Mr Mark Batkin v Active Lifestyle & Nutrition Pty Ltd (in liquidation)

[2013] FWC 8832

[2013] FWC 8832

FAIR WORK COMMISSION

DECISION

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

Mr Mark Batkin
v
Active Lifestyle & Nutrition Pty Ltd (in liquidation)
(U2012/14180)

COMMISSIONER BOOTH BRISBANE, 13 NOVEMBER 2013

Termination of employment - arbitration.

[1] Mr Mark Batkin (the Applicant) brought an application under s.394 of the Fair Work Act 2009 (the Act) for an unfair dismissal remedy against Active Lifestyle Nutrition Pty Ltd (now in liquidation) (the Respondent). The Applicant says he was dismissed on 3 October 2012 by the Respondent’s then Director, Mr Jason Fava.

Preliminary Issue: Company in Liquidation

[2] Administrators were appointed to the Respondent on 4 June 2013 and liquidators appointed by the Victorian Supreme Court on 3 July 2013. The liquidators elected not to participate in these proceedings.

[3] Administration and liquidation can affect the Fair Work Commission’s (the Commission) jurisdiction, but not in this case as the liquidators were appointed by the Court and not by resolution of the company: see Smith v Trollope Silverwood & Beck Pty Ltd (in liquidation) 1.

Was the Applicant Unfairly Dismissed?

[4] The Applicant says he was unfairly dismissed. His former employer submits that either he was not dismissed but had abandoned his employment or alternatively the dismissal was fair.

The Applicant’s Evidence

[5] The Applicant represented himself, and in addition to his own statement and materials attached to his application, provided statements from former employees of the Respondent, Isaac Stewart, Kyle Rowe, Tristian Jackson and Nicola Jaggard. The Applicant, Mr Stewart and Ms Jaggard gave oral evidence. The Applicant’s main witnesses were himself and Ms Jaggard.

[6] The Applicant had worked at Active Lifestyle Nutrition since April 2010. He submits that on 3 October 2012, there was a heated argument on the factory floor with the Respondent’s then Director, Mr Jason Fava.

[7] Ms Jaggard gave evidence that she saw Mr Fava sitting on the forklift yelling at the Applicant, and saw Mr Fava pushing up against and shoving the Applicant.

[8] She confirms that the Applicant asked Mr Fava to stop yelling at him and that she heard Mr Fava twice tell the Applicant that he was fired. It is her uncontested evidence that the threatening and abusive conduct by Mr Fava continued until the Applicant left.

[9] The Applicant says that Mr Fava shouted at him and physically pushed him towards the office and said “you’re lucky I don’t fire you”. Also, the Applicant says that he asked Mr Fava to stop shouting, and in response Mr Fava told the Applicant that he was indeed fired. Further, he says that when Ms Nevin, the Respondent’s Administration Officer, suggested a warning might be appropriate, Mr Fava repeated that the Applicant was fired.

[10] The Applicant submits that the altercation continued as he went to collect his belongings and leave the premises, with Mr Fava apparently attempting to provoke the Applicant into hitting him. The Applicant admits that he was argumentative and that he slammed a door. He challenged Mr Fava on the ingredients of a product and later, from home, sent a text message to Mr Fava accusing him of using bulking products.

[11] The Applicant stated that no reasons were given for the dismissal and the Applicant has not been contacted by Mr Fava after being dismissed.

[12] He says that he gained new employment on 7 June 2013.

Active Lifestyle Nutrition’s Evidence

[13] The Respondent was represented by Mr Fava. Statements and oral evidence were provide by Mr Fava and Ms Kathleen Nevin who managed the Respondent’s accounts. At the time of the hearing Ms Nevin no longer worked with Mr Fava.

[14] Mr Fava denies the Applicant’s version of events. He says the Applicant was aggressive towards him and used inappropriate language. He says he asked the Applicant to remove himself from the workplace until he was calm, and that he asked Ms Nevin to issue a “third and final warning” to the Applicant and that he go home until he had decided whether or not to terminate his employment.

[15] Mr Fava’s statement asserts that it was the Applicant who was abusive on 3 October 2012 after Mr Fava reprimanded him on a work related matter. He says the Applicant had previously been counselled for poor conduct. He admitted in oral evidence there were no issues with the Applicant’s capacity, only his conduct.

[16] He stated that he received a text message the next day from the Applicant in which the Applicant sought his entitlements. Mr Fava says he interpreted this as the Applicant abandoning his job.

[17] Ms Nevin’s statement says that about an hour after she and the Applicant had what appears to be a calm conversation about his pay and sick leave entitlements that she witnessed “a ruckus between Jason and Mark Batkin both walking into the office and a lot of shouting and yelling and Mark was threatening towards Jason and he was then asked to leave the building”. However in oral evidence Ms Nevin stated that she was not a witness to the precipitating events, only the aftermath.

[18] In an email exchange with the Applicant, Ms Nevin says “I do not like offensive language and yelling and shouting so do not always hear what is actually meant.”

[19] A copy of a Centrelink Employment Separation Certificate was attached to the Respondent’s Form F3. It is dated 17 October 2012 and indicates the reasons for separation to be misconduct, and notes “aggressive to supervisor – offensive language”. The date employment ceased is given as 5 October 2012.

[20] An employee file note dated 12 October 2011 was also exhibited noting that the Applicant left work early without letting management know. It indicates he had unresolved issues with his pay. A second note dated 6 May 2011 indicates Applicant was warned for not cleaning equipment properly between uses.

[21] A file note attached to the Respondent’s Form F3 dated 3 October 2012 reports a “heated discussion” between the Applicant and Mr Fava and states “Mark was abusive to Jason and he was asked to leave the building”.

[22] Ms Nevin in oral evidence could not recall the Applicant being fired on the day in question, and expressed an opinion that he “just left in a huff”.

Was the Applicant Dismissed?

[23] The Respondent says that the Applicant was not dismissed but abandoned his employment. I held on 13 August 2013 that the Applicant had been dismissed. These are my reasons for that decision.

[24] Under s.386(1) of the the Act a person is dismissed if :

“(a) the person’s employment with his or her employer has been terminated on the employer’s initiative; or

(b) the person has resigned from his or her employment, but was forced to do so because of conduct, or a course of conduct, engaged in by his or her employer.”

[25] Mr Fava alleged that the Applicant had merely been warned “for a third and final time” or that he had directed such a warning to be issued by Ms Nevin while he decided whether or not to dismiss him. The evidence of the earlier warning was in the form of file notes.

[26] In deciding that the Applicant had been dismissed I took into account the written material before me at the time. The oral evidence given at the hearing confirms this decision, in particular the evidence of Ms Jaggard and the Applicant.

Unfair Dismissal

[27] Section 390 of the Act provides that the Commission may order a remedy for unfair dismissal if the Commission is satisfied of two factors – first that the person was protected from unfair dismissal at the time the dismissal took place and second, the person was unfairly dismissed.

[28] First, it is clear that the Applicant was protected from unfair dismissal as described by s.382. The Respondent falls within the definition of “national system employer” and is not subject to the small business code. Mr Fava gave evidence that at peak times some 70 employees worked for the Respondent. At the date of dismissal there were 39 employees. It is uncontested that the Applicant’s employment was covered by a relevant modern award and that his earnings were below the high income threshold. Further, he had served the minimum period of employment which under s.383 is six months.

Second, was the dismissal unfair?

[29] In considering if the dismissal was fair I must take into account the criteria set out in s387.

s.387(a) Valid reason

[30] Mr Fava has told the Commission that the Applicant’s capacity was not in issue, only his conduct, specifically (from the Centrelink record) “aggressive to supervisor – offensive language”. While, I take into account the two file notes that the Respondent said constituted warnings I prefer the Applicant’s evidence, corroborated by Ms Jaggard, that he was generally a diligent and careful worker.

[31] On the question of whether the Applicant was fired, I accept again the evidence that following the earlier altercation he was fired by Mr Fava. The only person other than the two parties who gave evidence was Ms Jaggard and she supported the Applicant. Her evidence was clear and generally I found her to be a truthful witness.

[32] Having been fired, there is clear evidence from both parties that another altercation took place involving strong language and aggressive conduct.

[33] The Applicant alleges that Mr Fava was acting provocatively and this time the Applicant admits to slapping or slamming a door. There was no physical violence and the Applicant’s conduct was not alleged to be serious misconduct as defined in the Fair Work Regulation 1.07.

Even if it is not serious misconduct, was there a valid reason for the dismissal?

[34] A valid reason must be objectively based on facts and evidence and not “capricious, fanciful, spiteful or prejudiced”. 2

[35] Having preferred the evidence of the Applicant to the Respondent on what happened on the 3 October 2012, I have concluded that the Applicant’s conduct on that day was inappropriate but not a valid reason to dismiss him. It was also a response to what appears to be at least some verbal provocation by his former employer. In this regard, the decision in Symes v Linfox Armaguard Pty Ltd 3 appears to be relevant. In that case the Applicant swore at a manager and hit a roster board. The conduct was held to be inappropriate but not a valid reason for dismissal.

s.387(b)-(d) Notice of the reason; Opportunity to respond; Support person

[36] The Applicant’s uncontradicted evidence was that he was given no reason for his dismissal and that he was not given an opportunity to respond. It appears there were no discussions and accordingly no opportunity for him to be accompanied by a support person.

s.387(e) Warning about unsatisfactory performance

[37] On Mr Fava’s evidence the dismissal related only to conduct. This factor is not relevant.

s.387(f) and (g) Size of the employer and procedures followed; Dedicated specialists or expertise and procedures followed

[38] Evidence was given that there was a system of warnings for employees. However no human resource specialists were on staff to assist with dismissal procedures. On the evidence before the Commission this factor appears neutral.

s.387(h) Other matters

[39] In the altercation that followed the dismissal and after returning home, the Applicant was critical of the Respondent’s practices and accused Mr Fava of adding bulking agent to product. While these are not matters that decide whether the dismissal was justified, they are matters which may be considered as misconduct and can be taken into consideration in any compensation payable.

Conclusion

[40] On the evidence, the reasons given by the Respondent were not valid reasons for dismissal in all the circumstances. Further, the Respondent failed to give notice of the reasons, to afford an opportunity for the Applicant to respond and to be supported. The Respondent did not have dedicated human resource personnel. The criticisms of the Respondent’s practices are important matters, but of themselves do not justify dismissal. I conclude therefore that the dismissal was, in all the circumstances, harsh, unjust and unreasonable.

Remedy

[41] Having concluded that the Applicant was dismissed, that he was protected from unfair dismissal and that the dismissal was unfair, the next step is to consider the appropriate remedy, if any.

[42] The remedies under the Act are reinstatement or compensation. The Applicant does not seek reinstatement and is already in other employment. In any case, with the Respondent under administration, reinstatement is not a realistic prospect. The course of conduct between the Applicant and Mr Fava is also indicative that the employment relationship has broken down. It would seem very difficult for the Applicant to return to work under Mr Fava in all the circumstances. Accordingly I find that reinstatement is inappropriate.

[43] Compensation, the other remedy, is dealt with by s.392. Compensation is only available in lieu of reinstatement. The amount of compensation, if any, is calculated by considering the criteria in s.392(2), reduced by an appropriate amount considering any misconduct of the Applicant and the cap on compensation.

[44] I address each factor in turn.

(a) Viability

[45] Any order made for compensation will merely become a claim in the administration of the Respondent and cannot affect its viability.

(b) Length of service

[46] The Applicant worked for the Respondent for 2½ years. He commenced as a casual employee, progressing to permanency. This factor does not affect the amount of any compensation.

(c) Remuneration the Applicant would have received

[47] In calculating this amount, I make reference to the Sprigg formulation as refined in Ellawala v Australian Postal Corporation 4. Under that formulation, the Commission calculates how much the Applicant would have earned in anticipated future employment, deducts earnings in alternative employment over that period and contingencies, and adjusts for taxation.

[48] The Applicant gave evidence that he returned to employment on 7 June 2013 some 8 months after the dismissal.

[49] Given the history of his employment and poor relationships with Mr Fava, it is unlikely he would have remained in the Respondent’s employment for a lengthy period. I consider that the Applicant’s employment would have been terminated within four weeks of the incident. On the evidence before me of an hourly wage of $16.57 and a 40-hour week, that amounts to $2651.20.

(d) Mitigation

[50] The Applicant asserts he was unemployed for 8 months which seems to me to be a considerable period. My focus is on the 4 week period I have found to be his probably term of continued employment. The Applicant did not adduce evidence of his attempts to find alternative employment nor of days worked following his dismissal. I conclude that the Applicant did not take sufficient steps to mitigate the loss, and in accordance with the principles set out by the Full Bench in Biviano v Suji Kim Collection 5 a reduction in the compensation to be ordered is warranted. I find that compensation should be reduced by 10% in regard to this factor.

(e) Remuneration earned in other employment

[51] It appears from the Applicant’s evidence that he did not obtain any work in the period from his dismissal to Christmas that year.

(f) Income between order for compensation and payment

[52] This factor is not relevant in the present circumstances.

(g) Any other matter that the Commission considers relevant

[53] The Sprigg formulation requires me to consider contingencies. Given the period of actual unemployment, my finding that four weeks is the appropriate period to be considered, and the fact that the Applicant’s current situation is known, no allowance needs to be made for contingencies.

Misconduct (s.392(3))

[54] There is no doubt that the Applicant was aggressive and used inappropriate language. Further, he made accusations of improper manufacturing processes both during the altercation and by later text message. I find that this amounts to misconduct that warrants a reduction of 30%.

Compensation cap (s.392(5))

[55] The amount ordered is less than the compensation cap and no further reduction is required by s.392(5).

Instalments (s.393)

[56] There was no submission that any amount of compensation should be subject to payment by instalments. I am not satisfied that payment by instalments is warranted.

[57] The amount of compensation order is therefore:

4 weeks’ wages	$2651.20
LESS earnings	n/a
LESS mitigation s.392(2)(d) 10%	$ 265.12
LESS misconduct s.392(3) 30%	$795.36
Total	$1590.72

Order

[58] An order will issue that the Respondent pay the Applicant compensation in lieu of reinstatement in the sum of $1590.72 less taxes.

[59] A copy of this decision and the order is to be served on the Respondent’s administrator, Worrells Solvency & Forensic Accountants.

COMMISSIONER

Appearances:

M Batkin appeared on his own behalf.

J Fava for Active Lifestyle & Nutrition Pty Ltd (in liquidation)

Hearing details:

2013.

Brisbane:

27 August,

29 October.

 1   PR940508 [2003] AIRC 1424

 2   Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371, 373; [1995] IRCA 333

 3   [2012] FWA 4789

 4 [2000] AIRC 1151

 5   PR915963

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