Ms Tina Bajwa v Investment Services Australia Pty Ltd

[2012] FWA 5643

[2012] FWA 5643

FAIR WORK AUSTRALIA

DECISION

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

Ms Tina Bajwa
v
Investment Services Australia Pty Ltd
(U2012/256)

COMMISSIONER CAMBRIDGE SYDNEY, 5 JULY 2012

Unfair dismissal - dispute about alteration to remuneration - assertion that applicant was an independent contractor rather than an employee - employment relationship found - no valid reason for dismissal - no opportunity for applicant to offer explanation - harsh, unjust and unreasonable dismissal – compensation Ordered.

[1] This matter involves an application for unfair dismissal remedy made pursuant to section 394 of the Fair Work Act 2009, (the Act). The application was lodged at Brisbane on 12 February 2012. The application was made by Tina Marie Bajwa (the applicant) and the respondent has been identified as Investment Services Australia Pty Ltd ABN: 68148174618 (ISA).

[2] The application indicated that the date of the applicant’s dismissal was 31 January 2012. Consequently the application was made within the 14 day time limit prescribed by subsection 394 (2) of the Act.

[3] The matter was not resolved at conciliation and has proceeded to arbitration before Fair Work Australia (FWA) in a Hearing conducted in Brisbane on 18 June 2012.

[4] At the Hearing the applicant represented herself and gave evidence as the only witness called in support of the claim. The employer was also unrepresented and Mr Chris Duffy a Director of ISA, appeared at the Hearing and made submissions in opposition to the application. Mr Duffy confirmed that ISA did not wish to provide any evidence at the Hearing but instead sought to rely on the Employer’s Response to Application for Unfair Dismissal Remedy (Form F3) which had been filed on 21 May 2012.

Factual Background

[5] The applicant had worked for ISA for a little over 1 year. According to the Form F3 ISA has about 40 employees.

[6] The applicant was initially engaged in a position described as Property Consultant. The applicant’s initial engagement was established by reference to a document dated 20/1/2011, signed by the applicant and by a Director of ISA, and entitled “Employment Agreement” 1 (the employment agreement). The employment agreement mentioned, inter alia, that the remuneration of the applicant was determined on a commission only basis.

[7] In March of 2011, ISA decided to alter some of the details of the commission only basis upon which the applicant was paid remuneration. These alterations were reflected in a document provided to the applicant, erroneously dated 3rd March 2010, unsigned, and titled “Re: Offer of Employment” 2 (the offer of employment document). The offer of employment document describes the applicant’s position as “Contract Property Consultant” and it also states: “Nature of Employment: Contract employment incorporating a standard 3 month probation period,...”. The offer of employment document also stipulates that; “On settlement you will be required to provide Investment Services Australia Pty Ltd a tax invoice stating property details, clients name, settlement date, amount payable, banking details and ABN.”

[8] The remuneration arrangements for the applicant changed in March 2011 broadly in accordance with the offer of employment document. From this time forward the applicant commenced to receive an increased commission payment upon the provision of tax invoices, an ABN, and the other details specified in the offer of employment document. The additional commission payments apparently comprehended taxation and legislative minimum superannuation.

[9] The applicant also worked for ISA in a second, concurrent role which involved work which was largely office based and performed on different days of the week. The applicant was paid a wage for this office based work and she decided to resign from that position in about November 2011.

[10] On 23 January 2012, the applicant received e-mail advice from ISA that the commission structure for the “sales team” was to change “as of the 23/01/12”. The applicant assessed that the alteration to the commission structure would result in significant financial loss to her and on the following day, 24 January 2012, she sent an e-mail response to ISA complaining strongly about the matter. The applicant was scheduled to travel interstate on ISA business and she indicated to ISA management that she would not be prepared to undertake such work on the reduced commission structure.

[11] ISA management requested that the applicant attend a meeting with the CEO and Director, Mr Chris Duffy on 31 January 2012. The meeting involved the applicant, Mr Duffy and one other ISA management representative. Mr Duffy commenced the meeting with an angry outburst and he directed a tirade of derision at the applicant. Mr Duffy then tossed an envelope across the table in the direction of the applicant. The applicant was directed to open the envelope and read the contents of a letter addressed to the applicant which reads as follows:

“Dear Tina,

Re: Contractor - Property Consultant

Please be advised effective as at 31st January 2012 we no longer require your services as a Property Consultant. I also bring to your attention your obligations under the signed Confidentiality Agreement.

All the best for your future endeavours

Yours sincerely

Chris Duffy

CEO”

[12] The applicant inquired about her outstanding commission payments which amounted to some $52,800. Mr Duffy told the applicant that her outstanding commissions would be paid. At the time of Hearing the commission payments had not been made and were apparently being pursued by the applicant in other proceedings.

The Case for the Applicant

[13] The applicant submitted that her dismissal was unfair because there was no valid reason for her summary termination on 31 January 2012. The applicant said that she was a top sales performer for ISA.

[14] The applicant also submitted that she had not been notified either verbally or in writing of any misconduct or a breach of any description. The applicant said that at no time was there any serious misconduct such as theft, fraud, violence, or serious breach of occupational health and safety procedures.

[15] The applicant further submitted that she was not given an opportunity to respond to any reason given on the day in question nor was she given an opportunity to have a witness present although Chris Duffy ensured that he had a witness being Belinda Gibbons.

[16] The applicant submitted that she had been unable to find work for 9 weeks after her dismissal. The applicant said that she was pursuing the outstanding commissions elsewhere and she sought compensation for her unfair dismissal by way of loss of remuneration for the 9 weeks that followed the dismissal before she gained other employment. The applicant said that this amounted to $7,200.

The Case for ISA

[17] Mr Duffy who is a Director of ISA appeared at the Hearing. Mr Duffy submitted that the applicant was not an employee but instead an independent contractor. Mr Duffy said that as commission payments were made to the applicant upon production of a tax invoice with an ABN and the applicant was responsible for her own tax and superannuation, she was a contractor as opposed to an employee.

[18] Mr Duffy sought to rely upon the contents of the Form F3 in resistance to the application. Relevantly in the Form F3 the answer to the question “Date employed” is “as contractor” and in answer to the question “What were the reasons for dismissal?” it was stated:

“A new commission structure was introduced to all Sales Contractors. Mrs Bajwa insisted and I Quote “I am not going away for less money than what I am currently on. Email to support this Quote.”

[19] The Form F3 also contained the following answer to the question: “What is your response to the Applicant’s contentions?”

“ISA Pty Ltd response was simple and clear to the fact that Mrs Bajwa clearly states she no longer wants part [sic] of our company based on her email dated 24/01/2012 10:22 am.”

[20] I have interpreted these particular contents of the Form F3 to have mistakenly excluded the words “to be” which probably should have appeared before the word “part” in order to make the sentence a little more grammatically correct.

Consideration

[21] Section 385 of the Act stipulates that FWA must be satisfied that 4 cumulative elements are met in order to establish an unfair dismissal. These elements are:

(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.

[22] In this case there was no suggestion that the respondent was a small business or that there was any redundancy involved. Consequently subsections 385 (c) and (d) of the Act do not require any fulfilment.

[23] The respondent sought to resist the application primarily upon the assertion that the applicant had not been dismissed from employment because she was not an employee but rather an independent contractor. In support of this assertion the respondent chose to rely upon the contents of the Form F3. Curiously however particular contents of the Form F3 provide strong indication to defeat the respondent’s assertion.

[24] If the applicant was truly an independent contractor and not an employee Mr Duffy would be unlikely to refer to her with use of the terms “no longer wants part [sic] of our company...”. An employee would usually be considered as part of a company and a contractor would usually be seen as someone or something separate to the company.

[25] Consequently Mr Duffy’s own statement made in the Form F3 is a strong reflection of the applicant’s employment status. When the other well established indicia which are determinative of the issue of employee or contractor are considered there is overwhelming support for finding that the applicant was an employee and not an independent contractor.

[26] The evidence revealed some regrettable employment practices which involved the clumsy, attempted conversion of employment into independent contracting which centred upon the issuing of the offer of employment document and the associated alterations to remuneration arrangements made in March 2011.

[27] Consequently the applicant was not an independent contractor and the events of 31 January 2012 involved Mr Duffy summarily dismissing the applicant from her employment as a Property Sales Consultant.

[28] Logically the matter must proceed to a determination of that element contained in subsection 385 (b) of the Act, specifically whether the dismissal of the applicant was harsh, unjust or unreasonable. Section 387 of the Act contains criteria that FWA must take into account in any determination of whether a dismissal is harsh, unjust or unreasonable. These criteria are:

(a) whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees); and

(b) whether the person was notified of that reason; and

(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and

(d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and

(e) if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal; and

(f) the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(h) any other matters that FWA considers relevant.

387 (a) - Valid reason for the dismissal related to capacity or conduct

[29] The reason for the applicant’s dismissal was unmistakably her strong reaction in opposition to ISA’s decision to alter the sales commission structure. The decision to alter the commission payments was conveyed by e-mail sent on 23 January 2012, from Belinda Gibbons on behalf of Chris Duffy 3. The alteration to the commission structure applied to the applicant and other sales staff and during the Hearing Mr Duffy confirmed that it represented an unambiguous reduction in commission payments when he stated: “It was a generic notification to all employees that commissions would be reduced.” 4 [Emphasis added]

[30] The applicant strongly objected to the employer’s unilateral decision to reduce her remuneration. In a response e-mail the applicant indicated that, in particular, she was not prepared to undertake interstate business travel for lower rates of remuneration. Mr Duffy was obviously enraged by the applicant’s challenge to his decision and he berated the applicant before summarily terminating her employment at the meeting held on 31 January.

[31] Although the applicant could have worded her response e-mail in more diplomatic terms, it remains that the reason for dismissal was the applicant’s complaint about a unilateral reduction in remuneration and a suggested refusal to undertake all aspects of work at lower rates of remuneration. Consequently the applicant was dismissed because she refused to accept a unilaterally imposed reduction in remuneration.

[32] To dismiss someone because they voice objection to a unilateral reduction in remuneration represents an indefensible, dictatorial, and anachronistic exercise of a perceived authority of master over servant. Consequently there was not a valid reason for the dismissal of the applicant.

[33] Further, the attempts by ISA and Mr Duffy in particular, to avoid scrutiny of the decision to dismiss by ineptly attempting to characterise the applicant as an independent contractor reflect poorly upon the respondent and have served to expose dubious employment practices which should be the subject of further appropriate investigation.

387 (b) - Notification of reason for dismissal

[34] ISA provided no written notification of the reason for the applicant's dismissal. The brevity and disingenuous of the letter of dismissal, reproduced above, is highly regrettable.

387 (c) - Opportunity to respond to any reason related to capacity or conduct

[35] ISA did not provide any opportunity for the applicant to respond to issues regarding her complaint about the reduction in commission payments. Even if Mr Duffy felt that the applicant had committed some misconduct by having the audacity to strongly object to a reduction in remuneration, there was no contemplation of any alleged misconduct before the applicant was given the letter of dismissal which had been prepared before the meeting of 31 January.

387 (d) - Unreasonable refusal to allow a support person to assist

[36] There was no process whereby the applicant could have benefited from the assistance of a support person because the decision to dismiss was taken before the meeting of 31 January and the applicant had not been told that the meeting was of a disciplinary nature.

[37] The applicant mistakenly believed that the meeting would have involved some rational and reasonable discussion about the new commission structures. Consequently the process adopted by Mr Duffy created an unreasonable refusal to allow the applicant to have a support person to assist.

387 (e) - Warning about unsatisfactory performance

[38] There was no evidence of any warning made to the applicant about either her behaviour or performance giving rise to potential for termination of employment.

387 (f) - Size of enterprise likely to impact on procedures

[39] The size of the employer’s enterprise including the engagement of approximately 40 employees, should have allowed for a higher standard of decision making and associated procedures to have been followed. The employees of small or medium size businesses might expect a degree of informality about some employment procedures but they are nevertheless entitled to be treated with dignity and provided natural justice.

387 (g) - Absence of management specialists or expertise likely to impact on procedures

[40] The employer did not have dedicated employee relations management specialists. However the absence of management specialists does not provide any defence for the adoption of severely sub-standard employment practices.

387 (h) - Other relevant matters

[41] The respondent adopted something of a cavalier attitude toward the unfair dismissal claim. File notes record that the respondent did not participate in conciliation scheduled for 5 March 2012 because “... he did not have time to participate in the conciliation today.” Further the respondent decided not to file any material for due consideration at the Hearing but instead relied upon the Form F3.

Conclusion

[42] The applicant was dismissed because she objected to the respondent’s unilateral decision to reduce her remuneration. The respondent has attempted to avoid scrutiny of the decision to dismiss by asserting that the applicant was an independent contractor. The spurious basis of the respondent’s challenge to the unfair dismissal claim has been exposed and exampled by the respondent’s own frequent description of the applicant as an employee.

[43] Upon proper analysis there is compelling basis to find that the applicant was an employee and that ISA has improperly attempted to misrepresent her employment as contracting. Further, the applicant was dismissed because she complained about the unilateral reduction in her rate of remuneration. Such basis for the applicant's dismissal cannot be held to have been a valid reason.

[44] Consequently the dismissal of the applicant was harsh, unjust and unreasonable.

Remedy

[45] The applicant did not seek reinstatement as remedy for her unfair dismissal but instead, a specified amount of monetary compensation. In the circumstances I am satisfied that reinstatement of the applicant would be inappropriate and that payment of compensation would represent an appropriate remedy for the applicant's unfair dismissal.

[46] Section 392 of the Act prescribes certain matters that deal with compensation as a remedy for unfair dismissal. I have approached the question of compensation having regard for the guidelines that were established in the Full Bench Decision in Sprigg v Paul’s Licensed Festival Supermarket 5 and as commented upon in the subsequent Full Bench Decision in Smith and Ors v Moore Paragon Australia Ltd 6.

[47] Firstly, I confirm that an Order of the payment of compensation to the applicant will be made against the respondent in lieu of reinstatement of the applicant.

[48] Secondly, in determining the amount of compensation that I Order I have taken into account all of the circumstances of the matter including the factors set out in paragraphs (a) to (g) of subsection 392 (2) of the Act. There was no evidence that an order of compensation would impact on the viability of the respondent’s enterprise. The applicant had 1 year’s service. The applicant would have been likely to have received minimum weekly remuneration of $800. The applicant made efforts to mitigate the loss suffered because of the dismissal and she secured alternative work after a period of 9 weeks unemployment.

[49] Thirdly, in this instance I am satisfied that misconduct of the applicant did not contribute to the employer's decision to dismiss.

[50] Fourthly, I confirm that the amount ordered does not include a component by way of compensation for shock, distress or humiliation, or other analogous hurt caused to the applicant by the manner of the dismissal.

[51] Consequently for the reasons outlined above I have decided that an amount approximating with nine weeks remuneration should be ordered as compensation to the applicant. That amount is $7,200.00. Accordingly separate Orders [PR525872] providing for remedy in these terms will be issued.

COMMISSIONER

Appearances:

Ms T. Bajwa appeared on her own behalf.

Mr C. Duffy appeared on behalf of Investment Services Australia Pty Ltd.

Hearing details:

2012.
Brisbane:
June, 18.

 1   Exhibit 1 - Annexure D.

 2   Exhibit 1 - Annexure C.

 3   Exhibit 1 - Annexure A.

 4   Transcript of proceedings (18 June 2012) @ PN120.

 5 Sprigg v Paul’s Licensed Festival Supermarket, (Munro J, Duncan DP and Jones C), (1998) 88IR 21.

 6   Smith and Ors v Moore Paragon Australia Ltd, (Lawler VP, Kaufman SDP and Mansfield C), (2004) PR942856.

Printed by authority of the Commonwealth Government Printer

<Price code C, PR525871>