Pejman Domenic Farshadi v Vkhv Pty Ltd ATF the Vasilios Chronarakis Family Trust T/A Tony and Guy Leichhardt

[2016] FWC 2765

[2016] FWC 2765

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Pejman Domenic Farshadi
v
VKHV Pty Ltd ATF the Vasilios Chronarakis Family Trust T/A Tony and Guy Leichhardt
(U2015/11640)

DEPUTY PRESIDENT LAWRENCE SYDNEY, 6 MAY 2016

Application for relief from unfair dismissal.

Introduction

[1] On 7 November 2015 Pejman Domenic Farshadi (the Applicant) lodged an application pursuant to s.394 of the Fair Work Act 2009 (the Act) for a remedy for unfair dismissal against his former employer VKHV Pty Ltd ATF the Vasilios Chronarakis Family Trust T/A Tony and Guy Leichardt (the Respondent).

[2] The Applicant says that he commenced employment with the Respondent on 8 October 2013. He says he was dismissed on 4 September 2015 and the dismissal took effect on 5 September.

[3] The Applicant’s F3 form states that he had been the subject of bullying and exploitation during his two years employment as a senior hair-stylist.

[4] The Respondent’s business is a hair salon in Leichardt, an inner western suburb of Sydney. It is managed by Ms Kathy Callas Chronarakis but the Respondent was represented by her husband Mr Bill Chronarakis.

[5] The Applicant say that Mr Chronarakis visited him at home late at night on Friday 4 September 2015 and dismissed him. He claims unpaid wages, entitlements and superannuation as well.

[6] The Respondent says that the Applicant resigned on 5 September. The Respondent sent the Applicant a dismissal email on 7 September to confirm that there were issues with his performance that had led to a decline in the business of the salon and that he had fraudulently attempted to obtain permanent residency in Australia by contacting the Respondent’s immigration agent posing as the Respondent.

Commission Proceedings

[7] The matter was conciliated on 22 October 2015 but was not settled. A further conciliation took place on 4 November 2015 but this also failed.

[8] I conducted a telephone programming hearing on 19 January 2016.

[9] The hearing took place in Sydney on 23 February 2016. The Applicant was overseas by this time and appeared by telephone. The Respondent was represented by Mr Bill Chronarakis.

[10] The Applicant had provided a relatively brief statement only. The Respondent provided no formal statement but provided some documentary material.

Protection from Unfair Dismissal

[11] An order for reinstatement or compensation may only be issued where I am satisfied the applicant was protected from unfair dismissal at the time of the dismissal.

[12] Section 382 sets out the circumstances that must exist for the applicant to be protected from unfair dismissal:

“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.

Note: High income threshold indexed to $136,700 from 1 July 2015”

[13] The Respondent was a small business of three employees. However, the Applicant had the required minimum service as he had been employed for almost two years. His hourly rate was $27.06 per hour he was below the high income threshold. He was also covered by a modern award although I doubt he was paid according to it.

[14] The applicant was therefore protected from unfair dismissal.

Was the dismissal unfair?

[15] A dismissal is unfair if I am satisfied, on the evidence before me, that all of the circumstances set out at s.385 of the Act existed. Section 385 provides the following:

“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.”

Was the Applicant dismissed?

[16] A person has been unfairly dismissed if the termination of their employment comes within the definition of “dismissed” for the purposes of Part 3-2 of the Act. Section 386 of the Act provides that:

“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 because of conduct, or a course of conduct, engaged in by his or her employer.

(2) However, a person has not been dismissed if:

(a) the person was employed under a contract of employment for a specified period of time, for a specified task, or for the duration of a specified season, and the employment has terminated at the end of the period, on completion of the task, or at the end of the season; or

(b) the person was an employee:

(i) to whom a training arrangement applied; and
(ii) whose employment was for a specified period of time or was, for any reason, limited to the duration of the training arrangement;

and the employment has terminated at the end of the training arrangement; or

(c) the person was demoted in employment but:

(i) the demotion does not involve a significant reduction in his or her remuneration or duties; and
(ii) he or she remains employed with the employer that effected the demotion.

(3) Subsection (2) does not apply to a person employed under a contract of a kind referred to in paragraph (2)(a) if a substantial purpose of the employment of the person under a contract of that kind is, or was at the time of the person’s employment, to avoid the employer’s obligations under this Part.”

[17] There was a dispute in this case as to whether the Applicant was dismissed or resigned.

[18] The Respondent had three employees, but the Small Business Fair Dismissal Code was not raised. Section 385(d) also has no application.

Harsh, Unjust or Unreasonable

[19] I must consider whether I am satisfied the dismissal was harsh, unjust or unreasonable. The criteria I must take into account when assessing whether the dismissal was harsh, unjust or unreasonable are set out at s.387 of the Act:

“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.

Approach of the Commission

[20] The ambit of the conduct which may fall within the phrase ‘harsh, unjust or unreasonable’ was explained in Byrne v Australian Airlines Ltd [1995] HCA 24; (1995) 185 CLR 410 at 465 by McHugh and Gummow JJ as follows:

“... It may be that the termination is harsh but not unjust or unreasonable, unjust but not harsh or unreasonable, or unreasonable but not harsh or unjust. In many cases the concepts will overlap. Thus, the one termination of employment may be unjust because the employee was not guilty of the misconduct on which the employer acted, may be unreasonable because it was decided upon inferences which could not reasonably have been drawn from the material before the employer, and may be harsh in its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct in respect of which the employer acted.”

[21] Vice President Ross, as he then was, in B Rose v Telstra Corporation Limited (1998) Q9292 (Rose) restated the above proposition and also stated:

“In my view whether there has been a `fair go all round’ is a matter which I think is relevant and hence I am to have regard to it determining whether the termination was harsh, unjust or unreasonable. It is not necessarily determinative but it is a factor to be taken into account.”

The Applicant’s Case

[22] The Applicant complains about bullying behaviour from Kathy Chronarakis. Some of this appears to be related to his application for residency.

[23] It had been arranged for Mr Chronarakis to visit him at home on the evening of 4 September to talk about the issues. Mr Chronarakis arrived just before midnight with the Applicant’s tools. Mr Chronarakis is alleged to have said that it would be better if he found something else.

[24] At 2.13 am on 5 September the Applicant sent an email to the Respondent which said:

“Herewith I will resign my position and moving forward. And Bill had notified me to let me go on the spot after our talk this evening.”

[25] The Applicant then received a letter from the Respondent by email on 5 September which stated:

“ Termination of your employment

I am writing to you regarding the termination of your employment with Toni and Guy Leichhardt. Reasons for dismissal are:

Misrepresentation (emailing an immigration officer/agent as a third party management)

Fraudulently attempting to obtain usernames & passwords from the government immigration dept website for the business without permission.

Accessing private information from within the business computers without approval or prior Authorization.

We consider that your actions constitute serious misconduct warranting summary dismissal. We also acknowledge receipt of your written/emailed resignation dated 05/09/2015.

Regards,

Mr. H. Chronarakis
Director”

[26] The Applicant submits that he was forced to send the resignation email and was therefore constructively dismissed.

The Respondent’s Case

[27] The Respondent says that there were a number of issues with the Respondent’s performance which are contained in the 5 September letter to him but the Applicant resigned first of his own volition.

[28] The late night visit by Mr Chronarakis to the Applicant’s home was at his request so there was no coercion.

Was the Applicant Dismissed Pursuant to s.386?

[29] Cases such as Mohazab v Dick Smith Electronics Pty Ltd (No. 2) (1995) 62 IR 200 (Mohazab) and O’Meara v Stanley Works Pty Ltd[2006] AIRC 496 (O’Meara) deal with s.386(1)(a). A termination is at the employer’s initiative when its action “directly and consequentially” results in the termination of employment, and the employee would have still been employed but for that action. An analysis of all the circumstances is required. The Full Bench states in O’Meara:

“[23] In our view the full statement of reasons in Mohazab which we have set out together with the further explanation by Moore J in Rheinberger and the decisions of Full Benches of this Commission in Pawel and ABB Engineering require that there to be some action on the part of the employer which is either intended to bring the employment to an end or has the probable result of bringing the employment relationship to an end. It is not simply a question of whether “the act of the employer [resulted] directly or consequentially in the termination of the employment.” Decisions which adopt the shorter formulation of the reasons for decision should be treated with some caution as they may not give full weight to the decision in Mohazab. In determining whether a termination was at the initiative of the employer an objective analysis of the employer’s conduct is required to determine whether it was of such a nature that resignation was the probable result or that the appellant had no effective or real choice but to resign.”

[30] Where an Applicant claims they were forced to resign they must show they had no real choice, Mohazab. The onus is on the employee to prove that they did not resign voluntarily and that the employer forced them to do it, Australian Hearing v Peary (2009) 185 IR 359. An employer is generally able to treat a clear and unambiguous resignation as such, Ngo v Link Printing Pty Ltd (1999) 94 IR 375 (Ngo).

[31] Deputy President Wells in Dawes v Presbyterian Care [2014] FWC 4067 provides the following useful summaries of the approach to be taken:

“[4] The Explanatory Memorandum to the Fair Work Bill 2008 (Cth) said in respect of now s.386(1) that:

“Clause 386 – Meaning of dismissed

1528. This clause sets out the circumstances in which a person is taken to be dismissed. A person is dismissed if the person’s employment with his or her employer was terminated on the employer’s initiative. This is intended to capture case law relating to the meaning of ‘termination at the initiative of the employer’ (see, e.g., Mohazab v Dick Smith Electronics Pty Ltd (1995) 62 IR 200).

1529. Paragraph 386(1)(b) provides that a person has been dismissed if they resigned from their employment but were forced to do so because of conduct, or a course of conduct, engaged in by their employer. Conduct includes both an act and a failure to act (see the definition in clause 12).

1530. Paragraph 386(1)(b) is intended to reflect the common law concept of constructive dismissal, and allow for a finding that an employee was dismissed in the following situations:

● where the employee is effectively instructed to resign by the employer in the face of a threatened or impending dismissal; or

● where the employee quits their job in response to conduct by the employer which gives them no reasonable choice but to resign.”

. . .

[59] In order for there to be access to a remedy to unfair dismissal, the employee must have been dismissed in accordance with s.386 of the Act. Accordingly, I am required to determine on the evidence whether Ms Dawes was dismissed at the initiative of PCT or whether she was forced to resign due to the conduct engaged in by PCT.

Consideration

[32] There was a paucity of submissions and reliable evidence to be considered in this matter. What is not contested is that the Applicant sent the email resigning. I am not persuaded, on the basis of the cases quoted above, that the Applicant had no alternative but to resign. It is clear that there had been a range of conflicts in the workplace in respect of which there are accusations on both sides. That does not mean that the Applicant had no choice but to resign.

[33] I am satisfied that Mr Chronarakis said to the Applicant in the late night conversation on 4 September words to the effect that it might be better for the Applicant to look for something else. However, this does not amount to a dismissal or grounds for treating the Applicant’s subsequent resignation email as a constructive dismissal.

[34] The Respondent’s action in sending the “letter of termination” on 5 September was an unusual course of action but it does not change the essential character of what happened.

[35] I note that there are accusations of underpayment and overpayment of wages and entitlements on each side but these cannot be resolved by this proceeding.

Conclusion

[36] Therefore, I find that the Applicant was not dismissed pursuant to s.385(a).

[37] It follows that the Applicant’s claim for a remedy for unfair dismissal must fail and is therefore dismissed. An Order [PR580103] will be issued with this decision.

DEPUTY PRESIDENT

Appearances:

P. Farshadi, self-applicant;

B. Chronarakis, for the Respondent.

Hearing details:

2016

Sydney:

January 19 (Telephone Conference);

February 23.

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