Richard Kinnane v Glow Drive Pty Ltd

[2014] FWC 4742

[2014] FWC 4742

FAIR WORK COMMISSION

DECISION

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

Richard Kinnane
v
Glow Drive Pty Ltd
(U2013/16462)

COMMISSIONER BULL PERTH, 16 JULY 2014

Application for unfair dismissal, unable to obtain insurance for employee, small business employer, small business code if relevant not followed, no valid reason for dismissal, dismissal unfair, compensation ordered.

[1] This is an unfair dismissal application brought by Mr Richard Kinnane (Applicant) who was employed by Glow Drive Pty Ltd (Respondent) as a truck driver until his termination of employment on 12 November 2013. The Applicant’s mother Ms Deborah Kinnane appeared on behalf of the Applicant and the Respondent was represented by its Manager Mr Elvis Di Pasquale. Both advocates needed Commission assistance and direction in putting forth their respective cases.

Background

[2] The Applicant commenced employment with the Respondent as a truck driver on 4 February 2012. On 2 May 2013, the Applicant was involved in a work related motor vehicle accident. On 29 July 2013, the Applicant broke his ankle while at work and was away from work until his return on 29 September 2013. A workers compensation claim was made to cover this period of absence from work. On Monday 4 November 2013, the Applicant was advised that motor vehicle insurance could not be obtained for him and that he was to finish on Tuesday, 12 November 2014. The Applicant’s employment contract was not put in writing and his termination of employment was not reduced to writing.

Applicant’s Submissions

[3] The Applicant submitted that he was unfairly dismissed based on the reason provided by Mr Di Pasquale as this was not the real reason. It was submitted that the inability to obtain insurance for the Applicant was a guise to rid the employer of Mr Kinnane due to his workers compensation claim.

[4] The Applicant gave evidence and tendered a witness statement. 1 The Applicant was upset by a number of matters relating to his employment, most of which are not germane to a claim of unfair dismissal. These matters included allegations of not being provided with the appropriate notice period when terminated, not receiving his last pay, not receiving his holiday pay and loading, non payment of superannuation and a failure to provide his last pay slips. As is often the case, the role of the Office of the Fair Work Ombudsman was assumed to be that of the Fair Work Commission by the Applicant. Alleged underpayment of wages and breaches of workplace laws are generally not matters able to be enforced by the Fair Work Commission and in this case are not relevant to the Applicant’s claim for unfair dismissal.

[5] The Applicant claims he commenced work with the Respondent on 12 February 2012 2 with a multi combination licence delivering supermarket and liquor orders to country and metropolitan stores through Busselton Freight Services. The majority of deliveries were to IGA stores. The Applicant was paid $27.00 per hour for the first 45 hours worked in a week and double time for hours worked in excess of 45 hours per week.

[6] The Applicant stated that he worked on average 60-78 hours a week. Following his dismissal he was unemployed for four weeks and his new position as a truck driver pays around $500.00 per week less. His hourly rate is now $25.00 and he works between 55-60 hours a week but he is not paid an overtime rate. A bundle of pay slips from Glow Drive Pty Ltd were tendered by the Applicant and marked Exhibit A2.

[7] Mr Kinnane was not cross examined by Mr Di Pasquale. No other witnesses were called by the Applicant.

Respondent’s Submissions

[8] While the unfair dismissal application was filed in December 2013, the Respondent did not complete the required employer response form until 14 June 2014. The Respondent stated he had not received correspondence from the Commission, emailed on a number of occasions to his email address, despite having participated in a telephone conciliation conference on 23 January 2014.

[9] The Employer’s response was brief and stated:

“1/ November 2013 I received notice from the insurance brokers that Mr Kinnane would no longer be granted insurance upon renewal of policy, being December 2013

2/ Upon this advice I informed Kinnane that I could no longer employ him, 4-11-13”

[10] To assist the Commission in determining this matter Mr Di Pasquale was requested on 16 June 2014 via email, to provide any documents from the insurance company supporting his position.

[11] A series of emails dated 5 May 2014, were provided in response to this request. The emails are in the following form:

From: Tom Bucat

Sent: Monday, 5 May 2014 3:51 PM

To Bob Marchei

Subject: GLOW DRIVE PTY LTD -POLICY NUMBER: CMB20044460 - HEAVY MOTOR VEHICE DRIVER DECLARATON - MR RICARD KINNANE

Importance: High

Hi Bob,

As per our telephone conversation this afternoon, please find attached National Police Certificate and Certified copy of Traffic infringements for Mr Richard Kinnane. Based on the completed Heavy Motor Vehicle Driver Declaration signed by the driver on the 30th July 2012 and signed by the owner 4th August 2012, I request confirmation by email that in light of the extra information provided in the attachment, would cover have been provided to the driver.

If you have any further queries with respect to the above then please do not hesitate to contact me.

Regards

Thomas Bucat

Director Senior Broker

IPS Insurance Brokers

From: Bob Marchei

Sent: Monday, 5 May 2014 4:04 PM

To Tom Bucat

Subject: GLOW DRIVE PTY LTD -POLICY NUMBER: CMB20044460 - HEAVY MOTOR VEHICE DRIVER DECLARATON - MR RICARD KINNANE

Tom,

Based on the information supplied, we would not offer cover to Richard Kinnane, as he would not qualify as an acceptable driver, as per our Underwriting guidelines.

Hope of assistance [sic]

Regards

R Marchei

Manager, Western Australia

GT Insurance

[12] Di Pasquale appeared on behalf of the Respondent and gave evidence. Mr Di Pasquale stated that the Applicant was employed on 12 February 2012 and worked for six months 3 and was re-employed by the Respondent on 30 August 2012. On 3 May 2013 the Applicant had a motor vehicle accident while employed by the Respondent.4 The actual employment dates provided by the Respondent were confusing and not evidenced by any documentation.5 Mr Di Pasquale was given the opportunity to provide further clarification on the employment dates of the Applicant but did not avail himself of this opportunity.

[13] Mr Di Pasquale relied solely on having been advised by his insurance broker that driver vehicle insurance was denied to the Applicant because of his poor driving record. Mr Di Pasquale said that in November 2013, he had a discussion with his insurance broker Mr Thomas Bucat from IPS Insurance regarding his insurance renewal due in December 2013. It was revealed that there had been non disclosure by the Applicant regarding his motor vehicle accident record. This was uncovered by examining records completed by the Applicant and kept on file in the office. According to Mr Di Pasquale each November employees are required to make a statutory declaration regarding their driving record.

[14] On the first day of hearing Mr Di Pasquale was advised by the Commission that a difficulty with his defence was that confirmation of what his insurance broker had told him and upon which he acted was an email trail some six months after the termination of the Applicant which in any event did not confirm what he was told at the relevant time in November 2013. Mr Di Pasquale was unable to offer the Commission any further assistance.

[15] On the basis that the Respondent’s defence rested solely on advice he purportedly received from his insurance broker, the hearing was adjourned to enable Mr Di Pasquale’s insurance broker Mr Bucat to be directed to appear before the Commission. Mr Di Pasquale was also asked to bring with him evidence of when the Applicant was employed with the Respondent.

[16] Both parties advised the Commission that there were no dates when they were unavailable for the matter to be relisted. The matter was relisted for 1 July 2014.

[17] Mr Bucat was duly ordered to attend the Commission and bring with him any documents relating to obtaining insurance for the Applicant on behalf of the Respondent.

[18] On 1 July 2014, the Applicant and Mr Bucat were in attendance at the Commission. However, the Respondent representative was not in attendance. My Associate rang Mr Di Pasquale’s mobile phone at 10:10am and again at 10:15am, leaving a voice mail message after the last call.

[19] At 10:20am Mr Di Pasquale phoned my chambers and he was asked if he had received the Notice of Listing regarding the hearing and if he would be appearing. He confirmed that he had received the notice of listing; however, he had to fly to South Africa the day before. When asked why he could not contact the Commission to advise that he would not be in attendance Mr Di Pasquale stated that he had given his evidence so “it wouldn't change anything.” He stated it was now the witnesses turn to provide evidence.

[20] I instructed my Associate to enquire with Mr Di Pasquale what time it was in South Africa, Mr Di Pasquale did not state the exact time but replied “well its six hours in front of Perth, so if it’s just after 10am there, it must be just after 4pm”.

[21] He was advised that the hearing would proceed in his absence.

Evidence of Mr Bucat

[22] Mr Bucat confirmed he was the Respondent’s insurance broker and a Director and Senior Broker for IPS Insurance Brokers. As per the Order Requiring a Person to Attend the Fair Work Commission, Mr Bucat brought with him documents relating to the Applicant’s motor vehicle insurance. 6 He stated that drivers of heavy vehicles seeking insurance are initially required to complete a Heavy Motor Vehicle Declaration which included a Claims and Accident History section. Any significant incidents after this are to be notified. The declaration was completed by the Respondent on 30 July 2012, a copy of which was contained in Exhibit W2. An email dated 9 August 2012, from Global Transport & Automotive Insurance Solutions Pty Ltd to IPS Insurance Brokers advised that the Applicant had been accepted as an approved driver but that an excess applied when in charge of a prime mover.

[23] On 5 November 2013 (Melbourne Cup day), while at a function Mr Bucat received a phone call from Mr Di Pasquale who said he was putting on a new driver who had had two major traffic accidents and asked with this record would he be insured? Mr Bucat replied that he would have to consult the insurer but it would most likely be declined. Mr Di Pasquale then told Mr Bucat that he had to put a driver off but gave no reason.

[24] Mr Bucat stated that the Respondent, Glow Drive Pty Ltd, had their insurance renewed on 15 October each year. The Respondent’s commercial motor vehicle insurance covering the Respondent was in force from 15 October 2013 until 15 October 2014. 7 Mr Bucat confirmed that the Respondent was a nominated driver under the policy and was insured at the time of his dismissal and that the insurance would be in place until 15 October 2015.

[25] Mr Bucat stated that he was not advised of the Applicant’s driving record by Mr Di Pasquale in November 2013, and nor did he advise Mr Di Pasquale in November 2013 that the Applicant was or could no longer be insured. Mr Bucat advised that it was not until May 2014 that Mr Di Pasquale said that extra information regarding the Applicant had come to his attention and he was forwarded by Mr Di Pasquale a copy of a National Police Certificate dated 2 September 2011, relating to the Applicant. This resulted in the emails of 5 May 2014, repeated above. Mr Bucat was unaware that the incidents recorded on the National Police Certificate related to a boat accident as opposed to a motor vehicle, as explained by the Applicant in cross examination.

[26] In concluding his evidence Mr Bucat told the Commission that in the previous week his personal assistant had phoned Mr Di Pasquale to remind him that he had defaulted on his insurance repayments a number of times and they must be kept up to date. Mr Di Pasquale responded that they were to cancel the insurance as the Respondent was not going to be in business anymore.

Conclusion

[27] While not raised by the Respondent it would appear that the Respondent is a Small Business for the purposes of the Fair Work Act 2009 (the FW Act) employing less than 15 employees. 8 The Respondent’s written response states that at the time of dismissal one other employee was engaged. In addressing an unfair dismissal claim the Small Business Fair Dismissal Code as prescribed at s.388(2) of the FW Act applies. This is due to the operation of s.385 that describes an unfair dismissal as being a dismissal which is not consistent with the Small Business Fair Dismissal Code.

[28] However in this case the relevance of the Small Business Fair Dismissal Code appears limited as it pertains to cases of summary dismissal and poor performance. Frustration of an employment contract due to the inability of the employer to obtain the appropriate insurance for the Applicant is neither serious misconduct nor related to the Applicant’s conduct or capacity to do the job. As the Code states in cases not involving summary dismissal, the employee must be warned verbally or preferably in writing that he or she risks being dismissed if there is no improvement. If the Small Business Fair Dismissal Code has application I find that the Respondent has not complied with the Code.

[29] In determining a claim of unfair dismissal where the Small Fair Dismissal Business Code has no application or has not been complied with, I am required to have regard to each of the matters in s.387 of the FW Act.

Section 387(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)

[30] In light of the evidence presented to the Commission set out above, I find that that there was no valid reason for the dismissal of the Applicant. The Respondent did not receive notice in November 2013 from his insurance broker that Mr Kinnane would no longer be granted insurance upon renewal of policy being December 2013. I arrive at this conclusion by preferring the evidence of Mr Bucat the Respondent’s insurance broker where it contrasts with the evidence of Mr Di Pasquale. Mr Bucat stated that he did not discuss anything to do with the Applicant’s insurance with Mr Di Pasquale until six months later in May 2014.

[31] As Mr Di Pasquale deemed it unnecessary to turn up to the hearing on 1 July 2014, he obviously was not in a position to dispute the evidence of Mr Bucat. I further find having been provided with a copy of the Respondent’s commercial motor vehicle insurance policy by Mr Bucat that it was renewed in October 2013 and was not up for renewal in December 2013, as stated by Mr Di Pasquale. With these findings Mr Di Pasquale’s credibility on the key issues is open to question.

[32] Further Mr D Pasquale’s explanation of being in South Africa at the time of hearing without advising the Commission not only demonstrates a lack of interest in the outcome of the claim, but is questionable in that the time zone in South Africa is six hours behind Western Australia not six hours ahead, making the time of his phone call if made from South Africa at 4:20am not 4:20pm as he stated to my Associate.

[33] Whatever the reason Mr Di Pasquale had for terminating the Applicant they were not those given in his evidence, and as such, cannot be considered valid reasons in the sense explained by Northrop J in Selvachandran v Petron Plastics Pty Ltd 9where he held the adjective "valid" should be given the meaning of sound, defensible or well founded.

[34] The contact made with his insurance broker some six months after the Applicant’s dismissal and the provision of the Applicant’s Heavy Motor Vehicle Driver Declaration to obtain advice that the Applicant would not be offered insurance due to his driving record, is simply a belated attempt to justify what was not done six months earlier.

[35] Having determined that a valid reason for the dismissal of the Applicant did not exist I am still to required to consider and give due weight to the each paragraph of s.387. 10

Section 387(b) - whether the person was notified of that reason

[36] Having found that there was no valid reason for the dismissal it is possibly unnecessary to make a finding whether the Applicant was notified under s.387(b), however, the Applicant was provided with a reason for his dismissal.

Section 387(c) - whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person

[37] The Applicant was not given an opportunity to respond to the reason provided. Had this occurred the Applicant may have ascertained that his motor vehicle insurance was still in force and that the incidents in question related to a boating accident as opposed to a heavy motor vehicle accident.

Section 387(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

[38] There was no evidence of any such refusal.

Section 387(e) - if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal

[39] The dismissal did not relate to unsatisfactory performance.

Section 387(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 s.387(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

[40] The small size of the Respondent and the absence of dedicated human resource management specialists or expertise would have allowed for a less formal process to have been adopted but it does not relieve the Respondent from having to be transparent and honest in the exercise of a dismissal. In this case, the Respondent appears to have fabricated a reason for termination by purporting to rely on an inability to obtain insurance cover for the Applicant when this was not the case.

Section 387(h) - any other matters that FWC considers relevant.

[41] I have taken into account each of the matters relied upon by the Applicant and the Respondent. The lack of substance in the Respondent’s case is exemplified by Mr Di Pasquale’s failure to attend the second and final hearing day when the evidence of Mr Bucat upon which he relied was to be given. Mr Bucat’s evidence contradicted what Mr Di Pasquale told the Applicant and the Commission.

[42] The treatment of the Applicant was clearly unfair.

Remedy

[43] The Applicant has not sought reinstatement. As the Applicant has now found other employment an order for reinstatement would not be appropriate.

[44] The Applicant has asked for an award of compensation based on his loss of earnings while unemployed. The Applicant was unemployed for a four week period and states that his earnings are now approximately $500.00 per week less, although he now only works between 55 - 60 hours.

[45] In determining whether there should be an award of compensation in lieu of reinstatement under s.392(1) of the FW Act, the Commission is required to consider the matters specified in s.392(2) of the FW Act.

Section 392(2)(a) - the effect of the order on the viability of the employer’s enterprise

[46] There was no evidence provided by the Respondent that an award of compensation would affect the financial viability of the Respondent’s enterprise.

Section 392(2)(b) - the length of the person’s service with the employer

[47] The Applicant had been employed since February 2012, until his dismissal in November 2013. I consider it more likely than not that the Applicant’s employment would have continued at least for another four weeks being the period of unemployment, but for his unfair dismissal.

Section 392(2)(c) - the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed

[48] If the Applicant had not been dismissed he would have continued receiving his usual earnings. Based on the payslips submitted this would be an average of 60 hours a week. 11 At $27.00 per hour for the first 45 hours and $54.00 per hour (double time) for hours worked after this, being 15 hours each week the Applicant averaged earnings of $2,025.00 per week.

Section 392(2)(d) - the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal

[49] The Applicant secured a job after a period of four weeks.

Section 392(2)(e) - the amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for compensation

[50] The Applicant works less hours, has a lower hourly rate and does not receive an overtime penalty in his new position.

Section 392(2)(f) - the amount of any income reasonably likely to be so earned by the person during the period between the making of the order for compensation and the actual compensation

[51] This amount does not have a material effect on the outcome because the period in which compensable loss was suffered by the Applicant is limited to four weeks.

Section 392(2)(g) - any other matter that FWC considers relevant

[52] While I have taken into consideration the Applicant’s ongoing lower earnings, I am not inclined to adjust any compensation awarded to the Applicant based on this fact.

[53] In the exercise of my discretion, I determine that the proper measure of compensation due to the Applicant in all the circumstances is the earnings he lost during his four weeks of unemployment.

[54] The Applicant’s relevant loss is as follows:

Lost wages 45 hours x $27.00	= $1,215.00
15 hours x $54.00	= $810.00
$2,025.00
By 4 weeks
Total	$8,100.00

[55] The Respondent will be ordered to pay the Applicant four weeks wages at $2,025.00 per week being a total of $8,100 less the relevant tax within 21 days of the Order (PR553166).

COMMISSIONER

Appearances:

Ms D Kinnane on behalf of Richard Kinnane.

Mr E Di Pasquale for the Respondent.

Hearing details:

2014.

Perth:

18 June and 1 July.

 1   Exhibit A1 Applicant’s Witness Statement dated 2 June 2014.

 2   PN147

 3   PN271

 4   PN357

 5   PN387

 6   Exhibits W1, W2, W3, W4.

 7   See Exhibit W4.

 8 See s.23 of the FW Act for the definition of Small Business.

 9 (1995) 62 IR 371 at 373.

 10   See Full Bench in Pipe Hunter Pty Ltd T/A Pipe Hunter v Mr Daniel Mahony and Mr Anthony Russell [2013] FWCFB 4852.

 11   Exhibit A2, excluding the week of annual leave.

Printed by authority of the Commonwealth Government Printer

<Price code C, PR553159>