Muhlberg v Trustee for Sajasan Trust Trading as Port Lincoln Travel and Cruise
[2020] FCCA 427
•5 March 2020
FEDERAL CIRCUIT COURT OF AUSTRALIA
| MUHLBERG & ANOR v TRUSTEE FOR SAJASAN TRUST TRADING AS PORT LINCOLN TRAVEL AND CRUISE | [2020] FCCA 427 |
| Catchwords: AWARDS – Breach of award – underpayment and non-payment – where alleged adverse action found not to have been for impermissible reason – underpayment rectified – matter adjourned for penalty submissions. |
| Legislation: Airline Operations – Ground Staff Award 2010, cls.30.5 & 35.2(a) Crimes Act 1914 (Cth), s.4AA Fair Work Act 2009 (Cth), ss.44, 45, 97, 107, 107(3)(a), 107(5), 117, 340, 340(1), 340(1)(a)(ii), 340(1)(c), 341, 341(1)(c)(a), 342, 342(1), 342(1) Item 1(a) & (c), 352, 360, 360(1), 361, 539(2), 545(2)(b), 546 & 546(2) |
| Cases cited: Patrick Stevedores Operations No.2 Pty Ltd v Maritime Union of Australia (No.3) [1998] HCA 30; (1998) 195 CLR 1 Klein v Metropolitan Fire and Emergency Services Board [2012] FCA 1402; (2012) 208 FCR 178 | ||
| First Applicant: | LINDSAY MUHLBERG | |
| Second Applicant: | LISA-MARIE MUHLBERG |
| Respondent: | THE TRUSTEE FOR SAJASAN TRUST TRADING AS PORT LINCOLN TRAVEL AND CRUISE |
| File Number: | ADG 119 of 2017 |
| Judgment of: | Judge Heffernan |
| Hearing date: | 11 September 2018 |
| Date of Last Submission: | 14 September 2018 |
| Date of Last Written Submission: | 19 October 2018 |
| Delivered at: | Adelaide |
| Delivered on: | 5 March 2020 |
REPRESENTATION
| Counsel for the Applicant: | Ms K Stewart |
| Solicitors for the Applicant: | Ezra Legal |
| The Respondent: | Mr Shane Wedding |
THE COURT DECLARES
The respondent has breached s 45 of the Fair Work Act 2009 (Cth) by making various underpayments to the applicants contrary to the Airline Operations – Ground Staff Award 2010 between 7 May 2016 and 18 November 2016
ORDERS
These proceedings are adjourned to a directions hearing on 2 April 2020 at 9.30am at which time the matter will be listed for submissions as to what, if any, penalty should be imposed for the respondent’s breach of s 45 of the Fair Work Act 2009 (Cth), the subject of the above declaration.
The respondent pay to the first applicant the amount of FIVE THOUSAND, NINE HUNDRED AND SEVENTY ONE DOLLARS AND NINE CENTS ($5,971.09) within 35 days of these orders.
The respondent pay to the second applicant the amount of SIX THOUSAND, SIX HUNDRED AND SIXTY THREE DOLLARS AND EIGHTY SIX CENTS ($6,663.86) within 35 days of the date of these orders.
The applicants’ application is otherwise dismissed.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT Adelaide |
ADG 119 of 2017
| Lindsay Muhlberg |
First Applicant
| LISA Muhlberg |
Second Applicant
And
| The Trustee For Sajasan Trust TRADING AS Port Lincoln Travel And Cruise |
Respondent
REASONS FOR JUDGMENT
This is a claim by the applicants, both former employees of the respondent, with respect to two forms of alleged adverse action committed against them by the respondent during the course of their employment. It is alleged that the respondent altered their positions to their prejudice within the meaning of s 342(1), item 1(c) of the Fair Work Act 2009 (Cth) (FW Act). The second form of adverse action alleged is that the respondent dismissed each applicant within the meaning of s 342(1), Item 1(a) of the FW Act.
The applicants allege that both types of adverse action were taken against them because they had exercised a workplace right to make a complaint or inquiry relating to their employment.[1] It is alleged that the applicants made complaints about their remuneration and certain entitlements which they claim they were owed under the Award which governed their employment. That Award was the Airline Operations – Ground Staff Award 2010 (the Award). In the event that that claim is not made out, the applicants allege, with respect to their dismissal in the alternative, that it was because they had exercised a workplace right to initiate or participate in a process or proceedings under a workplace law or workplace instrument.[2] It is alleged that they did this when they filed a Notice in the Fair Work Commission (FWC) as well as a general protections application (not involving dismissal) in January of 2017.
[1] Section 340(1)(a)(ii), FW Act.
[2] Section 340(1)(a)(ii), FW Act.
In the third alternative, the applicants allege that their dismissal was because they exercised their workplace right to take paid personal leave pursuant to s 97 of the FW Act.
As originally pleaded, the applicants raised a claim in the alternative pursuant to s 352 of the FW Act. The applicants acknowledged prior to trial that there was an overlap between that claim and the s 97 claim and accordingly some duplicity. As a result, the s 352 claim was not pressed in these proceedings.
Both applicants claim compensation for a loss of income that they say arose from their hours being reduced following their complaint to the respondent about their level of earnings in contrast to the Award.[3] Mr Lindsay Muhlberg claims an amount of $1,198.03. Ms Lisa Muhlberg claims an amount of $1283.38. Both applicants seek further compensation for the loss of earnings that each of them suffered as a result of them being dismissed. Mr Muhlberg seeks an amount of $22,521.60, and Mrs Muhlberg seeks an amount of $29,001.60.
[3] Section 545(2)(b), FW Act.
In addition to the above and on the basis that s 340 of the FW Act is a civil remedy provision, each applicant seeks that a civil penalty be imposed with respect to each contravention against them by the respondent.
In addition, the applicants allege that they were underpaid during the course of their employment by reference to the Award, which was of itself a contravention of a civil remedy provision of the FW Act.[4] Each seeks the imposition of a civil penalty in relation to that contravention against them.
[4] Section 45, FW Act.
Each applicant seeks pay in lieu of one weeks’ notice on the basis that neither of them committed serious misconduct immediately prior to their dismissal.[5] A failure to provide notice is a breach of the National Employment Standards and itself a contravention of a civil remedy position under the Act. Each seeks the imposition of a civil penalty for the failure to give notice.[6]
[5] Section 117, FW Act.
[6] Section 44, FW Act.
Each applicant seeks pay relating to absence from work on 17 January 2017. It is alleged that each had a right to take paid personal leave on the basis that both of them were unwell and accordingly not fit for work on that day. They assert that they had both complied with the relevant notice and evidence requirements under the Act and the Award.[7] Further, it is alleged that in failing to pay each of them for paid personal leave on that day, the respondent further breached the National Employment Standards. They each seek the imposition of a civil penalty with respect to that breach.
[7] Sections 97 & 107, FW Act; cl.35.2(a) of the Award.
In its response, the respondent opposes the making of any order for compensation or pecuniary penalty on the basis alleged. The respondent says the application is thoroughly without merit and that they were dismissed not for a prohibited reason but for a failure to follow its reasonable direction to provide it with evidence to substantiate their sick leave claim relating to their absence from work on 17 January 2017, a day on which each of them was rostered to work a shift. The respondent essentially alleges that the applicants refused to cooperate with its investigation into their right to receive paid personal leave for that day (‘the sick leave investigations’). Put simply, the respondent says that the taking of unauthorised leave is not a workplace right. By that, I infer that it refers to the taking of paid personal leave in circumstances other than provided for under the FW Act and the Award. The respondent’s case is that by their actions following 17 January, the applicants failed to follow his lawful and reasonable direction to provide evidence that would satisfy a reasonable person of their ability to work when required by it to do so.[8]
[8] Section 107(3)(a), FW Act.
Background
In April 2017, the respondent purchased the business, Port Lincoln Travel and Cruise (‘PLTAC’). This comprised a travel agency in Port Lincoln and, as an adjunct to that business, a contract to run the ticketing and baggage handling requirements for Regional Express, an airline operating in and out of Port Lincoln Airport (‘Rex Airlines’). The first applicant worked as a baggage handler. The first applicant worked as a baggage handler. The second applicant performed ticketing duties. Both had previously worked for Rex Airlines at Adelaide Airport.
The following matters have been agreed between the parties.
Date Event 1 April 2016 Shane and Jocelyn Wedding purchased and began operating the business Port Lincoln Travel and Cruise 3 May 2016 Lisa-Marie Muhlberg (Second Applicant) commenced employment with the Respondent 23 May 2016 Lindsay Muhlberg (First Applicant) commenced employment with the Respondent June 2016 First Applicant met with Respondent regarding superannuation 14 October 2016 Letter dated 12 October 2016 from Applicants and Graham Wedding to Respondent regarding employment conditions 21 October 2016 Respondent advised Applicants of advice pending from Fair Work Ombudsman 8 November 2016 Respondent met with Applicants and Graham Wedding regarding work arrangements and classification of ordinary time November 2016 Applicants met with Respondent to provide Fair Work Ombudsman customer reference number On or about 17
November 2016Applicants and Graham Wedding, Nick Kapnistis and Barry Ashby met with Respondent regarding employment conditions 23 November
2016Respondent held a meeting with relevant Airport staff and during the meeting staff were given offers of employment 9 December 2016 First Applicant gave Respondent letter from Applicants and other staff advising of intention to lodge Fair Work Commission Form PIO
(Dispute Resolution) and Form F8C (General Protections)12 December 2016 Respondent’s letter to Applicants and other staff regarding Award conditions and employment contracts 13 December 2016 Letter to Respondent from Applicants and other staff enclosing proposal to vary Award conditions 16 December 2016 Letter from Respondent to Applicants and other staff 6 January 2017 Letter from Applicants and other staff formally requesting back pay 13 January 2017 Letter from Respondent to Applicants and other staff rejecting proposal to vary Award conditions and regarding pay conditions January 2017 Fair Work Commission Dispute Resolution and General Protections claims lodged 17 January 2017 Applicants absent from work following telephone call from First Applicant to Respondent advising that the Applicants will need to call in sick on that day 18 January 2017 Applicants give Respondent a National Pharmacies Certificate for Personal Leave for 17 January 2017 19 January 2017 Respondent’s letter to Applicants seeking medical certificate or statutory declaration to explain why they were unable to work due to illness or injury; notice that failure to comply will be considered serious
Misconduct20 January 2017 Applicants’ letter to Respondent enclosing statutory declarations 20 January 2017 Respondent’s letter to Applicants seeking evidence to substantiate claim that illness of a personal nature prevented the Applicants from performing their work duties on 17 January 2017 On or about 21 January 2017 Applicants met with Respondent regarding sick leave investigation 23 January 2017 Applicants’ letter to Respondent advising their belief of satisfying requirements of supporting evidence 25 January 2017 Respondent summarily dismisses Applicants 25 January 2017 Fair Work Commission Notice of Listing of alleged dispute about matters arising under the modern award and the NES and an application to deal with other contravention disputes received by Respondent and
Applicants
Legislative Framework
The term ‘adverse action’ is defined in s 342 of the FW Act. Section 342(1) provides a table as to those matters which amount to adverse action. The protection against adverse action is provided in s 340 in the following terms:
“(1)A person must not take adverse action against another person:
(a)because the other person:
(i)has a workplace right; or
(ii)has, or has not, exercised a workplace right; or
(iii)proposes or proposes not to, or has at any time proposed or proposed not to, exercise a workplace right; or
(b)to prevent the exercise of a workplace right by the other person.”
A person has a ‘workplace right’ if the person:
“(c)is able to make a complaint or inquiry:
(i) to a person or body having the capacity under a workplace law to seek compliance with that law or a workplace instrument; or
(ii)if the person is an employee—in relation to his or her employment.”[9]
[9] Section 341(1)(c), FW Act.
Under Item 1 of the table in s 342(1) of the FW Act, an employer is deemed to have taken adverse action against an employee if the employer dismisses the employee or alters the position of the employee to the employee’s prejudice. In determining the reason for a party having taken adverse action, s 360 of the Act provides as follows:
“360 Multiple reasons for action
For the purposes of this Part, a person takes action for a particular reason if the reasons for the action include that reason.”
There is a presumption embodied within the FW Act as to the reason for taking adverse action. In this regard, s 361(1) provides:
“(1)If:
(a)in an application in relation to a contravention of this Part, it is alleged that a person took, or is taking, action for a particular reason or with a particular intent; and
(b)taking that action for that reason or with that intent would constitute a contravention of this Part;
it is presumed that the action was, or is being, taken for that reason or with that intent, unless the person proves otherwise.”
By virtue of Item 11 of the table in s 539(2) of the FW Act, s 340 of the FW Act is a civil remedy provision. Pursuant to s 546, a Court may impose a pecuniary penalty for a contravention of a civil remedy provision. Section 546(2) provides as follows:
“(2)The pecuniary penalty must not be more than:
(a)if the person is an individual—the maximum number of penalty units referred to in the relevant item in column 4 of the table in subsection 539(2); or
(b)if the person is a body corporate—5 times the maximum number of penalty units referred to in the relevant item in column 4 of the table in subsection 539(2).”
The maximum number of penalty units with respect to a contravention of s 340 is 60 penalty units.[10] The rate of a penalty unit is determined by s 4AA of the Crimes Act 1914 (Cth).
[10] Item 11 of the table in s 539(2), FW Act.
As I have noted, the applicants alleged, firstly, pursuant to Item 1(c) of the FW Act that the respondent altered their positions to their prejudice. The alteration of an employee’s position has been held to be a broad category. It covers not only legal injury but any adverse effect on or deterioration in the advantages and benefits enjoyed by an employee before the conduct in question.[11] A prejudicial alteration occurs where such alteration is a real and substantial rather than simply a possible or hypothetical alteration.[12] It is not necessary that the employee suffer an infringement of a legal right. A causal link is required between the protection or activity and the taking of the adverse action. More than a temporal connection is required and accordingly the Court must make a determination of fact as to the reasons motivating the person who took the adverse action.[13]
[11] Patrick Stevedores Operations No.2 Pty Ltd v Maritime Union of Australia (No.3) [1998] HCA 30; (1998) 195 CLR 1 [18]; Klein v Metropolitan Fire and Emergency Services Board [2012] FCA 1402; (2012) 208 FCR 178 [84]; Australian and International Pilots Association v Qantas Airways [2006] FCA 1441.
[12] Qantas Airways Ltd v Australian Licensed Aircraft Engineers Association [2012] FCAFC 63 [32].
[13] Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd [2014] HCA 41; (2014) 314 ALR 1 [19].
The applicants’ succinctly described the issues to be determined in their outline of submission as follows:
a)Did the applicants have or exercise a workplace right within the meaning of s 341 of the FW Act?
b)Did the applicants suffer adverse action within the meaning of s 342(1), Item 1 of the FW Act?
c)Was the adverse action taken because the applicants had or exercised a workplace right?
d)If so, what loss or damage did the applicants suffer as a result of the adverse action?
Of course, in addition to the above, if I am satisfied that adverse action has been suffered by the applicants, it will be necessary to determine the appropriate amount, if any, to be paid by way of compensation and/or pecuniary penalties.
The Evidence
At the commencement of the trial, the parties indicated that the relevant Award was not in dispute and nor was the relevant classification for the two applicants.
Mr Muhlberg is married to the second applicant in this matter, Mrs Muhlberg. Prior to commencing work with PLTAC, Mr Muhlberg had worked at Rex Airlines for 12 years managing their ground staff department at the Adelaide Airport. At Rex Airlines, he had been classified as a Leading Hand, but for PLTAC, his classification was Level 3 Airline Services Operator as defined in Schedule B.1.3 of the Award. His hourly rate was $19.55 per hour. At the time he commenced employment with PLTAC, the hourly rate was $19.09. On about 22 May 2016, he attended an interview with Mr and Mrs Wedding and was offered employment. He says he was told by Mrs Wedding that he was to be employed in a permanent part-time position with his pay and conditions as determined by the Award. At that time, he says that his roster of ordinary hours was agreed, being an average of 72 hours per fortnight on a two-week rotation with a requirement that he work overtime as per operational needs. He was told that at the beginning of each shift he would need to meet other staff members at the PLTAC office on Liverpool Street in Port Lincoln and that they would all be driven out to the airport in a work vehicle. At the conclusion of the shift, they would be returned to the Liverpool Street office in the work vehicle. The distance from the office to the airport is approximately 14 kilometres. It was Mr Wedding who informed him of this procedure.
The duties he was required to perform involved loading and unloading Rex Airlines aircraft at Port Lincoln Airport. He was required to load and unload baggage and freight, marshal and dispatch aircraft, liaise with flight crew, secure the cargo hold, clean aircraft, and to assist disabled passengers with boarding.
He states at about the time he received his second payslip, his gross wage was lower than he had expected. He was concerned that he did not appear to be receiving superannuation at a rate of 9.5 per cent of his gross pay. He believed that his wife was similarly not being paid the correct amount of superannuation. It was at that point that he began to make inquiries about his entitlements.
Mr Muhlberg says that he and his wife made their first inquiry about superannuation with Mr Wedding on 6 June 2016. The response they received was that the respondent did not have to pay superannuation on hours worked on weekends and public holidays due to the fact that staff received penalty rates for those shifts. He considered such shifts to be overtime and, therefore, not relevant to the accrual of superannuation. Mr Muhlberg did not accept that explanation and said so.
In the weeks that followed that initial meeting, Mr Muhlberg says he became concerned about other ways in which the Award was not being complied with. He and his wife spoke again to Mr Wedding on about 14 June, reiterated their belief that Mr Wedding was wrong about their superannuation entitlements, and advised that they believed they were not receiving proper overtime penalty rates. Mr Muhlberg says that Mr Wedding said he would look into it. They made a further inquiry with Mr Wedding on 29 June 2016 and were advised that he was still looking into it and would sort it out. A further inquiry on 12 August 2016 was met with the response that Mr Wedding had not yet had time to look into it but that backpay would be paid to staff in the event that an error had occurred. Mr and Mrs Muhlberg raised the issue again with him on 20 September 2016 together with other queries they had about inconsistent compliance with the terms of the Award. He was advised that Mr Wedding had still not had an opportunity to look into the matter. On Mr Muhlberg’s account, he thought that his employer was becoming standoffish or angry and that his demeanour towards him had changed.
On 12 October 2016, Mr and Mrs Muhlberg and another employee of PLTAC, Graham Wedding (‘Graham’)[14] wrote to Mr Wedding raising issues with respect to annual leave accrual; sick leave accrual; superannuation accrual; overtime; shift penalties; set minimum hours for permanent part-time employees; and paid and unpaid breaks.[15] He states that he was advised by Mr Wedding on 21 October that he was awaiting advice from the Fair Work Ombudsman in order to answer the inquiry.
[14] It is agreed that Graham Wedding is not related to Shane Wedding and Jocelyn Wedding.
[15] Exhibit A1, Annexure LM2.
Mr Muhlberg says that one of the issues he raised, namely, a 15 per cent shift loading allowance, was rectified in the pay week ending 24 October 2016 but none of the other issues raised in the letter of 12 October were addressed.
A further meeting occurred on 8 November between Mr and Mrs Muhlberg, Graham and Mr Wedding with respect to overtime issues for 14 hour shift spans. It was after this meeting that Mr Muhlberg says he contacted the Fair Work Ombudsman and obtained a customer reference number specifically so that his employer could contact them and receive the same information that he was receiving. He says that he was advised they should have been paid overtime for shift spans of more than 12 hours. He says that he gave the reference number to Mr Wedding.
On or about 17 November 2016, Mr Muhlberg says that he, his wife, Graham, and two other employees spoke to Mr Wedding to inquire whether he had received clarification from the Fair Work Ombudsman. He says they were told that he had not heard back from them and further that if they wanted to be paid according to the Award, their hours would be reduced and the roster changed. It was at this point that Mr Muhlberg claims Mr Wedding told them that there would no longer be a work vehicle available to them and that it would be necessary to use a private vehicle to travel from the office to the airport at the start and end of each shift. Mr Muhlberg says that this change reduced his paid working hours and shifted costs for transport on to the employees (‘the company car and reduced hours issue’). He says that at this meeting Mr Wedding advised the employees that he wanted them to agree to sign a waiver or shift swap regarding weekend work because the current roster arrangements had staff working over the maximum spread of hours in any given day in the Award. He presented them with a draft proposal in that regard.
From the date of that meeting, Mr Muhlberg says that his rostered working hours were reduced. Prior to the reduction, he says he worked 86.75 hours per fortnight on average, comprised of 59 hours one week and 27.75 hours the next week. The reduction meant that between 19 November and 2 December 2016, and 3 December and 16 December 2016, he was rostered to work 85.37 hours per fortnight, and between 17 and 30 December, he was rostered to work 60.97 hours per fortnight. Between 31 December 2016 and 13 January 2017, he was rostered for 73.54 hours, and between 14 January and 27 January, he was rostered for 64.33 hours. He calculated that he lost a total of around 62.79 working hours.
A staff meeting was held on 23 November 2016. This was at the instigation of Mr Wedding and involved all PLTAC airport staff. Both Mr and Mrs Wedding were present. He says that at this meeting, staff were presented with new contracts of employment. The contract apparently stipulated a significant reduction in minimum hours per week and other matters that Mr Muhlberg believed were inconsistent with the Award.
A further full staff meeting was convened on 29 November 2016. Mr Muhlberg says Mr Wedding made it clear that the changes in the contract were a result of the advocacy by staff for compliance with the Award. He was not able to recall the exact words used.
No staff agreed to sign the new contracts, and a further meeting was scheduled on 9 December 2016. Mr Muhlberg says he advised the respondent at that meeting that he regarded changes in working conditions and hours to be adverse action and that he intended to lodge a claim with the Fair Work Commission. Following that meeting, the respondent wrote to the employees asserting his belief that the new proposed contracts were compliant with the Award based on advice he had received from the FWO and expressing his disappointment at the allegation of adverse action. That letter stated in part:
“The next issued working roster includes some minor changes that are required for it to be compliant with the award, which is what you asked for. Compliance with the award is not optional. I do not see how compliance with the award or making an offer of employment can be adverse action. As you know the offer of employment was just that; an offer. If you do not wish to sign the contract you do not have to. If you choose not to sign the contract I will confirm the terms of your employment by way of letter.”
The letter concluded with the respondent indicating that it was prepared to resolve any dispute by way of discussions, consistent with cl 10 of the Award, expressing his desire to resolve any dispute quickly and indicating that he had “no issue” with involving the FWC if warranted. The letter asked the employees to define the nature of their dispute clearly.[16]
[16] Exhibit A1, Annexure LM6.
On the day after that letter was sent, PLTAC airport staff wrote to Mr Wedding proposing a variation to the Award in order to keep consecutive days off of two days per fortnight.[17] Mr Wedding responded that he would formally respond to that proposal in the new year. On 6 January 2017, Mr and Mrs Muhlberg wrote a letter which was signed by all staff, formally requesting backpay. The employer rejected the employees’ proposal for a variation to the Award on 13 January 2017.
[17] Exhibit A1, Annexure LM7.
Having lodged their application in the FWC on 13 January 2017, Mr Muhlberg stated that they received a notice of listing for that application on 25 January 2017 and that, “Later that same day, I was summarily dismissed …” (emphasis added).
Events leading to dismissal
On 17 January 2017, the second applicant’s father planned to launch a boat that he had restored at the Port Lincoln Marina. Both applicants wanted to be present for the launch.
On 16 January, the applicants and Graham worked an afternoon shift at the airport. That morning, Mr Muhlberg organised to swap a shift with another employee for the following day on 17 January so that he could attend the boat launch. Mrs Muhlberg rang Mrs Wedding that afternoon also requesting to swap a shift for the next day. Mr Muhlberg understands that Mrs Wedding approved the shift swaps. Graham also wanted to attend the launch and arranged a swapped shift with another employee for the next day. This meant that two teams had now effectively swapped shifts.
Mr Muhlberg says that he was advised by Mr Wedding later in the day that all shift swaps had been cancelled on the basis that it contravened the Award. The relevant clause stipulated that all employees must work five consecutive afternoons or else it was necessary to pay them overtime. Mr Muhlberg told him that no one would be claiming overtime. He claims that shift swaps had previously been done prior to lodging a complaint with the FWC on 13 January.
Mr Muhlberg says that overnight on the evening of 16 and 17 January, he and Mrs Muhlberg both became quite ill, vomiting, and had diarrhoea, stomach cramps and lethargy. They believed that it was gastro or food poisoning.
He telephoned Mr Wedding on the morning of 17 January, telling him that both of them were unwell and would not be able to attend their shift on that afternoon. He claims that both he and his wife improved somewhat during the course of the morning but were still fatigued and incapable of working. He says that he rang Graham at about 10.30am to tell him that he would not be able to drive him to work because he and his wife were ill. Graham apparently told him that he was also ill with gastro and had already phoned in sick. Both Mr and Mrs Muhlberg went to the local chemist for advice and obtained medical certificates for that day. They then went to her parents’ house, because Mrs Muhlberg’s mother was an enrolled nurse. She gave them some medication. Whilst there, they saw Graham watching the boat being craned onto a semitrailer. He and his wife also watched this before returning home to rest. They drove to the marina at 1.30pm and watched the boat being lowered into the water. Mr Muhlberg says that he was out of the car for 15 to 20 minutes whilst this occurred. He says that he held a rope as the boat was being lowered into the water but did not lift anything or take any other part in proceedings.
Mr Muhlberg says that if he had not been sick, he would have commenced his shift as directed at 1.25pm that day. He maintains he was not well enough at that time to work. He supplied his employer with the medical certificate on 18 January.[18]
[18] Exhibit A1, Annexure LM12.
On 19 January, he received a letter from Mr Wedding directing him to provide either a medical certificate or statutory declaration within 48 hours explaining why he was too ill to work.[19] The letter informed him that a failure to comply with that reasonable direction or any dishonesty may amount to serious misconduct and may result in summary termination of employment.
[19] Exhibit A1, Annexure LM13.
Mr Muhlberg believed that he had already provided a sufficient medical certificate and says that he provided a statutory declaration on 20 January 2017 with a covering letter from himself and his wife.[20] On 21 January, they wrote to Mr Wedding, telling him that they would not produce any further evidence, on the basis of advice received.
[20] Exhibit A1, Annexure LM14.
Mr Muhlberg makes the point that at no time during any of the correspondence or in the meeting with Mr Wedding did he question their movements on 17 January. He was not aware that Mr Wedding’s son had taken photographs of him at the boat launch until seeing the affidavits in this matter.
It is common ground that Graham was spoken to by Mr Wedding who conducted a sick leave investigation with respect to his absence but he was not summarily dismissed. Mr Muhlberg says that he was never asked to explain why he was fit to attend a boat launch but not fit to attend work.
On 25 January, at the conclusion of his shift, he and Mrs Muhlberg were instructed to attend at the PLTAC office. They were both handed a letter of summary dismissal.[21] That letter makes no reference to the fact that Mr Wedding knew that the applicants had attended the boat launch.
[21] Exhibit A1, Annexure LM17.
In oral evidence, Mr Muhlberg clarified that he was unemployed for six months after his dismissal. He also corrected his affidavit, stating that he had called Graham at 10.03am on the morning of 17 January.
In cross-examination, Mr Muhlberg conceded that over the Christmas period and up until the long weekend in January, Rex Airlines services were reduced, for example, there being no flights on Christmas Day. He also acknowledged that where that occurred, shifts could be reduced. He agreed that he had sent a letter to his employer dated 13 December 2016[22] on behalf of himself and other employees indicating their agreement to a reduction from a 71.25 hour fortnight to a guaranteed 48 hour fortnight to take into account a reduction in Rex Airlines flight schedules if necessary. He stated that as of mid-December he believed that he and other employees were being paid correctly. However, he maintained that he was still not getting appropriate overtime, meals allowance or uniform allowance. He acknowledged that the accrual of superannuation was corrected following the discussions of November 2016 and that it may have been the case that meal allowances, shift extensions and other matters were corrected on that occasion but disagrees that those benefits were paid from mid-December. He conceded that he did not do much overtime during the December/January period and that it was possible that the meal allowance issue had been corrected without him knowing.
[22] Exhibit A1, Annexure LM7.
Mr Muhlberg accepted that as a result of the Award, an employee could not be required to work two shifts back to back on the same day. He agreed in general terms that what was occurring in the correspondence between himself and his employer was an attempt to agree on all aspects of employment.
Mr Muhlberg was cross-examined about the meeting conducted on 15 January at the request of staff members. He agreed that other staff members also brought up issues and that Mr Wedding had indicated he would provide him with a copy of the relevant clause from the Award in response to the issues he had raised. Further, he agreed that it was possible that that clause had been given to him by Mr Wedding on 19 January. He agreed that the meeting took about an hour and was conducted at the office of PLTAC. He agreed that the meeting was an open forum and that Mr Wedding went around the room to hear people’s grievances. He agreed that Mr Wedding did listen to people’s issues but said that they did not really get an answer or anything firm at that stage. He said there were definitely Award issues raised at that meeting. He agreed that the tone of the meeting could be described as civil and that was nothing was put off limits. He also conceded that it was possible that from time to time he could be mistaken in his own interpretation of the Award. For example, he conceded that he mistakenly raised the question of a cash handling allowance under the Award for Mrs Muhlberg but that in fact it was not payable for her. Further, he conceded that Mr Wedding had made him aware of cl 30.5 of the Award on 16 January and that he had not previously been aware of that requirement.
With respect to the period for which he was unemployed after dismissal, Mr Muhlberg told the Court that he was actively looking for work during that time and named a number of businesses to whom he claimed to have applied for work.
A further concession that Mr Muhlberg made was that when he first started working with the respondent, he was not rostered on the same shift as his wife, who had commenced working there prior to him. He agreed that this changed at his request, meaning that he was rostered on the same shifts as Mrs Muhlberg and that this occurred both before and after him raising the issue of appropriate Award rates. He accepted that there was no requirement that this should have occurred.
Mr Muhlberg made an important concession about the chronology of events when a matter was raised with him in cross-examination. His trial affidavit stated that he was dismissed on the same day as, but after, he and the employer received notice from the FWC about the first listing date for his complaint. If correct, the timing and possibly the reasons for their dismissal, might appear to have been directly related to what Mr Wedding perceived as an escalation in the dispute between the respondent and the applicants. When pointed out to him, he agreed that he and his wife had been dismissed prior to either of them or the respondent receiving the email from the FWC. Their dismissal occurred at about lunchtime, and the notice arrived from the FWC at about 5.30pm.
Mr Muhlberg agreed that he had been given the option to take annual leave if he wanted to attend the boat launch and that this had been offered to him as a solution, but he regarded it as not worth burning the annual leave time. He did not mention that matter in his trial affidavit. He denied, however, that it was not simply a case of him just not attending his shift the next day. He denied mentioning to Graham that he could take annual leave. When asked why he had not simply told Mr Wedding why it was that he and Lisa were ill, he responded that he thought Mr Wedding was going above and beyond what was required for a sick leave certificate. That question did not appear to prompt his recollection of anything to the contrary. He admitted that when his sick leave certificate was not initially accepted, he and his wife had an inkling that it might have had something to do with the boat launch and that he understood his employer would think it might be suspicious. It would have been remarkable if this had not occurred to him.
He denied having been at his wife’s mother’s house earlier in the day than he had stated in his evidence. He said he was certainly not there at 9.00am in the morning. He said he still had diarrhoea on the morning of 17 January and stomach cramps. It had not occurred to him to go to a doctor and it can be hard to get in to see a doctor in Port Lincoln.
With respect to the provision of the medical certificate and the statutory declaration, Mr Muhlberg clarified that he did not tell the FWO when seeking advice, the background to his having taken sick leave on 17 January. He simply discussed the basic requirements of the legislation with them. He said that on an initial reading of the Award, he probably did not think that an employer had the right to ask for particular details as the cause or nature of an illness.
In re-examination, and with some prompting, Mr Muhlberg stated that he believed he could recall his wife telling Mr Wedding at some time during the dispute that they had had gastro on 17 January but that Mr Wedding still wanted to know what it was about the illness that stopped them from working. This was not a matter mentioned in his affidavit.
Mrs Lisa-Marie Muhlberg
Ms Muhlberg was employed by the respondent from 3 May 2016 in a permanent part-time role with consistent hours. She had previously worked for Rex Airlines in Adelaide for 10 years. She says her ordinary hours were agreed to be 72 hours per fortnight on a two week rotation, being required to work overtime as per operational limits. Prior to commencing work, she met with Mr and Mrs Wedding, who confirmed that the arrangement was that work would commence at the Liverpool Street office from which all employees would be driven to the Port Lincoln Airport. When she received her second payslip, the amounts were lower than she had anticipated, and she noted that she did not appear to have received superannuation calculated on her gross pay.
Ms Muhlberg’s narrative of the complaints and inquiries made which are the subject of these proceedings is in all respects consistent with the evidence given by her husband. In the pay week ending 24 October 2016, the 15 per cent shift loading allowance rose to its correct Award listed rate. That is a matter for which she and her husband had been advocating. She did not receive backpay at that time. Ms Muhlberg claims that after the meeting on 17 November 2016, her rostered working hours were reduced from having been consistently rostered to work 86.75 hours per fortnight to rosters of 85.37, 79.16, 60.54, 61.04 up until the time she was dismissed from employment. She calculates that she lost 62.27 hours as a result. Her trial affidavit also claimed that she and her husband were dismissed after they had received the notice listing their application from the Fair Work Commission.[23]
[23] Exhibit A3 [36].
Ms Muhlberg’s account of the events leading to her termination were consistent in all respects with the account given by her husband. She annexed a copy of the receipt for the medical certificate and some medicine that had been purchased on 17 January 2017.[24] She maintains that even though her condition had improved somewhat during the morning of 17 January, she was too “washed out” to perform her work in any kind of professional manner. Her role with the respondent was to check-in passengers; tag baggage; manage flight delays; sell tickets and assist passengers to board flights and associated duties.
[24] Exhibit A3, Annexure LMM5.
She believed, having provided the medical certificate, that she had done her best to comply with the reasonable direction of her employer for evidence of her illness. She maintained that she was not at any stage dishonest in providing information to the employer. She says that when she was advised that there was a sick leave investigation being conducted by the employer, Mr Wedding told her that employees could not take personal leave for any illness, only an illness that prevented the employee from performing their work duties. Ms Muhlberg says that she asked Mr Wedding what additional evidence would satisfy him as substantiation of her illness beyond a medical certificate and statutory declaration. He did not tell her what further evidence would satisfy him and she did not regard his request as a reasonable direction. Her evidence is that she and her husband explained to Mr Wedding that they had been suffering from gastro on the day in question. Ms Muhlberg says she was never asked to explain why she was fit to attend the boat launch but not fit to attend at work.
After termination, she was unemployed for eight months and calculates her lost earnings during that time at $29,001.60 based on $20.14 per hour and a 72 hour fortnight.
In terms of underpayment, she says that the figure is $7,558.68. Further, as a result of the reduction in her hours, she lost $1,283.38.
Ms Muhlberg said the result of the decision not to drive employees from the office to the airport meant she lost about one hour per day by virtue of starting her shift at the airport and not the office. She said that they did not start at the airport at the same time as they would typically arrive at the office. That meant that even though she was rostered on the same shift, the start and finish times would be different, perhaps starting 15 minutes earlier and sometimes finishing an hour earlier.
She said that on the evening of 16 January she fell sick towards the end of her shift.
In cross-examination, Ms Muhlberg said she was not sure when she commenced starting her shifts on arrival at the airport. She agreed when pointed out to her, that her starting time in the week of 25 June was identical to certain start times that were pointed out to her in her December shifts. She said that the times changed later on and that in December her start times varied. She acknowledged that not all of her shifts had been reduced. When it was put to her that all of her shifts in June showed a starting time in the morning which were the same as her December starting times, she responded that it was her husband’s shifts that had varied. When questioned about various starting times, she agreed that a consideration of her hours seemed to reflect a baseline of rounding off starting time by five minutes to the nearest quarter hour relative to aircraft departure time, and she acknowledged that shifts appeared to start 55 minutes prior to a flight. She added that her recollection is that flight schedules did not change between 25 June and December.
Ms Muhlberg denied telling Graham that she did not intend to work on 17 January. She said that she first started to feel sick after the last departure at 7.40pm. She did not leave work early because she had no way of getting home, her husband still being at work. When put to her specifically, she denied that she had not told Mr Wedding that she had suffered from gastro on the relevant day. When asked why she did not make mention of this in her letter to him of 21 January, her response was that she was not prepared to go into detail. As to why it was not in her statutory declaration, she clarified by saying that she had told Mr Wedding that she had had gastro after she had signed the statutory declaration.
On the afternoon of the boat launch, she regarded herself as feeling considerably better but added that she had spent a lot of time sitting in the air conditioned car. She left the car a couple of times but sat in the car for the majority of time with the air conditioner running. She remained in her parent’s back yard whilst she watched the crane lift the boat onto the semi-trailer. She also suspected that the sick leave investigation might have had something to do with Mr Wedding knowing that she had been at the boat launch. She said that it did cross her mind that objectively her attending at the boat launch might have looked suspicious to her employer. She said the reason that she had not mentioned having gastro in her statutory declaration was that she had never had to disclose the reason for a sick day before. She agreed that having provided the sick certificate and the statutory declaration in the terms that she did, she believed that she had satisfied her obligations to provide an explanation for her day off. When asked whether it occurred to her given that she suspected Mr Wedding knew that she attended the boat launch, whether it would be reasonable to go into further information in her statutory declaration, Ms Muhlberg responded that that was the reason she ultimately told Mr Wedding that she had had gastro.
Ms Muhlberg acknowledged that from 16 December, staff queries with respect to annual leave, superannuation and overtime rosters had been corrected. She also acknowledged that outstanding items from the employees’ letter of 16 January were addressed in Mr Wedding’s letter of 13 January 2017.
During her period of unemployment following dismissal, Ms Muhlberg says that she received about $4,000 in Centrelink payments but was not sure whether she had factored that in to her figure for lost income.
When cross-examined about the events leading to 17 January, Ms Muhlberg acknowledged that she had raised with Mr Wedding that she wanted the day off to attend her father’s boat launch and that he had suggested annual leave by way of her working the morning shift and taking annual leave for the afternoon. This was not mentioned in her affidavit.
Case for the respondent
As I have noted, Mr Shane Wedding ran the business with his wife, Mrs Jocelyn Wedding, having purchased it in April of 2017. They are the trustees of the Sajasan Trust. They were the employers of the applicants. As can be seen from the evidence, Mr Wedding was for relevant purposes, the controlling mind of the business and the decision maker with respect to the dismissal.
The case for the respondent was based primarily on the evidence of Mr Wedding.[25] In broad terms, his evidence was to the effect that at the time he started running the business, he was not aware that his employees were covered by the terms of the relevant Award, and that he made genuine attempts throughout the relevant period to address concerns that various employees, including the applicants, had raised with respect to the business complying with the terms of the Award.
[25] Exhibits R13 & R14.
He denied that the applicants were dismissed because they had repeatedly raised their concerns about non-compliance with Award conditions. His position is that he did not believe that they were unfit to work on the day they took sick leave and that they failed to cooperate with his reasonable request for information during the sick leave investigation and had failed to establish an entitlement to the leave.
Prior to April of 2017, Mr Wedding had never run a business and concedes that he had a lot to learn. He had not previously been employed in a management position, or any position where he was responsible for other employees. He states that when he and his wife took over the business, the employees continued to work as they had with their previous employer.
At the time the applicants were employed, he says there was no mention of a covering Award and no written employment contracts. The rates of pay that he offered to them were based on the rates of pre-existing employees. With respect to the employment of the first applicant, Mr Muhlberg, Mr Wedding says that he only had a discussion with him about the terms of his employment in broad terms because Mr Muhlberg appeared very well aware of the operational requirements of the role.
He denies having told Mr Muhlberg that his working hours would be approximately 72 hours per fortnight. He says he showed an existing roster to Mr Muhlberg at the time of his interview and says that he made it very clear that the roster was subject to change. They discussed operational requirements with respect to rostered hours over long weekends, and from Christmas through to March, a period in which there is a reduction in flights, which in turn reduces rostered hours.
He denies telling Mr Muhlberg at the time of the interview that overtime would be paid according to the Award, because at that stage he was not aware that an Award applied to the Rex Airlines agreement. Indeed, he says that when the employees first raised with him the terms of the Award, he was not initially convinced that it applied to the business because their business was not an airline. The position was clarified for him when he sought advice.
With respect to shifts at the airport, each shift was worked by three people and at the relevant time there were two shifts per day, subject to operational requirements.
Mr Wedding denies telling Mr Muhlberg that they would provide a work vehicle to drive between the office and Port Lincoln Airport. He accepts that he told Mr Muhlberg to start work at the office, and that at the time he commenced working for the respondent, they all drove from the office to the airport together.
He says neither of the applicants was provided with an Award classification level on commencement of their employment because he did not, at that time, know they were covered by the Award, and he was simply applying existing rates of pay as paid to employees at the time he took over the business.
Mr Wedding was frank in his admission that when it came to his attention that the Award applied to the employment, he found the terms of the Award extremely confusing and had to consult with the Fair Work Ombudsman. He says that about the time of the meeting with the applicants and Graham on 8 November 2017, his intention was to respond to the letter of 12 October 2017 and to review workplace arrangements overall. This was at a point when he had been operating for about six months, and he was interested in getting feedback from employees, looking at efficiencies in how they operated and requirements as to Award compliance.
On his evidence, it was at this time that he first properly considered what work arrangements would suit the business, as opposed to simply copying what had been previously done by the prior owner. Having settled into the business, he determined to implement some changes. For example, more appropriate start and finishing times for shifts based on the scheduled arrivals and departures of the aircraft. He also proposed rostering a baggage handler to start when the early arrival passengers were due to check in, and then a second baggage handler to commence work when the workload associated with the flight was due to increase.
He said that because of this introduction of staggered shifts, the practice of driving to the airport together from the Port Lincoln office would logically have to cease. In addition, it included that the Award required him to roster staff on one shift per day for a maximum of 12 hours, and that this would necessitate the Saturday and Sunday long shift being converted into two shifts. His proposal at the 17 November 2017 meeting was that employees would commence work at the airport rather than the office in town.
Mr Wedding says that it was at the meeting of 23 November 2016 that he distributed written offers of employment which referred to the Award; the nature of the position; the classification; the employment location; hours of work; guaranteed minimum hours; and the rate of pay. The written offers were, he says, specifically designed to meet the actual operating requirements of the business, in addition to some alterations to meet compliance with the Award. He states that he confirmed at that meeting that staff would be required to commence work at the airport.
He says that the shift swap form presented to the employee along with the written offers of employment was something that he had come up with as an example of how the employees themselves could facilitate a standing arrangement to evenly swap shifts on Sunday in a manner that would be compliant with the Award. He stressed that such an arrangement was of no benefit to him, that he was simply trying to assist staff with their concerns about this potential change in Sunday shifts.
Mr Wedding denied that he told the applicants and other employees on 1 December 2017 that if they wanted to be paid according to the Award, their hours would need to be reduced and their rosters changed. One reason he points to is that he had already confirmed in writing his intention to pay them the Award. He reinforced at that meeting that it would be necessary, due to the Award, to split Saturdays and Sundays into two shifts, as previously discussed. He says he had not made any final decisions about the roster at that time.
On Mr Wedding’s evidence, he was somewhat taken aback by the letter from five employees on 9 December alleging that the new roster was not compliant with the Award or the National Employment Standards. The suggestion that he had taken adverse action by not offering them 71.25 hours per fortnight even though there had been no written agreement in place, and that the employees intended to lodge dispute resolution and general protections forms with the FWC, also took him off-guard.
He made the observation that the 9 December letter from the employees suggested that they had not conclusively decided to lodge a complaint with the FWC.[26]
[26] Exhibit R14, Annexure ‘E’.
In that context, he wrote his letter of 12 December 2016, asking why they thought the contract was noncompliant, and expressing some doubt as to how his attempts to comply with the Award or making an offer of employment could possibly be adverse action. His view was that, after all, he was introducing changes after consultation with the staff and at their request.
On his evidence, the two letters of response from the employees, dated 13 December 2016, were the result of his request asking them to define their dispute. Having read the first of those letters, he concluded that the employees did not take issue with his moves to achieve Award compliance, including the new roster. He understood the second letter to be proposing a variation to the operation of the Award, and indicated by his letter of 16 December that he considered the proposal.
The overall thrust of Mr Wedding’s evidence is that from the time the applicants first raised their disputes and the other employees began to get involved, he was engaged in a consultative process directed towards answering their claims and ensuring that he was Award compliant. In that context, he notes that the letter from the employees, dated 6 January 2017, acknowledge increased compliance with the Award, but that they still had some issues.
He says that his letter of 13 January 2017 demonstrates that he was reaffirming his commitment to being compliant with the Award, but that he rejected their proposal to vary the Award because it did not meet the needs of the business. He addressed their concerns about the need to calculate underpayments in that letter. He invited them to raise any ongoing concerns they had about the roster. He points out that the proposal of the employees to vary the Award acknowledged that a reduction of up to 23.25 hours per fortnight was acceptable during periods when the Rex Airlines schedule reduces.
Mr Wedding’s evidence is that the applicant’s working hours reflect only some necessary changes to meet Award compliance and “normal” variation in rostered hours. He acknowledges that the hours did fluctuate between 19 November 2016 and 27 January 2017. This was something that affected both the applicants and the other employees. That reflected nothing other than the available rostered hours for airport staff during that period. The periods between 31 December 2016 and 25 January 2017 involve a significant number of flight cancellations, and this affected rostering for all employees during that period.
He says that between 19 November 2016 and 27 January 2017, Mr Muhlberg worked an average of 5.96 shifts per week, and Ms Muhlberg worked 5.94 shifts per week. That represented a very limited change given they had an average of six shifts per week under the prior arrangements. That is particularly so, given the reduction in hours, and due to the reduction in the Rex Airlines schedule over the Christmas/New Year period.
He denies vehemently that he dismissed the applicants because of their complaints as to pay levels, and his belief was that from 17 December 2016, conditions were brought into line with the Award. The only reason for changing the requirement to start at the airport was to ensure that employees were only rostered during periods where the workload justified staffing levels. It was not a change that was implemented to punish employees.
He believed that progress had been made during the course of December and January and acknowledged that he was not expecting the five airport employees, including the applicants, to lodge a claim with the FWC.
The shift swap and sick leave controversy
Mr Wedding says that he was advised by his wife at about 2.00pm on 16 January 2017 that Ms Muhlberg had requested to change shifts with her on the following day because of the boat launch. He also learnt at that time that Mr Muhlberg had swapped his shift with “Jack”. He discussed that with his wife. His concern was that one implication of Ms Muhlberg switching her shift would be that both she and Mr Muhlberg would, being on afternoon shifts that week, not be working five afternoon shifts in a row by virtue of the swap.
The terms of the Award meant that it would be necessary to pay them a penalty payment of time and a-half for their shifts on Monday, Wednesday, Thursday and Friday of that week. It also meant that Jack would be entitled to a penalty rate for the afternoon shift he worked.[27]
[27] Clause 30.5 of the Award.
Having discussed the matter with his wife, he spoke to Ms Muhlberg on the phone. He says that he told her that in principle a shift swap was acceptable but that he explained to her the implications for payment under the Award. He suggested that she take annual leave for their shift the following day, because under the Award it would not invalidate the five shifts in a row principle. He indicated that despite the short notice he could cover their shifts if they were prepared to take annual leave. He says that he discussed the same matters with Mr Muhlberg during that call.
Counsel submitted that this meant that the medical certificate and the statutory declarations had to be considered as if there were no surrounding circumstances to cast doubt on their accuracy. I do not accept that submission. The effect of Mr Wedding’s evidence, embodied in his affidavit, including the dismissal letter and in his answers to cross-examination, was not that the surrounding circumstances were irrelevant to him but that he had not been satisfied by the material presented and had not, for that reason, been able to reach a conclusion as to whether the applicants had an entitlement to paid personal leave and that, despite repeated requests, they had not complied with his reasonable demand for further information that might satisfy him.
As stated in his affidavit:
“Had I received that evidence, I would have been in a position to assess whether the applicants were entitled to be paid sick leave or whether they were dishonestly claiming to be too sick to work in order to receive employment benefits for which they were not entitled. The taking of unauthorised leave is not a workplace right.”[49]
[49] Exhibit R14 [73].
An acknowledgement by him that of itself, their presence at the Marina would not mean they were not unfit to work, or his denial that he was motivated by a settled belief that they were being untruthful did not alter that position. The effect of his evidence, consistent with the letter of dismissal, was that he had been prevented from reaching a conclusion by the failure of the applicants to cooperate with his requests. I accept that evidence as to his state of mind. I do not accept that, in light of his answers in cross-examination, the background circumstances fall away as relevant and operative considerations to the respondent’s sick leave investigation and his dismissal of the applicants.
If I rejected that primary submission, the applicants submitted that I could conclude that the respondent had failed to discharge the onus because of the differential treatment given to Graham. He told Graham that he had been seen at the Marina. He did not extend the same courtesy to the applicants. Graham had not been dismissed and the applicants were. It was submitted that the situation with respect to all three employees was the same and demanded identical treatment. The failure to accord identical treatment should weigh heavily against the respondent’s denial that he dismissed the applicants for a proscribed reason.[50]
[50] State of Victoria (Office of Public Prosecutions) v Grant [2014] FCAFC 184 [32].
Further, it was submitted by the applicants that the fact that Graham had provided explicit detail as to why diarrhoea made him unfit for work did not appear to have satisfied Mr Wedding that Graham was exercising a workplace right to take paid personal leave. This also cast significant doubt on the respondent’s claim that the applicants were dismissed for failure to comply with Mr Wedding’s sick leave investigation. That submission ignores the fact that Graham acknowledged, after having submitted two false statutory declarations, that he did not have diarrhoea and that he apologised and withdrew his claim.[51]
[51] Exhibit R14 [74].
Mr Wedding completed his inquiry with respect to Graham but was not able to do so with respect to the applicants. I do not accept that the respondent “unfairly targeted the applicants”. I find that the respondent did not dismiss the applicants because they had exercised or proposed to exercise a workplace right to take paid personal leave. As observed by Jessup J in Sperandio v Lynch t/as Doctors of Northcote:[52]
“… For an employer to act in breach of the provision [of the Act], there must be an awareness that the absence was because of illness or injury, and the absence must be the reason for the termination. Or, to put it defensively, an employer will succeed in avoiding an adverse finding under the provision upon proving either that he or she did not know the reason for the absence or that he or she did not terminate the employment by reason of the absence.”
[52] [2006] FCA 1648; (2006) 160 IR 360 [91].
I accept that Mr Wedding was genuinely conducting an enquiry as to whether the applicants were unfit to work as claimed, and thus entitled to the leave.
I am satisfied that the respondent has discharged its onus on the balance of probabilities and that the applicants were dismissed for the reasons stated by the respondent. The fact that the applicants had proposed to exercise a workplace right to take paid personal leave was not the reason or one of the reasons for their dismissal. In reaching that conclusion, I do not regard it as persuasive or conclusive that Mr Wedding told Graham but not the applicants that they had been seen at the Marina. As observed in Ermel v Duluxgroup (Australia) Proprietary Limited (No.2):[53]
“In a general protections claim brought pursuant to s 340 of the FW Act, success depends upon the court being satisfied that the applicant has been subjected to adverse action for one or more of the specific reasons identified by the FW Act as an impermissible basis upon which action adverse to the applicant may be taken. A general protections proceeding is not a broad inquiry as to whether the applicant has been subjected to a procedurally or substantively unfair outcome. As Gray, Cowdroy and Reeves JJ said in Khiani v Australian Bureau of Statistics [2011] FCAFC 109 at [31]:
A general protections application is not intended to provide an opportunity for the appellant to raise whatever issues she wishes to about the validity of the steps taken before her dismissal. The crucial issue in such an application is the causal relationship between adverse action and one or more of the factors mentioned in the various provisions of Pt 3-1. The issue is whether the person who has taken the adverse action has done so because the person against whom the adverse action has been taken has one or more of the relevant characteristics or has done one or more of the relevant acts.”
[53] [2015] FCA 17 [48].
His actions towards Graham are not conclusive of his state of mind with respect to the dismissal of the applicants.
Even if he had held an honest but mistaken belief that the applicants were not sick, that would make no difference to the question here. This is not an unfair dismissal action.[54]
[54] See Construction, Forestry, Mining and Energy Union v Anglo Coal (Dawson Services) Pty Ltd (No.2) [2015] FCA 265 [138].
Further, if it is not already clear from the above, I am also satisfied that the respondent has discharged its onus in proving that the fact that the applicants had instigated negotiations with respect to Award compliance or filed proceedings before the FWC was not the reason or one of the reasons for their dismissal.
As I have found that there has not been contravention of s 341 with respect to either the company car issue or the dismissal issue, the question of compensation under s 545(2)(b) for either the loss of hours due to roster changes or the loss of earnings suffered by each of them after dismissal does not arise. Nor does the question of the imposition of a civil penalty.
Claims for Underpayment and Non-Payment
Payment in Lieu of Notice
I have made my findings as to the basis of the applicants’ dismissal. The respondent acted lawfully when he directed them to provide further information in support of the claim for paid personal leave. ‘Serious misconduct’ is defined by reg.1.07(3)(c) of the Fair Work Regulations 2009 (Cth) and includes an employee refusing to carry out a lawful and reasonable instruction that is consistent with the employee’s contract of employment. The instruction given by the respondent was in all the circumstances lawful and reasonable. The applicants’ deliberately refused to comply with the direction of their employer. The direction was clear enough in its terms, the respondent wanted some evidence as to what it was about their personal illness that made them unfit for work. I am satisfied that the refusal of the applicants was serious misconduct. Apart from anything else, they suspected (correctly as it turns out) the reasons for the respondent seeking the explanation from them. They did not tell the FWO the factual background to the leave they were asserting a right to have taken when making their enquiries, even though they suspected the respondent knew they had been at the Marina. They can hardly be heard to complain about the fact that the advice they received from the FWO was not adapted to their circumstances. The direction was clearly consistent with their contract of employment. As such, there is no entitlement to one weeks’ payment in lieu for either applicant. Their summary termination was justified.
Payment for each Applicant for 17 January 2017
Neither applicant is entitled to payment for paid personal leave for 17 January 2017. They had an entitlement pursuant to s.97, subject to complying with the obligations imposed by s.107. They did not so comply. They have no entitlement to be paid their normal wage for that day.
Underpayment by Reference to the Award
The applicants went to some considerable effort to formulate their claims for underpayment. The respondent’s evidence as to why the underpayments were not as claimed lacked some focus and was not clearly articulated, notwithstanding the schedules he tendered at trial.[55] It is not disputed that the applicants experienced a degree of underpayment, as did other employees. The respondent was forthright in his evidence that he had found the application of the Award to be very confusing.
[55] Exhibits R15 and R16.
He acknowledged to all employees during the second half of 2016 that back-payments would have to be made and entered negotiations with other employees after the dismissal of the applicants to resolve that issue. I accept the submission of counsel for the applicant that their calculations as to underpayment were not significantly challenged in cross-examination. On the basis of the rosters and payslips tendered together with the evidence of Mr and Mrs Muhlberg, I accept, on the balance of probabilities, that the relevant provisions of the Award are as asserted by the applicants. I further accept that they suffered underpayment as alleged in the schedules attached to their respective trial affidavits up until 16 December 2016 when Ms Muhlberg acknowledged underpayment issues had been rectified.[56] I note the concession made by the applicants that their original interpretation of cl 30.5 of the Award relating to continuous afternoon and night shifts was incorrect. I have made alteration for the hours worked in the pay week of 27 August 2016 for the first applicant and pay weeks 11 June 2016, 27 August 2016 and 12 November 2016 for the second applicant. The underpayment for the first applicant comes to $5,971.09 for the second applicant it comes to $6,663.86.
[56] Exhibit A1, LM18; Exhibit A3, LMM11.
I take note that of the above amounts, an amount of $1,531.38 represents superannuation payable to the first applicant and $1,858.03 superannuation payable to the second applicant.
The calculations with respect to each employee as amended are attached to this judgment as Annexures ‘A’ and ‘B’.
The applicants seek a civil penalty to be imposed pursuant to s 45 of the FW Act for breaching a modern award by the underpayment of wages. No submissions have been made with respect to that matter and I have adjourned these proceedings to a directions hearing to arrange for penalty submissions.
I make the orders to be found at the beginning of these reasons.
I certify that the preceding one hundred and eighty-nine (189) paragraphs are a true copy of the reasons for judgment of Judge Heffernan
Associate:
Date: 5 March 2020
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