Ronald Davy v ABS Business Sales Pty Ltd T/A ABS Business Sales

[2014] FWC 3624

[2014] FWC 3624 [Note: An appeal pursuant to s.604 (C2014/5089) was lodged against this decision - refer to Full Bench decision dated 15 September 2014 [[2014] FWCFB 6141] for result of appeal.]

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Ronald Davy
v
ABS Business Sales Pty Ltd T/A ABS Business Sales
(U2014/4146)

COMMISSIONER SIMPSON BRISBANE, 4 JUNE 2014

Jurisdictional objection -Minimum employment period not met - Application dismissed.

[1] The following Decision, now edited, was issued during proceedings on 2 June 2014.

[2] This matter concerns an application under s 394 of the Fair Work Act 2009 (“the Act”) by Mr Ronald Davy (“the Applicant”) who alleges that the termination of his employment with ABS Business Sales Pty Ltd T/A ABS Business Sales (“the Respondent”) was unfair in accordance with the definition contained within s 385 of the Act.

[3] The application was filed on the 30 January 2014 and was allocated to me. We had a directions hearing on 23 April where the Respondent pressed their jurisdictional objection that the Respondent is a small business employer and that the Applicant does not meet the minimum employment period, in that the minimum employment period would be a period of 12 months if I was to find that the Respondent was a small business. There was also some dispute about the commencement date of employment, whether that be the 27 May or 29 May 2013.

[4] I do note there is also an issue in the employment separation certificate which says the employment commenced some time later, but at the end of the day I have not found that matter to be of critical importance because between the parties themselves for the purposes of the hearing the discrepancy of a few days does not have an impact on whether or not Mr Davy would be in or out for the purposes of the minimum employment period. It is apparent that there is a dispute about the date of termination. Having considered the submissions and the evidence, I will deal with that today.

[5] In terms of dealing with the matter today there is quite a bit of material that has been put on in the statutory declaration of Ms Keough that goes to the particular circumstances of the individual persons engaged by the Respondent. I will touch on some of those as I go through, but it seems to me what is of critical importance in this case is a determination of the date of termination because, for the Applicant’s case to have a chance of succeeding and defeating the Respondent’s objection by arguing that there were at least 15 employees, it rests on an argument that the termination occurred either on 9 or 10 December and not 29 January, as claimed by the Respondent. So I thought the most sensible thing was to deal with that issue because, depending on what I decide on that, it may or may not be necessary to touch on some other issues so I will deal with that first.

[6] There seems to be two critical issues here. To my mind I was particularly interested in the evidence, and I am glad that we got evidence on oath today because it assists me in deciding on balance what findings I should make about what occurred, particularly on the afternoon of 9 December and to some extent what happened on 10 December to try and decide whether or not there was a termination of employment on either of those dates. So what is relevant is the evidence about the events at those times and I am also cognisant that Mr Davy has placed quite a bit of weight on the employment separation certificate and the fact that it referred to the date of termination as being 10 December 2013. Ms Keough has given evidence and been cross examined about the reasons why she put that date and I will deal with that as well.

[7] In terms of trying to decipher whether or not there was a termination on the 9th or 10th I have had reference to some authorities on that issue. I did make some reference to these decisions in the course of the hearing today. One of those is Makenja v Baptist Community Services. 1 That was a decision of the Full Bench of the Australian Industrial Relations Commission in January 2007 and it wrestled with this issue about whether or not a termination had been communicated. Obviously every case turns on its own facts, but what is important for the purposes of dealing with today’s case is what those full benches have said. In the first authority I will refer to the final paragraph at 18 where the Full Bench said as follows:

“(18)...Normally a termination of employment would not take effect before it was communicated to the employee concerned, although that may not always be the case. In this case it does not seem to be in contest that the appellant was not aware of the letter of termination until 22 August 2006. The application for relief was filed within 21 days of that date. In cases in which abandonment of employment is alleged the time at which the termination took effect may only be ascertainable after resolving factual and legal issues.”

[8] The relevant part of that authority is really the first part of that paragraph I have read out which talks about the importance of the communication to the employee concerned. Another authority which dealt with the question of whether or not a termination was operative before communication was a decision of a Full Bench of the Australian Industrial Relations Commission on 26 February 2001 in P.T.Wilson v Australian Tax Office 2. That Full Bench said the following at paragraph 11 of that decision:

“Whilst it is clear that a contract can be terminated unilaterally, it is beyond contemplation, unless there is special provision in the contract to the contrary, that a contract could be terminated without communication of the termination to the other party. We think that at common law, where termination occurs by letter, generally the termination is not effective until the letter is received.”

[9] In that case it involved the termination being effected by letter. In this case it is asserted by Mr Davy that the termination was effected by the nature of the exchange, as I understand it, between himself and Mr Allsop on the afternoon of 9 December or alternatively on 10 December by the effect of being suspended without an ability to earn income. I think that is the thrust of the argument, as I understand. I will not read from the relevant section of the authority but I also rely on Burns v Aboriginal Legal Services Western Australia 3 which again deals with this question about dismissal not being effective until it is communicated. So I have been informed by those decisions in considering how to deal with the facts in this case.

[10] In terms of the evidence taken in order, Ms Keough gave evidence first about this issue of the nature of the reason why she included on the separation certificate the date of 10 December. She said in her statutory declaration on the second page:

“...In earlier correspondence it is clear that we agree the date is 29 January 2014. At the time I was asked to prepare a separation certificate for Mr Davy, I sought advice as to what his termination date would be. One source said the date the Applicant was placed on suspension 10/12/ 2013 should be the date I use and the other source said I should use 29/01/2014, being the date we notified the Applicant of the decision to terminate his employment. As I was still unsure, I did use 10/12/ 2013 as that was the last date Mr Davy had been in the office of ABS Business Sales Pty Ltd. However I clearly stated on the employment separation certificate (see attached appendix 9)  4“This certificate is effective and current today. Monies that may be outstanding are currently under negotiation and a final certificate shall be issued in due course if changes occur.”

[11] In terms of the employment separation certificate itself, clearly it was executed by the representative of the Respondent Mr Allsop on 31 January 2014. That is the date on which it was signed. Ms Keough also gave oral evidence today that elaborated on what she put in her statutory declaration that said that she was told by Mel Smith who was a consultant to the Respondent that she should use 10 December and she said that she was given that advice on the basis that the Applicant had refused to attend a meeting to address issues that were the subject of an investigation.

[12] There was some evidence about the fact that there is no contest that Mr Davy did not ultimately attend that meeting for reasons that he gave in his evidence that he had received some advice not to. Having considered the evidence of Ms Keough, it would seem to me that it is plausible that she did not hold a clear conviction about the fact that the date of termination was 10 December, as she put in the employment certificate, but did so on the basis of advice that she had received from someone else. She did give evidence that she was advised differently by Mr Law that the date of termination was the 29th but elected to put the 10th on the employment separation certificate anyway.

[13] In terms of other material I need to consider, particularly important is the evidence of Mr Davy about the events of 9 and 10 December. I listened closely to the evidence of Mr Davy about the events of the afternoon of the 9th. I did that in the context that I had read and was familiar with, what Mr Davy had put in the material that he had attached to his originating application which I think was a four page document setting out a chronology of events or the history of employment from commencement right through to the ending of the relationship. Importantly, when I read the written material, it said as follows from the written chronology attached to the originating application.

“On 9 December Mr Allsop came to the office late in the morning. At one stage he walked past me and Karen Keough and then they went into the Board Room. Later they came out and walked past me but never spoke to me. Later Ken Allsop was in the glass walled meeting room. I got up and took down the framed ABS Business Pty Ltd Office of Fair Trading licence. Ken Allsop could see what I was doing. I went to the copier which was copying and put the frame face down on the copier plate. I was waiting for the copier to stop printing when Ken Allsop came up to me and asked if he could see me for a minute. I took the frame off the copier and hung it back on the wall. I then went to my desk and picked up the two tape recorders I had brought with me to the office that morning and walked behind Ken Allsop into the room. I put the recorders on “record” and placed them on the table. Ken Allsop looked at me and said, “What’s going on?” I replied, “I’m not talking to you without the conversation being taped. I’m not going to be stood over and abused by you anymore.” He was livid. In the afternoon he called me in for meetings with Karen Keough there as a witness. He refused to allow me to record insisting I put the recorders on my desk. At the second meeting he demanded that I hand over my keys to him. I told him that I didn’t have a problem with doing that but before I did could I have his reasons in writing for demanding them. As he had not sacked me I felt that he had to give me a reason. Finally, he wrote out a note saying the reason he wanted the keys was because I had tried to tape him. I left the office. On the 10 December I attended the office as usual. Ken Allsop was not there. I was sitting at my desk when Karen Keough came out of the second meeting room (the door had been closed) and said, “Ken wants to see you.” I went inside to find a complete stranger there. He introduced himself as Kenneth Law...”

[14] I will not go on further from there. That was the written material filed with the original application. Having considered that, I listened carefully to the oral evidence today about those events. There was some discrepancy between what is written there and the oral evidence in that I think the oral evidence was that Mr Allsop demanded the keys from the Applicant as he was leaving the office that afternoon and the reason in oral evidence given as to why he wanted the keys was that he did not trust the Applicant.

[15] So while there is some discrepancy there, that is not so much what draws me to my conclusion on what actually occurred. I have not missed the fact that, the Applicant, you have said that you also, following the meeting the following day, found that there were issues with your computer access and what might be able to be inferred from that, but what probably does attract my attention more than anything is the fact that there was nothing explicit said either in the written material or in your oral evidence today that asserted that there was a communication to you that your employment had been terminated on the afternoon of the 9th December.

[16] Certainly it is open to the tribunal to draw inferences from conduct. You do not necessarily need an explicit statement that you are sacked to find that there has been effectively a termination. In this particular case the evidence, it seems to me, particularly the oral evidence, was that the keys were being asked for because Mr Allsop said he did not trust you. That was in the context of the tape-recorder, but for me to be able to go to the point of saying on that afternoon the effect of that request for the keys was, in effect, a termination I think is a bridge too far.

[17] I make that finding, firstly, because there was no express communication of a termination but also because of the conduct of both parties the following day which does not leave the impression that either party regarded the employment as having ended on the afternoon of the 9th for the reason that, firstly, on your own material, the Applicant, you say you attended the office the next day as usual which was not the sort of conduct you would expect had you thought you have been sacked the afternoon before and also the fact that the employer, it is clear, made arrangements for an industrial advocate to attend at the office that day, as is evident from your material, but from your evidence that Mr Law was present the next day. You were summoned to a meeting with Mr Allsop that day and advised that Mr Law was there and that there was a proposal to commence some sort of investigation.

[18] So that deals with the 9th in my mind but now I have to deal with the 10th, the day itself. Was the effect of what happened that day being labelled a suspension, still a termination effectively? The argument that the 10th was a termination, as I understand it, Mr Davy, is that you say it is the effect of no longer being able to earn income. I listened to the evidence from both sides about the nature of the exchange on the 10th. It is evident from the course of the discussion that the employer proposed that Ms Keough be the support person or witness for both parties. I could see you were not comfortable with that proposal. Your proposal was to have a retired solicitor who could not be available at that time to assist you in representing you in the process. The meeting was adjourned on that basis. That is the evidence.

[19] You said you left the office. There were subsequent exchanges by email. Obviously the whole situation was distressing for you, Mr Davy. Your evidence was clear you were anxious about it through Christmas and you made a decision in the middle of January that you would get some advice and the advice was not to participate in what you called a Star Chamber process. What I have to consider is the letter that was given to you dated 10 December 2013.  5 Mr Law took you in cross examination particularly to the second sentence in the first paragraph which says, “This letter is to advise that you are suspended on full wages commission (as prior arranged) until finalisation of the workplace investigation.” The last sentence reads, “Should any sales occur and commissions become due to you while you are under this suspension, you will be paid as per your normal process.”

[20] In terms of the conduct of both parties on the 10th, it is not indicative of in my view, of either party treating the employment relationship as being terminated on the 10th. I think it is not surprising, Mr Davy, that you raise a legal question about what is the effect of a suspension where you cannot earn income. It might give rise to a question about whether or not the employer is entitled to do that on a common law basis. Certainly there would appear to be no common law right to suspend without pay. I have not been shown an employment contract that gives the Respondent a right to suspend without pay, but given the circumstances and the particular facts of this case, that might give rise to a dispute about whether or not that was a breach. I am satisfied it does not give rise to a termination of the contract by the effect of the conduct that day.

[21] What arises from all of that is, as I have formed the view that the 10th was not a termination, as I did for the 9th, I have had regard to the other evidence. When I look at exhibit 3 and the termination letter, the evidence being that you chose not to participate in the investigation, the termination was effective, as the employer says, on 29 January. Having made that finding, there was other evidence in the statutory declaration of Ms Keough that goes to who should and should not be counted.

[22] That becomes academic, I think, on the basis of my finding that the employer is able to show that as at 29 January it only no more than had 14 employees. It would appear to me on the basis of the material it was arguable it might have had as few as 11 on the basis of the arguments about others. I am not going to make a finding on the question as to whether the two employees that were asserted were properly characterised as independent contractors were because I do not need to. So that is my conclusion on the termination date.

[23] I am cognisant of the fact that it is always frustrating for applicants when a jurisdictional finding is found against them because it means they cannot effectively argue the merits of the case. It is a serious question determining jurisdictional questions because it prevents the applicant from being able to effectively argue the case, but we have to apply the law as it stands. The statute says quite clearly there is a time limit for employees of small businesses of 12 months as opposed to six months for employers larger than 14 and for that reason I have no jurisdiction to go on and hear the argument. So that is my finding and on that basis the application has to be dismissed.

COMMISSIONER

Mr R Davy the Applicant.

Mr K Law for the Respondent.

Hearing details:

2014.

Brisbane:

2 June

 1   [2007] AIRCFB 38 PR975837 Makenja v Baptist Community Services

 2   PR901127 P.T.Wilson v Australia Tax office

 3   S8525 Burns v Aboriginal Legal Services Western Australia

 4   Employment separation certificate attached as appendix 9 to Ms Keough statutory declaration

 5   Exhibit 2 Letter dated 10 December 2013 from ABS Business Sales Pty Ltd to the Applicant

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