Mr Simon Charles Wogan v Plantbiz Pty Ltd T/A Bondi Gardens
[2010] FWA 5119
•12 JULY 2010
[2010] FWA 5119 |
|
DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Mr Simon Charles Wogan
v
Plantbiz Pty Ltd T/A Bondi Gardens
(U2010/6583)
COMMISSIONER DEEGAN | CANBERRA, 12 JULY 2010 |
Termination of employment.
[1] This matter arises from an application for an unfair dismissal remedy made by Simon Wogan (the applicant) against his former employer Plantbiz Pty Ltd (the respondent). The application was filed on 2 March 2010. The respondent refused to engage in a conciliation conference in relation to the matter.
[2] The matter was listed for hearing on 2 June 2010. The applicant appeared in person and the respondent was represented by a director, Mr Scott Williams.
[3] The respondent initially responded to the application by stating that the applicant was a casual employee and had been terminated for performance reasons. The respondent also objected to the application, claiming that it was covered by the Small Business Fair Dismissal Code and had terminated the applicant’s employment in compliance with the Code.
The evidence
[4] The applicant was employed by the respondent pursuant to a contract of employment dated 15 September 2008 and signed by the applicant and the respondent’s (sole) director, Mr Scott Williams. The letter setting out the terms of the contract was titled “Casual Employment Contract” and provided the following terms of employment:
- his position was Retail Nursery Manager;
- there was a three month probation period;
- the wage rate was $55,000 per annum with commission payments to be made “in hand” on takings above nominated amounts;
- the hours were 40 per week;
- 9% superannuation paid on ordinary time earnings; and
- each party was to provide the other with four weeks’ notice to terminate the contract of employment.
[5] The respondent is a company that operates two plant nurseries, in Bondi and Double Bay, and a plant farm at Peats Ridge.
[6] The evidence was that the applicant and Mr Williams, the director, were friends and that the applicant assisted Mr Williams to set up and commence operation of the nursery at Bondi.
[7] The applicant maintained that he considered that he was a permanent employee and had not been aware of the reference to “casual” on his letter of employment until, in early 2009, he applied for and took leave and pay was deducted from his wages. At that time the applicant sought clarification of his entitlements from Mr Williams and the deducted wages were repaid. Later that year the applicant had again advised Mr Williams that he believed he had entitlement to leave consistent with normal full-time employment.
[8] In early January 2010 the applicant applied for and took two days’ leave. Later in January he received a letter from Scott Williams date 11 January 2010 with reference to “Days Off”. The letter stated that, as a casual employee, the applicant did not accrue entitlements such as annual leave or sick leave or access to personal days or paid public holidays. The letter also noted that the applicant had, over the period of his employment, taken nine days’ leave (the days were itemised) for which he had been paid but had no entitlement. The letter stated that the applicant owed the company for those days.
[9] The applicant responded by email to the letter on 13 January 2010. The email indicated that there had been discussions between the applicant and Mr Williams about the applicant’s leave entitlements and that these had been “confrontational”. The applicant also advised that he had sought legal advice as to his entitlements and had been advised that he was not a casual employee and had the leave entitlements of a full-time employee.
[10] It was the applicant’s evidence that on 18 January (the applicant’s usual day off) Mr Williams attended at the nursery at Bondi and advised the employee who worked with the applicant that the applicant would be leaving his position. On 20 January, Mr Williams, together with another employee of the respondent, presented the applicant with a document directed at terminating his employment and paying to him a sum of money “in full and final settlement” of any claim the applicant may have had against the respondent. The applicant refused to accept the conditions of the document, was not provided with a copy and requested that his concerns about his entitlements be addressed. Later that day, at Mr Williams’ request, the applicant met with him away from the workplace. According to the applicant Mr Williams berated him and accused him of blackmail. The applicant advised Mr Williams that he wanted to continue in his position but with his proper entitlements.
[11] It was the applicant’s evidence that the next day Mr Williams requested that he provide him with a “letter of demand” and indicated that he would be getting someone else to manage the nursery, and that the applicant’s hours would be decreased but that his salary would be paid in full.
[12] On Thursday 21 January Mr Williams advised Mr Mallard (the other employee at the Bondi nursery) that Mr Mallard would be managing the nursery.
[13] On 22 January Mr Williams advised the applicant to take the following Thursday and Friday off as he had some “restructuring to do”. On 27 January the applicant provided Mr Williams with a further letter setting out his concerns about his entitlements and the manner in which he had been treated since first enquiring about his rights. The applicant also requested that he be supplied with a response concerning his entitlements (in the manner of wages and leave) which were owing to him.
[14] On 1 February Mr Williams sent the applicant a further letter stating that he was a casual with no entitlements to paid leave. The letter also noted that the applicant now owed the company for 12 days leave he had taken and been paid for, despite having no entitlement to payment. On 4 February the applicant received from Mr Williams a letter of termination stating that the applicant’s employment was terminated as from the date of the letter but that he was being given four weeks’ notice in accordance with his employment contract and his last day of employment was to be 3 March 2010.
[15] Mr Williams, apparently the respondent’s sole director, responded to the applicant’s application for an unfair dismissal remedy by submitting the profit and loss account of the Bondi nursery where the applicant was employed, noting a trading loss of $75,751 for the 2009 calendar year. He also filed two letters of employment (one for Mr Mallard dated 4 March 2010 and one for another person dated 26 February 2010) indicating that both persons were being employed in the position of manager at the Bondi Nursery on a trial basis. Both purported to be contracts for casual employment subject to one weeks’ notice of termination. Also included in the respondent’s response was an invoice claiming that the applicant owed the respondent for 14 days leave for which he had been paid but to which he was not entitled.
[16] Attached to the respondent’s response was a Small Business Fair Dismissal Code Checklist apparently completed by Mr Williams indicating that:
- the respondent has fewer than 15 employees;
- the applicant had been employed for more than 12 months’;
- the applicant was dismissed for genuine redundancy (the reason for the redundancy given as trading loss);
- the applicant had not been dismissed for stealing, fraud, threats or breach of OH&S procedures;
- the applicant had been dismissed for serious misconduct (drinking in the workplace, shutting the shop before closing time);
- the applicant was dismissed for unsatisfactory conduct, performance or capacity, was warned (verbally in March 2009), offered training, did not improve, given an opportunity to respond but no records of the warnings etc. were kept;
- that the shop was trading at a loss under the applicant’s management.
[17] According to Mr Williams no reason was given to the applicant for the termination of his employment because it was considered unnecessary given the applicant’s status as a casual employee.
[18] The applicant denied that the reason for his termination was the trading position of the business. He disputed the turnover figures contained in the financial statements produced by the respondent and produced documents he had kept throughout his employment which indicated that the business had had a significantly higher turnover. He also noted that the largest cost to the business was the cost of plants supplied by the respondent’s plant farm and those plants were priced by the respondent. He noted that during Mr Williams’ overseas trip in October 2009 he had sent him a congratulatory email concerning the trading figures of the Bondi business. He also noted that his employment contract provided for commission to be paid on turnover figures not profits.
[19] In summary, it was the applicant’s position that his employment had been terminated as a direct result of his legitimate enquiries concerning his leave and other employment entitlements. The trading position of the business had never been raised with him in connection with his continued employment.
[20] It was Mr Williams’ position (for the respondent) that he had never believed that the applicant had sufficient enthusiasm about building up the Bondi business and that the applicant had caused him “ a lot of heartache” as other employees had ganged up against him. He believed that as a result of his problems with the applicant “Workcover” had been through his business and his wages and records had been summonsed. Other staff had been making claims against him and he had just wanted the applicant out of his business. 1
Consideration and conclusion
[21] The relevant sections of the Fair Work Act 2009 are as follows:
387 Criteria for considering harshness etc.
In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, FWA must take into account:
(a) whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees); and
(b) whether the person was notified of that reason; and
(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and
(d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and
(e) if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal; and
(f) the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal; and
(g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and
(h) any other matters that FWA considers relevant.
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.
[22] I will deal first with the relevance of the Small Business Fair Dismissal Code (the Code). The respondent claimed, and the applicant did not challenge, that the respondent is a small business employer for the purposes of s.388 of the Act.
[23] The Code was published on 24 June 2009. The applicant was not summarily dismissed but required to work out four weeks’ notice so that part of the Code that deals with summary dismissal is not relevant. In relation to other dismissals the Code states:
Other dismissal
In other cases, 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.
[24] In this matter it is clear the applicant was not given a reason for his dismissal. No reason was included in the termination letter as the respondent took the view that the applicant was a casual employee and a reason was not necessary. Despite the claims made by the respondent in the Checklist provided with the employer’s submissions, I am satisfied that the Small Business Fair Dismissal Code was not complied with in this case, so that it is necessary for me to consider the matter in the light of the requirements of s.387 of the Act.
Genuine redundancy
[25] Nothing in the evidence of the respondent supports a finding of genuine redundancy. The evidence was that the applicant was replaced in his position by two employees, albeit on a trial basis. In any event it cannot be maintained that the employer no longer wished the applicant’s job to be done by anyone.
[26] The applicant was not dismissed for reasons of genuine redundancy.
Harsh, unjust or unreasonable?
Whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees)
[27] Having heard from both the applicant and the sole director of the respondent responsible for the decision to terminate the applicant’s employment I accept in full the evidence of the applicant concerning the events surrounding his employment and the termination of that employment. After hearing the applicant’s evidence Mr Williams stated that “most of the information Simon went over is true” 2. I am satisfied that the main reason for the termination of the applicant’s employment was his persistence with his enquiries concerning his leave and other pay entitlements. This is not a valid reason for the termination.
[28] I do not accept the respondent’s evidence that the applicant’s employment was terminated because the business was trading at a loss and that this was attributable to the applicant’s poor management. I attach very little, if any, weight to the figures produced by the respondent concerning the trading position of the Bondi business. The figures were disputed by the applicant and as the respondent owns the supplier which represented the largest cost to the Bondi business I would need more cogent evidence to convince me that the financial position of the store was as dire as presented. In any event, there was no documentary evidence showing any real concerns about the trading position of the business that was extant prior to the termination of the applicant’s employment.
Whether the person was notified of that reason
[29] Similarly, were the poor performance of the store the real reason for the applicant’s dismissal there was no evidence whatsoever that this matter was ever raised with him during his employment. In this respect I accept the evidence of the applicant and note that the respondent was unable to produce any such notification. I do not consider the arbitrary “targets” set by Mr Williams for the business to represent such a notification.
Whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person
[30] The applicant was never given any opportunity to respond to any supposed reason related his alleged poor management of the Bondi business. There is no satisfactory evidence that the matter was ever raised with him during his employment.
Any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal
[31] This matter was not raised and while the applicant did not have a support person with him during any of his conversations with Mr Williams relating to the termination of his employment there is no suggestion he sought, or was refused, such a person.
If the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal
[32] Again there is no evidence whatsoever that the applicant was warned about any unsatisfactory performance prior to the dismissal.
The degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal
[33] I take the view that the size of the employer did have an adverse impact on the procedures that were followed in effecting the dismissal in this matter.
The degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal
[34] Although not addressed directly by the parties, it would be a reasonable inference that a company with fewer than 15 employees (in this case 12) is unlikely to employ dedicated human resource specialists. Additionally it is clear from aspects of this matter that a lack of human resources expertise led to many mistakes being made by the employer in both employment and termination of employment matters.
[35] Although I have taken the size of the employer into account I am unable to accept that this matter offers any real excuse for the treatment of the applicant. The respondent should have been aware that it was not acceptable for him to dismiss an employee because that employee raised questions about his entitlements. It is incumbent on even the smallest employer to be fully aware of all the entitlements of their employees and to be in a position to answer questions about those entitlements and to readily rectify any errors.
Any other matters that FWA considers relevant.
[36] In my view it is a relevant matter that the applicant appears to have lost his employment for making a reasonable enquiry about a legitimate entitlement. The response from the employer was unreasonable. Either the applicant had an entitlement or he did not. If the applicant had the entitlement then the matter should have been remedied. If he did not then a full response should have been given. Any repercussions experienced by the respondent as a result of the applicant’s claims and the termination of his employment are entirely the fault of the respondent. The respondent should have nothing to fear from an examination of its employees’ wages and entitlements. If it does then the employees are not at fault.
Conclusion
[37] In light of everything set out above I am satisfied that the dismissal of the applicant was harsh, unjust and unreasonable.
Remedy
[38] The relevant sections of the Fair Work Act 2009 are sections 390 and 392.
[39] I am satisfied that the applicant was dismissed from his employment by the respondent. The dismissal was harsh, unjust and unreasonable and was not consistent with the Small Business Fair Dismissal Code. The dismissal was not a case of genuine redundancy. The applicant was, therefore, unfairly dismissed.
[40] I am satisfied that the applicant was a person protected from unfair dismissal at the time of the termination of his employment by the respondent.
[41] Given the size of the employer and the obvious antagonism of Mr Williams towards the applicant I do not consider reinstatement is appropriate. I do consider that an order for payment of compensation is appropriate.
[42] The respondent made some general claims that any order for compensation that may be made would have a deleterious effect on the respondent’s viability but no evidence was produced to support the claim.
[43] The applicant was employed by the respondent in a position of responsibility for in excess of 17 months. The applicant’s evidence was that he had attempted to find other employment but had been unsuccessful, he claimed that his age may have been a problem. The applicant had earned no remuneration from any other employment since his employment with the respondent was terminated. Had the applicant not had his employment terminated there is no reason why he would not have continued in his position receiving remuneration at the rate of $55,000 per annum for, at least, the next year. I do not accept the evidence of Mr Williams’ that the fate of the business was precarious as the turnover appeared reasonably healthy and, apart from the cost of the plants supplied by another arm of the respondent, the costs unremarkable.
[44] I do not consider that any misconduct on the applicant’s part contributed to the employer’s decision to terminate his employment.
[45] It is my view that the circumstances of this dismissal are such that the applicant should receive the full amount of compensation it is open to me to award. I intend to order that the respondent pay to the applicant an amount equal to the total amount of remuneration he was entitled to receive in the 26 weeks immediately preceding his dismissal on 3 March 2010. An order to that effect is published separately.
[46] It is open to the respondent to apply for an amendment to the order to provide for payments by instalments. Such an application will require the production of sufficient evidence to justify such an alteration to the order.
COMMISSIONER
Appearances:
Applicant in person
Scott Williams Director for the respondent
Hearing details:
Sydney
1 June 2010
1 Transcript PN347-PN351
2 Transcript PN121
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