Mr Phillip Joinbee v Troppos Pizza and Spare Ribs

[2010] FWA 9159

[2010] FWA 9159

FAIR WORK AUSTRALIA

DECISION

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

Mr Phillip Joinbee
v
Troppos Pizza and Spare Ribs
(U2010/10825)

SENIOR DEPUTY PRESIDENT RICHARDS BRISBANE, 1 DECEMBER 2010

Summary: jurisdictional objection - whether dismissal at Respondent's initiative - whether dismissal unfair - s.387 - whether failure to render assistance to employer in a confrontation provides a valid reason for dismissal.

[1] This matter concerns an application by Mr Phillip Joinbee, (“the Applicant”) under section 394 of the Fair Work Act 2009 (“the Act”). The Applicant is seeking a remedy in relation to his alleged unfair dismissal. The application was the subject of a conciliation conference but the matter remained unresolved. The Applicant worked for “Troppos Pizza and Spare Ribs”, this business is part-owned by two persons: Ms Elvira Kerschbaumer and her son, Mr Andreas Kerschbaumer. I will intermittently refer to the business owners jointly as the Respondent.

[2] This decision was given in transcript on Friday, 19 November 2010, and is now replicated in writing for the benefit of the parties. The decision largely is only redacted for minor grammatical purposes and the inclusion of citations.

JURISDICTIONAL OBJECTION

[3] Prior to dealing with this application under section 394 of the Act, I am required to deal with the embedded jurisdictional objection to the claim which concerns whether or not the Applicant was terminated at the initiative of the employer.

[4] The Respondent's position is that the Applicant resigned his employment at his own initiative and as a consequence there was no termination at the initiative of the employer and as a further consequence the Applicant is jurisdictionally barred from making an application under section 394 of the Act.

[5] Section 386(1)(a) of the Act states that a person can only be dismissed, amongst other reasons, if the person's employment with his or her employer has been terminated on the employer's initiative. This is not a matter where the Applicant, at least on the face of the application, is contending that his resignation was, for the purposes of section 386(1)(b) of the Act, forced upon him by the course of conduct by his employer. The Applicant is claiming at all times that he was dismissed at the initiative of the Respondent.

[6] Notwithstanding this, I will, however, return to this matter in my further comments in relation to these proceedings.

[7] The Applicant claims that he was expressly dismissed from his employment by the Respondent. The claim to the contrary by the Respondent is said to be a fabrication by the Applicant. This is a matter, therefore, at least on its face, which largely turns on Fair Work Australia's assessment of the relative credibility of the witnesses, determined as it must be on the civil burden of proof; that is, on the balance of probability.

[8] The Respondent's case was based on the witness evidence of Mr Kerschbaumer and Ms Kerschbaumer. That evidence was to the effect that on 11 July 2010 they were required to deal with an irate customer who made a particularly aggressive and abusive comment at Ms Kerschbaumer.

[9] There followed an altercation of some ill-defined kind involving Mr Kerschbaumer, in which the customer slipped over and broke his mobile telephone. According to the Respondent's evidence, the Applicant, who was employed on the premises, emerged from the rear of the shop and followed the customer out to the sidewalk at the conclusion of the incident.

[10] Upon his return to the shop, Ms Kerschbaumer stated to the Applicant that it would have been helpful if he had rendered assistance at the time of the altercation. Her words are set out at paragraph 14 to 16 of her evidence. Her words were substantially corroborated by Mr Kerschbaumer, who stated similar, that Ms Kerschbaumer had made such comments and general terms, and that is in Mr Kerschbaumer's statutory declaration at paragraphs 11 and was also replicated in his oral evidence.

[11] The Applicant was said by Mr Kerschbaumer and Ms Kerschbaumer to have replied that he was not employed to be their bodyguard and that Mr Kerschbaumer had been responsible for escalating the incident. The Respondent's evidence was that despite the apparently benign and emotionally calm manner in which both Mr Kerschbaumer and Ms Kerschbaumer represented their point of view, the Applicant responded to the situation by declaring his resignation.

[12] The Applicant had worked at the business for 20 years with five previous owners and had been employed with this particular Respondent for some nine months prior to this incident. The Respondent's evidence was that upon resigning, the Applicant agreed to work out the remainder of his shift and left otherwise on agreeable terms.

[13] The Applicant's version of events is different insofar as he contends principally that upon returning to the store after following the customer, he was confronted by Mr and Ms Kerschbaumer. They spoke to him in relation to his deficiency in his conduct in not rendering them assistance. It was at this point that the Applicant states that his employment was terminated by Mr Kerschbaumer yelling at him that he should leave. He also states that he was subsequently directed to work out the remainder of the shift otherwise he would not be paid.

[14] The Applicant's evidence in these respects was corroborated to some very limited manner by Mr McDonald who gave evidence in relation to this matter, in the circumstances in which he has said to have been at the pizza shop shortly after the incident.

[15] It appears that Mr McDonald's evidence corroborates to some extent only that the Applicant was of the view that he'd been terminated, but that is a subjective view put to Mr McDonald, that was only repeated by Mr McDonald and does not on its own face provide evidence as a fact that the Applicant was terminated at the initiative of the employer.

CONSIDERATION OF JURISDICTIONAL OBJECTION

[16] It falls to me to determine which of these constructions of evidence is, on the balance of probability, to be accepted.

[17] It seems to me that the Respondent's construction of the events lacks some authenticity. The reason for this is that the Applicant is said to have resigned his employment in an emotionally charged moment but the surrounding context for the emotionally charged decision to resign his employment after such a very lengthy period of employment seems difficult to accept.

[18] On Mr and Ms Kerschbaumer's evidence, they spoke in civil and constrained terms about what they believed to have been a reasonable expectation that the Applicant would have rendered them assistance in dealing with an abusive client or customer.

[19] There appears to me to be a disjunction between the Applicant's conduct as the Respondent said it was and the circumstantial conduct in which that conduct (that is, the resignation) occurred. That is, the benign circumstances on the Respondent's construction do not appear to me to be capable of triggering a decision that can only be described as being of great significance to the Applicant, given that he had been an employee in the same business continuously for in excess of 20 years.

[20] This disjunction is not apparent in the Applicant's evidence. His narrative was convincing as to causality; that being that the Respondent spoke to him about the failure to provide and render assistance and in aggressive terms and invited him to leave the establishment.

[21] I also find that Mr Kerschbaumer's description of the abusive language used by the customer to have been excessively rich in word length for a heated exchange. Indeed the language seems to me to be overcooked, as it were, and designed to inflate the significance of the Applicant's failure to render assistance in such extreme circumstances.

[22] It is said that the irate customer threatened Ms Kerschbaumer in what can only be characterised in the most heinous terms; that is, it was threatened that Ms Kerschbaumer's throat would be cut and she was vilified in extreme terms that one seldom encounters. There is no requirement for me replicate the language of the threat in this decision.

[23] In response to such extreme provocation, Mr Kerschbaumer states that his response was polite. I find it difficult to accept that when Mr Kerschbaumer otherwise gives evidence that when the irate customer sought to move towards him aggressively to trigger a physical confrontation, that he too moved forward, on his evidence. This does not strike me as being the disposition of a person who would, on an ordinary construction of events, react in exclusively polite terms to a threat being made against his mother in such profound and extreme terms.

[24] Further, Mr Kerschbaumer, also in his statement, made reference to the nature of the incident as involving a scuffle on two occasions, which is suggestive of a physical confrontation, although Mr Kerschbaumer did subsequently, upon me raising this matter with him, seek to remove that from his statutory declaration.

[25] [I am also not persuaded that Mrs Kerschbaumer would have taken such offence at the Applicant's failure to render assistance to her and her son if the incident itself had been managed with civility and politeness the Respondent alleges. That is, if the incident had a low emotional intensity and was managed in a polite way, then it seems difficult to reconcile this with Mr Kerschbaumer having complained about the Applicant’s reluctance to render assistance. I find there is a disjunction in the Respondent's evidence in these respects.]

[26] In all, I do not find that the Respondent's narrative and therefore its construction of the events to be persuasive.

[27] Because of this, I accept that on the balance of probability the Applicant's employment was terminated at the initiative of the employer and that is expressly by, on the Applicant's evidence which I have accepted, on Mr Kerschbaumer's indication following the incident that he should leave the premises. I therefore find that the Applicant's application under section 394 of the Act is within jurisdiction of the Fair Work Australia tribunal to determine in the ordinary manner.

[28] That said, there is more to this matter on jurisdiction and I will make some further extended comments about an argument in the alternative. Should I have found that the Applicant had resigned his employment, I would nonetheless have found that Fair Work Australia had jurisdiction to deal with his application under section 394 of the Act. My reasons for suggesting this alternative argument are as follows.

[29] When a resignation occurs, ordinarily there will be no termination at the initiative of the employer and consequently there can be no application under section 394 of the Act. However, when an employee has no effective choice but to resign their employment, the resignation constitutes a constructive dismissal. In such circumstances, then an application under section 394 of the Act may be made. This is because the resignation was not, in effect, an exercise in volition by the employee in that case.

[30] In this particular case Ms Kerschbaumer admitted to speaking in front of a customer that she was disappointed in the Applicant's apparent failure to render assistance in the confrontation earlier that evening. That comment in my view was designed to cause hurt to the Applicant and had a significant impact and caused a loss of trust and confidence in the employment relationship, at least from the Applicant's part.

[31] But there is more to my interpretation of the alternative construction than this. It also seems to me that on the evidence that the extent of the loss and trust and confidence was made the worse by what I believe on the evidence was a much more volatile and aggressive context for the accusation than the Respondent's evidence suggests.

[32] As I said above, I was not persuaded by Mr Kerschbaumer's evidence of his apparent civility and polite disposition at all times. I am inclined much more to the view that the Kerschbaumers were much more voluble and much more discomforted by the Applicant's conduct than their evidence makes out.

[33] I accept that the Applicant's evidence that following his remarks to Mr Kerschbaumer, that he believed Mr Kerschbaumer to have been partially responsible for the altercation.

[34] I accept the Applicant's evidence that Mr Kerschbaumer subsequently became particularly voluble about the Applicant. That emotional state would appear to conform easily and provide continuity with the immediately prior emotionally intense confrontation.

[35] It therefore also creates a more authentic environment in which the Applicant would resign his employment than that advanced by the Respondent's evidence.

[36] The authority in respect of a conclusion in relation to effectively constructive dismissal is found in the full bench authority in “O’Meara” 1. In that Full Bench decision, the Bench suggests that a course of conduct engaged in by an employer that leaves an employee with no reasonable alternative but to resign their employment will constitute a constructive dismissal and therefore found jurisdiction for an unfair dismissal application.

[37] In my view, the alternative construction that there was a resignation by the Applicant in this matter will inevitably lead to the conclusion that that resignation falls within the authority of the Full Bench in O’Meara, and is to be properly constructed as being a constructive dismissal. They are my comments on jurisdiction.

DECISION ON S.394 APPLICATION

[38] I now turn to my decision in relation to whether or not the termination of the Applicant's employment was harsh, unjust or unreasonable. The employer in this matter is a small business for the purposes of section 23 of the Act and it is subject to the Small Business Code “the Code”).

[39] However, the nature of the termination in this matter was not a summary termination and as such the Code is not attracted in relation to whether or not the small business employer's decision-making warranted or reasonably believed to be warranted a summary termination. In effect the Small Business Code is not applicable to the circumstances of this case and I must ordinarily apply the Act. The effect of the Code is that in circumstances other than summary dismissal the Code effectively advances the same statutory approach as is conferred by way of Part 3-2 of Division 3 of the Act.

[40] The first consideration that I need to have, therefore, in relation to the determination (for purposes of s.387(a) of the Act) as to whether or not the dismissal was unfair is to determine whether or not there was a valid reason for the termination of the Applicant.

[41] In this matter, as I said earlier at the commencement of these proceedings in effect, the factual matrix relevant to the jurisdictional considerations has a significant overlap with the factual considerations that I must find for the purposes of section 387 of the Act.

[42] In relation to section 387(a) of the Act - that is, whether there was a valid reason for the termination of the Applicant - I find as follows.

[43] Given the circumstances of the dismissal, it cannot otherwise be found that the Respondent could have possessed a valid reason for the dismissal of the Applicant. This is because a failure to render assistance to his employer in the circumstances of the case cannot be construed as conduct that is in some way amicable to the employment relationship.

[44] Whether the Applicant could have meaningfully rendered assistance is a discretionary consideration for himself and it may turn on subjective responses to the situation as he saw it escalating.

[45] In this case the Applicant did not render assistance because he believed to some extent at least that Mr Kerschbaumer had exacerbated the situation and made it more volatile than it should have been. In any event, an employee has no obligation arising from his employment relationship to put himself at risk for the interests of his employer.

[46] Any such obligation arises, as I've said above, from profoundly contextual considerations, perhaps social mores, and other arguably self-imposed obligations. Consequently no valid reason can be found for the Applicant's dismissal on the factual milieu that is evident in this matter.

[47] I should add that because it has been agitated in these matters and it deserves some comment, that even in the event that I was to find that the Applicant had some prior knowledge of the irate customer who was the cause of the relevant incident, the relationship between the Applicant and the irate customer does not appear to have been one of any personal nature and on the evidence before me, it appears to have been a marginal and commercially based relationship and not to have any significant bearing on these proceedings.

[48] Section 387(b) of the Act requires me to determine whether notice for the reason for the termination was given effect. Again, given the circumstances of this matter, such considerations are not readily applicable.

[49] But nonetheless, the factual milieu does nonetheless suggest to me that it appears that on the Respondent's evidence as well as on the Applicant's evidence, the Applicant had a sufficient view of the reason the Respondent had taken an adverse view about his conduct, and that is for his failure to render assistance to the situation in respect of the situation as I have set it out above.

[50] An issue would arise as to whether or not that notice of the reason was given in advance of the termination. It would appear that that is an arguable issue (see below).

[51] In respect of the requirements of section 387(c) of the Act, I need to determine whether a person was given an opportunity to respond to any reason related to the capacity or conduct of the person.

[52] It seems that there was an exchange between the Respondent and the Applicant. The Respondent accused the Applicant of not rendering assistance. The Applicant, in turn, proffered his view that he was under no obligation to perform the duties of a bodyguard. In some very rudimentary sense there was a capacity for the Applicant to respond to the allegations of conduct that were raised about him, although again it is arguable on the evidence as to whether or not this particular opportunity for response came before or after the actual fact of the constructive dismissal or else the termination.

[53] On the Applicant's evidence, it would appear that the termination generated by Mr Kerschbaumer's comments preceded further conversation.

[54] I am next required, for the purposes of section 387(d) of the Act, to consider whether or not there was any unreasonable refusal by the employer to allow the person to have a support person present to assist in any discussions relating to the dismissal. This is not a situation where that matter ever had an opportunity to arise.

[55] Section 387(e) of the Act requires me to consider whether or not, if there were performance issues, the Applicant was given an opportunity to respond or was warned about unsatisfactory performance before the dismissal. This is a not a matter that is germane to such considerations.

[56] Section 387(f) of the Act requires me to consider the degree to which the size of the employer's enterprise would likely to impact on the procedures followed in effecting the dismissal. Equally, section 387(g) of the Act requires me to consider the degree to which the absence of dedicated human resource management specialists or expertise also impacted on the procedures followed in effecting the dismissal.

[57] The Respondent is a small business, and that is not challenged on the evidence. They do not have access to human resource facilities. The business is a small business. The way in which the manner of the incident was handled no doubt reflects the informal nature of the operation of the business, which is reflected in other aspects of the evidence put to me in relation to the payment of wages and so forth.

[58] It is likely that those circumstances did impact upon the procedures followed. Equally, however, I do add that the situation that arose wasn't one of great complexity and would not have required great resources to investigate or to provide a more extended deliberation or else to engage in a process rather than an exercise in confrontation and decision-making.

[59] Section 387(h) of the Act requires me to consider any other matters that I consider relevant. The only other matter that I consider relevant is that the employee had been a very longstanding employee of the business. He had been employed I think, on the evidence, since 1989 through five successive changes of business ownership.

[60] That said, in my view, in consideration of all the circumstances of the matter and having regard to the difficulties which confront small businesses as well in dealing with confrontations and issues that arise in the workplace where they are under-resourced and don't have opportunities to seek expert advice, I nonetheless come to the view that the Applicant was terminated harshly, unjustly, unreasonably in the totality of the circumstances.

[61] This therefore brings me to the issue of remedy under Division 4 of Part 3-2 of the Act.

REMEDY

[62] Reinstatement is a possibility in relation to this particular matter but in the current circumstances the Applicant does not seek it and has new employment. This is because the Applicant obtained work two months after the dismissal and has no wish to return to the Respondent's employment and is content with his current remuneration.

[63] In my view, I am reluctant to reinstate the employee. As I said, this is a matter in which there was some degree of emotional tension and aggression in the relevant incident which may have caused anxieties and discomfort, particularly on the part of the Applicant. That said, I am of the view that the Applicant was, to some extent I think, humiliated in front of a customer in relation to his being effectively accused of cowardice in not rendering assistance at a time of need in the business, and I think I should in such circumstances approach reinstatement cautiously and therefore I will not order reinstatement.

[64] In circumstances where reinstatement is not ordered, s.392 of the Act provides an opportunity for Fair Work Australia to make an order of payment of compensation to a person in lieu of reinstatement. There are criteria that have to be considered by Fair Work Australia before such an order is made. The first of those matters concerns the impact on the viability of the employer's business or its enterprise. I have taken evidence in relation to that matter previously. Mr Kerschbaumer told me that the financial circumstances of the business are fraught and that it is carrying debt which it cannot repay. I am conscious of that matter in relation to the order that I make.

[65] I will also consider the length of a person's service with the employer. With this employer it was for nine months but for all other purposes, the employee had been employed in the business for in excess of 20 years. I need to consider the remuneration the person would have received or would likely to have received if the person had not been dismissed. If this incident had not occurred and the conduct had not occurred, given the longevity of the relationship to that point, it appears to me that there would have been an ongoing employment relationship between the parties.

[66] Section 392(2)(d) of the Act requires me to consider the efforts made by the Applicant to mitigate the losses suffered as a result of the dismissal. The Applicant's evidence is that he sought employment and obtained employment some two months after his employment had ceased with the employer. Under section 392(2)(e) of the Act, I need to consider any remuneration earned by the Applicant from employment or other work during the period after the dismissal. I know that from two months after the dismissal the Applicant's evidence is that he is being paid I think slightly in excess or approximately the same amount as his full-time employment with the employer.

[67] Section 393(2)(f) of the Act requires me to consider the amount of income reasonably likely to be earned by the person during the period between the making of the order for compensation and the actual compensation. No such issue arises in the context of this application, as I am disposing of the matter in its entirety at the same time for the purposes of the decision and the making of the order.

[68] I also need to consider any other matters that I consider relevant, and there are no other matters. Any award that I do make of compensation in lieu of reinstatement cannot have regard to any shock, distress, humiliation or analogous hurt caused by the dismissal.

[69] In the circumstances I also detect no misconduct for the purposes of section 392(3) of the Act which would cause me to deduct the termination.

[70] In my view, the circumstances of this matter and having regard to the compensation cap and my general discretion considering the circumstances of the employer, it is my view that I should order in lieu of reinstatement an amount of one month's ordinary wages to the Applicant.

[71] Mr Kerschbaumer has given me evidence that the cash flow of the business may be such that he might give consideration to a schedule of payments being warranted in relation to this matter. It would appear to me that an appropriate schedule of payments might include the payment of the one month's ordinary salary subject to taxation in the framework of the normal weekly pay cycle.

[72] An order to this effect in PR504111 was issued on 23 November 2010.

SENIOR DEPUTY PRESIDENT

Appearances:

Mr. P. Joinbee for himself

Ms. C. Bourke of Smithfield Law for the Respondent

Hearing details:

2010.

Cairns Supreme, District and Magistrates Court Complex.

November 19.

 1   Appeal by O’Meara against certificate issued by Raffaelli C on 15 May 2006 – Re: Stanley Works P/L, Giudice J, Watson VP, Cribb C, 11 August 2006 [PR973462]

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