Ms Alicia Tollner v Sterling Ms Pty Ltd T/A Sterling Management Services
[2011] FWA 1880
•27 APRIL 2011
[2011] FWA 1880 |
|
DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Ms Alicia Tollner
v
Sterling MS Pty Ltd T/A Sterling Management Services
(U2011/4738)
COMMISSIONER CLOGHAN | PERTH, 27 APRIL 2011 |
Unfair dismissal remedy.
[1] On 4 February 2011, Ms Alicia Tollner (“the Applicant”) made application to Fair Work Australia (FWA) alleging that she was unfairly dismissed from her employment with Sterling MS Pty Ltd T/A Sterling Management Services (“the Employer or SMS”).
[2] The application is made pursuant to s.394 of the Fair Work Act 2009 (“the FW Act”).
[3] The Employer objected to conciliation and sought its jurisdictional objection to be dealt with prior to the Tribunal hearing and determining the merits of the application.
[4] The jurisdictional objection can be divided into two parts:
• Ms Tollner was not an employee of SMS as she was the Managing Director and Licensed Branch Manager;
and, in the alternative, if the Tribunal determines that she was an employee of SMS,
• she was not dismissed or forced to resign by the Employer but resigned her employment of her own volition.
[5] A statement and procedural directions were issued to the parties on 4 March 2011 and the matter heard in Darwin on 16 March 2011.
[6] At the hearing, Ms Tollner represented herself and gave evidence in support of her application. Mr Phillip Doyle, Director, Doyles Real Estate Pty Ltd gave evidence on behalf of the Employer along with Ms Christine Grant, who is subcontracted to SMS from Sterling Property Services Pty Ltd to provide administrative services including managing payroll records.
[7] As part of the procedural directions, both parties provided documentation to the Tribunal which was incorporated into proceedings. Having received this material, heard oral evidence and submissions, I reserved my Decision. In reaching this Decision, I have considered and given appropriate weight to all the material provided to the Tribunal.
RELEVANT BACKGROUND FACTS
[8] Ms Tollner commenced employment on 12 March 2009 with Doyles Real Estate Pty Ltd, trading as Doyles Strata Management.
[9] On 1 September 2009, Ms Tollner became a shareholder of SMS. Ms Tollner’s share in SMS was one third. The two other shareholders are:
• Doyles Real Estate Pty Ltd - one third shareholding; and
• Sterling Property Services Pty Ltd - one third shareholding.
[10] The Board of Directors of SMS consists of three directors: Ms Tollner, Mr Doyle and Mr Fluder on behalf of Sterling Property Services Pty Ltd.
[11] Mr Doyle is the Chairman and Chief Executive Officer of SMS.
[12] SMS has been established pursuant to the Corporations Act 2001 (Cth).
[13] The objectives of SMS include that each shareholder must “cooperate and use the shareholder’s best endeavours to ensure that the company carries on the business”.
[14] The Shareholders Agreement provides for a number of matters including Board meetings, decision making, funding, transfer of shares, determination of sale price, repayment of a loan borrowed by Ms Tollner from Doyles Real Estate Pty Ltd 1 and what the Applicant described as restricted trade or a non-competitive clause.
[15] Ms Tollner’s duties, responsibilities, remuneration and conditions continued, with one exception (the provision of a mobile telephone), with SMS, as when she was employed by Doyles Real Estate Pty Ltd.
[16] Ms Tollner conceded that she entered into the shareholder agreement to “run it [SMS] together and build it into a large business that we would both profit from and receive dividends” 2.
[17] Doyles Real Estate Pty Ltd provided Ms Tollner with a loan as her contribution to “get into the business” 3.
[18] The parties have sought a valuation of SMS to determine the sale value of Ms Tollner’s shareholding in SMS as part of her leaving the business 4.
RELEVANT LEGISLATIVE FRAMEWORK
[19] Section 382 of the FW Act provides:
• When a person is protected from unfair dismissal
A person is protected from unfair dismissal at a time if, at that time:
(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 … (my emphasis).
[20] Consequently for a person to be protected from unfair dismissal, he or she must be an employee.
[21] Section 380 of the FW Act states that the meaning of an employee is a “national system employee”. A “national system employee” is defined in s.13 of the Act as follows:
A national system employee is an individual so far as he or she is employed, or usually employed, as described in the definition of national system employer in section 14, by a national system employer, except on a vocational placement.
[22] If it is established that Ms Tollner is an employee, it is necessary to determine whether she is protected from unfair dismissal.
[23] Section 382 of the FW Act provides:
• When a person is protected from unfair dismissal
A person is protected from unfair dismissal at a time if, at that time:
(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.
[24] If Ms Tollner meets the provisions of s.382(b)(iii), as no other criteria applies, it is necessary to determine whether she has met the definition of unfair dismissal. The definition of what is unfair dismissal, and the meaning of dismissal, is found in s.385 and s.386 of the FW Act. They are as follows:
• Section 385 - What is an unfair dismissal
A person has been unfairly dismissed if FWA 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.
• Section 386 - Meaning of dismissed
(1) A person has been dismissed if:
(a) the person’s employment with his or her employer has been terminated on the employer’s initiative; or
(b) the person has resigned from his or her employment, but was forced to do so because of conduct, or a course of conduct, engaged in by his or her employer.
[25] Consequently, Ms Tollner is only protected by the unfair dismissal provisions of the Act if it can be established that she was an “employee” of a national system employer. There is no dispute that SMS trading as Sterling Management Services is a national system employer.
DISCUSSION
Objection 1: Ms Tollner was not an employee of SMS as she was the Managing Director and Licensed Branch Manager.
Was Ms Tollner an employee?
[26] The Employer has submitted to the Tribunal that Ms Tollner was not an employee of the Company but is a shareholder, was the Managing Director and was the Licensed Branch Manager.
[27] The Employer’s submission essentially raises the question of whether a person can be a shareholder, Director of a Company and an employee of that Company.
[28] Firstly, and I consider it uncontroversial, SMS is a separate and distinct legal entity to that of Ms Tollner. Secondly, Ms Tollner, as a shareholder of the Company, is a different legal entity to that of Ms Tollner, as an employee, if indeed she was an employee.
[29] Secondly, and I again consider it uncontroversial, Sterling Property Services Pty Ltd is a different legal entity to SMS, notwithstanding that Mr Doyle is a Director of both companies.
[30] Thirdly, as Mr Doyle is a 50% stakeholder in Sterling Property Services Pty Ltd which, in turn, has a third share of SMS, his overall control of SMS, is described succinctly by himself, “which gives me, say 50 per cent in a board or shareholder situation [of SMS]” 5.
[31] Returning to the question of whether or not Ms Tollner is an employee, the legislative framework, as to be expected, does not provide direct assistance. The legislation does not provide assistance because whether a person is an employee will always depend upon the particular facts of the circumstances.
What are the facts relating to Ms Tollner’s working circumstances?
[32] There is no dispute between the parties that Ms Tollner was an employee of Doyles Real Estate Pty Ltd from 12 March 2009 up until the establishment of SMS on 1 September 2009.
[33] While employed with Doyles Real Estate Pty Ltd, Ms Tollner had what she described as a “managerial role” 6. Essentially, Ms Tollner continued in that role from 1 September 2009 until 1 July 2010, when the management structure changed7.
[34] Prior to 1 July 2010, Mr Doyle spent one week a month in the business in Darwin; for the rest of the time, Mr Doyle was overseas in Bali and contactable my email 8.
[35] I am satisfied, from the evidence, that Ms Tollner’s role as an employee with the Company did not substantially change from when she was an employee of Doyles Real Estate Pty Ltd up until 1 July 2010. I do note that as the Licensed Branch Manager, her responsibilities would have changed, but that does not, in context, affect my finding.
[36] Secondly, with the exception of receiving a paid mobile telephone, it was uncontested that Ms Tollner’s conditions of employment remained the same as she transitioned from Doyles Real Estate Pty Ltd to SMS 9.
[37] The continuation of Ms Tollner’s conditions of employment was endorsed at a Board meeting of SMS 10.
[38] Neither party provided documentation of a specific contract of employment and the only evidence the Tribunal had was from Ms Grant who provides administrative services to SMS. Ms Grant was “pretty sure” that Mr Doyle had a “standard” document “like an employment contract thing” 11. In the absence of any documentary evidence, Ms Grant’s evidence suggests a formal contract of employment.
[39] The Tribunal was provided with documentary evidence of Ms Tollner’s pay slip from SMS which sets out her ordinary hours of work, PAYG withholding tax, holiday leave accrual and superannuation details. From this material, I consider it fair and reasonable to conclude that Ms Tollner was paid similar to other employees of SMS.
[40] From the evidence, and it is minimal, Mr Doyle agreed that both he and Ms Tollner were paid a salary 12. There was no evidence of any disbursement of profits. However, there is a dispute on the sale price of Ms Tollner’s shareholding on leaving the business.
[41] With respect to control in the business, Mr Doyle is both the Chairman and Chief Executive Officer. Ms Tollner described him as the “controlling mind of the business” 13. Mr Doyle described the circumstances when Ms Tollner entered the business as follows, “she would be the branch manager and responsible for the day-to-day management of the business”14.
[42] In conclusion, while the Applicant was responsible for the day-to-day management of the business, I am satisfied, on the evidence, that Ms Tollner was under the control of Mr Doyle as Chairman and CEO. In many respects, the employer/employee relationship which existed at Doyles Real Estate Pty Ltd never changed for Ms Tollner with the exception of her buying into the business. Mr Doyle was the majority and controlling shareholder and behaved accordingly. Ms Tollner, while a shareholder, when the facts are applied, continued to behave as an employee and on the facts was an employee of SMS. Accordingly, I reject Mr Doyle’s first jurisdictional objection that Ms Tollner was not an employee.
Objection 2: She [Ms Tollner] was not dismissed or forced to resign by the Employer but resigned her employment of her own volition.
[43] Ms Tollner provided in her Statement of Facts 15 that Mr Doyle was the “controlling mind”, and had the overriding say on what happened in the business. Mr Doyle made changes without consulting Ms Tollner and she was uncomfortable with such changes.
[44] Ms Tollner also outlines in her Statement of Facts 16 that she was “forced to re-assess my working situation due to many attempts to resolve issues in the workplace failed (the full background which is set out in the original application)”. Specifically, these issues are:
• “Mr Doyle constructively made life stressful and unbearable for Ms Tollner;
• Mr Doyle yelled and swore at Ms Tollner and threw things around the office;
• Mr Doyle knew of Ms Tollner’s problems with his management style;
• Mr Doyle ignored her;
• Mr Doyle destroyed a “very happy (office) team”;
• Ms Tollner was being forced out of her managerial role; and
• problems with Sterling Property Services Pty Ltd.” 17
[45] As a consequence of what Ms Tollner describes as an “intolerable situation”, she sets out the following facts:
• Mr Doyle agreed that they would sever their ties and Ms Tollner would be allowed to “walk away” as long as she worked in the business until 28 January 2011 while he was overseas;
• Ms Tollner resigned on 14 January 2011 giving two weeks’ notice;
• On 24 January 2011 when Mr Doyle returned from overseas, he advised Ms Tollner that she was no longer allowed back in the office.
[46] As Ms Tollner resigned on 14 January 2011, the question to be determined is whether she was forced to resign due to the conduct of her employer, or specifically, Mr Doyle?
[47] Before addressing the above question, it is notable that Ms Tollner, at no time, asserted a purpose to Mr Doyle’s conduct in either her application, documentary evidence or oral evidence.
[48] To consider whether Ms Tollner was forced to resign as a result of the conduct of Mr Doyle, it is necessary to assess all the evidence provided to the Tribunal. The assessment needs to be made having regard to all the circumstances that existed at the time and determine, objectively, whether it is reasonable for Ms Tollner to be considered affected in the way she claims and forced to resign.
[49] In her Statement of Facts, Ms Tollner refers to her original application where she sets out in an attachment a number of accusations against the Employer. The Employer provided a response to these accusations. Neither party in oral evidence pressed, rejected or tested the assertions or responses. For the purposes of this Decision, I note that Ms Tollner made only one claim specifically relating to herself in the original application, and that was, “on 2 occasions since July I had to leave the office from the intimidation [by Mr Doyle] and both times struggled to return to continue working in the business”.
[50] With respect to the assertions made in paragraph [44], Ms Tollner made similar general statements in her oral evidence but gave no specific details of the behaviour of Mr Doyle which allegedly led to her employment being unbearable because of his management style.
[51] With respect to contemporaneous evidence, Ms Tollner provided in evidence a copy of extracts of the Employer’s response to her original application, in which an email is set out from the Applicant to Mr Doyle:
“What is your response to the Applicant’s contentions?
1. I dispute her suggestion that I have every bullied her or behaved in an aggressive manner towards her.
2. From the commencement of Alicia’s employment with Sterling MS Pty Ltd (SMS) she held the position of the Managing Director and the Branch Real Estate License (sic) for SMS.
3. She employed the staff and managed the day to day operations of the business and was responsible for the administration of the trust accounts up until the 24th January 2011.
4. I was in the office on a part time basis until July 2010 when I returned to work full time working under her license with the responsibility of bringing in new business. In September 2010 she went on leave and I became aware of various anomalies in the administration of the business and identified to her various areas of poor management, the lack of staff supervision by her and the poor moral (sic) in the office environment upon her return.
5. She acknowledged our disagreement as to what is good management which is evidence by her email to me dated 14th October 2010 in which she states:
‘Hi Phil
I am not sure if you realise but I have put a lot of time and effort into this business and I feel the business is in very good shape.
Our reputation out there is exceptional of which has taken a lot of hard work and control in the office.
It seems you now want to take the business in another direction. I feel that these changes are going to change the output from this office to an unsatisfactory standard that I do not happy (sic) to be a part of.
I think we need to work out a sale price for the business and I need to move on.
King Regards Alicia Tollner Manager [email protected]’
After that email we agreed verbally she would finish work when I returned from annual leave on the 24th January 2011.” 18
[52] While Ms Tollner claims, and it was not disputed, that she did not receive a response to the email, the parties agreed verbally to go their separate ways at the end of November. From the end of November 2010, the parties entered into commercial discussions regarding the terms of Ms Tollner leaving the business 19.
[53] On 13 January 2011, Ms Tollner sent the following email, which I find unsolicited:
“Hi Chris
FYI my final day is 28th January. My final pay will be 27th.
Kind regards
Alicia Tollner
Manager” 20
[54] Later on 13 January 2011, Ms Tollner received the following email from Ms Grant:
“SMS’s next payday is for fortnight ending the 25th January, I will therefore pay you an extra 2 days for the 27th & 28th of January and your Annual Leave Entitlement. Can I please have a copy of your letter of resignation for my file. Thank you.” 21
[55] Ms Tollner responded on the same day:
“I hereby resign my employ with SMS effective 28th January.”
[56] An objective evaluation of the conduct of the parties from 1 July 2010, when Mr Doyle returned to the business, is that Ms Tollner was not comfortable with his management style and the proposed taking of the business in another direction. From the facts I conclude that Ms Tollner, from 12 March 2009 to 1 July 2010, was happy running her “own show”. However, from 1 July 2010, the “Boss” came back and things changed, in Ms Tollner’s view for the worse, and she wanted out. Being a shareholder and having a loan within the business, meant leaving was and is, a lot more difficult than a normal employer/employee relationship.
[57] Apart from the general assertions of complaint, I received no evidence of specific incidents of Mr Doyle’s behaviour other than Ms Tollner generally considering it intolerable or unbearable. Statements from other employees, who elected not to be witnesses, carry little or no weight. By far the majority of evidence given by Ms Tollner was her putative feelings or perceptions. I have to consider this evidence in the context of all the relevant circumstances. These circumstances are essentially Mr Doyle returning full-time to the business and Ms Tollner feeling that she was being “forced out” or unsupported in her managerial role. Further, the only reliable piece of contemporaneous evidence is her email of 14 October 2010 in which she needed to “move on” due to Mr Doyle, as majority stakeholder, wishing to take the business in another direction.
[58] Finally, I should observe that Ms Tollner handed in her resignation on 13 January 2011. At this date, Mr Doyle was six (6) weeks into overseas leave, the resignation was neutral in its terms and did not express similar sentiments to others which I have seen containing statements to the effect that “I feel I have been forced to resign”. Such statements, while not conclusive, give an insight into the context of how a resignation has been provided to the employer.
[59] It is well established that the Tribunal does not have to address every point raised in proceedings. These proceedings were enveloped in disputes about the valuation of the business, billing practices, disgruntled staff, low morale, the employment of Mr Doyle’s wife in the business, Mr Doyle’s increase in salary, business profitability and whether Ms Tollner benefitted from her shareholding in the business. Notwithstanding all these issues, the application stripped to its bare essentials is whether, objectively, the Tribunal can determine from the evidence, that the Applicant was forced to resign. On the facts presented, I find that Ms Tollner resigned of her own volition on 13 January 2011 and was not forced to resign.
CONCLUSION TO APPLICATION
[60] For the reasons set out above, I conclude that Ms Tollner was not forced to resign from her employment. As a consequence of not being dismissed from her employment, Ms Tollner is not protected by the unfair dismissal provisions of the FW Act. Accordingly, the application must be and is dismissed as failing to meet the jurisdictional requirements of s.385(a) of the FW Act.
COMMISSIONER
Appearances:
Ms Tollner, the Applicant.
Mr Doyle, the Employer.
Hearing details:
2011:
Darwin:
16 March.
1 PN 206
2 PN 210
3 PN 219
4 PN 220
5 PN 68
6 Exhibit A1
7 PN 206
8 PN 69
9 PN 206
10 PN 72
11 PN 163
12 PN 69
13 Exhibit A1
14 PN 66
15 Exhibit A1
16 Exhibit A1
17 Exhibit A1
18 Exhibit A1-4
19 Exhibit A1-10
20 Exhibit R5
21 Exhibit R6
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