Mr Daniel Martin v G and P Martin Family Trust trading as Martin Brothers House Removers

[2014] FWC 1926

[2014] FWC 1926

FAIR WORK COMMISSION

DECISION

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

Mr Daniel Martin
v
G & P Martin Family Trust trading as Martin Brothers House Removers
(U2012/7653)

Mr Russell Martin
v
G & P Martin Family Trust trading as Martin Brothers House Removers
(U2012/7682)

DEPUTY PRESIDENT SMITH MELBOURNE, 26 MARCH 2014

Remedy arising out of earlier decision issued; PR529844.

Overview

[1] This matter has a long history. By decision dated 4 October 2012, 1 the Commission as constituted found that the termination of employment of Mr Russell Martin and Mr Daniel Martin by G & P Martin Family Trust trading as Martin Brothers House Removers (the Respondent) to be harsh unjust and unreasonable. That decision was appealed. On 8 March 2013 the Full Bench delivered judgement2 refusing leave to appeal. This decision must be read in conjunction with these two earlier decisions.

[2] The Full Bench remitted the matter back to determine remedy.

[3] Since that time the matter has not been able to progress as a consequence of illness of Mr Geoffrey Martin of the Respondent. The matter was listed for hearing on 11 February 2014, at which time Mr Addison of counsel, for the applicants, sought the payment of maximum remedy under the Fair Work Act 2009 (the Act). At this stage, the respondent was no longer legally represented but the wife of Mr Geoffrey Martin, Mrs Pennette Martin, appeared.

[4] It was argued by Mr Addison that the evidence in the proceedings demonstrated that the breakdown in the relationship occurred because the two applicants were of the view that they were not being paid correctly and that they were being forced to take sick leave. In addition, there were complaints about overtime and penalty payments. It was the submission of Mr Addison that these matters were being pursued in the Magistrates’ Court.

[5] On behalf of his clients, Mr Addison did not seek re-instatement. He advised that Mr Russell Martin (an employee of ten years service) was unemployed until September of last year and that he is now driving a bus for disabled persons for 20 hours a week and at a lower rate of pay. Mr Daniel Martin tried to establish a business and earned approximately $4009.57 although his loss in the business was $60,000. Mr Daniel Martin commenced employment at the beginning of 2014 at a cleaning company.

[6] In opposition to the granting of any remedy, the respondent provided written submissions and Mrs Pennette Martin made some brief oral submissions. The submissions were of short compass. It is argued that the breakdown of the relationship arose from a family dispute over Mr Daniel Martin’s relationship with a woman approximately 30 years his senior. It was also submitted that Mr Russell Martin had been seeking other employment prior to the cessation of his employment. These factors, it was argued, meant that the expectation of continuing employment was low.

Assessment of remedy

[7] Against the background of this overview I now turn to consider the statutory requirement when considering relief.

[8] To this end ss.390 and 392 of the Act must be examined. Having regard to the submissions and the evidence I am satisfied that reinstatement is inappropriate. It is not sought and the case does not support a finding that it would be appropriate in all the circumstances. It is therefore necessary to examine the criteria contained in s.392 to decide what compensation, if any, should be awarded in lieu of reinstatement. The section provides:

“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.”

[9] I turn firstly to consider the effect of the order on the viability of the employer’s enterprise [s.392(2)(a)]. During the proceedings a letter was tendered from the businesses accountant which concluded that “the reduced profitability and high level of debt servicing required by the business has precluded the owners from drawing a wage. The business has very limited cash reserves and working capital which means that it is reliant upon future trading to service its commitments”. This material was objected to by the applicants without more detail. A request was made for additional detail and this was subsequently provided but the respondent objected to it being made available to the applicants.

[10] Some explanation is needed. As mentioned earlier, the applicants have proceedings on foot in the Magistrates’ Court for matters going to the award obligations and I advised the respondent that if it were to provide financial detail in response to this matter it should seek advice from its legal representatives. This is a difficult matter as the respondent is facing additional legal action in which there may be a need for advice to protect its interests. However I must act upon the evidence in this case and the material presented cannot be used by me given the conditions placed on it by the respondent.

[11] In earlier submissions the respondent put that it lost two contracts as a result of not having any staff available to perform the contract. I will consider this aspect.

[12] Given the objection to the material being provided to the applicants, I have not taken this recent material into consideration as the material could not be tested. In an email from the applicant’s representatives it was put that if I did use the material to inform the decision without giving them an opportunity to consider the matter, such an approach would constitute a denial of natural justice.

[13] Section 392(2)(b) requires the Commission to consider the length of service. Both applicants have reasonably long service. Mr Russell Martin was employed for 10 years and Mr Daniel Martin was employed for seven and half years.

[14] Section 392(2)(c) requires consideration of what remuneration the person would have received, or would have been likely to receive, if the person had not been terminated. Given the facts and timing of this case, all relevant facts are known about earnings and it is not necessary to make any assumptions about what may have happened. However, the gravamen of this matter is how long would the employment relationship have lasted?

[15] In the written submission reliance was placed on the family relationships which populated the business. The applicants are the brother and nephew of the owner (the brother’s son).

[16] A review of the evidence discloses that:

● The applicants were seeking to have what they believed were award entitlements (see employers F3 supporting documentation).

● The respondent’s position from the beginning was that there had been no termination at the initiative of the employer (see respondents form F3).

● The respondent was trying to work through the claims but could not reply within the timeframe demanded by the applicants (see form F3).

● The respondent was offering an alternative to the employee/employer relationship namely to transfer to being subcontractors.

[17] There is nothing put in the hearing, by way of submissions or cross-examination, which went to a breakdown in family relationships being a factor in the cessation of employment. Indeed the only matters dealt with were the concerns held by the applicants in relation to their terms and conditions of employment. There is one document which can give some insight into the allegation of a family dispute and that was a note forwarded to the applicants by Mrs Pennette Martin and which is contained in the file and attached to a witness statement. The note referred to the relationship between Mr Daniel Martin and a person substantially older than him. However, no argument was raised before the Commission, as constituted, that a family relationship issue was the basis of the termination of employment of the applicants. Similarly, from the appeal decision, the issue was not raised either.

[18] In short, there is no probative evidence that the relationship of Mr Daniel Martin was in any way related to the termination of employment of both applicants. In any event, if the termination of employment had occurred as a consequence of a family dispute unrelated to conduct in the workplace, that may well have constituted a discriminatory act and be found to be a harsh, unjust and unreasonable termination of employment. Looked at from the position of the applicants, there is no reason to believe that they would have resigned their employment because of the relationship that Mr Daniel Martin had with this older person. It is put in an earlier submission that there had been a “resultant breakdown in family relationships” [written submissions 19 October 2012]. There is no doubt that this is true. There are serious police matters between these parties. However, a breakdown in relationships, family or otherwise, is a matter going to the question of reinstatement.

[19] It follows that with the length of service and but for the reason for termination of the employment, there is no reason to believe that the employment would not have lasted for longer than six months. In this connection, the evidence about Mr Russell Martin seeking other employment is scant and does not demonstrate any imminent decision to resign.

[20] Turning to s.392(2)(d) and (e), it is clear that efforts were being made by the applicants to secure employment or create an income. Mr Daniel Martin tried to start his own business which was not successful. It was submitted that he earned $4,009.57 but sought to offset this amount with some start up cost for his business. Mr Russell Martin finally secured work at the beginning of 2014. In relation to Mr Daniel Martin I shall take into account his earnings but not the start up costs or the eventual significant loss incurred by his business.

[21] In relation to s.392(2)(f) all the facts are known given the effluxion of time and no separate assessment is needed. In this connection it is also not necessary to consider the concept of contingencies.

[22] Finally any other matter that FWC considers relevant. I have dealt at length with the breakdown in this family and its relevance to the proceedings so there is nothing more to be said on this matter. Whilst the total financial position could not be tested there was evidence of the loss of contracts as a consequence of the cessation of employment of the two applicants. Whilst the impact was real, although undefined in the totality of the financial affairs of the business, nevertheless it was as a consequence of the termination of employment of the applicants by the respondent. Therefore the impact upon the business resulted directly from the action of the employer.

[23] Finally, there is no evidence which could give rise to a conclusion that misconduct played any part in the dismissal of the two applicants [s.392(3)] or that performance was an issue prior to the termination of employment.

Conclusion

[24] Mr Russell Martin had his employment terminated on or about 24 April 2012. He obtained employment in September of last year. Mr Daniel Martin was terminated at the same time and sought to run his own business which failed. It was submitted that the business continued to operate until the beginning of 2014. However with a loss of about $60,000, Mr Martin ended the business.

[25] In relation to Mr Russell Martin it is clear that he was unemployed for approximately 17 months. The position of Mr Daniel Martin is more complicated. To begin, he started his own subcontracting business and from the material provided the business undertook work on 23 May 2012. Therefore his period of unemployment was from 24 April until 23 May. The failure of the business after that is of no relevance other than lesser income earned. In circumstances where a person finds another position at a lesser rate, the Commission has taken that into consideration when assessing compensation the amount of “lost remuneration” [Sprigg v Paul’s Licensed Supermarket [(1998-1999) 88 IR 21 at p.26]. How mitigation is sought to be achieved is not to the point, it is the amount of lost remuneration, although care needs to be taken when consideration is given to a circumstances where an ex-employee starts a business. It cannot be, as Mrs Pennette Martin submitted, that her business should subsidise the start up of another business or its running costs. Therefore I am not prepared to offset the losses from the business with the income earned. The income earned will stand alone.

[26] For both Mr Russell Martin and Mr Daniel Martin I find that they would have remained in employment beyond six months. In relation to Mr Russell Martin, the remedy I award is the cap of six months’ salary.

[27] For Mr Daniel Martin, he sought to mitigate his loss by starting a business one month after his employment was terminated. I will treat this in no different manner than I would with a person obtaining further employment. I will award Mr Daniel Martin the cap of six month’s salary less the $4,009.57 he earned during that period.

[28] The amount of 6 months is subject to normal taxation. The order will apply from today and the respondent shall have thirty days to make the payments.

DEPUTY PRESIDENT

Appearances:

M. Addison of Counsel for the applicants.

P. Martin on behalf of G & P Martin Family Trust trading as Martin Brothers House Removers.

Hearing details:

2014.

Melbourne:

February, 11.

Final written submissions:

27 February 2014.

 1   [2012] FWA 8516

 2   [2013] FWCFB 1073

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<Price code C, PR548875>