Mr Jean De Poilly v Cast Iron Pty Ltd T/A RO Gas Electrical

[2014] FWC 2947

[2014] FWC 2947

FAIR WORK COMMISSION

DECISION

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

Mr Jean De Poilly
v
Cast Iron Pty Ltd T/A RO Gas - Electrical
(U2013/17304)

Mrs Corinne De Poilly
v
Cast Iron Pty Ltd T/A RO Gas - Electrical
(U2013/17306)

COMMISSIONER BISSETT MELBOURNE, 7 MAY 2014

Applications for relief from unfair dismissal - no dismissal - genuine redundancy - small business.

[1] These are applications for unfair dismissal made by Mr Jean De Poilly and Mrs Corinne De Poilly (the Applicants) pursuant to s.394 of the Fair Work Act 2009 (the Act). The Applicants were employed by Cast Iron Pty Ltd T/A RO Gas - Electrical (the Respondent).

[2] Whilst separate applications were made the matters were heard together on the basis that they concerned the same set of facts. Whilst one decision has been issued each application has been considered separately.

[3] At the commencement of proceedings I granted the Respondent permission to be represented by Counsel on the grounds that it would allow the matter to be dealt with more efficiently because of the complexity of the matters (s.596(2)(a) of the Act). The complexity of these matters relates to the relationship between the employment of the Applicants and the contract of sale of the business between the owner of the business, Mr Robert Dehaini and Mr De Poilly.

Background

[4] Mrs Corinne De Poilly commenced employment with the Respondent in July 2010. Mr Jean De Poilly commenced employment with the Respondent in October 2012. Both ended their employment on or about 21 November 2013.

[5] The Respondent is a small business in accordance with s.23 of the Act. At the time the employment of the Applicants ended they, along with Mr Dehaini (also the owner of the business), were the only employees of the Respondent.

[6] The Respondent says that it did not terminate the employment of either of the Applicants but rather that they each abandoned their employment. Alternatively the Respondent says the Applicants were made redundant. In the further alternative the Respondent says that the conduct of the Applicants is such to justify summary dismissal.

[7] This matter is complicated to some degree by a contract entered into by Mr De Poilly and Mr Dehaini for Mr De Poilly to purchase the business. A contract was signed in November 2012 which involved payment of an upfront amount of $40,000 and then weekly payments by Mr De Poilly to Mr Dehaini over a period of more than three years. At the completion of this period ownership of the business would transfer to Mr De Poilly. Re-negotiation of this contract was undertaken in October and November 2013 but these re-negotiations were never successfully concluded.

[8] The lease on the premises occupied by the Respondent in South Oakleigh was due to expire on 22 November 2013. As part of the sale process it was agreed that at this time the premises would move to Mr De Poilly’s residential property.

The Applicants’ evidence

[9] On 21 November 2013 Mrs De Poilly arrived at work to find that the office and warehouse were being packed up ready to vacate the premises. She says that Mr Dehaini told her that he had concerns about the business and wanted to talk to both her and Mr De Poilly. Mr Dehaini then said to her words to the effect that there was no money to pay her and she could stay if she was willing to work for nothing.

[10] Mrs De Poilly says she gathered her personal belongings and left as she was not willing to work for free. She says she also contacted Mr De Poilly that day on his mobile phone provided by the Respondent. She says she went to see her (and Mr De Poilly’s) lawyer a few days later who told her to have nothing to do with Mr Dehaini and the Respondent.

[11] It is apparent (from correspondence received in reply) that the Applicants’ lawyer wrote to the lawyer for the Respondent on 21 November 2013, in part with respect to the sale of the business and in part in relation to Mrs De Poilly’s employment. In reply, on 21 November 2013, the Respondent’s lawyer said, in part:

We refer to your letters of 21 November 2013.

We now comment as follows:

3. Your clients have not been “locked out” of the business. As your clients would be aware, the business premises must be vacated by tomorrow, Friday 22 November 2013. Accordingly, Mrs De Poilly was requested to return her keys to our client. We hereby advise that Mr De Poilly is also now required to return his keys to our client immediately so they can be returned by our client to the managing agent. We also require your clients to deliver all stock currently in their possession, as we understand some stock has been delivered directly to their postal address.

...

6. Our client also denies that Mrs De Poilly’s dismissal is unfair. Her position has become redundant as the business can no longer afford to maintain her position. Given the size and nature of the business, our client has been unable to redeploy Mrs De Poilly elsewhere within the business. Our client will pay Mrs De Poilly all her lawful employee entitlements, of course. 1

[12] Mrs De Poilly has had no contact with the Respondent or Mr Dehaini since 21 November 2013 and at no stage sought to contact the Respondent or Mr Dehaini herself to determine her position. There is no evidence of any related correspondence from her lawyer.

[13] Mrs De Poilly says that she had nothing to do with the arrangements relating to the sale of the business from Mr Dehaini to Mr De Poilly. She said that was a matter for them and she did not want to get involved. As it was, she says she was often caught up in the middle of these matters.

[14] Mr De Poilly did not attend at the Respondent’s premises on 21 November 2013. He says he believes he was dismissed because of the failure of the sale of the Respondent’s business to him. He also says that on 20 November 2013 his mobile phone provided by the Respondent was disconnected and on 21 November 2013 he was ‘locked out’.

[15] Mr De Poilly has not attempted to contact the Respondent or Mr Dehaini at least since 21 November 2013. He has not returned to the workplace. He has not returned any of the Respondent’s equipment he had in his possession as at 21 November 2013. All contact with the Respondent and Mr Dehaini has been through Mr De Poilly’s lawyer.

Respondent’s evidence

[16] Mr Dehaini says that he has had concerns about the financial situation of the business for some period of time. He says he asked Mrs De Poilly on a number of occasions to ensure that Mr De Poilly properly accounted for cash payments received for work undertaken and that these should be paid into to business. In March 2013 he cut back his involvement in the business to allow Mr De Poilly to get hands on experience of running the business. During this time however, Mr Dehaini did retain access to all aspects of the business including bank accounts, bookings etc. In August 2013 he had a meeting with Mr De Poilly where he discussed the financial position of the business.

[17] Around August 2013 Mr Dehaini put to Mr De Poilly that he seek a loan to enable the sale of the business to be completed more expeditiously.

[18] Mr Dehaini subsequently entered into re-negotiations over the contract of sale for the business with Mr De Poilly but on 15 November 2013 these broke down. He says that was the last time he spoke to Mr De Poilly. Mr Dehaini says that this made it impossible to finalise arrangements for the business to be relocated to Mr De Poilly’s residence. His attempts to contact Mr De Poilly following this were unsuccessful.

[19] Mr Dehaini says that when he was packing up the premises on 21 November 2013 in preparation for the move from that site when Mrs De Poilly arrived at work. He indicated to her that he needed to talk to both her and Mr De Poilly as to how to move forward with the business. This was because the business had a problem in that the amount of cash it had in the bank was outweighed by creditors that needed to be paid. He said that Mrs De Poilly then left the premises. Around this time he also tried to contact Mr De Poilly but the calls went through to message bank.

[20] Mr Dehaini says that at 11.51am on 21 November 2013 he received a letter from the lawyer for Mr and Mrs De Poilly advising that he was not to have any direct contact with them again.

[21] Mr Dehaini says that, had he been able to meet with Mr and Mrs De Poilly around 21 November 2013 he would have been able to explain the financial situation of the business to them.

Mr De Poilly

[22] I deal with Mr De Poilly’s application first.

[23] I do not accept that Mr De Poilly was dismissed from his employment. I accept the evidence of Mr Dehaini that at no time from 15 November 2013 onwards had there been any contact, despite his attempts, with Mr De Poilly. While Mr De Poilly says he was ‘locked out’ of the Respondent premises on 21 November 2013 I do not accept this to be the case. Mr De Poilly still had a key to the premises which he later sent to Mr Dehaini. He also knew that the premises had to be cleaned out and returned to the letting agent on 22 November 2013. He received a call from Mrs De Poilly on 21 November 2013 and made no attempt to contact Mr Dehaini after this time.

[24] I find no evidence to support Mr De Poilly’s assertion that his mobile phone, supplied by the Respondent, has been disconnected on 20 November 2013. Mrs De Poilly says she contacted him on that phone on 21 November 2013. This would not have been possible if it had been disconnected.

[25] Mr De Poilly assumed his employment had been terminated and, on that basis, refused to engage in any discussion with Mr Dehaini.

[26] For all intents I find that Mr De Poilly voluntarily left his employment. There is nothing before me to suggest that, at any stage he told Mr Dehaini that he believed his employment had been terminated such that Mr Dehaini could have corrected that belief. Instead he left, took any tools and equipment of the Respondent with him, and refused to have any discussion with Mr Dehaini. There is nothing to suggest that Mr Dehaini said or did anything to Mr De Poilly such that he could form the view that his employment had been terminated.

[27] It would appear, on its face, that Mr De Poilly confused his employment status with the Respondent with the unsuccessful attempts to re-negotiate the sale contract. That the re-negotiations had failed was not an indication that his employment had ended.

[28] Mr De Poilly made the decision to cease contact with the Respondent and not reply to Mr Dehaini’s calls prior to 21 November. It was Mr De Poilly’s decision to do so. He bears the consequences of that decision.

[29] For these reasons I find that Mr De Poilly was not dismissed.

Mrs De Poilly

[30] Mrs De Poilly’s situation is quite different to that of Mr De Poilly.

[31] On 21 November 2013 Mrs De Poilly arrived at work and was told by Mr Dehaini, on his evidence, that the business could not afford to pay her anymore. On this basis she was entitled to consider that her employment had been terminated at the initiative of the employer.

[32] Mrs De Poilly accepts that she was made redundant. The letter from Mr Dehaini’s lawyer confirms this. The matter to determine is if the redundancy was a genuine redundancy for the purposes of the Act.

[33] Section 389 of the Act states:

389 Meaning of genuine redundancy

(1) A person’s dismissal was a case of genuine redundancy if:

(a) the person’s employer no longer required the person’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise; and

(b) the employer has complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy.

(2) A person’s dismissal was not a case of genuine redundancy if it would have been reasonable in all the circumstances for the person to be redeployed within:

(a) the employer’s enterprise; or

(b) the enterprise of an associated entity of the employer.

[34] In the circumstances of this case I accept that the Respondent no longer required Mrs De Poilly’s job to be done by anyone. This was caused by the severe financial position the Respondent found itself in. Mr Dehaini gave evidence of the financial situation of the Respondent and Mrs De Poilly gave evidence of the limited cash available in the Respondent’s bank account in November 2013 such that I can accept the Respondent was in a difficult financial situation.

[35] I accept the evidence of Mr Dehaini that he now does the work previously done by Mrs De Poilly and he has not replaced her.

[36] There is nothing to suggest that Mrs De Poilly’s work was not covered by an award. She worked in administration taking orders, invoicing and processing of payments. I accept that given Mrs De Poilly’s work is covered by an award, the relevant award would contain a provision that requires consultation with employees prior to any redundancy.

[37] I accept the evidence of Mr Dehaini that, when Mrs De Poilly attended work on 21 November 2013 (at 9.00am), he indicated to her that he wished to talk to both her and Mr De Poilly. I also accept his evidence that Mrs De Poilly then left and at 11.51am Mr Dehaini received advice from her lawyer not to speak to her directly.

[38] On this basis I conclude that Mr Dehaini attempted to consult with Mrs De Poilly about the situation at work but that she left the premises and he could no longer communicate with her. Mrs De Poilly shunned the attempts of the Respondent to talk to her and instead packed her belongings and left. She seemed in undue haste to do so and does not appear to have engaged with Mr Dehaini at all. Her lawyer’s letter appeared relatively soon afterwards.

[39] The obligation on Mr Dehaini is to consult. He cannot however undertake such consultation if Mrs De Poilly is unwilling to participate in it. Whilst it would have been prudent for Mr Dehaini to put the issues he had in writing, I accept that the Respondent is a small business. As such it cannot be expected to have a sophisticated approach to dealing with such an unusual circumstance. In this situation I do not consider that Mr Dehaini should be held liable for the failure of the consultation to occur to its fullest.

[40] For these reasons I find that Mrs De Poilly’s dismissal was a case of a genuine redundancy as defined in s.389 of the Act.

[41] Mrs De Poilly says that all she wants is her annual leave entitlements and for her notice period to be paid. Regardless of my decision here, having been made redundant, she is entitled to those payments and I would encourage the Respondent to make those payments without the need of further litigation.

Conclusion

[42] I accept (and it was not disputed in the hearing) that both Mr De Poilly and Mrs De Poilly were protected from unfair dismissal (s.382 of the Act).

[43] Section 385 of the Act states:

385 What is an unfair dismissal

A person has been unfairly dismissed if the FWC is satisfied that:

(a) the person has been dismissed; and

(b) the dismissal was harsh, unjust or unreasonable; and

(c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and

(d) the dismissal was not a case of genuine redundancy.

[44] For the reason given above I find that Mr De Poilly was not dismissed. In such circumstances he cannot have been unfairly dismissed. His application for relief from unfair dismissal is therefore dismissed.

[45] For the reasons given above I find that Mrs De Poilly was dismissed but that her dismissal was a case of a genuine redundancy. Her application for relief from unfair dismissal is therefore dismissed.

COMMISSIONER

Appearances:

N Bowen of Counsel for the Respondent.

Hearing details:

2014.

Melbourne:

May 5.

 1   Exhibit A2.

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