Mr Peter Bakker v Poreid Pty Ltd T/A Cox Kelly Fine Wine Cheese and Chocolate

[2013] FWC 1084

[2013] FWC 1084

FAIR WORK COMMISSION

DECISION

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

Mr Peter Bakker
v
Poreid Pty Ltd T/A Cox Kelly Fine Wine Cheese and Chocolate
(U2012/11756)

COMMISSIONER DEEGAN CANBERRA, 15 FEBRUARY 2013

Unfair dismissal - jurisdiction - s.386(1) meaning of dismissed - whether termination was at the initiative of the employer - application dismissed.

[1] On 26 July 2012 Mr Peter Bakker (the applicant) lodged an application under s.394 of the Fair Work Act 2009 seeking a remedy in respect of the termination of his employment with Poreid Pty Ltd trading as Cox Kelly Fine Wine Cheese and Chocolate (the employer).

[2] When the matter was listed for a conciliation conference the representatives of the applicant and the employer sought an adjournment, requesting additional time before further proceedings occurred. Further time was allowed but, as the matter did not settle, Directions were issued and the matter was listed for hearing on 24 October 2012. Subsequently the representative for the applicant requested further time to comply with the Directions. Further time was allowed and the matter was relisted for hearing on 4 December 2012.

[3] On 4 December 2012 the hearing was adjourned as there was no appearance for the respondent. The failure to appear seemed to have been the result of a misunderstanding so the matter was relisted for 5 February 2013.

The applicant’s case

[4] The applicant filed a statement of evidence 1 and gave oral evidence in support of his case. According to the evidence, he commenced working for the respondent on 16 May 2011 but worked unpaid until 26 June 2011. For the period of his employment the applicant managed the business operated by the respondent. He claimed that from 26 June 2011 until his resignation he was paid an above award wage but received no penalty payments for the various shifts he performed.

[5] The applicant claimed that on 9 July 2012 he was instructed by Mr Abdul Osman, one of the two directors of the respondent, that he was “not to pay - be paid my wages until there were some accounts sorted and he decided on the future of the company” 2.

[6] On 13 July the applicant sent an email 3 in the following terms to Mr Abdul Osman:

Abdul

Can you please confirm ASAP that wages will not be paid this week. I need to know please.

Thanks Peter.

[7] The email was responded to the same day by Mr Javid Osman, the other director of the respondent, with the word “Yes”.

[8] It was the applicant’s position that as his employer had told him that he was not to be paid his wages, he had no alternative but to resign. He also alleged that at the date of his resignation he was owed amounts by the respondent in respect of overtime and penalty payments. He claimed to have sought payment of these amounts from the respondent but had received no response.

[9] It was the applicant’s evidence that during his employment he was responsible for the preparation of the staff rosters.

[10] Under cross-examination, the applicant agreed that during his employment he was responsible for transferring moneys from the respondent’s accounts, including for the payment of his own wages. He also agreed that about three or four months before he resigned he had made payments from the respondent’s accounts to his credit card in $3000 and $5000 lots.

[11] It was the applicant’s evidence that the main reason he had taken employment with the respondent was because he could see the potential option of purchasing a share in the business. He agreed that he had explained to Mr Abdul Osman that he needed a wage of at least $1000 per week net to enable him to support his family.

[12] When it was put to the applicant, he denied that the company’s financial position changed dramatically because he had supplied stock to other retailers without Mr Abdul Osman’s knowledge. The applicant did not deny that he had sent stock to other retailers that had been charged to the respondent but claimed that by doing so the respondent had received bonus stock.

[13] The applicant agreed that he had been responsible for paying the bills from the company’s account and getting the takings to the bank. He also conceded that he was responsible for ordering the stock and drawing up his own roster.

[14] When re-examined, the applicant stated that he had paid for stock for the respondent using his own credit card and had then transferred money from the respondent’s account to pay the credit card bill.

The employer’s case

[15] Evidence for the respondent was given by way of the employer’s response Form F3 to the application and through a witness, Mr Abdul Osman.

[16] It was the employer’s case that in early 2011 the applicant had expressed an interest in an equity partnership in the respondent’s business. A company was formed, apparently between the applicant and the owners of the respondent. The applicant paid a sum of money to purchase the “stock” of the business and a contract was drawn up providing for the purchase of the respondent by the newly formed company. It was Mr Osman’s evidence that the contract was not completed in the period prior to the applicant’s resignation as the applicant had indicated that he did not want to proceed with the purchase until the respondent had paid out a large bank loan related to the installation of the refrigeration equipment on the respondent’s leased premises.

[17] It was also Mr Osman’s evidence that from July 2011 until the applicant resigned in July 2012, the applicant had responsibility for the management of the respondent’s business. This involved ordering stock, preparing staff rosters and making payments for wages to himself and other staff.

[18] Mr Osman stated that the applicant had used his own credit cards to purchase stock for the business without having been asked to do so and without the knowledge of Mr Osman. He claimed that the applicant was supposed to report regularly to the bookkeeper but had wanted to take full control of the company, including full control of the company’s accounts to the extent of paying his own wages. Mr Osman had concurred with the applicant’s wishes as he had wanted someone to take control to relieve him of the burden. He had not, however, given the applicant permission to on-sell stock.

[19] Around early July 2012 Mr Osman’s attention was drawn to a number of transfers that had been made from the respondent’s accounts to make payments on credit card accounts in the name of the applicant. The bookkeeper and accountant, who were in the process of preparing the financial year accounts for the respondent company, also drew to his attention a number of anomalies concerning stock transfers to other retail outlets. It was at this time that Mr Osman instructed the applicant to make no further payments from the company’s accounts while he investigated the discrepancies and determined what to do with the business.

[20] It was Mr Osman’s evidence that it was not his intention that the applicant would not be paid his wages for the work performed. As there were a lot of discrepancies in the accounts, the bookkeeper had many questions relating to shortfalls in the banking and in trade. It was for the purpose of allowing the applicant to explain these matters that a meeting was called for 21 July. The applicant subsequently resigned on 18 July and did not attend that meeting.

[21] Mr Osman agreed that he had not responded to the applicant’s email concerning whether wages would be paid. He stated that his brother, Mr Javid Osman, who was a director of the business but took no active involvement, had sent the response.

[22] Mr Osman agreed with the applicant’s representative that he had not pursued the matter of the applicant’s resignation with him. He noted however that the applicant had not attended the meeting called for on 21 July in order to clarify the account discrepancies.

[23] It was the respondent’s position that the applicant had not been terminated at the initiative of the employer but had resigned his employment immediately after questions were raised with him about discrepancies in the accounts of the business, and upon being requested to attend a meeting to clarify the position.

[24] It was the evidence of Mr Osman that the respondent company had ceased to trade and owed a large amount of money to its landlord. Under cross-examination, Mr Osman denied having told the applicant not to pay his own wages but claimed that he had told him not to make any transfers to other accounts, to his credit cards or to suppliers. He reiterated that the applicant had always been responsible for paying his own wages. It was also Mr Osman’s evidence that he believed that his brother’s response to the applicant’s email asking about the payment of wages made it clear that the applicant would be paid.

[25] Mr Osman noted that after his conversation with the applicant about not making transfers from the accounts the applicant retained the ability to pay his own wages and full access to all the company’s accounts. He remained a signatory to the bank account and retained the keys to the store.

Jurisdiction - Was there a termination at the initiative of the employer?

[26] Section 386(1) of the Act provides as follows:

386 Meaning of dismissed

(1) A person has been 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.

[27] It was the submission of the applicant that his resignation amounted to a termination at the initiative of his employer as he had no alternative but to resign when instructed by Mr Abdul Osman not to transfer any money from the respondent’s accounts and Mr Javid Osman confirmed his belief that this instruction meant that he would not be paid for his work.

[28] In the normal course of events an employer’s failure to pay an employee for work performed may amount to the repudiation of the contract of employment. In all the circumstances of this case I am not satisfied that the applicant had no alternative but to resign. I accept the evidence of Mr Osman that the applicant would have been paid for any work he performed and that his instruction in relation to the accounts was motivated by a concern about discrepancies which he wished to have clarified before further moneys were paid out. In this regard, I note that despite giving the applicant a direction about the accounts Mr Osman did not remove the applicant’s ability to deal with the accounts or remove him as manager of the business.

[29] The applicant also relied on the response he received to the email he sent to Mr Osman on 13 July 2012 as justification for his resignation. The question asked in the email was not well expressed and I do not accept that Mr Javid Osman’s reply clearly indicated an intention on the part of the directors that no wages would be paid that week. Despite the lack of clarity provided in the email response the applicant immediately submitted his resignation. Much was made of the fact that Mr Abdul Osman did not seek to respond to the applicant’s resignation letter and clarify the position if, as he claimed, there had been no intention not to pay the applicant’s wages. I do not consider his lack of action in this regard as determinative of his intention. His concerns were clearly directed to the discrepancies in the accounts which he was making arrangements to examine so as to be able to determine the future of the business.

[30] All the evidence indicates that the business was not doing well. Although it continued to trade for a few months after the applicant’s resignation, it ceased trading prior to the end of 2012. As the manager responsible for ordering the stock, staff rostering and paying the accounts, the applicant must have been aware of the precarious financial situation of the business. It was the applicant’s evidence that he had on occasion paid for stock using his own credit card (hence the transfers to make payments of the card). It was Mr Osman’s evidence that he was unaware of this. It was also Mr Osman’s evidence that he had not been aware of an arrangement adopted by the applicant whereby he would order stock for other retail establishments using the respondent’s accounts. While, at the time of the hearing, Mr Osman did not dispute the applicant’s explanation that the stock in question had been paid for by those establishments, he reiterated that when the transactions were discovered he had been unaware of any arrangement whereby the respondent would pay for stock delivered to other establishments, and had a legitimate concern.

[31] On the basis of the evidence before me I am not satisfied that the applicant was forced to resign because of conduct, or a course of conduct engaged in by the employer. The situation was unusual. Clearly the applicant was more than an employee. He had had full management control of the business and used his own credit facilities to purchase stock for the business. I do not accept that Mr Osman’s instruction to him not to transfer funds from the company’s accounts until the financial position of the business had been clarified amounted to a repudiation of his contract of employment.

[32] As there was to be a meeting three days later to clarify the position and it was clear that Mr Osman both expected and wanted the applicant to attend I do not consider that there was any intention on his part that the applicant’s employment should terminate.. It was the applicant’s decision to resign his position and not to attend the meeting. This was his choice and not something he was “forced” to do as a result of Mr Osman’s instructions about the accounts. It was the applicant’s own evidence that Mr Abdul Osman was in the store on several occasions in his last week of work. The applicant chose not to clarify the matter of the payment of his wages directly with Mr Osman on any of these occasions but to send an email in less than clear terms and then resigned in response to an ambiguous reply from Mr Javid Osman.

[33] As there was no termination at the initiative of the employer there is no jurisdiction for the application. The application is dismissed.

COMMISSIONER

Appearances:

Mr K. Pattenden, for the applicant.

Mr A. Osman, for the respondent.

Hearing details:

2013.

Canberra:

February 5.

 1   Exhibit B1

 2   Transcript PN 64

 3   Exhibit B1 Attachment C

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