Sarafina Grazia v Australian Olive Oil Supplies Pty Ltd

[2015] FWC 8570

[2015] FWC 8570

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Sarafina Grazia
v
Australian Olive Oil Supplies Pty Ltd
(U2015/6637)

COMMISSIONER BISSETT DARWIN, 15 DECEMBER 2015

Application for relief from unfair dismissal.

[1] Miss Sarafina Grazia has made an application seeking relief from unfair dismissal pursuant to s.394 of the Fair Work Act 2009 (the Act). Miss Grazia lodged her application against The Australian Olive Oil Supplies t/a The Artisan’s Bottega (formerly Cellars Plus) which the Respondent indicated was not the correct legal entity.

[2] The Artisan Bottega was previously known as Cellar Plus. CP Imports Trust is the Trustee for Australian Olive Oil Supplies Pty Ltd.

[3] I am therefore satisfied that the name of the employer in this matter is Australian Olive Oil Supplies Pty Ltd and the file will be amended accordingly. For ease of reference in the decision I will refer to Australian Olive Oil Supplies Pty Ltd as ‘The Artisan Bottega’.

[4] Miss Grazia says that her employment was terminated on 4 July 2015.

[5] The Artisan Bottega says that Miss Grazia’s employment was not terminated but rather she was suspended pending the resolution of matters associated with her unauthorised withdrawal of money from the business bank account.

[6] The history of the employment relationship between Miss Grazia and The Artisan Bottega is unusual and opaque. Miss Grazia was employed by The Artisan Bottega in August 2009. She had worked with a predecessor family owned company from about 2000. Sometime between 2000 and 2009 she started a relationship with the son of the owners of the company (Mr Steven Baggio). Miss Grazia says that she contributed substantial funds when Mr Baggio purchased the business (what is now The Artisan Bottega). At the time of her financial contribution Miss Grazia was in a de facto relationship with Mr Baggio.

[7] From the time he purchased the business Mr Baggio was the sole shareholder and Director of Australian Olive Oil Supplies Pty Ltd. Miss Grazia does not appear to be named on any documents in relation to the business although she says that she understood she was a part owner of the business and only became aware that she was not in early 2015.

[8] Sometime in 2013 the personal relationship between Miss Grazia and Mr Baggio ended. Miss Grazia however remained employed (subject to my comments below) by The Artisan Bottega. Whilst continuing to work for The Artisan Bottega and after the end of the personal relationship Mr Baggio apparently allowed Miss Grazia to have continued access to business bank accounts.

[9] Miss Grazia, around this time, also established her own business, Sausages Made Simple (SMS), with Mr Baggio’s knowledge. SMS and The Artisan Bottega had a beneficial businesses relationship through the referral of customers and some sharing of premises. This apparent recognition of mutual benefit deteriorated in around early 2015.

[10] For part of the time that Miss Grazia worked for The Artisan Bottega she received a salary. Payments into her bank account indicated the payments as ‘wages’. For other periods of time she was paid by distributions from CP Imports Trust as Trustee for Australian Olive Oil Supplies Pty Ltd. Miss Grazia, along with Mr Baggio was listed, at least for some period of time, as a beneficiary of the trust. Payments into Miss Grazia’s bank account during this period showed the payments as ‘drawings’.

[11] Distributions from the trust appear to have commenced around 15 July 2013 and continued until December 2014. These distributions were paid instead of wages.

[12] It is not disputed that from January 2015 Miss Grazia was paid wages as an employee of The Artisan Bottega. A PAYG payment summary for her indicates that she received $11,857 in wages for the period 1 January 2015 – 30 June 2015.

[13] From November 2014 to February 2015 Miss Grazia took annual leave to travel overseas (although there does not appear to be any accounting of such leave).

[14] In February, on her return from leave, Miss Grazia was dismayed that she had not received wages she considered due to her. She agrees that for this reason she withdrew approximately $25,000 and then, some weeks later, about $60,000 from the business account of The Artisan Bottega.

[15] From 3 July 2015 to 5 July 2015 Mr Baggio sent a number of text messages to Miss Grazia demanding the return of ‘$25k and now $60k’ and ‘$61k’ he says (and she agrees) she withdrew from the business bank account.

[16] On 5 July 2015 in his final text message Mr Baggio demanded the return of his car which he says, and Miss Grazia agrees, she took (although she claims it is a business car). He also said:

“Until a screen print or remittance showing $60k+10k is returned. Your sales position is suspended and you are not permitted access to building or resources of cp imports pl (sic)

[17] On 6 July 2015 Miss Grazia sent a text to Mr Baggio in which she said he was:

“Not to come near my friends or family, my shop, my home and my things. As soon as you have the paperwork you owe me we can meet…”

[18] Mr Baggio agrees that he changed the locks on the store Miss Grazia primarily worked at about this time and she no longer had access to the premises.

[19] At this time it appears that both Miss Grazia and Mr Baggio engaged lawyers who appear to have primarily addressed issues in relation to the end of the de facto relationship including the shareholdings in the business. In one of the correspondence between the representatives Mr Baggio’s lawyer includes a demand for Miss Grazia to return in excess of $86,000 taken by her from the business account, return of the car and make payment for stock taken to the value of $20,000.

[20] The Commission understands that the pair currently has proceedings in the Family Court.

Was Miss Grazia an employee of The Artisan Bottega?

[21] Miss Grazia was an employee of the business from early 2000. She appears to have been in receipt of wages for most of the time until July 2015 when her employment ceased. During part of this time Miss Grazia did not receive wages for her work but was remunerated by way of a distribution from the Trustee. I am not convinced that this changed her status as an employee. I am therefore satisfied that Miss Baggio was an employee of the business. Whether Miss Grazia should have been listed as a shareholder in the business is not relevant. On any view she provided labour to the business for reward.

[22] Even if I am wrong, and Miss Grazia was not an employee while she was receiving a distribution from the trust, Miss Grazia clearly was an employee for the period January to July when her employment was terminated as she was paid a wage.

Was Grazia dismissed?

[23] I am satisfied that Mr Baggio, by his actions, dismissed Miss Grazia from her employment with The Artisan Bottega. Although his text message of 6 July 2015 states that she had been suspended, he has taken no action to resolve the employment matter he says caused the suspension. Whilst there is an exchange of correspondence between lawyers for Miss Grazia and Mr Baggio, none of this goes to the employment relationship.

[24] By changing the locks on the premises from which Miss Grazia worked and to which she had a key, Mr Baggio did terminate her employment and Miss Grazia was entitled to form the view that her employment was terminated.

[25] When asked what he had done to resolve the employment issues Mr Baggio stated that he was waiting for the lawyers to arrange ‘some sort of mediation.’

Was Grazia unfairly dismissed?

[26] I am satisfied that Miss Grazia was dismissed and the dismissal was not a redundancy. I have nothing before me to suggest that The Artisan Bottega is a small business although it may be so. In this respect I note that no Form F3 (Employer response to an application for unfair dismissal) was lodged by Mr Baggio. In any event he has not put at any time that The Artisan Bottega is a small business as defined in the Act.

[27] In determining if Miss Grazia’s dismissal was harsh, unjust or unreasonable I am required to consider the factors set out in s.387 of the Act.

Section 387(a) – a valid reason

[28] Mr Baggio believed that Miss Grazia had taken over $86,000 for the business bank account without authorisation. Miss Grazia agrees that she took the money but says it was owed to her for unpaid wages and that she had previously paid other staff their wages.

[29] The unauthorised removal of money belonging to a business that an employee was not authorised to take clearly provides a valid reason for dismissal.

[30] What Miss Grazia engaged in could be seen as theft from the business. That it was done in the context of a broader personal and business dispute between Miss Grazia and Mr Baggio does not make it right.

[31] I am satisfied that there was a valid reason for dismissal.

Section 387(b) – was she notified of the reason?

[32] It is well accepted that the notification of the reason for dismissal must, for it to have any meaning, be done prior to a decision being taken to dismiss the employee.

[33] In this case Miss Grazia was asked to return the money she had taken and advised she was stood down. She was not told that a failure to return the money would result in locks being changed such that she could no longer access the business which I accept as a step that constituted a termination of her employment. For this reason I am satisfied that she was not advised of the reason for the termination of her employment prior to the decision being taken by Mr Baggio to take the final step of locking her out.

Section 387(c) – opportunity to respond

[34] Miss Grazia was not given an opportunity to respond prior to Mr Baggio taking those actions that I have said amounted to the termination of her employment.

[35] I do note however that soon after the actions that lead to the termination of her employment Miss Grazia instructed Mr Baggio to not approach her, her friends or family or her residence or place of work.

[36] Both parties then engaged lawyers with whom it now appears many of the of intertwined issues between Miss Grazia and Mr Baggio now rest.

Section 387(d) – support person

[37] There was no meeting with Miss Grazia with respect to the matters relevant to her dismissal. All communication between the two was done via text message although Miss Grazia, in this regard does not appear she was unreasonably denied access to a support person.

Section 387(e) – warned of performance issues

[38] This matter does not relate to performance matters. It is therefore not necessary for me to consider this.

Section 387(f) & (g) – size of the employers business and access to expertise

[39] The Artisan Bottega is not large business by any measure. I am satisfied that its size and lack of access to human resource expertise has impacted on the procedures in relation to the dismissal of Miss Grazia. On any view of the material submitted to the Commission by Mr Baggio, The Artisan Bottega does not have highly developed systems or processes in relation to staffing matters.

Section 387(h) – any other matters

[40] Miss Grazia says that The Artisan Bottega has failed to provide her with group certificates for previous years (prior to 2014/15). I am not convinced that this is a matter relevant to this application but do note that this matter has been addressed in correspondence from Mr Baggio’s lawyer to Miss Grazia’s lawyer.

[41] Miss Grazia also says that there are a number of matters in relation to (non-payment of) her wages, annual leave and so on that I should consider. These are matters best resolved through the assistance of the Fair Work Ombudsman and are not matters I can determine as part of this application. In any event the evidence before me is of such poor quality that a rough assessment of her entitlements from the material provided by her to Mr Baggio would be impossible.

[42] Miss Grazia and Mr Baggio were civil to each other during the proceedings before the Commission. Miss Grazia appears to still have the money and the car. Whether the car belongs to Mr Baggio personally or to The Artisan Bottega, Miss Grazia continued to have a key to it (she used her key to drive it away). It does not appear that any actions have been taken in a court of competent jurisdiction to retrieve what Mr Baggio says belongs to him or The Artisan Bottega nearly six months after the event despite his claim that her withdrawal of the money left the business in a perilous position.

Conclusion as to unfair dismissal

[43] I am satisfied that the dismissal of Miss Grazia was not harsh, unjust or unreasonable. Miss Grazia had taken money from the business that Mr Baggio says she was not entitled to. That provided a valid reason for the dismissal. There were however substantial procedural flaws in the actions of Mr Baggio in the steps he took following Miss Grazia taking the money and the car.

[44] This is a case where, despite the procedural flaws, the actions of the employee are of such gravity that they far outweigh those flaws such that I cannot find the dismissal was harsh, unjust or unreasonable.

[45] Even if Miss Grazia was right in her view that she was a part owner of the business, she was an employee and, as an employee, she had obligations to her employer. She cannot confuse her rights and obligations as possibly a business owner but also an employee. I am not convinced that taking money or the car is compatible with the obligations of an employee. At the same time, as an employee she was entitled to be paid wages, annual leave and all other entitlements in the National Employment Standards in the Act and in the relevant award.

[46] There is no doubt in my mind that this application is another prong in an array of actions between Miss Grazia and Mr Baggio. Most of those actions have nothing to do with the employment relationship or otherwise between Miss Grazia and The Artisan Bottega – rather they go to the business and personal relationships between them.

[47] I should comment that I consider neither Miss Grazia nor Mr Baggio blameless for the breakdown in the employment relationship. Having found Miss Grazia not to have been unfairly dismissed should not be taken by Mr Baggio as an indication that he did nothing wrong. The current state of affairs eventuated due to a number of contributing factors from both Mr Baggio and Miss Grazia. Mr Baggio had an extremely laissez-faire approach to the running of his business and access to the business accounts in circumstances where, as an employee and not part-owner of the business, Miss Grazia did not need such access. Further, there was no distinction by either Miss Grazia or Mr Baggio between their personal relationship and business relationships.

[48] I would also comment that the state of the material provided to the Commission in relation to this application by both Miss Grazia but particularly by Mr Baggio has made it extremely difficult for the Commission in deciding the matter. A simple request, particularly of Mr Baggio, for the provision of an email he said existed resulted in the Commission receiving enormous amounts of further material without any submissions as to what could, or should, be made of it. I have placed no reliance on this material. As was said to both parties during the hearing of this matter they may not find courts in relation to their civil/family law matters as accommodating as the Commission of their lack of preparedness and evidence of those things each asserts as fact.

[49] For the reasons given above Miss Grazia was not unfairly dismissed. The application is therefore dismissed. An order dismissing the application will be issued with this decision.

COMMISSIONER

Appearances:

S. Grazia for herself.

S. Baggio for the Respondent.

Hearing details:

2015.

Melbourne:

November 18.

Printed by authority of the Commonwealth Government Printer

<Price code C, PR574960>