause for which the company cannot reasonably be held responsible. Section 526(1) allows the Commission to deal with a dispute about the operation of Part 3-5, and s 526(2) states that it may do so by arbitration. The note to that section states that the Commission may also deal with a dispute by mediation or conciliation, or by making a recommendation or expressing an opinion.

[6] Section 526(3) limits the power of the Commission to deal with disputes about the operation of Part 3-5. It states that the Commission may deal with a dispute ‘only on application by any of the following’. Section 526(3)(a) then refers to ‘an employee who has been, or is going to be, stood down under subsection 524(1) (or purportedly under subsection 524(1))’. I understand Mr Richards to contend that he is a person described in s 526(3)(a). The other provisions in s 526(3) are clearly not relevant, as they relate to applications by unions, inspectors, and employees who have requested to take leave to avoid being stood down.

[7] Mr Richards lodged his application on 4 June 2020. His employment with the company ended on 15 May 2020. At the time he lodged his application, Mr Richards was not ‘an employee who has been stood down under s 524(1)’. He was a former employee who had been stood down in the past during his employment with his former employer. Mr Richards is therefore not a person who was able to make an application under s 526 and the Commission cannot deal with the application.

[8] In any event, the relief sought by the application is beyond the Commission’s jurisdiction. The Commission is not a court. It cannot exercise judicial power, and therefore cannot make binding determinations as to whether an employer has acted lawfully in standing down an employee. The Commission can neither declare that an employer has failed to comply with s 524, nor order that an employer pay wages due to an employee because of that non-compliance. Only a court can make orders of this kind.”[30]

1. It is unnecessary for me to formally establish why Mr Maharaj is no longer employed by the Respondent and to identify whether the circumstances are those of resignation or dismissal. This is because it is evident from the material before me that irrespective of the reason, he is no longer an employee of Amber Aero Engineering and has not been since 25 March 2022.

1. As a result, Mr Maharaj’s application must fail, irrespective of whether a finding is able to be made that he could not be usefully employed during the standdown period. Accordingly, Mr Maharaj’s application is dismissed and an Order to that effect is issued at the same time as this decision.

COMMISSIONER

[1] Witness Statement of Mahendra Naidu; Digital Hearing Book 37.

[2] Ibid.

[3] Respondent’s Outline of Argument, Digital Hearing Book 35.

[4] Applicant’s Document Bundle, Digital Hearing Book 12 – 15.

[5] Respondent’s Outline of Argument, Digital Hearing Book 35

[6] Applicant’s Document Bundle, Digital Hearing Book 12 – 15.

[7] Applicant’s Document Bundle, Digital Hearing Book 16 – 18.

[8] Respondent’s Outline of Argument, Digital Hearing Book 35.

[9] Ibid.

[10] Respondent’s Outline of Argument, Digital Hearing Book 35.

[11] Respondent’s Outline of Argument, Digital Hearing Book 35.

[12] Respondent’s Outline of Argument, Digital Hearing Book 35.

[13] Naidu email 27 October 2022.

[14] Respondent’s Document Bundle, Digital Hearing Book 87.

[15] Applicant’s Outline of Submissions, Digital Hearing Book 9.

[16] Respondent’s outline of argument, Digital Hearing Book 35.

[17] Applicant’s Outline of Submissions, Digital Hearing Book 9; Applicant’s Document Bundle, Digital Hearing Book 22.

[18] Digital Hearing Book 35.

[19] Letter from Muhammad Arsalan, 19 August 2022, Digital Hearing Book 40.

[20] Applicant’s Outline of Submissions, Digital Hearing Book 9.

[21] Applicant’s Document Bundle, Digital Hearing Book 23.

[22] Applicant’s Outline of Submissions, Digital Hearing Book 9.

[23] Applicant’s Document Bundle, Digital Hearing Book 25.

[24] Respondent’s Outline of Argument, Digital Hearing Book 35.

[25] Digital Hearing Book 88.

[26] Digital Hearing Book 35.

[27] Respondent’s further materials, 17 October 2022.

[28] Respondent’s Outline of Argument, Digital Hearing Book 36.

[29] Applicant Outline of Submissions; Digital Hearing Book 10.

[30] [2020] FWC 4168.

Printed by authority of the Commonwealth Government Printer

<PR746800>