Star X Technology Solutions Pty Ltd v Kang Huai Liu
[2024] FWC 1536
•21 JUNE 2024
| [2024] FWC 1536 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.604 - Appeal of decisions
Star X Technology Solutions Pty Ltd
v
Kang Huai Liu
(C2024/3732)
| DEPUTY PRESIDENT MILLHOUSE | MELBOURNE, 21 JUNE 2024 |
Appeal against order PR775155 of Deputy President Boyce at Sydney on 20 May 2024 in matter number U2024/1693 – application for a stay order granted.
This decision concerns an application by Star X Technology Solutions Pty Ltd (appellant) for a stay order pursuant to s 606 of the Fair Work Act 2009 (Cth) (Act). The appeal concerns an Order[1] issued by Deputy President Boyce on 20 May 2024 for the payment of compensation as a remedy for the unfair dismissal of the respondent, Kang Huai Liu, for reasons delivered ex tempore on transcript at a hearing that the appellant failed to attend.
The appellant seeks a stay of the whole of the Order pending determination of the appeal. The stay is opposed by Mr Liu.
For the reasons that follow, the application for a stay is granted.
Relevant principles
Section 606 of the Act gives the Commission the discretionary power to stay the operation of the whole or part of a decision the subject of an appeal. Section 606(1) of the Act
provides as follows:
“If, under section 604 or 605, the FWC hears an appeal from, or conducts a review of, a decision, the FWC may (except as provided by subsection (3)) order that the operation of the whole or part of the decision be stayed, on any terms and conditions that the FWC considers appropriate, until a decision in relation to the appeal or review is made or the FWC makes a further order.”
The case of Edghill v Kellow-Falkiner Motors Pty Ltd,[2] provided the following formulation for determining stay applications:[3]
“In determining whether to grant a stay application the Commission must be satisfied that there is an arguable case, with some reasonable prospect of success, in respect of both the question of leave to appeal and the substantive merits of the appeal. In addition, the balance of convenience must weigh in favour of the order subject to appeal being stayed. Each of the two elements referred to must be established before a stay order will be granted.”
Accordingly, both “elements” are necessary conditions to the grant of a stay.
Context
Mr Liu filed a Form F2 application seeking an unfair dismissal remedy on 16 February 2024. A conciliation conference was unable to proceed as the appellant advised of its inability to attend.
The matter was allocated to the chambers of the Deputy President. The appellant was directed to file its Form F3 employer response by 4 April 2024, which it did not do. On 5 April 2024, the appellant was issued with a further direction to file its Form F3 by 5 April 2024 or the matter would proceed to a show cause hearing against the appellant at short notice. The appellant did not file its Form F3 by the revised date or at all. Rather, the appellant’s Director, Benson Shi advised that the parties were “in discussions” to “resolve the issue.”[4]
On 8 April 2024, the Deputy President’s chambers listed the application for a case management conference, noting the subject matter of the conference as “application for an unfair dismissal remedy.” The case management conference proceeded on 10 April 2024 as listed. The appellant did not appear.
Directions were issued on 10 April 2024 for the filing of material in “support of” or “in opposition to” Mr Liu’s “substantive unfair dismissal claim.” The Directions specified that the matter would proceed to hearing on 1 May 2024 and further noted that a failure to comply will limit a party’s capacity to rely upon any written submissions, witness statements, or any documents at the hearing.
Shortly after the Directions were issued on 10 April 2024, the appellant’s Director sent an email to the Deputy President’s chambers, stating:
“Hi, The payment is made and I will update to you once the payment is received. Thanks”
In accordance with the 10 April 2024 Directions, Mr Liu filed with the Commission submissions and evidentiary material in support of his application for an unfair dismissal remedy. The submissions addressed Mr Liu’s contention that he had been unfairly dismissed. This material does not appear to have been served upon the appellant by Mr Liu or the Commission.
No submissions or material was received by the Commission from the appellant in response to the 10 April 2024 Directions.
The matter proceeded to hearing before the Deputy President on 1 May 2024. The appellant did not attend this hearing. During the hearing, Mr Liu filed with the Commission a copy of the resignation letter that he had produced to the appellant on 29 January 2024 and a copy of his employment contract with the appellant dated 5 January 2023. Mr Liu’s emails to the Commission attaching the resignation letter and employment contract do not appear to have been served upon the appellant by Mr Liu or the Commission.
The application was relisted to proceed to further hearing on 20 May 2024. The appellant was provided with notification of the revised listing date and time on 1 May 2024.
On 9 May 2024, Mr Liu sent an email to the Deputy President’s chambers in which he requested a Mandarin interpreter at the 20 May 2024 hearing. The email also attached three documents that had been filed by Mr Liu on 15 April 2024 in Mandarin, which had been translated from Mandarin to English. This email was not copied by Mr Liu to the appellant.
On 10 May 2024, the Deputy President’s chambers responded to Mr Liu’s 9 May 2024 email, and copied the appellant. Chambers’ email attached the three translated documents filed by Mr Liu on 9 May 2024, and advised the parties that a Mandarin interpreter would be available at the 20 May 2024 hearing.
In response to this correspondence, the appellant sent an email to the Deputy President’s chambers, which was copied to Mr Liu and stated as follows:
“Hi Chambers,
The full amount is paid.please kindly check”
The application proceeded to hearing on 20 May 2024 before the Deputy President. Mr Liu appeared on his own behalf with an interpreter. The respondent did not attend the hearing.
The Deputy President issued a decision ex tempore on transcript which, in summary, reasoned as follows:
(a)The 5 January 2023 employment contract sets out Mr Liu’s remuneration, duties, hours of work and related matters and contained a termination provision.
(b)The appellant had not filed a Form F3 in accordance with the requests made by chambers.
(c)The appellant, by its Director Mr Shi, had engaged with chambers from time to time but had not engaged with the proceedings resulting in the first hearing on 1 May 2024 being adjourned.
(d)The 20 May 2024 hearing proceeded in the absence of the appellant, as it had been appropriately notified.
(e)The 29 January 2024 resignation letter brought the employment contract to an end, but the relevant question was whether it amounted to a dismissal within the meaning of
s 386 of the Act.(f)The email correspondence between the parties demonstrated a breakdown in the relationship. Mr Liu’s evidence and submissions demonstrated that he had been stood down without pay in January 2024 and was owed salary that had not been rectified by the appellant.
(g)The appellant’s failure to pay Mr Liu in accordance with his employment contract is a fundamental breach of contract and the employment relationship. Mr Liu brought the employment to an end because of the appellant’s failure to pay him, despite Mr Liu’s requests.
(h)Mr Liu’s resignation was forced because of conduct engaged in by the appellant, such conduct amounts to repudiation and brought the employment contract to an end. Accordingly, Mr Liu was dismissed within the meaning of s 386 of the Act such that Mr Liu’s unfair dismissal application was within jurisdiction.
There was no valid reason for Mr Liu’s dismissal for the purposes of s 387(a). As there was no valid reason, Mr Liu was not notified of it or given an opportunity to respond (s 387(b) and (c)). There were no considerations relevant to s 387(d) and no evidence of unsatisfactory performance by Mr Liu for the purposes of s 387(e). Sections 387(f) and (g) were treated as neutral considerations.
(j)With respect to any other relevant matters (s 387(h)), Mr Liu continued to be owed salary for work performed, which weighed in favour of a finding that the dismissal was harsh, unjust or unreasonable. The dismissal was found to be unfair.
(k)With respect to remedy, reinstatement was not regarded to be appropriate. Having regard to the matters under s 392(2) and taking into account (i) Mr Liu’s period of one year’s service, (ii) there being no evidence of the appellant’s viability, (iii) Mr Liu’s recently secured new employment, and (iv) the amount of remuneration he would have received and earned pursuant to ss 392(2)(c) and (f), the Deputy President determined it appropriate to order compensation in the amount of two months’ pay, representing the period it took Mr Liu to secure new employment. Having regard to the considerations in Sprigg,[5] no deductions were made for contingencies and the Deputy President was satisfied that the amount, expressed as a gross sum, was appropriate.
The Deputy President issued an order in the following terms:
“Further to the Decision issued on transcript on 20 May 2024, the Fair Work Commission makes the following Orders:
A. The Respondent is to pay to the Applicant:
i)the gross sum of $8,496.06 (subject to applicable taxation as required by law) by way of electronic funds transfer into the Applicant’s nominated bank account; and
ii)statutory superannuation contributions in the amount of $934.57 (being 11 percent of $8,496.06) by way of electronic funds transfer into the Applicant’s nominated superannuation account.
B. Order A ((i) and (ii)) above must be complied with within 21 days of the date of these orders.”
Arguable case with some reasonable prospect of success
In determining a stay application, the Commission must assess the strength of the appellant’s case without the benefit of hearing the appellant’s full argument and usually without the opportunity to undertake a full analysis of the case materials. Accordingly, the consideration of whether the appellant raises an arguable case with some reasonable prospect of success is to be undertaken against that context.
There are 21 paragraphs within section 2.1 of the Form F7 Notice of Appeal in response to the question “what are the grounds for your appeal?” These grounds fall under two headings: significant errors of fact and misleading actions. As to the alleged “significant errors of fact,” the appellant contends that Mr Liu resigned from his employment on 29 January 2024 and accordingly, he has not been dismissed within the meaning of s 386 of the Act. The appellant has foreshadowed an application to lead fresh evidence in relation to this issue on appeal.
Under the heading “misleading actions,” the appellant contends that it was notified of Mr Liu’s application for an unfair dismissal remedy on or about 20 February 2024. The appellant says that it reached an agreement with Mr Liu’s girlfriend on 4 April 2024 “on the outstanding entitlement and salary amount” for Mr Liu. The appellant’s position is that in circumstances where the “final amount was agreed upon and payment had been made, the Appellant assumed the matter was resolved and did not see the need to respond to the FWC.”
The appellant submits that the Deputy President erred by failing to take steps to engage with it upon receiving advice that “payment” had been made, ostensibly to resolve the application. This is particularly so in circumstances where the appellant says that it misapprehended that there were two applications made against it: one involving the Commission and another with the Fair Work Ombudsman.
The Commission is required to accord parties procedural fairness or natural justice in respect of the decision-making procedure or process.[6] Further, in the performance of its functions and in the exercise of its powers, the Commission is to act consistently with the obligations in ss 577 and 578 of the Act. In addition to the statutory mandate to act in a manner that is fair and just, the Commission must also get to the heart of matters as directly and quickly as possible.[7]
The appellant failed to attend three proceedings listed before the Deputy President: a 10 April 2024 case management conference, a 1 May 2024 hearing, and a further hearing on 20 May 2024. The notices of listing issued by the Deputy President’s chambers were effective in placing the parties on notice of the proceedings, and in securing Mr Liu’s attendance at them.
Further, the appellant was in receipt of the 10 April 2024 Directions issued to the parties, which provided compliance deadlines and placed the parties on notice of potential outcomes arising from a failure to comply. Despite this, the appellant did not file submissions or other evidence, including in support of its position that the matter had been resolved between the parties.
These notifications from the Commission were clearly stated as being in connection with Mr Liu’s application for an unfair dismissal remedy. In this context, the appellant’s contention that it erroneously assumed that the Commission and the Fair Work Ombudsman are the same entity does not point to any arguable contention of appealable error on the part of the Deputy President. Further, the above matters appear to satisfactorily demonstrate that the appellant was given a reasonable opportunity to present its case, both in writing, and at hearings or conferences convened by the Commission.
Nevertheless, the duty upon the Commission is not limited to ensuring that a party is given a reasonable opportunity to present its own case. Amongst other things, the rules of natural justice extend to affording parties the opportunity to consider the case put against them.[8] As is demonstrated at [12] and [14] of this decision, it does not appear that the appellant was served with a copy of Mr Liu’s written submissions and evidence filed on 15 April 2024, or the emails filed by Mr Liu with the Commission on 1 May 2024 attaching the resignation letter or his employment contract. Having regard to the Deputy President’s reasons, this evidence appears to have been central to the determination of Mr Liu’s unfair dismissal application.
It follows that the appellant does not appear to have been on notice that Mr Liu filed submissions and other material in the Commission and was actively prosecuting his unfair dismissal application. On the basis of this issue, I consider that the appellant has an arguable case, with some reasonable prospect of success, in respect of both the question of leave to appeal and the substantive merits of the appeal.
Balance of convenience
The appellant must satisfy the Commission that the balance of convenience favours a stay. There is no prima facie position in favour of the stay of a reinstatement order.[9]
Mr Liu is currently employed. The nature of that arrangement is not before the Commission. Mr Liu did not contend that he would be at immediate financial or other risk if the stay were granted. However, Mr Liu did submit that he had been pursuing unpaid wages and superannuation from the appellant since January 2024. While Mr Liu says this has affected his physical and mental well-being, there is no evidence demonstrating this before the Commission. Regardless, should the stay be granted, I accept that Mr Liu will incur some prejudice.
In the counterfactual, the application for permission to appeal is listed to proceed on 10 July 2024, less than three weeks from the date of this decision. Should the appellant be successful in its substantive appeal, there may be some difficulty recovering the compensation award from Mr Liu or his superannuation fund if the Order is quashed and payment is required to be returned.
In the circumstances I am satisfied that the balance of convenience weighs finely in favour of the issuance of a stay order on the condition – notwithstanding the appellant’s reservations – that the appellant pay into its solicitor’s trust account the amount that would have otherwise been paid for Mr Liu’s benefit pursuant to the Order. Should the appellant be successful in its appeal, that amount may be returned in full to the appellant. Should the appeal be unsuccessful, the amount shall be paid to Mr Liu and to his nominated superannuation fund pursuant to the terms of the Deputy President’s Order.
Conclusion
Having regard to the above matters and the conclusions reached, I am satisfied that I should exercise my discretion to order that the operation of the whole of the Order PR775155 be stayed pending determination of the appeal.
The stay order is issued with this decision.[10]
DEPUTY PRESIDENT
Appearances:
Mr F Wang of Prudentia Legal for the appellant
Mr K Liu, Ms W Tian for the respondent
Hearing details
2024.
Melbourne (by video):
June 18.
[1] PR775155
[2] [2000] AIRC 785
[3] Ibid at [5], approved on appeal in Kellow-Falkiner Motors Pty Ltd v Edghill [2000] AIRC 786
[4] Email to chambers of Deputy President Boyce dated 5 April 2024
[5] Sprigg v Paul's Licensed Festival Supermarket [1998] AIRC 989; 88 IR 21
[6] Australian Broadcasting Tribunal v Bond [1990] HCA 33; 170 CLR 321 per Deane J
[7] See Coal & Allied Mining Services Pty Ltd v Lawler [2011] FCAFC 54 at [25] and the cases cited therein
[8] Re Australian Bank Employees Union; Ex parte Citicorp Australia Ltd [1989] HCA 41; 167 CLR 513 at 519; Galintel Rolling Mills Pty Ltd [2011] FWCFB 6772 at [27]-[28]
[9] Edwards v Telstra Corporation Limited [1998] AIRC 679, Print Q2467
[10] PR776296
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