Nathalie MocsarivExpanse Pty Ltd T/A Expanse Search and Selection

[2010] FWA 2138

[2010] FWA 2138

FAIR WORK AUSTRALIA

DECISION

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

Nathalie Mocsari
v
Expanse Pty Ltd T/A Expanse Search and Selection
(U2009/13374)

SENIOR DEPUTY PRESIDENT HAMBERGER SYDNEY, 24 MARCH 2010

Termination of employment; date when applicant’s employment with the respondent terminated.

[1] On 29 October 2009, Mrs Nathalie Mocsari (the applicant) filed an application with Fair Work Australia (FWA) seeking a remedy in relation to her dismissal by Expanse Pty Ltd (the respondent). A conciliation conference was held before an FWA Conciliator on 18 November 2009 but the matter did not settle. A Notice of Listing was issued directing the parties to file outlines of submissions and any witness statements and other documentary evidence they intended to rely upon. The matter was listed for arbitration on 1 March 2010.

[2] On 23 February 2010 the respondent’s representative raised a jurisdictional issue. In particular he contended that the termination of the applicant’s employment occurred prior to 1 July 2009 and therefore there was no statutory relief available, as the respondent employed fewer than 101 employees.

[3] At the hearing held on 1 March 2010, with the consent of both parties, the tribunal heard submissions solely in relation to this jurisdictional issue. No witnesses were called as the respondent submitted that the issues regarding its jurisdictional objection could be dealt with on the basis of “uncontroversial evidence that’s contained within the statements of the parties.” 1

The Evidence

[4] The respondent filed a statement by Mr Javier Izquierdo, the owner and director of Expanse Pty Ltd. The applicant filed a statement made by her, and one by her husband, Mr Dion Mocsari.

[5] The respondent was formed in February 2003 and is a small recruitment firm specialising in the civil engineering sector. Most of its work involves sourcing international candidates to work for its Australian clients.

[6] The applicant commenced work as a trainee recruitment consultant in January 2005. By 2008 the applicant was able to perform her duties with minimal supervision. As she became more experienced, her level of responsibility increased, but her main focus was the placement of candidates. According to Mr Izquierdo, he and the applicant became good friends. During most of this time, the applicant and Mr Izquierdo were the only people working for the respondent.

[7] On 30 May 2008 the applicant went on maternity leave. She gave birth to a daughter on 25 June 2008. The respondent had purchased a laptop to enable the applicant to work from home whilst she was on leave. Mr Izquierdo stated that the applicant agreed that she was the only person allowed to have access to the laptop and must not give the password to anyone else. According to Mr Izquierdo the applicant indicated that she would not consider doing any work until at least two to three months after the birth of the baby. The respondent would continue to pay the applicant her contractor commissions while she was on leave.

[8] There is some dispute between Mr Izquierdo’s statement and that of the applicant concerning liability for payment of the applicant’s phone and internet accounts while she was on leave. According to Mr Izquierdo, the applicant agreed that the respondent would continue as the direct debit payer, but the money would then be deducted from the applicant’s monthly commissions. The applicant opened an account in her name with Optus for her home phone and internet connection and provided the respondent’s bank details for the purpose of direct debit. The respondent continued to be the direct debit payer for the applicant’s ‘3’ mobile phone account. According to the applicant, Mr Izquierdo had agreed that, as she would be working from home, the respondent would continue to pay her phone and internet accounts.

[9] According to Mr Izquierdo, he took over all of the applicant’s work:

“(d)uring the length of NM’s maternity leave NM did not interview, represent or place any candidates with Expanse’s clients and therefore did not generate any new sales or invoices.” 2

Mr Izquierdo did however acknowledge that the applicant communicated with clients or candidates whom the applicant had been working with prior to going on maternity leave.

[10] According to Mr Izquierdo, on 6 June 2008 he reviewed the work done by the applicant in relation to a candidate named Fadi Sirrieh. He became concerned that the applicant had proposed that the contract between Mr Sirrieh and the client include a Living Away from Home Allowance (LAFHA). Because of the class of visa Mr Sirrieh held he was not entitled to a tax free LAFHA. Mr Izquierdo formed the view that the applicant had given incorrect and negligent advice that could have had negative legal consequences for the candidate, the client and the respondent.

[11] Mr Izquierdo’s statement indicates that on the same day, the applicant rang him to find out what was happening with certain candidates. He told her he could not speak to her as he had a serious problem with one of her candidates. He says that the applicant then put the phone down on him, something he says she had done before. He shortly after rang the applicant and asked her why she had put the phone down on him. She said he had raised his voice. At this point, Mr Izquierdo says that the applicant’s husband came on the phone and said words to the following effect:

“Nathalie is pregnant. I am going to come down and sort you out.”  3

[12] None of this exchange was referred to in the applicant’s or her husband’s statement.

[13] In December 2008 Mr Izquierdo arranged to take the laptop computer from the applicant as he said he needed it for a trip he was undertaking. The applicant told him she had photos of her daughter on the laptop. Mr Izquierdo agreed to transfer the photos to a memory stick. He told her he would not return the laptop after his trip as she had not been working during her maternity leave. He also, according to his statement, agreed with her that she would remove the respondent as the direct debt payer for her phone and internet accounts. The applicant’s statement gives a somewhat different version of events. In particular, while she agrees that she changed her mobile phone account so that it would be directly debited from her account she says that the respondent was to continue to pay the internet account.

[14] On 27 February 2009 the applicant sent Mr Izquierdo an email asking him about the placement of Mr Sirrieh. On 25 or 26 March 2009 Mr Izquierdo asked the applicant (via text message) to come into the respondent’s office to discuss Mr Sirrieh and the payment of a bonus they had previously discussed.

[15] On 27 March 2010 the applicant attended the office as arranged. According to her statement Mr Izquierdo came into the board room where he had asked her to wait for him and

“without a word of greeting threw a stack of paper work at me and in a menacing way told me to read and sign the papers straight away. He then put a pen on the papers and started to walk out of the boardroom. I told him not to speak to me like that, that I had come in for a chat and that if he had anything he wanted to discuss I would be happy to do so but that I didn’t come here to read anything or to be spoken to in that manner. JI continued to insist in a threatening manner that I read his paperwork. I looked at the 1st bundle of papers, which started off saying something like ‘on XYZ date you demanded payment for the placement of Fadi Sirrieh’. JI had then written several pages of hypothetical doomsday scenarios that he said may have come about as a result of an error on my part during the placement of this engineer…I said to JI that I had not demanded payment for anything, that I had merely asked what was happening with this candidate … and that if he didn’t want to pay me for it then he need only say so rather than construct a farfetched, hypothetical scenario that had never eventuated. JI appeared to become even more angered by this response and kept insisting in a threatening manner that ‘if you know what’s good for you, you will sign this paperwork now’. I said I would not and he said ‘You will do it now or I will call the police.’ At this point I stood up to leave and said I would take the papers home to read over them but that I would not be bullied in this manner. JI wouldn’t give me the papers. As I was walking out the doors towards the lifts he was shouting that I had defrauded the company of thousands of dollars and that he was calling the police. I told him to go ahead and call the police.” 4

[16] According to Mr Izquierdo the meeting proceeded thus:

“On Friday 27th March 2009 at 10am NM attended a meeting in Expanse’s office. NM pressed the office intercom and my office telephone buzzed. I answered my telephone and NM said words to the following effect:

‘Hello. I am here, please can you let me in.’

I said words to the following effect:

‘Hello. Please can you go into the boardroom. I will meet you in the boardroom in a few minutes.’

I entered the boardroom approximately 2 or 3 minutes after NM’s intercom call. I had with me the documents prepared on 25 and 26 March 2009 and a pen. When I entered to boardroom (sic) I could see NM was seated at the nearest chair to me and her daughter was in a push chair to her right. I did not know NM was bringing her daughter to the meeting. I said words to the following effect:

‘Hello Nathalie, how are you? How is Sophie?’

NM said words to the following effect:

‘Hello Javier, I’m very well and Sophie is very well. How are you and how is the business going?’

I walked around NM daughters (sic) push chair and sat opposite NM. I placed the documents 25 and 26 March 2009 on the table. I said words to the following effect:

‘Very well thank you. You have asked me questions about Fadi Sirrieh and your bonus. I have prepared a number of documents regarding Fadi Sirrieh and other matters. I think it better I leave the boardroom so you can read through the documents and require your response (sic).’

NM picked up one of the documents, opened one page and read it for approximately 20 – 30 seconds.

NM said words to the following effect:

‘I don’t have time to read the documents. What are they about?’

I said words to the following effect:

‘There are some serious issues and you need to make time to read them. The documents are about FS, continuing Optus and Three debits and pornography discovered on the laptop. I will leave the boardroom and please take your time and read through documents and make your comments’

NM threw the document back on the table and got up from her chair and moved her daughter (in her push chair.) I said words to the following effect:

‘You are not seriously leaving are you?’

NM left the boardroom with her daughter and exited Expanse’s office, then taking the lift. The meeting lasted about 3 to 5 minutes.” 5

[17] It can be inferred from Mr Izquierdo’s statement 6 that the documents shown to the applicant at this meeting are the first five documents attached to the employer’s amended response of 23 February 2010. The first deals with Fadi Sirrieh. It is in the form of a letter addressed to the applicant and commences: “You have demanded to be paid By Expanse for ‘your’ management of the recruitment of Fadi Sirrieh who joined Parsons Brinkerhoff.” The document finishes with the following “summary”:

“1. Your advice to Fadi that he was entitled to LAFHA, even though he held a skilled migrant/permanent residency visa, was incorrect and grossly negligent and could have caused Fadi to undertake a criminal act of not paying his taxes in full. Regardless of your advice Fadi would still have been solely liable to the ATO. This would have given rise to a lawsuit against Expanse by Fadi for any loss he incurred due to your negligent advice.

2. Your advice to Parsons Brinkerhoff that Fadi was entitled to LAFHA was incorrect and grossly negligent. This would have likely led to an action for damages by Parsons Brinkerhoff for any loss accrued and the end of our business relationship with them. Your actions brought Expanse into disrepute and if I had not interjected in the process it would have been disastrous for all concerned.

3. You have been trained on the application of LAFHA directly by me for a number of years. It is incredible that you gave such advice to Fadi and Parsons Brinkerhoff given your training. I am currently reviewing your work to see if you have repeated this type of advice to any of our clients or candidates. Please advise if you have given similar advice to candidates or clients.

4. The issuing of physical threats in the work place, whether directly made by an employee or countenanced as you have done, is completely unacceptable.

5. The continued unwarranted ending of telephone calls as you have done is completely unacceptable.

Given the above it is clear you were grossly negligent in your handling of Fadi Sirrieh’s placement and had no input into the renegotiation of Fadi’s offer without LAFHA Therefore you are not responsible for his placement nor due any commission.

For the above reasons please take this as a final written warning. Should any repeat of these actions occur again Expanse will have no other option but terminate you contract immediately.” 7

[18] The second document deals with the laptop. It consists of a series of questions, with a space left after each question, presumably to provide room for the applicant to write her responses. The questions include whether the applicant disclosed the password to anyone else, whether anyone else accessed the laptop while it was in her possession, the specific content of any files downloaded to the laptop, any use of the laptop “that would conflict with Expanse’s business and could lead the company into disrepute if the files or data, you accessed or downloaded, were transmitted to a third party, candidate or client” and whether any files had been deleted. Space was provided for the applicant sign her name and date her signature. 8

[19] The third document provided a draft letter for the applicant’s signature addressed to an unspecified recipient asking him or her to email a copy of her customer notes in relation to her “3” telephone account. 9 The fourth document contained a number of assertions concerning the basis on which Mr Izquierdo had agreed to pay contractor commissions to the applicant and included the statement: “During the period of your maternity leave you have not managed your contractors or had any input whatsoever into their management.”It then provided space for the applicant to indicate any disagreements she had with any of the assertions, again providing space for her to provide and date her signature.10 Finally, there was a letter to the applicant making a number of statements about responsibility for the payment of her phone and internet accounts. Again, space was provided for her to indicate any objections she had to these assertions.11

[20] According to the applicant, after she left the meeting, her husband asked her if she wanted him to speak to Mr Izquierdo. She said she did. On her account her husband spent around 30 minutes with Mr Izquierdo. According to Mr Izquierdo, Mr Mocsari verbally abused him, prompting him to call the police. While the police later arrested Mr Mocsari, no charges were pressed. Mr Izquierdo took out an Apprehended Violence Order against Mr Mocsari.

[21] On 20 April 2009, the applicant’s solicitors, Somerset Ryckmans, sent a letter to the respondent. This letter included the following:

“We have advised our client that the allegations made by you on behalf of Expanse that our client engaged in fraud and other improper conduct, constitutes a constructive dismissal of our client’s employment by Expanse which dismissal is hereby accepted by our client. As a result of the actions taken by you, our client has been wrongfully terminated by Expanse and we hereby reserve our client’s rights to sue Expanse for wrongful termination of employment.”

[22] The Somerset Ryckmans letter stated that their client was entitled to contractor payments, the placement fee for Mr Sirrieh, and a profit share. It said:

“Strictly on a without prejudice basis except as to costs, our client is prepared to settle all claims arising from her wrongful dismissal by the payment of $30,000 which we estimate to be the reasonable quantum of the loss and damage which she has suffered by virtue of your company’s wrongful termination of our client’s employment.”

[23] The letter also stated that their client had been defamed and demanded a written apology. If such an apology was not forthcoming “we hold instructions to issue proceedings without further notice to you.” The letter concluded by indicating that Mrs Mocsari had been advised that Mr Izquierdo’s conduct might constitute the criminal offence of blackmail. 12

[24] On 29 May 2009, Eakin McCaffery Cox responded on behalf of the respondent. Their letter denied that the respondent had engaged in conduct which amounted to Mrs Mocsari’s constructive dismissal. It went on:

“Failing your client accepting our client’s offer, your client will be dismissed summarily for gross misconduct.”

[25] Later on, under the heading of “Our Client’s Offer” the letter indicated that the respondent would not be apologising or making any ex-gratia payment:

“In rejecting your assertion that our client engaged in conduct which amounted to the constructive dismissal of yours our client has decided to terminate your client for gross misconduct.

In the interests of bringing this matter to conclusion and allowing your client to move forward our client is prepared to defer issue of the notice and in lieu thereof, offer that your client tender her resignation on the basis that any payment to which she is entitled either by way of notice or payment of bonus (which is denied in any event) by agreement, and in the alternative, be abandoned as offset payment in undertaking forensic examination of our client’s laptop computer and obtaining legal advice.

If we do not obtain your response by close of business, Friday 5 June 2009 we will issue your client’s written notice of termination. In the event that for whatever reason you require an additional period beyond 7 days please contact the writer in order to seek an extension.” 13

[26] In the event, this letter was not replied to by the applicant until 20 October 2009. No notice of termination was issued by the respondent. In her letter of 20 October 2009, the applicant wrote to the respondent:

“In your solicitor’s letter, I have been advised that unless I resign, you intend to terminate my employment on the grounds of gross misconduct. In the circumstances, I have no alternative but to resign with effect from the date of this letter.

My resignation is not made voluntarily but is brought about at the initiative of Expanse. Accordingly, I consider that I have been constructively dismissed.” 14

Consideration

[27] To attract the jurisdiction of FWA, the applicant’s employment must have been terminated at the initiative of the respondent. Moreover, this must have occurred after 30 June 2009. Any termination prior to this date would not come within jurisdiction as the respondent had fewer than 101 employees and the application would have been excluded by virtue of the “small business exemption” specified by s. 643(10) of the Workplace Relations Act 1996.

[28] In Searle v Moly Mines Limited 15 (Searle) a Full Bench of the Australian Industrial Relations Commission considered the meaning of the expression “termination at the initiative of the employer” and its relationship to the termination of the contract of the employment:

“[22] Before turning to the facts of this case there is another issue which arose in the course of the submissions with which we should deal. That matter concerns the relevance of the principles governing the termination of a contract of employment. It is clear that the statutory test relates to termination of the employment relationship, not termination of the contract of employment. The difference is well illustrated by the following passage from the joint judgment of Brennan CJ and Dawson and Toohey JJ in Byrne and Frew v Australian Airlines Ltd 16:

“It does not appear to have been doubted in this country that a wrongful dismissal terminates the employment relationship notwithstanding that the contract of employment may continue until the employee accepts the repudiation constituted by the wrongful dismissal and puts an end to the contract. That was accepted by both the majority and minority in Automatic Fire Sprinklers Pty Ltd v Watson [(1946) 72 CLR 435 at 471]. As Latham CJ said (at 454):

‘An employer terminates the employment of a servant when he dismisses him, though, as I say hereafter, such a dismissal does not put an end to the contract between the parties. An argument that a dismissal because wrongful was a nullity was raised and rejected in both Williamson's Case [Williamson v The Commonwealth, (1907) 5 CLR 174 at 185] and Lucy's Case [Lucy v The Commonwealth, (1923) 33 CLR 229 at 237, 238, 249, 252, 253].

And as Dixon J said [Automatic Fire Sprinklers Pty Lt(d) v Watson at 545]:

there is nothing in the general law preventing the wrongful dismissal of a servant operating to discharge him from service, notwithstanding that he declines to accept the dismissal as absolving him from further performance but keeps the contract open and remains ready and willing to serve.’ ”.

[23] In the case of wrongful dismissal, as the passage shows, the employment is terminated by the employer even though the contract continues until the employee accepts the repudiation, thereby bringing the contract to an end. In applying the statutory test it is the termination of the employment relationship which is important.”

[29] In Visscher v The Honourable Justice Giudice 17 a majority of the High Court recently affirmed this distinction between “the concepts of termination of an employment relationship and the discharge of a contract of employment” by holding that:

“(t)he concepts are different. It does not follow from the fact that a wrongful dismissal is effective to bring the employment relationship to an end that it thereby discharges the contract of employment”. 18

[30] The majority then went on to cite the above passages from Byrne and Frew v Australian Airlines Ltd 19 and Automatic Fire Sprinklers Pty Ltd v Watson20with approval.21

[31] In this case, if the “employment relationship” was terminated prior to 1 July 2009 then FWA has no jurisdiction to grant a remedy, and the application must be dismissed, even if the contract of employment continued. This must be determined by examining the circumstances of this case.

[32] There are some differences in the accounts of Mrs Mocsari and Mr Izquierdo about what happened on 27 March 2009. However the following facts are not seriously in dispute:

1. Mr Izquierdo invited Mrs Mocsari to a meeting on 27 March 2009 to discuss Fadi Sirrieh and her end of year bonus.

2. At the meeting Mr Izquierdo gave the applicant a series of documents outlining a range of allegations. The applicant looked at some of the material but did not read through all of the documents. She then left the room.

3. Mrs Mocsari sent her husband up to talk to Mr Izquierdo and there was an argument leading Mr Izquierdo to call the police.

4. Mrs Mocsari’s lawyer sent a letter dated 20 April 2009 to the respondent indicating that Mrs Mocsari had been wrongfully dismissed and seeking a sum in settlement.

5. On 29 May 2009 the respondent’s lawyer replied by rejecting the claim that Mrs Mocsari had been wrongfully dismissed but indicated that the respondent intended to terminate the applicant for gross misconduct. No formal notice of termination was ever issued, despite one being foreshadowed.

6. Mrs Mocsari made no attempt to resume her duties, nor was there any suggestion by the respondent that she would be provided with any. Mrs Mocsari sent the respondent a letter of resignation on 20 October 2009.

[33] It is clear that the applicant had no intention of ever returning to work after the events on 27 March 2009. The only communication she had with the respondent after those events was to send him a solicitor’s letter claiming that she had been constructively dismissed and seeking redress. She clearly acted on the basis that the employment relationship was over. Moreover, while it is possible that the respondent thought prior to 27 March 2009 that Mrs Mocsari could resume employment it is clear that by the 29 May 2009 at the latest that he had determined that he would no longer be offering any more work to Mrs Mocsari. It is possible that in a formal sense the contract of employment persisted until Mrs Mocsari’s letter of resignation in October 2009 – however, following Searle that is not the issue. The ‘employment relationship’ had been dissolved before 1 July 2009. Given the size of the employer and the prevailing legislation I need not determine whether the applicant’s employment was terminated at the initiative of the employer or otherwise. FWA lacks jurisdiction to deal with Mrs Mocsari’s application and I dismiss it accordingly.

SENIOR DEPUTY PRESIDENT

Appearances:

Mr S. Ryckmans on behalf of the Applicant.

Mr M. Scott on behalf of the Respondent.

Hearing details:

2010

Sydney:

1 March

 1   Transcript PN 44.

 2   Statement of Mr Javier Izquierdo, para. 16.

 3   Statement of Mr Javier Izquierdo, para. 21.

 4   Statement of Mrs Nathalie Mocsari, para.15.

 5   Statement of Mr Javier Izquierdo, para. 45.

 6   Statement of Mr Javier Izquierdo, para. 43.

 7   Amended Employer’s Response of 23 February 2010, Document 1 of Schedule A.

 8   Amended Employer’s Response of 23 February 2010 Document 2 of Schedule A.

 9   Amended Employer’s Response of 23 February 2010, Document 3 of Schedule A.

 10   Amended Employer’s Response of 23 February 2010, Document 4 of Schedule A.

 11   Amended Employer’s Response of 23 February 2010, Document 5 of Schedule A.

 12   Statement of Mr Javier Izquierdo, Annexure 23.

 13   Amended Employer’s Response of 23 February 2010, Document 10 of Schedule A.

 14   Amended Employer’s Response of 23 February 2010, Document 11 of Schedule A.

 15   Searle v Moly Mines Limited [2008] AIRCFB 1088 at [22] per Giudice J, O’Callaghan SDP and Cribb C.

 16 (1995) 185 CLR 410 at 427.

 17 (2009) 258 ALR 651.

 18   Ibid at 663 per Heydon, Crennan, Kiefel and Bell JJ.

 19 (1995) 185 CLR 410.

 20 (1946) 72 CLR 435.

 21   Visscher v The Honourable Justice Giudice (2009) 258 ALR 651 at 663–664 per Heydon, Crennan, Kiefel and Bell JJ.

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