Paul Keirl v Myrti Pty Ltd

[2017] FWC 3336

[2017] FWC 3336

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Paul Keirl
v
Myrti Pty Ltd
(U2017/3593)

COMMISSIONER BISSETT MELBOURNE, 23 JUNE 2017

Application for an unfair dismissal remedy- small business – applicant found to be employee – minimum employment period worked – dismissal harsh, unjust or unreasonable – applicant unfairly dismissed – remedy – compensation ordered.

[1] Mr Keirl says that the commenced employment with Myrti Pty Ltd (Myrti) in “January/February 2016”. He says he worked as an employee for Myrti as a general labourer and scaffolder (on gaining his scaffolding licence). He worked 40 hours a week and did not work for any other employer.

[2] Mr Keirl says he did not provide Myrti with his tax file number (TFN) or superannuation account details as when he tried to the person he understood as the owner of Myrti, Mr Foster, brushed his hand away or said he would catch up with him about it later but this never eventuated. He also says that he never provided Myrti an ABN and always considered himself an employee.

[3] Mr Keirl says that each week he was paid $1,300 per week gross, with $300 deducted for taxation purposes.

[4] Mr Keirl says that, over the period of his employment, he noticed that he was paid at different times by three different entities – Myrti Pty Ltd, Kapyong Pty Ltd and a third company whose name he could not recall. He said that, even though he was paid by different entities, he was working at all times for Mr Foster and, in any event, he understood that each of the companies was owned by Mr Foster and his wife, Ms Cybele Le Souef.

[5] Mr Keirl provided to the Commission copies of pay slips received by him in August 2016 from Kapyong Pty Ltd. These payslips show a gross pay, a deductions for taxation and an accumulation of annual leave and sick leave.

[6] Mr Keirl says that in mid-March he received a text message from Mr Foster addressed to him and five of his co-workers advising that the business had decided not to directly employ anyone anymore and would only engage sub-contractors. He says he spoke to his co-workers who advised that they had not received such a text message. He says that at about lunch-time that day Mr Foster approached him and told him to pack his tools and leave.

[7] Mr Keirl says that he was an employee for the entire time he worked for Mr Foster and that his employment was terminated by Mr Foster on or about 14 March 2017. On termination Mr Keirl says that he received payment of $780 and did not receive any payment for notice or any extended notice.

[8] Mr Keirl agrees that Mr Foster (or Myrti) paid him an additional $600 at Christmas 2016 but he says this was not so he could have a holiday but was payment in exchange for work he had performed on Christmas Eve and over the Christmas period.

[9] Of the $1,500 Mr Foster claims was a loan to Mr Keirl, Mr Kiel says that he had asked if his pay could be put into his bank account early so he could pay some fines. When he checked his bank account he found that he had been paid early (as requested) but that a further $1,500 had been deposited as well. When he asked Mr Foster about this Mr Foster had said something about sorting it out later.

[10] Mr Keirl says that Myrti (or one of the companies owned by Mr Foster and his wife) continues to directly employ staff.

[11] Mr Keirl made his application for relief from unfair dismissal on 3 April 2017. On 6 April 2017 a standard letter attaching the application form was sent to Mr Murray Foster of Myrti. The letter advised of the upcoming conciliation of the matter and requested that the employer response to the application (Form F3) be completed and returned to the Fair Work Commission (Commission) within seven days. On 2 May 2017 Mr Foster indicated that he would not participate in any conciliation of the application. Conciliation of the application therefore did not occur.

[12] On 3 May 2017 the Commission received material from Mr Foster in which he made a number of claims with respect to the engagement of Mr Keirl. These included that:

● Mr Keirl was engaged as a subcontractor and provided his ABN;

● Mr Keirl was habitually late to work and owed Mr Foster 73 hours (at $25.00 per hour) for this tardiness;

● Myrti gave Mr Keirl $2,200 to pay his court fines and time off without loss of pay to attend court hearings and rehabilitation programs;

● Mr Keirl attempted to blackmail Mr Foster in late January 2017 by saying he had a job offer in Melbourne and would leave unless he got a pay increase. He was therefore made a permanent employee. Mr Keirl then made an “unauthorised disclosure” by telling the other employees that he had received a pay increase so Mr Foster was “forced” to provide others with a pay increase;

● Myrti gave Mr Keirl $600 so he could go away for a couple of days with his partner;

● Myrti took the decision to reduce the number of direct employees and to “employ” sub-contractors. This was done in consultation with employees. Mr Foster decided to turn Mr Keirl’s job into that of sub-contractor at $400 per day for three days per week. Mr Keirl rejected the offer and left the business of his own accord.

[13] Mr Foster advised he had a number of witnesses who would testify if the matter went to hearing.

[14] Mr Foster also advised that, on termination, Myrti provided two weeks’ pay in lieu of notice “in order to assist [Mr Keirl] to repay the then amount outstanding of $1,600 as a loan to us”.

[15] On 17 May 2017 Mr Foster made an inquiry of the Commission with respect to a request by Mr Keirl for an extension of time within which to make his submissions. Mr Foster was provided with details in relation to making an application pursuant to s.399A of the Fair Work Act 2009 (FW Act) to dismiss Mr Keirl’s application for failure to comply with the directions of the Commission.

[16] On 18 May 2017 a copy of Mr Keirl’s application and a blank Form F3 were (again) sent to Mr Foster. On 29 May 2017 the Commission received a completed Form F3 from Myrti.

[17] On 5 June 2017 (the application was listed for hearing on 8 June 2017) the following correspondence was received from Myrti:

It is with some embarrassment that I need to amend our documentation.

Myrti Pty Ltd in fact has no employees and Paul Keirl was not employed by Myrti Pty Ltd. Myrti only pays sub-contractors. Please amend your records accordingly.

I also need to put on the record that Mr Murray Foster was never an employer of Paul Keirl. With that said, Paul Keirl will need to lodge a new application against his employer as an employee. Naturally we will await that application.

Furthermore, we were going to request the results of the judicial review which was requested under the name of Myrti, however, this request is no longer valid because Myrti has no employees and it never employed Paul Keirl as an employee.

If you have any further queries please don't hesitate to let me know.

Yours sincerely

Cybele Le Souef

[18] On 5 June 2017 my chambers responded to Ms Le Souef:

Dear Ms Cybele (sic),

Thank you for your email.

The Commissioner requires that you attend the hearing on the above matter on Thursday 8 June 2017 to deal with your objection.

If you have any records of a contract with Mr Keirl or any other material relevant to his status or yours you should bring that with you.

[19] Ms Le Souef responded with a lengthy email which said, in part, that:

● Myrti has no employees and therefore “no representative of Myrti will be attend any form of hearing” (sic);

● The Commission has no jurisdiction to deal with superannuation, income tax or awarding “damages” and that Mr Keirl should provide his Tax File Number and Superannuation account details so that appropriate payments can be made;

● She was confused how she could provide any contract Myrti may have with Mr Keirl as Myrti does not employ anyone;

● Myrti is a small business and the FW Act does not apply to small businesses.

[20] Ms Le Souef attached to her email a copy of an email she had sent to Mr Keirl which included his final payslip.

[21] It is noted that this final payslip provided to Mr Keirl was from Kapyong Pty Ltd. Given this circumstance my chambers asked Ms Le Souef to provide details of company ownership and the relationship between Myrti Pty Ltd, Kapyong Pty Ltd and any other related companies.

[22] Ms Le Souef was also advised that if the Myrti was not present or represented at the hearing on 8 June 2017 the matter may be determined in its absence.

[23] The Commission received no further correspondence from Ms Le Souef or Mr Foster and neither Myrti nor Kapyong Pty Ltd were represented at the hearing on 8 June 2017. My associate made two attempts to telephone Ms Le Souef prior to the hearing commencing but both calls and messages remained unanswered.

[24] Following completion of the hearing the transcript of proceedings was sent to Myrti with a request for any submissions it wished to make in reply to what was in transcript to be provided to the Commission within seven days.

[25] Ms Le Seouf responded to this email and requested that the correspondence not be sent to Mr Keirl. She also asked that she be given the same opportunity afforded to Mr Keirl to speak directly with the Commissioner. The email contained highly prejudicial material with respect to Mr Keirl. I directed that my associate respond to Ms Le Souef in the following terms:

The Commissioner cannot accept submissions from you that are not disclosed to the other party. To do so would be to deny Mr Keirl the right to know the case against him and be given the opportunity to respond to that case. He would be denied natural justice.

The Commissioner has already afforded you the same rights as those afforded to Mr Keirl – to attend a hearing and put your case – on 8 June 2017. You chose not to attend. A further private hearing will not be arranged. Your grounds for requesting such have not previously been raised as a reason [for] your [non]-attendance (or that of anyone from Myrti) on 8 June 2017. Requests for you to provide relevant information to the Commission have been ignored.

The Commissioner has given you an opportunity to respond in writing to any matter raised in the transcript of the hearing of Mr Keirl’s application. That response is required by 22 June 2017.

[26] No submissions in response to the transcript were received from Myrti by the required date.

Was Mr Keirl unfairly dismissed?

[27] The FW Act relevantly states:

396 Initial matters to be considered before merits

The FWC must decide the following matters relating to an application for an order under Division 4 before considering the merits of the application:

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

(b) whether the person was protected from unfair dismissal;

(c) whether the dismissal was consistent with the Small Business Fair Dismissal Code;

(d) whether the dismissal was a case of genuine redundancy.

[28] I am satisfied that the application was made within 21 days of the date of dismissal.

[29] I have considered if Mr Keirl is protected from unfair dismissal below.

[30] Myrti says that it is a small business (I accept that it is) and that the FW Act does not apply in such circumstances. It is incorrect in this view. The FW Act clearly applies to small businesses but with some modification such that the minimum employment period to be worked to be eligible to make a claim for unfair dismissal is 12 months (and not 6 months) and, in circumstances, the Small Business Fair Dismissal Code might apply.

[31] No submissions were made such that the Small Business Fair Dismissal Code might apply. I am therefore satisfied that, in this case, it does not.

[32] No evidence was produced by Myrti to demonstrate that the dismissal was a genuine redundancy. I am therefore satisfied that it was not.

[33] The FW Act also states:

382 When a person is protected from unfair dismissal

A person is protected from unfair dismissal at a time if, at that time:

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

(b) one or more of the following apply:

(i)  a modern award covers the person;

(ii)  an enterprise agreement applies to the person in relation to the employment;

(iii)  the sum of the person’s annual rate of earnings, and such other amounts (if any) worked out in relation to the person in accordance with the regulations, is less than the high income threshold.

383 Meaning of minimum employment period

The minimum employment period is:

(a) if the employer is not a small business employer—6 months ending at the earlier of the following times:

(i) the time when the person is given notice of the dismissal;

(ii) immediately before the dismissal; or

(b) if the employer is a small business employer—one year ending at that time.

Was Mr Keirl an employee?

[34] For Mr Keirl to be eligible to make an application for unfair dismissal he must, first, be an employee.

[35] Mr Keirl says that he was employed by Myrti and that he has always received payslips from Myrti, Kapyong Pty Ltd or a third company he could not remember the name of. He says that he always worked for Mr Foster.

[36] Apart from a claim that Mr Keirl was a sub-contractor until January 2017 when he “blackmailed” the business into making him a permanent employee, Myrti has failed to provide any evidence that Mr Keirl was paid in any way except as an employee. A request for a copy of the contract with Mr Keirl was rebuffed by Ms Le Souef. Myrti has not produced any record of its terms of engagement with Mr Keirl, any invoices provided to it by M Keirl or details of payments made by it to Mr Keirl.

[37] Mr Keirl has provided the Commission with copies of payslips he received from Myrti in August 2016. These payslips are headed “employee pay details”, contain an hourly rate, a deduction for tax and an annual leave and sick leave accumulation. No explanation is given by Myrti as to how these payslips for August 2016 could be reconciled with its claim of Mr Keirl being a sub-contractor at that time.

[38] The totality of reliable evidence before me with respect to the relationship between Mr Keirl and Myrti is payslips from 2016 and a final payslip of 2017. I am therefore satisfied that Mr Keirl worked as an employee for Myrti. He therefore is an employee.

Was Mr Keirl employed for over 12 months?

[39] It is not disputed that Myrti is a small business.

[40] I am satisfied that Mr Keirl commenced employment with Myrti in around February 2016. His employment was terminated on or about 14 March 2017. He has therefore completed 12 months employment and, in this respect, is eligible to make an application for unfair dismissal.

[41] I am satisfied that Mr Keirl was employed by Myrti.

[42] I am therefore satisfied that Mr Keirl is protected from unfair dismissal.

Was Mr Keirl dismissed?

[43] Section 386 of the FW Act states:

386 Meaning of dismissed

(1) A person has been dismissed if:

(a) the person’s employment with his or her employer has been terminated on the employer’s initiative; or

(b) the person has resigned from his or her employment, but was forced to do so because of conduct, or a course of conduct, engaged in by his or her employer.

[44] I am satisfied that Mr Keirl’s employment was terminated at the initiative of the employer.

[45] On Mr Foster’s own material he decided “to turn Mr Keirl’s position into a full time sub-contractors position.” He told Mr Keirl this and offered him three days’ work a week as a sub-contractor.

[46] Mr Foster took the decision to terminate Mr Keirl’s on-going employment when he advised him that his job was to become a sub-contractor’s position. In doing so the intent of Mr Foster was to terminate the on-going employment of Mr Keirl.

Was Mr Keirl unfairly dismissal?

[47] Section 385 of the FW Act states:

385 What is an unfair dismissal

A person has been unfairly dismissed if the FWC is satisfied that:

(a) the person has been dismissed; and

(b) the dismissal was harsh, unjust or unreasonable; and

(c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and

(d) the dismissal was not a case of genuine redundancy.

[48] I have made specific findings on s.385(a), (c) and (d) above.

[49] In determining if the dismissal was harsh, unjust or unreasonable, s.387 of the FW Act states:

387 Criteria for considering harshness etc.

In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the FWC must take into account:

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

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

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

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

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

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

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

(h) any other matters that the FWC considers relevant.

[50] Whilst Mr Foster has set out in his correspondence his actions in March 2017, he has provided no evidence to which any weight can be attached as to his reason for dismissing Mr Keirl. That he wanted “to employ sub-contractors” does not provide a valid reason for the dismissal of Mr Keirl. Whilst it may be a defensible business strategy it does not explain why Mr Keirl was selected to have his employment terminated.

[51] There is nothing before me to suggest that the actions might have arisen from a genuine redundancy and, in any event, there is no evidence that the requirements of a genuine redundancy have been met.

[52] I am therefore satisfied that there was no valid reason for the dismissal of Mr Keirl.

[53] Mr Foster did not attend the hearing of Mr Keirl’s application. I have therefore accepted Mr Keirl’s version of the events leading to his dismissal.

[54] I am also satisfied that Mr Keirl was not advised of the reason for his dismissal or given an opportunity to respond prior to the decision being taken to dismiss him.

[55] As no discussion occurred with Mr Keirl I make no finding with respect to a support person.

[56] It is not clear that the dismissal was for unsatisfactory employment.

[57] I accept that Myrti is a small business and I infer from this that it has no access to any human resources expertise. In the absence of any evidence to the contrary this does not provide any justification for its conduct in relation to this matter.

[58] Myrti, in its correspondence, makes a range of claims with respect to Mr Keirl’s character. Mr Keirl refutes these. In the absence of evidence from Mr Foster or Ms Le Souef to support their claims I have had no regard to them.

[59] For these reasons I am satisfied that the dismissal of Mr Keirl was harsh, unjust or unreasonable. Mr Keirl was therefore unfairly dismissed.

Remedy

[60] Mr Keirl does not seek reinstatement and I am satisfied that reinstatement would not be appropriate.

[61] I have therefore considered the appropriate remedy. In doing so, I have taken into account the provisions of s.392 of the FW Act.

[62] At the time of his dismissal Mr Keirl was apparently earning $1,300 per week. I take this from the final payslip provided to Mr Keirl by Ms Le Souef which indicates he received a payment for notice of $1,300. Whilst Mr Foster suggested he provided two weeks’ notice I doubt that the notice paid amounts to two week’s pay. In any event, $1,300 is the weekly gross amount shown on Mr Keirl’s payslips from August 2016. I am therefore satisfied, on this basis, that Mr Keirls’ gross weekly wage was $1,300.

[63] I am satisfied that, at the time his employment was terminated Mr Keirl would have continued to work for the business for a further six months. I have no contrary view from Myrti. Mr Keirl’s los remuneration is therefore 26 weeks’ at $1,300 per week ($33,800).

[64] Mr Keirl received a payment of $780.00 as his final pay. The validity of the deductions made from that payslip are not obvious. I have therefore not taken them into account.

[65] Since the termination of his employment Mr Keirl has had about four weeks’ work. During this period he earned $14,413.12. Mr Keirl’s lost earnings are therefore $18,606.88.

[66] I am satisfied that Mr Keirl has sought to mitigate his loss. He has taken work where he can get it with his employment ending when the work was completed.

[67] I have deducted an amount of 15% for contingencies.

[68] I have not deducted an amount for future earnings. At the time of making this decision Mr Keirl was without work. It was not clear when he would be next employed.

[69] There is no reason to reduce the amount of compensation ordered for misconduct.

[70] The amount does not include an amount for shock or distress and does not exceed the compensation cap.

[71] I have therefore determined to award an amount of $15,815.85 to Mr Keirl.

[72] An order 1 will be issued requiring Myrti to make a payment of this amount to Mr Keirl within 14 days of the making of the Order.

COMMISSIONER

Appearances:

P. Keirl on his own behalf.

No appearance for Myrti Pty Ltd.

Hearing details:

2017.

Ballarat:

June 8.

 1   PR593972.

Printed by authority of the Commonwealth Government Printer

<Price code C, PR593958