Mr Craig Laurie v KTI Management Company Pty Ltd T/A KTI Management Trust

[2014] FWC 8213

[2014] FWC 8213

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394 - Application for unfair dismissal remedy

Mr Craig Laurie
v
KTI Management Company Pty Ltd T/A KTI Management Trust
(U2014/359)

COMMISSIONER SPENCER BRISBANE, 4 DECEMBER 2014

Application for relief from unfair dismissal - Respondent applied for application to be dismissed - no reasonable prospects of success - frivolous and vexatious - application dismissed under s.587

[1] This decision relates to an application made by Mr Craig Laurie (the Applicant) for an unfair dismissal remedy under s.394 of the Fair Work Act 2009 (Cth) (the Act) against KTI Management Company Pty Ltd T/A KTI Management Trust (the Respondent/Employer).

[2] The Respondent has applied for the Applicant’s application for an unfair dismissal remedy (the substantive application) to be dismissed pursuant to s.587 of the Act.

Background

[3] The application was the subject of conciliation before a Fair Work Commission Conciliator but was unable to be resolved. Directions were issued for the filing of submissions and evidence in the substantive matter. A directions conference was held as the parties were unsure of the arbitration requirements. During this process the parties referred to elements of the substantive matter.

[4] The Respondent at all times submitted that the claim was frivolous and vexatious and that the Applicant had no prospect of success, as after a period of difficulties the Applicant had resigned, and that this application had only arisen when his plans after leaving had not met expectations. Further, the Respondent at all times questioned whether the Applicant would be present at the hearing of the proceedings.

[5] The matter was listed for a determinative conference on 14 August 2014.

[6] At 12:20am on the day of the hearing, the Applicant emailed Chambers indicating he and his partner had been admitted to the Gold Coast Hospital in relation to complications with the Applicant’s partner’s pregnancy. No evidence was provided in relation to these reasons for non-attendance.

[7] Mr Ritchie, on behalf of the Respondent, emailed at 1:14am that he was sorry to hear of the Applicant and partners’ health issues. Mr Ritchie indicated the disruption in his business arrangements, if the matter was not resolved this week, that he had postponed business trips to accommodate the hearing, and that he would have very limited availability over the next six months to further deal with the matter, given the prior attention he has paid to the application. He further stated that he and his witnesses would be available at the Commission at the allotted time frame for the hearing that morning unless notified differently.

[8] In his email, Mr Ritchie stated, “I want to make it very clear this matter has been misleading, vexatious, unconscionable, time-consuming and expensive.” The Respondent had foreshadowed that the Applicant would not present at the hearing.

[9] The Commission had been previously alerted to the Respondent’s contention that the Applicant would not attend the hearing, and the Respondent had outlined the impact of this to his business. Having been alerted to the Applicant’s possible non-attendance, the Chambers emails were checked very early and therefore, at 4:14am that morning, a response email was sent to the parties indicating; that all parties are notified, given the Applicant’s communication of his non-attendance at the hearing, that the hearing was cancelled and the parties were not required to attend at the Commission.

[10]  Further to this, the Respondent made an application, pursuant to section 587 of the Act, to have the application dismissed.

[11] Directions were set for the filing of material in relation to s.587.

[12] Both parties were self-represented.

[13] It is noted that whilst not all of the evidence and submissions are referred to, in this matter, I have considered all of such, in making the decision.

Legislative scheme

[14] Section 587 of the Act provides as follows:

587 Dismissing applications

(1) Without limiting when the FWC may dismiss an application, the FWC may dismiss an application if:

(a) the application is not made in accordance with this Act; or

(b) the application is frivolous or vexatious; or

(c) the application has no reasonable prospects of success.

Note: For another power of the FWC to dismiss an application for a remedy for unfair dismissal made under Division 5 of Part 3-2, see section 399A.

(2) Despite paragraphs (1)(b) and (c), the FWC must not dismiss an application under section 365 or 773 on the ground that the application:

(a) is frivolous or vexatious; or

(b) has no reasonable prospects of success.

(3) The FWC may dismiss an application:

(a) on its own initiative; or

(b) on application.

Submissions of the Respondent

[15] The Respondent contended that the Applicant commenced employment on 1 January 2008, and that the Applicant resigned on 18 December 2013, after reaching a mutually agreed plan to continue employment until the end of January 2014.

[16] The Respondent submitted that the Applicant’s pattern and quality of work had diminished towards December 2013 and it was submitted that the events prior to late 2013 were relevant. The Respondent stated the Applicant had sought increasingly to work from home and had made it known that he had been looking for a new job for some time.

[17] The Respondent submitted that the Applicant had threatened to resign on multiple occasions and continually expressed that he was unhappy with his pay and conditions. He had also had a relationship with another staff member that had caused complications at the workplace.

[18] The Respondent submitted that, leading up to December 2013, he believed that the Applicant was working from home to an excessive extent, which he considered counter-productive to the functioning of the company. The Respondent submitted that the Applicant had been advised that the standard of his work had decreased throughout 2013 and was substandard for his position.

[19] The Respondent submitted that on 10 December 2013, the Applicant, Mr Kelly Ritchie and Mr Chris Ritchie participated in a meeting to discuss the Applicant’s work, working hours and location of such.

[20] The Respondent submitted that, given the prior events, the Applicant was advised that his working hours were 9:00am to 5:00pm Monday to Friday, that the Applicant was to work from the Sunnybank office and was to take a 35 minute break each day. The Respondent submitted that the Applicant did not adhere to these arrangements. The Respondent referred to a further meeting on 18 December 2013 where the parties both discussed the difficulties with the employment relationship and an agreed outcome was reached in terms of mutually finalising the employment relationship.

[21] The Respondent submitted that the Applicant, at this meeting, voluntarily resigned but requested continuance of his employment until the end of January 2104, in order for him to put in place his employment for the future. Further, it was submitted that the Respondent asked the Applicant if leaving by the end of January 2014, would suit his purposes and that the Applicant replied in the affirmative and requested to take time off work, in order to attend interviews and be allowed to not put his resignation in writing, as he did not want to share the resignation with his partner’s mother, who was also employed by the Respondent.

[22] The Respondent submitted that the company’s usual protocol was that IT staff who had resigned would stop formal work two weeks before their finish date, but that they would still be paid for the last two weeks of employment and needed to be available to assist with any IT issues within those two weeks. The Respondent submitted that, from 20 January 2014 to 31 January 2014, the Applicant did not do any work for the company but was paid his full and usual pay.

[23] The Respondent stated that the Applicant recognised his resignation but requested that Mr Kelly Ritchie provide him a termination letter, which would enable Mr Laurie to receive Centrelink benefits from the date of finishing with the Respondent. In further support of the agreed planned finish date and that the application is frivolous, vexatious and has no reasonable prospect of success, the Centrelink certificate provided records 31 January 2014 as the final date.

[24] The Applicant went on annual leave from 20 December 2013 to 6 January 2014. The Respondent provided evidence that the Applicant performed a total of 16 hours and 20 minutes of work until the cessation of his employment, on 31 January 2014.

[25] The Respondent submitted that, following the Applicant’s cessation of employment, there were several problems which were attributable to the alleged poor work standards of the Applicant. The Respondent submitted that the Applicant engaged with clients on non-work related matters, whilst at work, including liaising with his partner to start a business.

[26] The Respondent submitted that due to the Applicant’s failure to attend the office, as agreed, and the Applicant’s performance issues and failure to be genuine, in relation to working in the office, the alleged misconduct and the elapse of time since the end of the Applicant’s employment, reinstatement would be unacceptable.

Submissions of the Applicant

[27] The Applicant submitted that he commenced employment with Biz-IQ Pty Ltd on 13 March 2006. A transmission of business occurred and his employment from Biz-IQ to KTI was effected on 1 January 2008. The Applicant stated that his entitlements were transferred to the Respondent and continuity of service was recognised. The Applicant submitted that his employment was terminated on 20 January 2014 by the Respondent. The Applicant’s total period of service was 7 years and 10 months.

[28] With regards to the merits of the matter, the Applicant accepted that on Monday 20 January 2014, he had been sent an SMS to not work from home and to come into the office for a l:00pm meeting with the Managing Director (Mr Kelly Ritchie).

[29] The Applicant submitted that in the meeting he was informed “we are done” and that he was to 'please leave immediately'. The Applicant submitted that he was not provided reasons for the termination of his employment.

[30] The Applicant further submitted that in the 18 months leading up to January 2014, the majority of his tasks were assigned to a Chinese university student, George Wang, working with a team of Chinese developers located in China. He stated he had to train Mr Wang. The Respondent denied this.

[31] The Applicant rejected the submissions of the Respondent and refuted that he had resigned.

[32] The Applicant submitted that in December 2013, he was advised by Kelly Ritchie (Managing Director) and Christopher Ritchie (IT Manager) to start looking for new employment.

[33] With regards to the evidence of the Respondent in relation to working from home, the Applicant submitted that in late November to early December 2013, he agreed to commence working from the office, during ordinary work hours from 6 January 2014.

[34] The Applicant submitted that on 15 January 2014, he was advised by Christopher Ritchie that there were no outstanding projects or tasks (other than support) and that he could work from home on tasks that Christopher would email later that night.

[35] The Applicant submitted that during his employment he did not receive any written or oral warnings in relation to poor conduct and other employment issues such as poor performance raised by the Respondent.

Consideration

[36] In relation to the performance issues, there is evidence to support the directions to desist from working from home and to adhere to the hours required in the office. There is also evidence and text messages to demonstrate this was not done by the Applicant. The Respondent had 9 employees and clearly, given the size and links between staff, the Respondent was endeavouring to handle the performance and arrangements in a conciliatory manner.

[37] In this matter, the Respondent submitted, the Applicant’s substantive application had no reasonable prospects of success and hence should be dismissed pursuant to s.587 of the Act. The Respondent submitted this is appropriate as the Applicant had failed to recognise his resignation and the limitations of his case and claim. The Respondent from the initial conference stated that he had anticipated that the Applicant would not appear at the listed hearing time to advance his case, and the aim was to disrupt the Respondent’s business.

[38] The words “without limiting when the FWC may dismiss an application” in s.587(1) of the Act, indicate that the Commission may consider dismissing an application in circumstances not contemplated by s.587(1)(a), (b) or (c) of the Act. The Explanatory Memorandum to the Fair Work Bill 2008, further states that this “provision is not intended to limit FWA’s power to dismiss applications for other reasons, such as failure to meet jurisdictional requirements.”

[39] The following is case authority on s.587 of the Act. In Applicant v Respondent 1, Deputy President McCarthy stated, in endorsing the approach taken by the Federal Court in relation to s.31A of the Federal Court Act (references deleted):

“[12] I consider that there are three separate tests with different types of considerations and approaches needed by the provisions of s.587 of the FW Act.

[13] Section 587(1)(a) provides for a matter to be dismissed if the application has not been made in accordance with the FW Act. That is not a matter in contention here as to how it should be applied.

[14] Section 587(1)(b) provides for matters that may be dismissed where the application is frivolous or vexatious. It is here that in my view the approach to be applied involves dismissing matters where the application is “so obviously untenable that it cannot possibly succeed”; “manifestly groundless”; “so manifestly faulty that it does not admit of argument”;  “discloses a case which the Court is satisfied cannot succeed”;  “under no possibility can there be a good cause of action”. 

[15] Section 587(1)(c) of the FW Act provides for a matter to be dismissed if the application has no reasonable prospects of success. The principles applied  by the Federal Court for s.31A of the FC Act were summarised by Foster J in Wang v Anying Group Pty Ltd  (“Wang”) and again in Davis v Insolvency and Trustee Service Australia (No 3) as follows (references deleted):

(a) The moving party does not have to demonstrate that the defence is hopeless or unarguable;

(b) The Court must consider the pleadings and the evidence with a “critical eye” in order to see whether the Respondent party has evidence of sufficient quality and weight to be able to succeed at trial;

(c) The Respondent party is not obliged to present its whole case in order to defeat the summary judgment but must at least present a sufficient outline of the evidence in order to enable the Court to come to a preliminary view about the merits for the purpose of considering the statutory test in s 31A(1)(b)); and

(d) The test may require greater scrutiny of the pleadings and evidence in some cases than in others.  In my judgment, the words of s 31A(1) compel a flexible approach.  The real question in every case is not so much whether there is any issue that could arguably go to trial but rather whether there is any issue that should be permitted to go to trial.”

[40] The conclusions have been considered against the merits of the current matter.

[41] In addition, in the matter of Kennedy v Australian Taxation Office 2, Deputy President Sams considered the meaning of “vexatious” as follows:

“[25] As to the meaning of vexatious, I refer to Attorney-General v Wentworth (1988) 14 NSWLR 481, where Roden J held:

‘(1) For the purposes of restraining a vexatious litigant under the Supreme Court Act 1970 NSW, s 84(1), legal proceedings might properly be regarded as vexatious on either objective or subjective grounds.

(2) The relevant tests for determining whether proceedings were "vexatious" were:

(a) proceedings were vexatious if they were instituted with the intention of annoying or embarrassing the person against whom they were brought;

(b) they were vexatious if they were brought for collateral purposes, and not the purpose of having the court adjudicate on the issues to which they gave rise;

(c) they were also properly to be regarded as vexatious if, irrespective of the motive of the litigant, they were so obviously untenable or manifestly groundless as to be utterly hopeless; and

(d) in order to fall within the terms of s 84 , (i) proceedings in categories (a) and (b) must also be instituted without reasonable ground (proceedings in category (c) necessarily satisfied that requirement); and (ii) the proceedings must have been "habitually and persistently" instituted by the litigant.

(3) Other relevant considerations on an application under s 84(1) included

(a) whether, having regard to the substance of the matter and not to its form, the particular matter could properly be regarded as the institution of proceedings as distinguished from the taking of a step in proceedings that were already on foot;

(b) whether the proceedings were in fact vexatious—not whether they had been instituted vexatiously;

(c) whether, if proceedings were found to be vexatious, what the litigant had done in instituting, as distinct from pursuing, the proceedings had been done "habitually and persistently"; and

(d) institution of the particular proceedings under consideration—as to which the mere presence of scandalous, embarrassing, irrelevant or objectionable material need not be relevant.

(4) The power of the court to make an order under s 84(1) was an unfettered discretionary one as to which the prima facie right of access to the courts enjoyed by all citizens and the availability of other powers to deal with abuse of process would be relevant considerations.

(5) In circumstances where, out of a large number of interrelated proceedings including both substantial and incidental matters, three matters only could be regarded as vexatious proceedings instituted without reasonable grounds, it was not appropriate to conclude that the defendant had "habitually and persistently" and without reasonable ground instituted vexatious proceedings, and no order should be made under s 84’.”

[42] In the matter of Brent Gorman v Australia Post 3, the Full Bench, Boulton J, Hamilton DP and Raffaelli C stated:

“[10] For the power under s. 587(1)(b) to be exercised, it must be determined that the application before FWA is “frivolous or vexatious”. This would suggest that the application must demonstrably be of such little merit or pursued for such ulterior purposes or motives as would amount to an abuse of process.

[11] The meaning of the words “frivolous or vexatious” in the context of the Order 26, rule 18 of the High Court Rules was considered by Barwick C.J. in General Steel Industries Inc v Commissioner of Railways (NSW) (1964) 112 CLR 125, at 129 as follows:

“The test to be applied has been variously expressed; "so obviously untenable that it cannot possibly succeed"; "manifestly groundless"; "so manifestly faulty that it does not admit of argument"; "discloses a case which the Court is satisfied cannot succeed"; "under no possibility can there be a good cause of action"; "be manifest that to allow them" (the pleadings) "to stand would involve useless expense".

At times the test has been put as high as saying that the case must be so plain and obvious that the court can say at once that the statement of claim, even if proved, cannot succeed; or "so manifest on the view of the pleadings, merely reading through them, that it is a case that does not admit of reasonable argument"; "so to speak apparent at a glance".” (at 129)

[12] Although this passage and other cases to which we were referred (see Naqvi v MPB (SA) Pty Ltd (1981) 36 ALR 379, at 383 and Heidt v Chrysler Australia Ltd (1976) 13 ALR 365) relate to court proceedings, they provide an indication of the type and nature of an application that might be found to fall within the meaning of the words “frivolous or vexatious”. Those words convey an intention that the power to dismiss an application and to thereby deprive an applicant of the right to pursue an otherwise available cause of action should only be used in limited circumstances.”

[43] These matters have been taken into account in assessing the current circumstances.

Conclusion

[44] In considering the dismissal application, the Commission may dismiss the application if it is satisfied that the application is not made in accordance with the Act (s.587(1)(a)); or the application is frivolous or vexatious (s.587(1)(b)); or has no reasonable prospects of success (s.587(1)(c)).

[45] If the Commission is satisfied on any of those three grounds then the application may be dismissed.

[46] The Respondent has placed little reliance on s.587(1)(a) of the Act and therefore it will not be considered further. The Respondent has not pointed to any specific requirement of the Act which it alleges has not been complied with.

[47] Regarding s.587(1)(b) of the Act, the Respondent has identified an alleged ulterior motive in the Applicant pursuing the substantive application, in that the application had been designed to be disruptive to the business by agitating the claim in circumstances after the Applicant had agreed to finalise his employment. The Respondent raised concerns in relation to the Applicant’s possible non-attendance at the hearing. Whilst the Applicant contacted Chambers early in the morning of the listing, the Applicant failed to provide any evidence regarding the reasons for non-attendance. The possibility of the Applicant’s non-attendance being anticipated is evidenced by the activity by email between the parties and Chambers early on the morning of the listing.

[48] The Respondent relied on the frivolous or vexatious nature of the application. The Applicant has failed to counter the Respondent’s performance issues with attendances, which are recognised in the Respondent’s material, the agreed plan and the Applicant’s material.

[49] The additional argument of the Respondent is in relation to s.587(1)(c) of the Act.

[50] The question becomes whether the Commission is satisfied that the application has “no reasonable prospects of success”. I apply the reasoning of McCarthy DP in Applicant v Respondent at [15] (extracted above).

[51] The underlying issue of the substantive application is whether there was a dismissal, or whether the Applicant resigned, and if the Applicant was dismissed, whether the dismissal was harsh, unjust or unreasonable. The Respondent has submitted that the Applicant resigned on 18 December 2013, with the Applicant’s last day of employment to be 31 January 2014, while the Applicant maintains he was terminated on 20 January 2014. The Applicant was paid out his accrued entitlements to annual leave on 31 January 2014, in addition to wages to 31 January 2014.

[52] The parties both self-represented, and sought procedural guidance as to the arbitration proceedings. A directions conference was held. During these proceedings, by agreement, the parties sought to refer to the manner in which employment relationship was finalised.

[53] The Respondent has been very clear in the material that both parties engaged in discussions, by consent, in relation to the nature of the ongoing employment relationship. Both parties acknowledged that there had been a relationship between the Applicant and another employee at the workplace and that difficulties had emanated from what was described as, at times, a volatile relationship, that impacted on the Applicant’s employment and all at the small workplace. It was also recognised by both parties that, whilst a lot of these issues had been resolved, it was clear from both that there were ongoing performance matters.

[54] Whilst the Applicant denied these were to the extent that the Respondents made out, it was clear there were issues between the parties that brought about the discussions in relation to the amount of time the Applicant was working from home, and the standards of performance the Respondent required. The Respondent also, however, pointed out that the Respondent regarded the Applicant well and had endeavoured to sort these issues out by reaching the earlier agreed structure of attendance.

[55] The Respondent clearly referred to the agreed outcome of the performance discussions in relation to the period by which the Applicant was to attend the office and the discharge of his duties from that point. The Respondent indicated that attendance at the office by the Applicant was not as required; however, it was clear that there was still goodwill in the relationship.

[56] The material indicates that both parties were aware that the employment relationship was not functioning as either required and accordingly engaged in the mutual discussion regarding how to move forward. The Respondent indicated that an agreed resolution was reached between the parties and that the Respondent maintained this agreement but that the Applicant repudiated the agreed position reached in the December 2013 discussion by not attending at work and this then required discussions of a further plan.

[57] The Respondent conceded that in the early periods of the Applicant’s employment, he had worked at a high standard and was a valued member of staff. However, the Respondent indicated that complications arose with the Applicant’s employment when 18 months prior to the Applicant’s resignation he became involved with another employee of the Respondent.

[58] The Respondent is a small business employing nine people. The Respondent submitted that the nature of the relationship had a detrimental effect on the other staff in the office. The mother of the other person in the relationship also worked for the Respondent. The Respondent indicated that the effects of the relationship had devastating effects on the growth and productivity of the business and some detail in relation to the circumstances of such were provided. The Respondent indicated that, to the Applicant and his partner’s credit, they worked out the personal issues and his partner voluntarily left the employment in 2013.

[59] There were some continuing issues as the Applicant continued to support his partner and her children and this had repercussions for his performance at work. The Respondent stated that it became obvious in December 2013 that the current situation had become untenable. Prior to this, there had been discussions with the Applicant about working from home and desisting with this practice. These issues had not been effectively resolved and there was reference from both parties to the Applicant being resistant to this and certainly text messages and evidence indicated a lack of attendance and punctuality, contrary to the agreed plan.

[60] It is clear on the materials that a meeting occurred in December 2013 and whilst both parties indicated that it was a difficult meeting, on the materials, a resignation on the agreed terms resulted, and an amicable agreement as to the terms of moving forward was reached.

[61] It is clear from the material that there has been an issue surrounding the Applicant working from home, and that a new arrangement was put in place for the Applicant to attend work from early January 2014, which he agreed to but was not maintained by the Applicant.

[62] In terms of s.587(1)(c), the Respondent was a small business and the procedures used were not procedurally perfect but were fair and transparent to the Applicant. While there was no written resignation, a mutual agreement finalising the employment relationship is not a dismissal.

[63] It is clear that a process was agreed by the parties to end the employment, where the parties were attempting to maintain a relationship and to organise a mutually acceptable plan. The application as presented is frivolous and vexatious and without reasonable cause. There was an agreed plan to finish. The Applicant asked for documents to support his planned end date and for time off during the period. It is clear on the material that the Respondent had, over a lengthy period, accommodated difficulties in conducting the business related to the Applicant’s distraction from his work, lack of performance and attendance and this led to a mutually agreed plan, with supporting documentation. Subsequent to the end of the relationship, the Applicant has become disgruntled.

[64] On the material before the Commission there is no reasonable prospect in establishing that the finalisation of the Applicant’s employment was harsh, unjust or unreasonable.

[65] For the aforementioned reasons, in all the circumstances it is fair and reasonable to dismiss the Applicant’s substantive application. The application for unfair dismissal remedy is dismissed pursuant to s.587(1)(b) and s.587(1)(c) of the Act.

[66] I Order accordingly.

COMMISSIONER

 1   [2010] FWA 1765.

 2   [2011] FWA 7469

 3   [2010] FWAFB 9413.

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