Mr David Moir v Industrial Abseiling Pty Ltd

[2013] FWC 9845

[2013] FWC 9845

FAIR WORK COMMISSION

DECISION

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

Mr David Moir
v
Industrial Abseiling Pty Ltd
(U2013/8258)

COMMISSIONER SIMPSON BRISBANE, 19 DECEMBER 2013

Application for relief from unfair dismissal.

[1] The following Decision, now edited, was issued during proceedings on 16 December

2013.

[2] This matter concerns an application under s 394 of the Fair Work Act 2009 (“the Act”) by Mr David Moir (“the Applicant”) who alleges that the termination of his employment with Industrial Abseiling Pty Ltd (“the Respondent”) was unfair in accordance with the definition contained within s 385 of the Act.

[3] The application was filed on the 6 April 2013. A jurisdictional objection was made by the Respondent on the basis that the Applicant was not an employee of the Respondent. I heard that matter and on 11 July 2013 issued a decision on that day dismissing the jurisdictional objection and giving reasons.

[4] The matter was listed for the substantive hearing today, being 16 December. On hearing argument I decided to grant legal representation for the Respondent on the basis of evidence that I received from the Respondent concerning the capacity of its sole director, Mr Glenn Sandell, to effectively represent the Respondent.

[5] I have proceeded on the basis that given the material before me at the hearing today, the employer is a small business and is therefore subject to the Small Business Fair Dismissal Code (“the Code”).

[6] The Code itself, which is established under section 388 of the Act, sets out the circumstances where a dismissal is fair in the case of a small business. The Code itself provides:

388 The Small Business Fair Dismissal Code

(1) The Minister may, by legislative instrument, declare a Small Business Fair Dismissal Code.

(2) 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.

[7] In relation to the hearing today, the Applicant, Mr Moir, called two witnesses in his case. He provided a statement himself, which was admitted into evidence as exhibit 1; and a statutory declaration from Mr Ehrnholm, which was admitted as exhibit 2.

[8] The Respondent called two witnesses, Mr Sandell who is the director of the Respondent, whose statement was submitted as exhibit 4; and Ms Paula Lee, the office manager for the Respondent, whose statement was admitted as exhibit 5.

[9] It is common ground that the length of employment Mr Moir was engaged in by the Respondent was from 12 March 2012 to 28 March 2013, being a period of just under 13 months.

ISSUES IN DISPUTE

[10] In terms of the dispute itself, I put a proposition to the parties at the commencement of the hearing this morning to attempt to deal with the central issues and not get caught up in matters that were not really central to dealing with the application today; that in essence the issue for determination in the hearing today was to deal with the dispute between the parties about the true reason for termination. The parties accepted that that was the case.

[11] In summarising those, the Applicant essentially argued that the real reason for his termination was that he was agitating an issue, he said, on behalf of other workers as well as himself, in the context of their status as employees as opposed to being contractors.

[12] His evidence in this regard was that he and others were in fact employees of the Respondent and not contractors, as asserted by the Respondent. This claim was supported by the evidence of Mr Ehrnholm.

[13] The Respondent maintained that the real reason for the termination was based on the behaviour of Mr Moir, in that he had poor communication skills, had misconducted himself in terms of the way he spoke to both Mr Sandell and Ms Lee over some time, and the manner in which he spoke to Ms Lee, particularly on the day of 28 March during the course of a conversation, was the trigger for a decision to terminate the Applicant based on misconduct.

NATURE OF ENGAGEMENT

[14] I determined in the course of dealing the jurisdictional issue that the nature of the relationship was that of an employer and employee relationship.

[15] I have had regard to the evidence and submissions in the matter, and I am satisfied that the engagement was on a regular and systematic casual basis, and on that basis the Applicant is entitled to pursue an unfair dismissal application.

[16] However, being a casual employment relationship, the Applicant would not be entitled to notice pay or redundancy pay if the role was made redundant.

[17] I do not, however, consider on the basis of the evidence before me that the circumstances of this case did involve a genuine redundancy. And so in that regard I do not intend to concern myself with section 389.

SMALL BUSINESS CODE

[18] In terms of the Small Business Code, I must be satisfied the reason for termination was a valid reason based on the employee's conduct.

[19] The Code requires that;

“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.”

[20] The Employer has not asserted that this is a case of summary dismissal under the Code but has argued the Applicant was warned previously about his conduct. In terms of that, there was evidence from Mr Sandell, particularly going to the telephone call with Mr Moir on 9 March 2012, which he said occurred in the evening.

CONDUCT OF MR MOIR

Telephone Call of Evening of 9 March 2012

[21] Mr Sandell claimed that on 9 March 2012 Mr Moir telephoned him late in the evening and wanted to discuss his employment and hourly rate. Mr Sandell said that it seemed to him that Mr Moir was drunk and Mr Sandell claimed that the conversation concluded with Mr Sandell warning Mr Moir;

“if you call me drunk, and keep changing what we have agreed you will have no job here, do you understand ? and Mr Moir replied “no worries.”

12 March 2012

[22] Following that, on 12 March Mr Sandell referred to and relied upon a file note, attached to his statement as attachment GBS2. There was some contest in the evidence as to whether the Applicant had in fact signed the file note, which the Respondent regarded as a warning regarding the Applicant's conduct.

[23] The Respondent, later in the hearing this morning, following the evidence of Mr Moir, produced a document which was a site induction form dated 10 February 2012, which was admitted into evidence as exhibit 3. There was some further evidence on this from Mr Moir.

[24] In comparing GBS2 and exhibit 3, where there is handwriting which records the name Moir appearing in both documents, I am satisfied that the handwriting is so similar that I am inclined to the view that, despite the evidence to the contrary from Mr Moir, he did in fact sign the file note dated 12 March 2012, and attached to the statement of Mr Sandell.

July 2012

[25] Ms Lee said in her evidence that Mr Moir in July 2012 asked her to send him a list of payments for the financial year in July 2012 so he could check them.

[26] Ms Lee said she spoke to Mr Moir several times in October 2012 about his “unacceptable behaviour”. She claimed that she had made some complaint about his behaviour in the conduct of those conversations, although she also said that Mr Sandell had asked her to speak to him. She said she had often tried to assist Mr Moir in sorting out issues outside of work.

[27] Ms Lee said she spoke to Mr Sandell about Mr Moir in October 2012 and advised him that Mr Moir was okay, he blows up then calms down again and she said she told Mr Sandell that Mr Moir is “that sort of guy” and not to worry about it as he would be fine.

February 2013

[28] In February 2013 there was some further evidence in Ms Lee's statements that she spoke to Mr Moir and told him to ‘calm down’ as Mr Sandell was not happy with his behaviour, and if he did not like contracting for Mr Sandell, he should go.

[29] Ms Lee claimed that Mr Moir said he did not like Mr Sandell or the way he ran his business, but there was not a lot of work on the Gold Coast.

March 2013

[30] It was claimed by Ms Lee that in March 2013, Mr Moir had sent Mr Sandell an inappropriate SMS text message. Ms Lee's evidence is that Mr Sandell was unhappy about it and Mr Sandell asked Ms Lee if she could speak to Mr Moir about it.

[31] Ms Lee said she rang Mr Moir and told him that if he had any sorts of issues on site he should speak to his foreman first, Leif.

28 March 2013

[32] We then proceed to the 28th issue. Intervening, there was some evidence, both in the jurisdictional matter and in today's material, about ongoing discussions regarding the controversy concerning the nature of the employment versus contracting issue.

[33] In the conversation on 28 March 2013 that ultimately triggered the termination of Mr Moir, it is not contested by Ms Lee that Mr Moir was agitating, in the course of the conversation, the issue that he was properly characterised as an employee. Issues of superannuation were raised.

[34] My finding in the jurisdictional hearing established the fact that Mr Moir was ultimately correct in making the assertions that he was, in the course of that conversation, about the true nature of his relationship with the Respondent.

[35] In my view the critical words in the course of the conversation were those uttered by Ms Lee. She accepted in her evidence that she did say words to the effect to Mr Moir that if he wanted to continue working for the Respondent then he needed to drop the conversation. That being in reference to the controversy over whether he was an employee or not.

[36] I acknowledge that there is some material before me, including copies of text messages, that the Respondent relies upon to put its case that the Applicant was not faced with a "take it or leave it" proposition at the time, and that he had some choice over his ongoing relationship and how it would be characterised.

[37] However, given the evidence before me concerning the way the conversation unfolded between Ms Lee and Mr Moir on 28 March, I am not satisfied that that was the way the position was being put to Mr Moir on the day.

[38] Ms Lee gave evidence that she said Mr Moir spoke to her in a “disgusting manner”, and called her an idiot. She said she was not putting up with this and the phone call was ended. She said she did not believe she deserved this at all. And after a conversation between Ms Lee and Mr Sandell, she said Mr Sandell decided that he had had enough and Mr Moir was told his contracting services were no longer required.

[39] I do not condone, in any way, the manner in which Mr Moir handled himself in the course of the conversation with Ms Lee. To some extent the nature of what he said has not been contested. I am satisfied that the Respondent was justified in having the view that the conduct warranted a disciplinary response.

[40] However, the conversation must be seen in its full context in the machinations of what had been occurring between the parties in this matter before 28 March.

[41] In that context, even though I did find in the earlier matter, that I was not persuaded that the Respondent's actions in engaging Mr Moir as a contractor were done to deliberately misrepresent the relationship, the matter of Mr Moir's demeanour in the course of his conversation with Ms Lee cannot be completely disentangled and isolated from the other dispute.

[42] In that context, given that the position being asserted by Mr Moir was ultimately correct, I am not satisfied that his use of the term ‘idiot’, while clearly inappropriate, was a basis to be satisfied that the employer had a valid reason for termination, based upon his conduct in connection with the earlier warning, which is in evidence from over a year earlier, and some other evidence going to other exchanges in the periods between March 2012 and March 2013.

[43] I am not, therefore, satisfied that the termination was in compliance with the Small Business Code.

HARSH, UNJUST UNREASONABLE

[44] I must now consider whether or not the termination was harsh, unjust and unreasonable in the context of the test in section 387 of the Act.

[45] In considering whether I am satisfied the dismissal was harsh, unjust or unreasonable, I must take into account whether there was a valid reason for the dismissal related to the person's capacity or conduct. For the same reasons that I am not satisfied that the Respondent complied with the Small Business Code, I am not satisfied that the Respondent had a valid reason for termination on 28 March.

[46] Secondly I must consider whether or not the person was notified of the reason. The evidence indicates that Mr Moir was advised of his termination on the day of the reason for his termination.

[47] In relation to whether he was given an opportunity to respond to any reason related to his conduct, it is evident to me he was not.

[48] In terms of whether there was any unreasonable refusal by the employer to allow Mr Moir to have a support person present to assist in any discussions, again, clearly because of the circumstances and the way the termination was affected, there was no opportunity to request a support person.

[49] The criteria under section 387(e) is not relevant for this matter.

[50] In terms of the degree to which the size of the Respondent's enterprise would be likely to impact on the procedures followed in affecting the dismissal, it is clear that the business was small in size and that clearly had an impact on the nature of the procedures that were followed on the day.

[51] In terms of the degree in which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in affecting the dismissal, there is no question that the absence of a dedicated HR specialist in the Respondent's organisation contributed to the way that the termination was affected.

[52] Having considered all of the criteria under section 387 I am satisfied that the dismissal was unfair.

[53] I now need to consider compensation in circumstances where the Applicant has made it clear he does not seek reinstatement.

COMPENSATION

[54] There are a range of criteria that I must consider in deciding what is appropriate. In determining an amount for that purpose, I must take into account all of the circumstances, including the effect of the order on the viability of the employer's enterprise.

[55] There has been evidence from Mr Sandell today that the company is struggling financially, but I cannot say that the nature of the evidence was so clear that it would preclude me from making any order at all.

[56] In terms of the length of Mr Moir's service, it was not long. It was just over 12 months. It was of a regular and systematic casual nature. That does not support a significant compensation order.

[57] I also need to consider what likely remuneration Mr Moir would have received or would have been likely to receive if he had not been dismissed.

[58] I make the observation that the nature of the relationship was already somewhat tenuous, given the evidence I have heard. In those circumstances I could not be confident that it would be likely to have lasted for any more than a number of months.

[59] Importantly, I need to consider section 392(d), which is, "The efforts of the person to mitigate the loss suffered by the person because of the dismissal." I am satisfied on the oral evidence of Mr Moir today that he did make efforts to mitigate his loss.

[60] The evidence was that Mr Moir gained other employment following his termination within a month with another employer, and that the remuneration he was paid was more generous than he received from the Respondent. Given his evidence concerning his personal circumstances, he had good reason to attempt to do that. It is not a basis to further reduce compensation.

[61] However, section 392(e) is such a basis. That is that, "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," be considered.

[62] The evidence on this point is that Mr Moir gained other employment within a month on more generous conditions. I am required to deduct from any compensation that might otherwise be payable from that figure, earnings made in that period following the month after termination.

[63] In those circumstances, on the basis of the evidence before me, then the compensation that I would be inclined to order could not be any more than that period of unemployment, which would be in the order of a month. I am, however, also required to consider section 392(3), which reads as follows:

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.

[64] I am satisfied that the conduct of Mr Moir on 28 March, in the manner in which he engaged with Ms Lee, did contribute to the reason for dismissal.

[65] On that basis I intend to make a deduction of 50 per cent in the amount of compensation that I would have otherwise ordered, which would have been the equivalent of one month's pay.

[66] On that basis it is my view that an appropriate compensation order would be the equivalent of two weeks' wages at the time of termination and that it should be taxed according to law.

[67] I requested that the parties confer over the dollar value of the two weeks wages. The parties agreed to the sum of $2,500.00. An order that the sum be paid is issued with this decision.

COMMISSIONER

Appearances:

Mr David Moir (the Applicant)

Ms Schwede from Lawyers Queensland T/A Lawyers Qld for the Respondent.

Hearing details:

2013

Brisbane:

16 December

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