Mr Wayne Williamson v Active Towing & Transport Pty Ltd - [2024] FWC 1885

[2024] FWC 1885

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.394 - Application for unfair dismissal remedy

Mr Wayne Williamson
v

Active Towing & Transport Pty Ltd

(U2023/3491)

DEPUTY PRESIDENT WRIGHT

SYDNEY, 18 JULY 2024

Application for relief from unfair dismissal – no valid reason – dismissal found to be unfair – order for compensation appropriate.

On 24 April 2023, Mr Wayne Williamson made an application to the Fair Work Commission (Commission) under s.394 of the Fair Work Act 2009 (Cth) (FW Act) for an order granting a remedy, alleging that he had been unfairly dismissed from his employment with Active Towing & Transport Pty Ltd (ATT).

ATT claimed that Mr Williamson was not employed by ATT. I determined this matter on 28 December 2023 and found that Mr Williamson was employed by ATT during the period from 11 November 2020 until 4 April 2023 for the purpose of the FW Act.[1]

I then conducted a further hearing in relation to the merits of the matter. I have determined that Mr Williamson’s dismissal was harsh, unjust and unreasonable and that an order for compensation is appropriate.

The hearing

There being contested facts involved, the Commission is obliged by s.397 of the FW Act to conduct a conference or hold a hearing.

After taking into account the views of Mr Williamson and ATT and whether a hearing would be the most effective and efficient way to resolve the matter, I considered it appropriate to hold a hearing for the matter according to s.399 of the FW Act.

The matter was listed for directions on 8 January 2024.

On 8 February and 8 March 2024 Mr Williamson filed submissions and evidence.

On 1 March 2024, ATT filed submissions and evidence.

The matter was listed for hearing on 14 March and 2 April 2024.

I granted permission for both parties to be legally represented at the hearing. Ms Wong of Counsel appeared for Mr Williamson. Mr Latham of Counsel appeared for ATT.

Mr Williamson gave evidence on his own behalf. The following witnesses also gave evidence on behalf of Mr Williamson:

a.Mr Timothy Drury, Restructuring and Insolvency Advisor, Private Broker Business Advisory;
b.Mr Scott Ferguson, National Disposal Manager, SG Fleet;
c.Mr Gareth Creasey, former tow truck driver, ATT.

The following witnesses gave evidence on behalf of ATT:

a.   Mr Richard Tunchon, Director, ATT;
b.   Mr Ronnie Mowad, Director, ATT;
c.   Ms Kim Hoefsmit, Bookkeeper, ATT.

In addition, Ms Febby Testolin, former Administrative Manager, ATT filed a witness statement which ATT did not rely upon as Ms Testolin did not attend the hearing due to a medical condition.

Background facts

Many of the background facts are set out in detail in my earlier decision.[2] In summary, Mr Williamson owned and operated the business Active Towing Sydney Pty Ltd (ATS) with his business partner Mr John Markham from on or about 1 March 1991 until ATS was wound up in 2021. Mr Williamson also owned and operated Central District Smash Repairs Pty Ltd (Central District) from around 1992 to about mid-2022 when it went into external administration. Both ATS and Central District operated out of the same premises in West Ryde, New South Wales and Mr Williamson was both a director and an employee of both businesses.[3]

During Mr Williamson’s employment at ATS, he hired and worked with both Mr Richard Tunchon and Mr Rene “Ronnie” Mowad. Mr Williamson has known Mr Tunchon for approximately 35 years and Mr Mowad for approximately 15 years.[4]

In January 2019, Mr Markham began to suffer serious health issues and decided that he did not want to be part of the ATS business anymore. Mr Williamson was not ready to close the business of ATS. He wanted to keep working as an employee for ATS for another 5 to 7 years before selling the business so that the business of ‘Active Towing’ could continue after he retired.[5]

In around March 2019 Mr Williamson decided he would ask Mr Tunchon and Mr Mowad if they wanted to come into the business of ATS with him.[6] Mr Tunchon and Mr Mowad agreed to become directors of a new company, ATT. On 4 May 2019, ATT was incorporated with Mr Williamson, Mr Tunchon and Mr Mowad as directors and shareholders.[7] Mr Tunchon was appointed Secretary and Public Officer of ATT.[8] Mr Tunchon and Mr Mowad had a 25% share each in ATT and Mr Williamson had a 50% share. Mr Williamson gave evidence that Mr Tunchon and Mr Mowad agreed that Mr Williamson would keep working as an employee in the new entity and that he would retire in 5 to 7 years and sell Mr Tunchon and Mr Mowad his 50% share of the new entity.[9] Further, Mr Williamson claims that the agreement between himself and Mr Tunchon and Mr Mowad included that his annual leave entitlements would be transferred from ATS to ATT, which Mr Tunchon and Mr Mowad denied.[10]

There was a period of overlap between the operations of ATS and ATT because they were essentially operating the same business in the same premises using the same plant and equipment.[11] The trading account for ATT was opened on 5 June 2019. The process for winding up ATS commenced on 11 February 2021. Mr Williamson resigned from his position as a Director of ATT the following day.[12]

Mr Timothy Drury, Restructuring and Insolvency Advisor at Private Broker Business Advisory gave evidence that during the period from 15 November 2019 to 24 February 2023, he acted as Mr Williamson’s advising consultant in relation to the liquidation of companies that Mr Williamson was a director of, and his bankruptcy.[13]

Mr Williamson gave evidence that an example of a normal day for Mr Williamson as an employee of ATT was as follows:
a.   Mr Williamson would arrive at work between 6am – 7.30am each morning and usually start in the office, reviewing emails;
b.   He would then receive emails and/or phone calls in relation to cars that needed to be towed, and their location;
c.   If required, he would then drive a tow truck, either alone or with another driver, to the location of the car, and tow the car to the required location whether the driver of the car would then organise to collect their car;
d.   He would then record the relevant towing details on his computer upon returning to the office; and
e.   He would usually finish work at approximately 6.45 pm each night.[14]
Mr Williamson said his usual days of work were Monday to Saturday, and he did not work Sundays. On Saturdays Mr Williamson would usually start work at around 7am in the morning, and leave at 11am. Each Wednesday, Mr Williamson would finish at 12pm.[15]

Mr Tunchon and Mr Mowad gave evidence that from October 2020, Mr Tunchon managed the business and its day-to-day trading, such as managing staff, answering incoming phone calls and allocating jobs, with the assistance of secretarial and/or bookkeeping staff.[16]

Payslips tendered during the hearing show that Mr Williamson and other staff employed by ATS became employees of ATT on 11 November 2020.

Mr Tunchon contends that in or around the start of 2022, he made the decision to move ATT’s day-today operations from the office at West Ryde to his home address.[17] The ASIC current and historical organisation extract tendered during the proceedings shows that the principal place of business of ATT changed from the West Ryde location to Mr Tunchon’s home address on 3 August 2022.[18] Mr Tunchon says that this resulted in Ms Hoefsmit carrying out duties from her own home and the tow truck drivers employed or contracted by ATT operating from the road.[19] Once ATT no longer had an office space in West Ryde, there was no work for Mr Williamson to complete. Mr Tunchon says that Mr Williamson loitered around the office space at West Ryde and picked up the occasional phone call until early 2022. However, Mr Williamson did not do this following the move of ATT’s operations out of West Ryde.[20]

Mr Williamson was declared bankrupt on 24 February 2023. Mr Tunchon says that around this time, he and Mr Mowad decided on behalf of ATT that the payments to Mr Williamson were to stop, primarily because Mr Williamson’s role at ATT had been redundant for over 12 months and he was no longer able to act as a director as an undischarged bankrupt.[21] Mr Tunchon and Mr Mowad’s concerns about Mr Williamson’s alleged misconduct also played a role.[22]

On 31 March 2023, Mr Williamson realised that he had not been paid on 30 March 2023. He tried to contact Mr Tunchon and Mr Mowad but was unable to get in touch with them.[23]

On 4 April 2023, having still not received payment, Mr Williamson engaged Mr Drury to write to Mr Tunchon on his behalf requesting payment of his outstanding salary for the preceding week. ATT responded to this email later on 4 April 2023 through its solicitor, denying the employment of Mr Williamson.[24] The email stated:

Dear Tim,
We act for Active Towing & Transport Pty Ltd and its other shareholders, other than Mr Williamson.
We have been provided with a copy of your email to our client of 4 April 2023 and advise that as far as the company is concerned, Mr Williamson was never employed by Active Towing & Transport, and he was never actively involved in doing any work or running the business.
Mr Williamson was paid a weekly amount but that has now stopped. That payment was made as a historical payment and not as a result of any actual work that Mr Williamson has undertaken or as a result of him being an employee. The company cannot (and has no obligation to) support Mr Williamson any further and accordingly the payment has stopped.
This email is not to be construed as an admission that Mr Williamson was in any way employed by the company, has any entitlement to employment benefits or any has [sic] entitlements of any kind. Our client reserves its rights to recover from Mr Williamson amounts wrongly paid to him.
In relation to his shares, without the remaining shareholders the company is worth nothing and Mr Williamson’s shares are essentially worth nothing. Our clients will ultimately deal with the Trustee in relation to the shares as your client’s shares now vest in the trustee.
If an arrangement cannot be reached with the Trustee, the company will be merely shut down and no one will get any value.
Kind regards,
Joseph Antoun
Principal Director
UTHER WEBSTER & EVANS
SOLICITORS

Mr Tunchon’s evidence was that Mr Williamson’s alleged misconduct involved the transfer of Mr Williamson’s entitlements from ATS to ATT without Mr Tunchon’s knowledge, Mr Williamson’s inappropriate behaviour towards Ms Testolin, unauthorised transactions conducted by Mr Williamson on ATT’s bank accounts and that Mr Williamson became progressively toxic in the workplace.

In relation to the transfer of entitlements, Mr Tunchon says that there were no employee entitlements transferred from ATS to ATT because Mr Tunchon was an employee of ATS for around 10 years prior to the date of the Asset Sale Agreement, and none of his employee entitlements were transferred to ATT.[25] Mr Tunchon says that he did not know at the time that Mr Williamson had attempted to transfer his employee entitlements from ATS to ATT and that he discovered Mr Williamson tried to transfer his employee entitlements after Mr Williamson filed his Application. If Mr Tunchon had known that Mr Williamson had attempted to transfer his entitlements, he would have immediately dismissed Mr Williamson for taking such actions in his own interests, rather than in the interests of ATT.[26]

In response to this allegation, Mr Williamson says that he would not have offered to give Mr Tunchon and Mr Mowad a 25% shareholding of ATT or directorships in ATT if they had not agreed to the transfer of his leave entitlements from ATS to ATT.[27] Mr Williamson says that it was his intention that when he retired from ATT, he would receive money from Mr Tunchon and Mr Mowad in payment for his 50% shareholding in ATT and receive his accrued annual leave entitlements from ATT.[28] Mr Williamson also says that he had a conversation with Mr Tunchon about the transfer of Mr Tunchon’s leave entitlements in response to a query by Mr Tunchon and that he understands that Mr Tunchon’s leave entitlements were transferred from ATS to ATT.[29]

In relation to Mr Williamson’s alleged inappropriate behaviour towards Ms Testolin, I note that this was the subject of a statutory declaration made by Ms Testolin on 28 October 2021 which was provided to Mr Tunchon at that time.[30] Ms Testolin was not available to give evidence at the hearing due to a medical condition. Mr Williamson denies the allegations and says that Mr Tunchon, Mr Mowad and Ms Testolin have never spoken to him about the allegations.[31]

In relation to the unauthorised transactions, Mr Tunchon says that the only signatories to ATT’s St George Bank account were Mr Tunchon, Mr Mowad and Mr Williamson. In addition, Ms Kim Hoefsmit, who is employed by ATT as a Bookkeeper was able to view the account and make online transactions.[32]

Mr Tunchon says that in early 2022, Mr Tunchon and his wife were reviewing ATT’s bank account statements and discovered a significant number of unauthorised transactions.[33] He noticed that ATT was paying American Express card fees and transferring money to an American Express account although ATT has never and still does not have an American Express card. Mr Tunchon believes that Mr Williamson has an American Express card.[34] There were further transactions on the business account that Mr Tunchon did not recognise, including ATM withdrawals.[35] Mr Tunchon spoke to Ms Hoefsmit who recommended that Mr Williamson be removed as a signatory on the ATT accounts.[36]

In or around April 2022, Mr Tunchon and Mr Mowad attended St George Bank in Kogarah and removed Mr Williamson as a signatory on the account, on the basis that he was making unauthorised transactions on behalf of ATT.[37]

A few months after Mr Williamson was removed as a signatory on the ATT bank accounts, Mr Williamson requested a fuel card for his personal car which Mr Tunchon refused to give him.[38]

In or around the later part of 2022, Mr Tunchon received an email from Fleet Card Australia addressed to Angela Tunchon and ATT, regarding the potential of fraud on ATT's company fuel card account. Angela Tunchon is Mr Tunchon’s brother's ex-wife. Ms Tunchon and Mr Williamson spent time together regularly during the later part of 2022. Based on the email Mr Tunchon received from Fleet Card Australia, he believes that Mr Williamson and Ms Tunchon attempted to obtain a fuel card for Mr Williamson's personal use using ATT’s corporate account with Fleet Card Australia.[39]

Mr Tunchon says he observed that Mr Williamson became progressively toxic in the workplace following the removal of Mr Williamson from the bank accounts and his decision to not provide Mr Williamson with a fuel card. Mr Williamson often gave Mr Tunchon and other employees of ATT the ‘silent treatment’.[40]

In response to these allegations, Mr Williamson says that since the time he owned and worked within Central Districts and ATS, his personal American Express credit card was used as the company credit card. Ms Hoefsmit was in charge of the finances of those businesses. Mr Williamson trusted Ms Hoefsmit and gave her his credit card to use as and when necessary for the businesses. Mr Williamson did not carry the credit card on him. It was generally in possession of Ms Hoefsmit in the workplace. Ms Hoefsmit would use the credit card to pay for business expenses such as vehicle registrations or spare parts and then when the credit card bill arrived, she would make payment to Mr Williamson for the credit card debt using ATT’s funds.[41]

Mr Williamson’s Submissions

Mr Williamson submitted that ATT gave evidence in the jurisdictional hearing that Mr Williamson’s engagement ceased because Mr Tunchon and Mr Mowad believed that Mr Williamson was not an employee, that he did not carry out any duties, that he was not under their control or direction and that the regular payments made to him were not wages (which meant they could be ceased at any time). ATT has now revised its case to assert that Mr Williamson was terminated either because of redundancy or because he engaged in misconduct. These allegations of misconduct, which occurred well before the date of dismissal, were not relied upon in terminating Mr Williamson’s employment. If they occurred, there was waiver and condonation of that alleged conduct on the part of ATT.

Mr Williamson submitted that ATT’s case should properly be confined to the proposition that it discovered that Mr Williamson transferred his annual leave entitlements to ATT after dismissing him and that such conduct should retrospectively justify the dismissal. This proposition is tenuous, unsupported by evidence, and would not be accepted in view of the payslips in evidence and the evidence of how and why ATT came to be incorporated with each of Mr Tunchon and Mr Mowad receiving directorships and 25% shareholdings in ATT at nil cost to themselves.

Mr Williamson submitted that the evidence clearly indicates that there was no valid reason for the dismissal; there was no notice given to Mr Williamson at all about any reason for dismissal; there was no opportunity given to Mr Williamson to respond to any allegation; there was no support person offered to Mr Williamson; there was no warning given to Mr Williamson about unsatisfactory performance and the human resourcing capacity and/or size of ATT cannot excuse its unlawful conduct.

ATT’s Submissions

ATT submitted that it is a small business for the purposes of the FW Act. As such it is covered by the Small Business Dismissal Code. It was therefore fair for ATT to dismiss Mr Williamson without notice or warning when ATT believed on reasonable grounds Mr Williamson’s conduct was sufficiently serious to justify immediate dismissal.

ATT accepted that it did not dismiss Mr Williamson for misconduct but claimed that it was entitled to. ATT submitted that Mr Williamson falsely claimed the transfer of employment entitlements in circumstances where those entitlements were not transferred. Had ATT known of that attempted transaction, it would have immediately dismissed Mr Williamson without notice. Mr Williamson made this decision in his own interests, in circumstances where those interests differed from those of ATT. Further, he made unauthorised payments and treated staff inappropriately.

Alternatively, ATT could have retrenched Mr Williamson on the basis that his position was redundant. Given that ATT was a small business, no redundancy payment would have been payable. Mr Williamson admitted that he performed no work for ATT after the business was moved to Mr Tunchon’s house.

In relation to procedural fairness, ATT submitted that there would have been no practical difference if Mr Williamson had been provided with a particularised show cause letter. He still would have been dismissed without notice.

When can the Commission order a remedy for unfair dismissal?

I have considered the submissions made by the parties and all of the evidence in my determination of this matter and the conclusions I have reached.

Section 390 of the FW Act provides that the Commission may order a remedy if:

(a) the Commission is satisfied that Mr Williamson was protected from unfair dismissal at the time of being dismissed; and

(b) Mr Williamson has been unfairly dismissed.

Both limbs must be satisfied. I am therefore required to consider whether Mr Williamson was protected from unfair dismissal at the time of being dismissed and, if I am satisfied that Mr Williamson was so protected, whether Mr Williamson has been unfairly dismissed.

When has a person been unfairly dismissed?

Section 385 of the FW Act provides that a person has been unfairly dismissed if the Commission 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.

Initial matters

A threshold issue to determine is whether Mr Williamson has been dismissed from his employment.

I find that Mr Williamson’s employment with ATT was terminated at the initiative of ATT when ATT stopped paying Mr Williamson on 30 March 2023 and confirmed through its lawyer by email dated 4 April 2023 to Mr Drury that ATT would not support Mr Williamson any further. I am therefore satisfied that Mr Williamson has been dismissed within the meaning of s.385 of the FW Act and that the dismissal took effect when Mr Williamson, through Mr Drury received written notification of this on 4 April 2023.

Under s.396 of the FW Act, the Commission is obliged to decide the following matters before considering the merits of the application:

(a) whether the application was made within the period required in s.394(2);

(b)   whether the person was protected from unfair dismissal;
(c)   whether the dismissal was consistent with the Small Business Fair Dismissal Code;
(d)   whether the dismissal was a case of genuine redundancy.

I have decided these matters below.

In relation to s.394(2), the Application was made on 21 April 2023 which is within 21 days of the date that Mr Williamson was dismissed.

Section 382 of the FW Act provides that a person is protected from unfair dismissal if, at the time of being dismissed:

(a) the person is an employee who has completed a period of employment with his or her employer of at least the minimum employment period; and

(b) one or more of the following apply:

(i)a modern award covers the person;
(ii)an enterprise agreement applies to the person in relation to the employment;
(iii)the sum of the person’s annual rate of earnings, and such other amounts (if any) worked out in relation to the person in accordance with the regulations, is less than the high income threshold.

It was not in dispute that ATT had less than 15 employees at the time of Mr Williamson’s dismissal, therefore I find that ATT was a small business employer within the meaning of s.23 of the FW Act. Under s. 383(b), the minimum employment period for an employee of a small business employer is one year from the earlier of the time when the person is given notice of the dismissal, or immediately before the dismissal. In my earlier decision, I found that Mr Williamson was employed from 11 November 2020 until 4 April 2023 which is a period greater than one year therefore, I find that Mr Williamson completed a period of employment with ATT of at least the minimum employment period.

Mr Williamson’s payslips were in evidence and show that at the time of dismissal Mr Williamson was paid an annual salary of $83,200 which is less than the high income threshold which was $162,000 per annum at the relevant time. The parties did not make any submissions about whether a modern award covered or an enterprise agreement applied to Mr Williamson however these are matters which I do not need to determine given that Mr Williamson’s earnings were less than the high income threshold.

I am therefore satisfied that, at the time of dismissal, Mr Williamson was a person protected from unfair dismissal.

Small Business Code

Section 388 of the FW Act provides that 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.

As ATT was a small business, the Small Business Fair Dismissal Code (the Code) applied to Mr Williamson’s employment. It is therefore necessary to consider whether ATT complied with the Code in relation to the dismissal. The Code provides:

Small Business Fair Dismissal Code
Commencement
The Small Business Fair Dismissal Code comes into operation on 1 July 2009.
Summary Dismissal
It is fair for an employer to dismiss an employee without notice or warning when the employer believes on reasonable grounds that the employee’s conduct is sufficiently serious to justify immediate dismissal. Serious misconduct includes theft, fraud, violence and serious breaches of occupational health and safety procedures. For a dismissal to be deemed fair it is sufficient, though not essential, that an allegation of theft, fraud or violence be reported to the police. Of course, the employer must have reasonable grounds for making the report.
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.
Procedural Matters
In discussions with an employee in circumstances where dismissal is possible, the employee can have another person present to assist. However, the other person cannot be a lawyer acting in a professional capacity.
A small business employer will be required to provide evidence of compliance with the Code if the employee makes a claim for unfair dismissal to Fair Work Australia, including evidence that a warning has been given (except in cases of summary dismissal). Evidence may include a completed checklist, copies of written warning(s), a statement of termination or signed witness statements.

The only contemporaneous evidence of the reason for Mr Williamson’s dismissal is the email from ATT’s lawyer dated 4 April 2023. The only indication in that email of a reason for termination is the following sentence:
‘The company cannot (and has no obligation to) support Mr Williamson any further and accordingly the payment has stopped.’

This sentence may be understood when read in the context of the entire email as firstly conveying that ATT is not able to support Mr Williamson by continuing to engage him and secondly that it is not required to because of ATT’s view that Mr Williamson was not an employee. The reason or reasons why ATT was not able to continue to engage Mr Williamson are not apparent from the text of the email. However, the sentence is expressed in the present tense and therefore suggests that the reason(s) that ATT terminated Mr Williamson was in relation to matters or events which had just or very recently occurred.

Mr Tunchon’s and Mr Mowad’s evidence at the hearing is that they decided to stop paying Mr Williamson because Mr Williamson’s role at ATT had been redundant for over 12 months and he was no longer able to act as a director as an undischarged bankrupt. They also said that Mr Williamson’s alleged misconduct ‘played a role’ in the decision to stop paying him.

I do not accept that there was an alleged redundancy in about April 2022 as the evidence shows that Mr Williamson continued performing work throughout the period that ATT traded from West Ryde and after it moved to Mr Tunchon’s home address. I also do not accept that ATT made a decision at the time it stopped paying Mr Williamson that it no longer required Mr Williamson’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise, because there is no evidence which establishes that such a decision was made.

The alleged misconduct that Mr Tunchon and Mr Mowad say they were aware of at the time of the dismissal comprised Mr Williamson’s alleged conduct in relation to Ms Testolin, his toxic behaviour, the unauthorised transactions and the fuel card. These events occurred between one and two years prior to the dismissal. In my view, as the alleged redundancy and misconduct were not recent events it is unlikely that either separately or together, they constituted the reasons for dismissal. However, Mr Williamson’s bankruptcy, which was cited by Mr Tunchon and Mr Mowad as a reason for the dismissal had occurred very recently, just over one month before the dismissal. Mr Tunchon and Mr Mowad claimed that Mr Williamson was no longer able to act as a director as an undischarged bankrupt. This is correct, although Mr Williamson had resigned as director of ATT two years earlier. The effect of the bankruptcy, as explained in the email dated 4 April 2023, is that Mr Williamson’s 50% shareholding vested in the trustee in bankruptcy which resulted in Mr Williamson no longer having a direct financial interest in ATT. In my view, having regard to the evidence before me, the reason for the dismissal was, as stated in the letter of 4 April 2023, because ATT could no longer support Mr Williamson. I understand this to mean that ATT could no longer support Mr Williamson financially. I also find that the timing of this decision was likely to be influenced by Mr Williamson’s bankruptcy.

The Code refers to a dismissal related to an employee’s conduct or capacity to do the job. ATT’s decision to dismiss Mr Williamson because it could no longer support him is not related to Mr Williamson’s conduct or capacity to do the job. ATT relies upon the ‘Summary Dismissal’ aspect of the Code, which was considered by a Full Bench of FWA in Pinawin T/A RoseVi Hair Face Body v Domingo.[42] The Full Bench stated:

[29] ... There are two steps in the process of determining whether this aspect of the Small Business Fair Dismissal Code is satisfied. First, there needs to be a consideration whether, at the time of dismissal, the employer held a belief that the employee’s conduct was sufficiently serious to justify immediate dismissal. Secondly it is necessary to consider whether that belief was based on reasonable grounds. The second element incorporates the concept that the employer has carried out a reasonable investigation into the matter. It is not necessary to determine whether the employer was correct in the belief that it held.
[30] Acting reasonably does not require a single course of action. Different employers may approach the matter differently and form different conclusions, perhaps giving more benefit of any doubt, but still be acting reasonably. The legislation requires a consideration of whether the particular employer, in determining its course of action in relation to the employee at the time of dismissal, carried out a reasonable investigation, and reached a reasonable conclusion in all the circumstances. Those circumstances include the experience and resources of the small business employer concerned.[43]

I have already found that the dismissal did not occur because of misconduct. If Mr Tunchon and Mr Mowad held a belief on behalf of ATT that Mr Williamson’s alleged conduct in relation to Ms Testolin, the unauthorised transactions, Mr Williamson’s toxic behaviour and the fuel card was sufficiently serious to justify immediate dismissal at the time it occurred, it was open for ATT to dismiss Mr Williamson at the time that each of these events occurred, however it did not do so. I therefore do not accept that ATT held a belief Mr Williamson’s conduct was sufficiently serious to justify immediate dismissal at the time of dismissal.

In relation to the allegation that Mr Williamson transferred his entitlements from ATS to ATT without Mr Tunchon’s and Mr Mowad’s knowledge, this is a matter which Mr Tunchon and Mr Mowad say they became aware of after Mr Williamson’s dismissal. To comply with the Code, the employer must form the requisite belief that the employee’s conduct is sufficiently serious to justify immediate dismissal at the time of the dismissal. There is no indication in the text of the Code that an employer can rely upon such a belief after the dismissal has taken place to establish compliance with the Code.

In relation to the ‘Other Matters’ aspect of the Code, I note that in cases not involving summary dismissal, a small business employer must give the employee a reason why they are at risk of being dismissed, the employee must be warned verbally or preferably in writing, that they risk being dismissed if there is no improvement, and the employer must provide the employee with an opportunity to respond to the warning and give the employee a reasonable chance to rectify the problem. There is no evidence which establishes that any of these steps occurred with respect to Mr Williamson.

Taking all of these matters into account, I find that ATT did not comply with the Code in relation to this matter and that the dismissal was not consistent with the Code.

Was the dismissal a case of genuine redundancy?

Under s.389(1) of the FW Act, a person’s dismissal was a case of genuine redundancy
if:
(a) the 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.

Section 389(2) provides that 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 the employer’s enterprise or the enterprise of an associated entity of the employer.

According to the Full Bench in Adams v Blamey Community Group[44], s.389(1)(a) requires findings of fact to be made as to whether, firstly, the employer has made the decision that the employee’s job is no longer required to be performed by anyone and, secondly, whether that decision was made because of changes in the operational requirements of the enterprise. If there was an ulterior motive for the decision – that is, if the real reason for the decision did not genuinely relate to any change in operational requirements, whatever the ostensible reason may have been – then it will not be possible to make the second finding of fact. However, once these findings of fact are made, the element of the genuine redundancy definition contained in s.389(1)(a) is satisfied and no further inquiry is necessary.[45]

As noted above, I have found that the reason for the dismissal was because ATT could no longer support Mr Williamson. For reasons that I explain later in this decision, I believe that ATT would have formed the view soon after the dismissal that it no longer required Mr Williamson’s job to be performed by anyone because of changes in the operational requirements of its enterprise. However, there is no evidence which establishes that ATT had made this decision at the time of the dismissal, so I am satisfied that the dismissal was not a case of genuine redundancy.

Having considered each of the initial matters, I am required to consider the merits of Mr Williamson’s application.

Was the dismissal harsh, unjust or unreasonable?

Section 387 of the FW Act provides that, in considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the Commission 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 the FWC considers relevant.

I am required to consider each of these criteria, to the extent they are relevant to the factual circumstances before me.[46]

Was there a valid reason for the dismissal related to Mr Williamson’s capacity or conduct?

In order to be a valid reason, the reason for the dismissal should be ‘sound, defensible or well founded’[47] and should not be ‘capricious, fanciful, spiteful or prejudiced.’[48] However, the Commission will not stand in the shoes of the employer and determine what the Commission would do if it was in the position of the employer.[49]

As noted above, I have found that the reason for the dismissal was because ATT could no longer support Mr Williamson. I do not accept that it occurred because of redundancy or misconduct.

I have already referred to the allegations about Mr Williamson’s conduct in relation to Ms Testolin, the unauthorised transactions and the fuel card which were matters within ATT’s knowledge well before the dismissal occurred.

Mr Williamson denied the allegations made by Ms Testolin and Ms Testolin was unavailable to give evidence at the hearing. In circumstances where there were no other witnesses in relation to Ms Testolin’s allegations, I am unable to find that Mr Williamson engaged in any misconduct towards Ms Testolin. There was also insufficient evidence, in the face of Mr Williamson’s denials, that Mr Williamson engaged in toxic behaviour in the workplace.

In relation to the alleged unauthorised transactions, I note that there was no material before me such as a policy or resolution which established the types of transactions which were regarded by ATT as ‘authorised’. Mr Williamson’s evidence suggests that there was some level of informality at ATS which may have carried over to ATT whereby his personal credit card was used to pay for business expenses which he then received reimbursement for. Mr Williamson also had an expectation that his mobile phone and fuel would be paid for by ATT, possibly because this may have been the practice at ATS. There was clearly disagreement between Mr Williamson on one side and Mr Tunchon and Mr Mowad on the other about what expenses could be paid for using ATT’s bank accounts. It was also unclear who had performed the transactions that Mr Tunchon and Mr Mowad say they were concerned about having regard to the bank account statements that were in evidence. Taking all these matters into account, I am not satisfied that there is sufficient evidence to establish that Mr Williamson performed unauthorised transactions on ATT’s bank accounts.

Quite apart from the issue of whether these allegations are able to be established on the evidence before me, I accept Mr Williamson’s submission that it is well established an employer is not entitled to summarily dismiss an employee for an earlier instance of employee misconduct if the employer with full knowledge of that misconduct had decided to retain the employee in employment.[50] I therefore find that none of these matters, together or separately constitute a valid reason for dismissal.

In relation to the transfer of Mr Williamson’s annual leave entitlements, I note that Mr Williamson relies upon an agreement between himself, Mr Tunchon and Mr Mowad that Mr Williamson’s annual leave entitlements would be transferred from ATS to ATT. There is no written agreement in relation to this matter, however, payslips of Mr Williamson which showed a large annual leave balance when he commenced employment with ATT are consistent with annual leave entitlements being transferred from ATS to ATT. Mr Tunchon and Mr Mowad denied the existence of such an agreement. They claimed that they were not aware that Mr Williamson had attempted to transfer his employee entitlements from ATS to ATT and that they discovered this after Mr Williamson filed his Application. Mr Tunchon also said that there were no employee entitlements transferred from ATS to ATT because Mr Tunchon was an employee of ATS for around 10 years prior to the date of the Asset Sale Agreement, and none of his employee entitlements were transferred to ATT. Mr Tunchon and Mr Mowad said that if they had known that Mr Williamson had attempted to transfer his entitlements, they would have immediately dismissed Mr Williamson for taking such actions in his own interests, rather than in the interests of ATT.

The evidence showed that in addition to Mr Williamson, other employees commenced employment with ATT on 11 November 2020 with annual leave balances greater than zero which was consistent with annual leave entitlements being transferred from ATS to ATT. Mr Tunchon had an annual leave balance of 228.2970 hours,[51] Mr Creasey had an annual leave balance of 40.4442 hours[52] and Fiorenza Molita had an annual leave balance of 31.9162 hours.[53]

Mr Tunchon gave evidence that he did not believe that any employees had transferred from ATS to ATT because he was told by the accountant that it was illegal and that anything that had value would not be transferred.[54] When Mr Tunchon was shown his payslip and the payslips of Mr Creasey and Ms Molita, he said that he wasn’t aware that their annual leave balances had been transferred from ATS to ATT because he did not look at the payslips.[55]

Mr Williamson submitted that because the evidence showed that all of the other aspects of the agreement between himself, Mr Tunchon and Mr Mowad had been implemented with respect to the incorporation of ATT, the directors and shareholders, that as a matter of logic, there must have also been agreement in relation to the transfer of Mr Williamson’s annual leave entitlements. I do not accept that this necessarily follows from the evidence. All of the other matters are supported by the documentary evidence filed which includes the Member resolution and Constitution, Consent to act as a director, Notice of appointment of public officer and ASIC current and historical organisation extract in relation to ATT. There is no written document which confirms that Mr Tunchon and Mr Mowad agreed that Mr Williamson’s annual leave would be transferred from ATS to ATT although the payslips could be evidence supporting the existence of such an agreement.

I believe, based on the evidence, that the most likely scenario is that Mr Williamson advised Mr Tunchon and Mr Mowad during their discussions in 2019 prior to incorporation that he wanted to transfer his annual leave entitlements from ATS to ATT but by the time Mr Williamson was employed by ATT 18 months later in November 2020, the dire financial situation of ATS which led to the liquidation process commencing in February 2021 was known. At this stage Mr Tunchon was advised by the accountant that the entitlements could not be transferred. In other words, even if there was an agreement that the annual leave entitlements were transferred, it is likely that this was overtaken by the events that led to the liquidation of ATS. Despite this, the payslips show the annual leave balance was transferred. Neither party called evidence which established who was responsible for creating the annual leave balances on the payslips, however, Mr Williamson, Mr Tunchon and Mr Mowad were all directors of ATT at the time that the first payslips were created so they all bear responsibility for the accuracy of the information contained in those payslips.

Ultimately, the issue that I am required to decide is not whether there was agreement between Mr Williamson, Mr Tunchon and Mr Mowad that Mr Williamson’s annual leave entitlements were transferred but whether Mr Williamson engaged in fraud by attempting to transfer these entitlements.

Where a dismissal relates to an employee’s conduct, the Commission must be satisfied that the conduct occurred and justified termination.[56] The question of whether the alleged conduct took place and what it involved is to be determined by the Commission on the basis of the evidence in the proceedings before it. The test is not whether the employer believed, on reasonable grounds after sufficient enquiry, that the employee was guilty of the conduct which resulted in termination.[57]

Deputy President Asbury (as she then was) summarised the relevant principles in relation to the employer’s onus of establishing that there was a valid reason for a dismissal on the balance of probabilities as follows in Gary Mellios v Qantas Airways Limited,[58] which was confirmed on appeal by the Full Bench:[59]

[17] In considering whether there is a valid reason for the Applicant’s dismissal, I am required to be satisfied on the balance of probabilities that he engaged in the alleged misconduct or in misconduct to which dismissal was a valid, sound and defensible response. I must be conscious of the gravity of the allegations and the ramifications for the Applicant if they are made out. However, the standard of proof does not change and the issues in dispute must be determined on the balance of probabilities. Put another way, it must be more probable than not that the Applicant engaged in the relevant misconduct.

I have applied these principles to the matter before me.

The evidence establishes that payslips were provided to Mr Williamson, Mr Creasey, Ms Molita and Mr Tunchon which showed annual leave balances greater than zero upon commencement of employment with ATT. There is no evidence which establishes who prepared the payslips or who directed the payslips to be prepared in such a way. Mr Williamson, Mr Tunchon and Mr Mowad were directors of ATT and therefore responsible, individually and jointly to ensure that ATT complied with its obligations to issue accurate information to employees. In addition, Mr Tunchon’s evidence is that from October 2020, which is prior to the date that Mr Williamson commenced employment with ATT, Mr Tunchon was responsible for managing the day-to-day operations of ATT. It is likely that management of ATT would have extended to managing the employee who was responsible for payroll issues. All that the evidence shows is that Mr Williamson’s first payslip has a very high annual leave balance. It does not show that Mr Williamson created the payslip or directed someone else to do this without the knowledge of Mr Tunchon and Mr Mowad. The evidence does not establish that Mr Williamson engaged in any fraud or other wrongdoing in relation to the annual leave balance on his payslip. In all the circumstances, I find that there was no valid reason for the dismissal related to Mr Williamson’s conduct

Was Mr Williamson notified of the valid reason?

Proper consideration of s.387(b) requires a finding to be made as to whether Mr Williamson ‘was notified of that reason’. Contextually, the reference to ‘that reason’ is the valid reason found to exist under s.387(a).[60]

As I am not satisfied that there was a valid reason related to dismissal, this factor is not relevant to the present circumstances.[61]

Was Mr Williamson given an opportunity to respond to any valid reason related to his capacity or conduct?

As I have not found that there was a valid reason related to dismissal, this factor is not relevant to the present circumstances.[62]

Did ATT unreasonably refuse to allow Mr Williamson to have a support person present to assist at discussions relating to the dismissal?

There were no discussions relating to the dismissal before it occurred so there was no opportunity for Mr Williamson to have a support person in relation to the dismissal.

Was Mr Williamson warned about unsatisfactory performance before the dismissal?

As the dismissal did not relate to unsatisfactory performance, this factor is not relevant to the present circumstances.

To what degree would the size of ATT’s enterprise be likely to impact on the procedures followed in effecting the dismissal?

ATT did not make any submissions about this matter. ATT is a small business, however, I note that ATT instructed a lawyer to respond to Mr Drury’s email to ATT about Mr Williamson on 4 April 2023 within four hours of receiving it. This suggests that ATT had access to external advice in relation to workplace relations matters.

To what degree would the absence of dedicated human resource management specialists or expertise in ATT’s enterprise be likely to impact on the procedures followed in effecting the dismissal?

There is no evidence in relation to this matter and ATT did not make any submissions about this matter. However, I repeat my observations above that ATT appeared to have access to external advice in relation to workplace relations matters at the time of Mr Williamson’s dismissal.

What other matters are relevant?

Mr Williamson submitted his age at the time of dismissal and his longstanding service

with ATS and ATT are relevant to an assessment of whether the dismissal was harsh. Mr Williamson contended that dismissal from any employment at age 76 creates real difficulties in relation to gaining further employment particularly for an employee who has been involved with only one business for almost the entirety of his working life. The Commission should find that Mr Williamson’s age is significant factor that weighs in favour of a finding of unfairness.

I accept that Mr Williamson’s age is a matter which weighs in favour of a finding of unfairness.

Is the Commission satisfied that the dismissal of Mr Williamson was harsh, unjust or unreasonable?

I have made findings in relation to each matter specified in section 387 as relevant.

I must consider and give due weight to each as a fundamental element in determining whether the termination was harsh, unjust or unreasonable.[63]

Having considered each of the matters specified in section 387 of the FW Act, I am satisfied that the dismissal of Mr Williamson was unjust and unreasonable because there was no valid reason for the dismissal related to Mr Williamson’s capacity or conduct and that the dismissal was harsh because of Mr Williamson’s age at the time of the dismissal.

Conclusion

I am therefore satisfied that Mr Williamson was unfairly dismissed within the meaning of s.385 of the FW Act.

Remedy

Being satisfied that Mr Williamson made an application for an order granting a remedy under s.394, was a person protected from unfair dismissal, and was unfairly dismissed within the meaning of s.385 of the FW Act, I may, subject to the FW Act, order Mr Williamson’s reinstatement, or the payment of compensation to Mr Williamson.

Under s.390(3) of the FW Act, I must not order the payment of compensation to Mr Williamson unless:

(a) I am satisfied that reinstatement of Mr Williamson is inappropriate; and
(b) I consider an order for payment of compensation is appropriate in all the circumstances of the case.

Is reinstatement of Mr Williamson inappropriate?

Mr Williamson submitted that the relationship between the parties has broken down irretrievably and that reinstatement is not an appropriate remedy. This is not disputed by ATT. On this basis, I consider that reinstatement is inappropriate. I will now consider whether a payment for compensation is appropriate in all the circumstances.

Is an order for payment of compensation appropriate in all the circumstances of the case?

Having found that reinstatement is inappropriate, it does not automatically follow that a payment for compensation is appropriate. As noted by the Full Bench, ‘[t]he question whether to order a remedy in a case where a dismissal has been found to be unfair remains a discretionary one…’[64]

Where an applicant has suffered financial loss as a result of the dismissal, this may be a relevant consideration in the exercise of this discretion.[65]

Mr Williamson submitted that payment of compensation is appropriate. ATT did not specifically submit that compensation was not appropriate but that any compensation awarded to Mr Williamson would be zero because there is no ongoing loss as Mr Williamson would have been dismissed summarily due to serious misconduct or alternatively any compensation awarded will be heavily discounted on account of the alleged misconduct.

Given that there is no evidence that supports a finding that the dismissal occurred because of misconduct and that the evidence establishes that Mr Williamson has not obtained alternative employment and therefore suffered financial loss as a result of the dismissal, I consider that an order for payment of compensation is appropriate.

Compensation – what must be taken into account in determining an amount?

Section 392(2) of the FW Act requires all of the circumstances of the case to be taken into account when determining an amount to be paid as compensation to Mr Williamson in lieu of reinstatement including:

(a)the effect of the order on the viability of ATT’s enterprise;
(b)the length of Mr Williamson’s service;
(c)the remuneration that Mr Williamson would have received, or would have been likely to receive, if Mr Williamson had not been dismissed;
(d)the efforts of Mr Williamson (if any) to mitigate the loss suffered by Mr Williamson because of the dismissal;
(e)the amount of any remuneration earned by Mr Williamson from employment or other work during the period between the dismissal and the making of the order for compensation;
(f)the amount of any income reasonably likely to be so earned by Mr Williamson during the period between the making of the order for compensation and the actual compensation; and
(g)any other matter that the Commission considers relevant.

I consider all the circumstances of the case below.

Effect of the order on the viability of ATT’s enterprise

Mr Williamson submitted that ATT’s business is a going concern and there is evidence of regular income deposits shown in ATT’s bank statements from 2019 onwards. Considering that the business of ATT is still operating, the Commission may draw an inference that it continues to receive regular income from its clients. Mr Williamson submits that an order requiring ATT to pay $41,600 would not have an appreciable impact upon the viability of ATT’s enterprise. There is no evidence which establishes that ATT is experiencing any financial difficulty. In the circumstances, I find that an order for compensation will not have a detrimental effect on the viability of ATT’s enterprise.

Length of Mr Williamson’s service

Mr Williamson submitted that he owned and operated ATS from 1991 until the business was transferred to ATT together with his employment and entitlements. At the time of dismissal on 4 April 2023, he had worked with the business for over 32 years. In my view, if a transfer of Mr Williamson’s employment occurred, which is disputed by ATT, Mr Williamson’s length of service needs to be viewed in the context of ATS going into liquidation in 2021. Ordinarily, such an event would bring the business and the employment of employees to an end, however the Active Towing business and Mr Williamson’s employment were able to survive because Mr Williamson initiated the incorporation of a new entity. This is not a situation where there was a power imbalance between Mr Williamson and his employer resulting in his employment being transferred from one entity to another without his consent. Rather, as a director and employee of both ATS and ATT, Mr Williamson was able to maintain his employment in circumstances where most other employees would not have been able to. In the circumstances I do not consider that Mr Williamson’s length of service with both ATS and ATT supports increasing the amount of compensation ordered. I also conclude that Mr Williamson’s length of service does not support reducing the amount of compensation ordered.

Remuneration that Mr Williamson would have received, or would have been likely to receive, if Mr Williamson had not been dismissed

As stated by a majority of the Full Court of the Federal Court:

[i]n determining the remuneration that the applicant would have received, or would have been likely to receive… the Commission must address itself to the question whether, if the actual termination had not occurred, the employment would have been likely to continue, or would have been terminated at some time by another means. It is necessary for the Commission to make a finding of fact as to the likelihood of a further termination, in order to be able to assess the amount of remuneration the employee would have received, or would have been likely to receive, if there had not been the actual termination.[66]

Submissions

Mr Williamson submitted that if he had not been dismissed, he would have continued working for ATT until he decided to retire. There is evidence that Mr Williamson planned to retire within 5 to 7 years of the agreement between himself, Mr Tunchon and Mr Mowad in around March 2019 to May 2019. Taking the earliest 5-year timeframe, Mr Williamson would have retired in around May 2024. Given that he was 76 years of age at the time of dismissal, his history with ATT and its predecessor ATS, his 50% shareholding and directorship within ATT, and status as a bankrupt, it is highly unlikely that Mr Williamson would have sought alternative work opportunities within the period March 2019 to around May 2024 or May 2026

(in the event that he retired 7 years after the agreement). It is also highly unlikely that ATT would have taken steps to dismiss Mr Williamson prior to his retirement given the nature of the agreement between the parties and that there were no performance or misconduct concerns ever raised with Mr Williamson.

Findings

I do not accept Mr Williamson’s submissions that if he not been dismissed, he would have continued working for ATT until he decided to retire. Mr Williamson planned to retire within 5 to 7 years of the agreement between himself, Mr Tunchon and Mr Mowad in around March 2019 to May 2019 on the basis that he was a director, shareholder and employee of ATT. There were two significant events which occurred after the incorporation of ATT which fundamentally changed the nature of the relationship between ATT and Mr Williamson and therefore the length of Mr Williamson’s employment.

The first of these is that on 12 February 2021, Mr Williamson resigned as a director of ATT. As a result, Mr Williamson was no longer responsible, together with Mr Tunchon and Mr Mowad, for ensuring that ATT fulfilled its legal and other obligations towards employees, customers and other stakeholders. Apart from the fact that this occurred the day after the liquidation process for ATS commenced, Mr Williamson did not provide an explanation as to why he relinquished his position as a director at that time. There is no suggestion that Mr Tunchon and Mr Mowad requested Mr Williamson to resign as a director or that they were even aware that this was going to occur.

From the date of Mr Williamson’s bankruptcy in February 2023, he could no longer be the director of a company. Separately to this event, he was disqualified from being a director by ASIC for three years from July 2023. However, neither of these events explain why Mr Williamson resigned as a director of ATT two years earlier. As he was no longer involved in running the business of ATT as a director, this gave Mr Tunchon and Mr Mowad greater autonomy in relation to the operations of ATT which ultimately saw Mr Williamson being removed as a signatory of the bank accounts and the principal place of business moving from the West Ryde premises to Mr Tunchon’s home address in August 2022. There is no evidence which establishes that the parties contemplated in 2019 that Mr Williamson would resign as a director prior to his planned retirement. I believe that it is unlikely that Mr Williamson would have been removed as a signatory of the bank accounts and the principal place of business would have been moved if Mr Williamson had remained a director.

The second event which changed the nature of the relationship between ATT and Mr Williamson was Mr Williamson’s bankruptcy which resulted in Mr Williamson’s shares in ATT vesting in the trustee in bankruptcy. Consequently, Mr Williamson no longer had a direct financial interest in ATT.

Although I have found that Mr Williamson continued to perform work for ATT after its office moved from West Ryde to Mr Tunchon’s home address, these duties decreased compared to when ATT was operating from West Ryde. At the time of dismissal, Mr Williamson’s duties largely comprised of taking phone calls from customers on his mobile phone and encouraging them to make contact with the office phone or Mr Tunchon directly to organise towing jobs.[67]

In my view, it is likely that the combination of the business operating from Mr Tunchon’s home address from August 2022 together with Mr Williamson no longer having a financial interest in the business of ATT from February 2023 would have led ATT to form the view soon after the dismissal that it no longer required Mr Williamson’s job to be performed by anyone because of changes in the operational requirements of ATT’s enterprise. This would have led to termination of Mr Williamson’s employment on the grounds of redundancy shortly after the date of dismissal. The notice period that ATT would have been required to provide Mr Williamson was 5 weeks if his employment with both ATT and ATS was regarded as continuous and 3 weeks if it was not.

In addition, ATT would have been required to consult with Mr Williamson in relation to redundancy if his employment was covered by a modern award. Allowing for a reasonable period of consultation and for the notice period, I find that it is likely that Mr Williamson would have remained employed for a further eight weeks following the dismissal and the remuneration that Mr Williamson would have received, or would have been likely to receive, if Mr Williamson had not been dismissed would have been eight weeks’ pay, plus superannuation.

Efforts of Mr Williamson to mitigate the loss suffered by Mr Williamson because of the dismissal

Mr Williamson must provide evidence that he has taken reasonable steps to minimise the impact of the dismissal.[68] What is reasonable depends on the circumstances of the case.[69]

Mr Williamson submitted that he attempted to mitigate his own loss by applying for an ‘Uber’ license between April 2023 and September 2023 but was unsuccessful due to his status as a bankrupt which prevented him from obtaining the required ABN to carry out that work. Further, Mr Williamson has continued to look for driving work using the ‘Seek’ website from April 2023 to present. However, at 77 years of age with his skillset and his status as a bankrupt, he has not been successful.

ATT did not make any submissions in relation to this issue. I am therefore satisfied that Mr Williamson took reasonable steps to mitigate his loss.

Amount of remuneration earned by Mr Williamson from employment or other work during the period between the dismissal and the making of the order for compensation

Mr Williamson’s evidence is that he has not been engaged in other work or employment after the dismissal. This evidence is not contested by ATT, so I find that Mr Williamson has not earned any remuneration from employment or other work during the period between the dismissal and the making of the order for compensation.

Amount of income reasonably likely to be so earned by Mr Williamson during the period between the making of the order for compensation and the actual compensation

Mr Williamson submits that he is not likely to earn income between the making of the order for compensation and the actual compensation. This evidence is not contested by ATT, so I find that Mr Williamson is not likely to earn any remuneration from employment or other work during the period between the making of the order for compensation and the actual compensation. Mr Williamson has successfully applied for pension payments and has been receiving between $779.45 and $839.75 each fortnight since 7 September 2023, however such payments are not usually deducted when assessing compensation.[70]

Other relevant matters

Mr Williamson submits that the maximum compensation should be awarded. Mr Williamson is 77 years of age with little to no prospects of obtaining employment after many decades working in the towing business with ATS and ATT. He is bankrupt which impedes his ability to start his own business or work as a contractor under an ABN. He was dismissed in the most egregious of circumstances and his plans for financial stability in retirement have been upended by the conduct of the ATT.

Mr Williamson deserves some sympathy for the callous way in which his employment was ended by ATT. However, Mr Williamson’s current limited prospects of employment appear to arise from circumstances beyond the control and influence of ATT. There is no evidence which establishes that ATT had anything to do with Mr Williamson’s bankruptcy, although it is Mr Williamson’s status as a bankrupt which is preventing him from starting his own business or working as a contractor under an ABN. Mr Williamson did not give evidence about the specific events which led him to apply for bankruptcy, however, it preceded his disqualification by ASIC from managing corporations for three and a half years due to his involvement in the failure of three companies which entered liquidation between November 2019 and February 2021. At the time of ASIC’s decision, the three companies owed a combined total of $1,833,747 to unsecured creditors, including approximately $1,472,006 owed to the ATO. Given Mr Williamson’s involvement in managing companies with debts so significant that they were placed in liquidation and his current status as a bankrupt, I have some difficulty accepting Mr Williamson’s submission that he would have enjoyed financial stability in retirement.

Compensation – how is the amount to be calculated?

As noted by the Full Bench, ‘[t]he well-established approach to the assessment of compensation under s.392 of the FW Act… is to apply the “Sprigg formula” derived from the Australian Industrial Relations Commission Full Bench decision in Sprigg v Paul’s Licensed Festival Supermarket (Sprigg).[71] This approach was articulated in the context of the FW Act in Bowden v Ottrey Homes Cobram and District Retirement Villages[72]’.[73]

The approach in Sprigg is as follows:

Step 1: Estimate the remuneration the employee would have received, or was likely to have received, if the employer had not terminated the employment (remuneration lost).

Step 2: Deduct monies earned since termination. Workers’ compensation payments are deducted but not social security payments. The failure of an applicant to mitigate his or her loss may lead to a reduction in the amount of compensation ordered.

Step 3: Discount the remaining amount for contingencies.

Step 4: Calculate the impact of taxation to ensure that the employee receives the actual amount he or she would have received if they had continued in their employment.

Step 1

I have estimated the remuneration Mr Williamson would have received, or would have been likely to have received, if ATT had not terminated the employment to be $12,800 on the basis of my finding that Mr Williamson would likely have remained in employment for a further period of 8 weeks after the dismissal. This estimate of how long Mr Williamson would have remained in employment is the ‘anticipated period of employment’.[74]

Step 2

I have found that the amount of remuneration earned by Mr Williamson from the date of dismissal until the end of the anticipated period of employment was $0.

Only monies earned since termination for the anticipated period of employment are to be deducted.[75] I therefore make no deductions from $12,800.

Step 3

I now need to consider the impact of contingencies on the amounts likely to be earned by Mr Williamson for the remainder of the anticipated period of employment.[76] There is no evidence before me which establishes the occurrence of contingencies which might have brought about some change in earning capacity or earnings by Mr Williamson during the anticipated period of employment. I therefore do not consider it appropriate to deduct any amount for contingencies.

Step 4

I have considered the impact of taxation but have elected to settle a gross amount of $12,800 plus superannuation and leave taxation for determination.

Having applied the formula in Sprigg, I am nevertheless required to ensure that ‘the level of compensation is an amount that is considered appropriate having regard to all the circumstances of the case,’[77]. These circumstances include my findings that the combination of the business operating from Mr Tunchon’s home address together with Mr Williamson no longer having a financial interest in the business of ATT would have led ATT to terminate Mr Williamson’s employment on the ground of redundancy soon after the dismissal.

I am satisfied that the amount of compensation that I have determined above takes into account all the circumstances of the case as required by s.392(2) of the FW Act and that the amount does not include a component compensating for shock, distress or humiliation.

Compensation – is the amount to be reduced on account of misconduct?

I am satisfied that the dismissal was not due to misconduct. Therefore, the amount of the order for compensation is not to be reduced on account of misconduct.

Compensation – how does the compensation cap apply?

Section 392(5) of the FW Act provides that the amount of compensation ordered by the Commission must not exceed the lesser of:

(a)the amount worked out under section 392(6); and

(b)half the amount of the high income threshold immediately before the dismissal.

The amount worked out under section 392(6) is the total of the following amounts:

(a)the total amount of the remuneration:

(i) received by Mr Williamson; or
(ii) to which Mr Williamson was entitled;
(whichever is higher) for any period of employment with the employer during the 26 weeks immediately before the dismissal; and
(b)if Mr Williamson was on leave without pay or without full pay while so employed during any part of that period – the amount of remuneration taken to have been received by Mr Williamson for the period of leave in accordance with the regulations.

Mr Williamson was not on leave without pay or without full pay during the 26 weeks immediately before the dismissal.

I find that the total amount of the remuneration received by Mr Williamson and to which he was entitled during the 26 weeks immediately before the dismissal was $41,600.

The high income threshold immediately before the dismissal was $162,000. Half of that amount is $81,000.

The amount of compensation ordered by the Commission must therefore not exceed $41,600. I have determined the amount of compensation as $12,800 gross plus superannuation which is below this amount.

Conclusion

I have found that Mr Williamson’s dismissal was harsh, unjust and unreasonable.

I have determined that an order for compensation is appropriate, and that ATT should pay compensation to Mr Williamson in the sum of $12,800 gross plus superannuation less taxation as required by law in lieu of reinstatement within 14 days of the date of this decision.

An order giving effect to this decision is published with this decision.

DEPUTY PRESIDENT

Appearances:

Ms Wong of Counsel appeared on behalf of the Applicant
Mr Latham of Counsel appeared on behalf of the Respondent

Hearing details:

2024
In person
14 March and 2 April 2024

[1] [2023] FWC 3480

[2] Ibid, [12]-[55].

[3] Statement of Wayne Williamson dated 19 July 2023, [7]-[10], Court Book (CB) 59.

[4] Ibid, [16]-[18], CB 60.

[5] Ibid, [19]- [21], CB 60.

[6] Ibid, [23], CB 61.

[7] Exhibit 10.

[8] Exhibit 12.

[9] Statement of Wayne Williamson dated 19 July 2023, [25] CB 61.

[10] Statutory Declaration on of Richard Tunchon dated 1 August 2023, [30]-[32], CB 304; Statutory Declaration of Rene Ronnie Mowad dated 1 August 2023 [21]-[22], CB 614-5.

[11] Statement of Wayne Williamson dated 19 July 2023, [31]. CB 61.

[12] Statutory Declaration on of Richard Tunchon dated 1 August 2023, [5], CB 301.

[13] Witness Statement of Timothy Drury dated 8 February 2024, [8], CB 283.

[14] Statement of Wayne Williamson dated 19 July 2023, [45]. CB 63-64.

[15] Ibid, [46], CB 64.

[16] Statutory Declaration of Rene Ronnie Mowad dated 1 August 2023 [7], CB 613.

[17]Statutory Declaration of Richard Tunchon dated dated 1 August 2023, [16], CB 302.

[18] Exhibit 20.

[19]Witness Statement of Richard Tunchon dated 29 February 2024 [34] CB 702.

[20] Ibid, [36] CB 702.

[21] Ibid, [38] CB 702.

[22] Ibid, [6], [39] CB 699, 702.

[23] Statement of Wayne Williamson dated 19 July 2023, [52]. CB 65.

[24] Ibid [52].

[25] Ibid, [54]-[55], CB 65.

[26] Witness Statement of Richard Tunchon dated 29 February 2024, [12] – [14], CB 700.

[27] Statement of Wayne Williamson dated 7 March 2024, [8], CB 786.

[28] Ibid, [9], CB 786.

[29] Ibid, [10], CB 786.

[30] Witness Statement of Richard Tunchon dated 29 February 2024, [15], CB 700.

[31] Statement of Wayne Williamson dated 7 March 2024, [14]-[21], CB 786.

[32] Witness Statement of Richard Tunchon dated 29 February 2024, [19], CB 700.

[33] Ibid, [18], CB 700.

[34] Ibid, [20]-[21], CB 700.

[35] Ibid, [22], CB 700.

[36] Ibid, [25], CB 701.

[37] Ibid, [26], CB 701.

[38] Ibid, [29], CB 701.

[39] Ibid, [31]-[33], CB 701.

[40] Ibid, [30], CB 701.

[41] Statement of Wayne Williamson dated 7 March 2024, [23], CB 788.

[42] [2012] FWAFB 1359.

[43] Ibid, [29]-[30].

[44] [2016] FWCFB 7202.

[45] Ibid, [14].

[46] Sayer v Melsteel Pty Ltd[2011] FWAFB 7498, [14]; Smith v Moore Paragon Australia Ltd PR915674 (AIRCFB, Ross VP, Lacy SDP, Simmonds C, 21 March 2002), [69].

[47] Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371, 373.

[48] Ibid.

[49] Walton v Mermaid Dry Cleaners Pty Ltd(1996) 142 ALR 681, 685.

[50] Toll Holdings Ltd v Johnpulle [2016] FWCFB 108, [15].

[51] Exhibit 19.

[52] Exhibit 16.

[53] Exhibit 17.

[54] Transcript PN1122-PN1130.

[55] Transcript PN1278-PN1283.

[56] Edwards v Justice Giudice [1999] FCA 1836, [7].

[57] King v Freshmore (Vic) Pty Ltd Print S4213 (AIRCFB, Ross VP, Williams SDP, Hingley C, 17 March 2000), [23]-[24].

[58] [2020] FWC 2989.

[59] [2020] FWCFB 5885.

[60] Bartlett v Ingleburn Bus Services Pty Ltd [2020] FWCFB 6429, [19]; Reseigh v Stegbar Pty Ltd [2020] FWCFB 533, [55].

[61] Chubb Security Australia Pty Ltd v Thomas Print S2679 (AIRCFB, McIntyre VP, Marsh SDP, Larkin C, 2 February 2000), [41]; Read v Cordon Square Child Care Centre [2013] FWCFB 762, [46]-[49].

[62] Chubb Security Australia Pty Ltd v Thomas Print S2679 (AIRCFB, McIntyre VP, Marsh SDP, Larkin C, 2 February 2000), [41]; Read v Cordon Square Child Care Centre [2013] FWCFB 762, [46]-[49].

[63] ALH Group Pty Ltd t/a The Royal Exchange Hotel v Mulhall (2002) 117 IR 357, [51]. See also Smith v Moore Paragon Australia Ltd PR915674 (AIRCFB, Ross VP, Lacy SDP, Simmonds C, 21 March 2002), [92]; Edwards v Justice Giudice [1999] FCA 1836, [6]–[7].

[64] Nguyen v Vietnamese Community in Australia t/a Vietnamese Community Ethnic School South Australia Chapter[2014] FWCFB 7198, [9].

[65] Vennix v Mayfield Childcare Ltd [2020] FWCFB 550, [20]; Jeffrey v IBM Australia Ltd [2015] FWCFB 4171, [5]-[7].

[66] He v Lewin [2004] FCAFC 161, [58].

[67] Transcript PN604-PN607.

[68] Biviano v Suji Kim Collection PR915963 (AIRCFB, Ross VP, O’Callaghan SDP, Foggo C, 28 March 2002), [34] citing Lockwood Security Products Pty Ltd v Sulocki and Ors PR908053 (AIRCFB, Giudice J, Lacy SDP, Blair C, 23 August 2001), [45].

[69] Biviano v Suji Kim Collection PR915963 (AIRCFB, Ross VP, O’Callaghan SDP, Foggo C, 28 March 2002), [34] citing Payzu Ltd v Saunders [1919] 2 KB 581.

[70] See Shorten v Australian Meat Holdings (1996) 70 IR 360, 380 – 381 cited with approval in Sprigg v Paul’s Licensed Festival Supermarket (1998) 88 IR 21, [26], [35].

[71] (1998) 88 IR 21.

[72] [2013] FWCFB 431.

[73] Double N Equipment Hire Pty Ltd t/a A1 Distributions v Humphries[2016] FWCFB 7206, [16].

[74] Ellawala v Australian Postal Corporation Print S5109 (AIRCFB, Ross VP, Williams SDP, Gay C, 17 April 2000), [34].

[75] Ibid.

[76] Enhance Systems Pty Ltd v Cox PR910779 (AIRCFB, Williams SDP, Acton SDP, Gay C, 31 October 2001), [39].

[77] Double N Equipment Hire Pty Ltd t/a A1 Distributions v Humphries[2016] FWCFB 7206, [17].

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