Swee Hu Liu v Universal Bakery T/A Timryl Pty Ltd

[2014] FWC 2967

[2014] FWC 2967

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Swee Hu Liu
v
Universal Bakery T/A Timryl Pty Ltd
(U2013/16483)

DEPUTY PRESIDENT GOOLEY MELBOURNE, 6 MAY 2014

Application for relief from unfair dismissal - dismissal was unfair - compensation ordered.

[1] Mr Swee Hu Liu was employed by Timryl Pty Ltd (Timryl) until his employment was terminated on 20 November 2013. Mr Liu alleges that the termination of his employment was unfair and he seeks a remedy.

[2] No employer response form was submitted.

[3] On 22 January 2014, a representive of Timryl advised that the company had gone into liquidation. A search of the ASIC website confirmed that on 27 September 2013 an application had been made to the Supreme Court of Victoria to wind up Timryl.

[4] On 17 March 2014, Mr Mark Wren from Mills Oakley Lawyers, solicitors for the plaintiff in the winding up proceedings, advised that Timryl had been placed in liquidation by order of the Supreme Court.

[5] On 19 March 2014, a copy of Mr Liu’s claim against the liquidator for unpaid entitlements was provided to the Commission by the liquidator.

[6] On 2 May 2014, the liquidators advised that they had been appointed on 20 November 2013 and they relied upon s.471B of the Corporations Act 2001 (Corporations Act). They further advised that they did not intend appearing at the hearing.

Can this matter be heard?

[7] In Smith v Trollope Silverwood & Beck 1(In liquidation), a Full Bench of the then Australian Industrial Relations Commission, considered the application of s.471B of the Corporations Act. That decision is authority for the proposition that there is no bar to the Commission hearing and determining an application for an unfair dismissal remedy, if a company is being wound up in insolvency by order of a court.

This is to be contrast with s.500 of the Corporations Act, which provides that no civil proceeding can commence or continue after the passing of a resolution to voluntary wind up a company. 2

[8] This matter can therefore be heard and determined.

[9] Mr Liu did not file material in support of his application. He advised that he wished to rely upon his application form.

[10] In an undated letter Mr Mark Siciliano, a director of Timryl, advised Mr Liu that the reason for the termination was because the company was being wound up.

[11] Mr Liu said he was given no warning about the termination of his employment and that other employees who were paid cash in hand were retained in the business. Mr Liu was not paid his accrued annual leave, long service leave, notice or redundancy pay.

Was the termination of employment harsh, unjust or unreasonable?

[12] In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the Fair Work Commission must take into account the following.

Whether there was a valid reason for the dismissal related to Mr Liu’s capacity or conduct (including its effect on the safety and welfare of other employees): s.387(a)

[13] Liquidators were appointed to Timryl on the day Mr Liu’s employment was terminated. The liquidators did not terminate Mr Liu’s employment.

[14] However on Mr Liu’s evidence, the business continues to operate and not all employees were terminated. No evidence was called by the liquidator about whether Timryl continues to trade or if the business was sold to another company. I do note that Universal Bakery, which was the trading name of Timryl’s business, continues to operate from the same address.

[15] There was no valid reason for the termination of Mr Liu’s employment relating to his capacity or conduct..

Whether Mr Liu was notified of that reason: s.387(b)

[16] Mr Liu was notified of the termination, however the reason for his termination was not related to his capacity or conduct.

Whether Mr Liu was given an opportunity to respond to any reason related to the capacity or conduct of the person: s.387(c)

[17] As the reason did not relate to Mr Liu’s capacity or conduct, this criterion is not relevant.

Any unreasonable refusal by the employer to allow Mr Liu to have a support person present to assist at any discussions relating to dismissal: s.387(d)

[18] No discussions occurred about the dismissal.

If the dismissal related to unsatisfactory performance by Mr Liu—whether he had been warned about that unsatisfactory performance before the dismissal: s.387(e)

[19] There was no evidence that the dismissal related to unsatisfactory performance.

The degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal: s.387(f)

[20] There was no evidence called about the size of the business.

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: s.387(g)

[21] There was no evidence called about this criterion.

Any other matters that the Commission considers relevant: s.387(h)

[22] Mr Liu was a long standing employee whose employment was terminated without notice. He was not paid his entitlements on termination. Because Timryl is in liquidation, Mr Liu will need to apply to the Federal Government’s Fair Entitlements Guarantee scheme for his unpaid entitlements.

[23] Mr Liu has found making his claim for unpaid entitlements difficult as his first language is not English.

Conclusion

[24] Mr Liu’s employment was terminated without notice. I am unable to conclude that his employment was in fact terminated due to the insolvency of Timryl. I therefore find that the termination of Mr Liu’s employment was harsh, unjust and unreasonable.

Remedy

[25] Mr Liu did not give evidence that he was seeking reinstatement of his employment. As the company is insolvent, I consider reinstatement would be inappropriate in all the circumstances.

[26] In assessing any amount in lieu of reinstatement, the Commission is required to have regard to the following.

The effect of the order on the viability of the employer’s enterprise: s.392(2)(a)

[27] Given Timryl is in liquidation, any order for compensation would affect the return to other creditors.

The length of Mr Liu’s service with the employer: s.392(2)(b)

[28] Mr Liu had worked for Timryl for 17 years. This weighs in favour of a higher level of compensation.

The remuneration that Mr Liu would have received, or would have been likely to receive, if he had not been dismissed: s.392(2)(c)

[29] Mr Liu was paid $669.23 per week.

[30] It is not clear how long Mr Liu would have continued in employment. However, it cannot be ignored that there was a high probability that Mr Liu’s employment would have been terminated by the liquidator. I would have expected the liquidator to have terminated the employment of Mr Liu within four weeks. This would have enabled the liquidator to review the business and comply with its obligations to consult under the Food, Beverage and Tobacco Manufacturing Award 2010.

The efforts of Mr Liu (if any) to mitigate the loss suffered because of the dismissal: s.392(2)(d)

[31] Mr Liu advised that he had sought other work but it was difficult given his age and his language skills. He was in receipt of the New Start allowance.

[32] I accept that Mr Liu has attempted to mitigate his losses and this weighs in favour of an order for compensation.

The amount of any remuneration earned by Mr Liu from employment or other work during the period between the dismissal and the making of the order for compensation: s.392(e)

[33] Mr Liu had not earned any remuneration since his dismissal.

The amount of any income reasonably likely to be so earned by Mr Liu during the period between the making of the order for compensation and the actual compensation: s.392(2)(f)

[34] Mr Liu is unlikely to earn any money between the making of the order and the actual compensation.

Any other matter that the Commission considers relevant: s.392(2)(g)

[35] Mr Liu has not been paid any of his outstanding entitlements. However he will be able to make a claim under the Federal Government Fair Entitlements Guarantee scheme. I therefore do not take this into account in determining the amount of compensation to be paid to Mr Liu.

[36] Mr Liu was a long serving employee. His employment was terminated without notice and payment of his entitlements by Timryl through no fault of his own.

Conclusion

[37] I have great sympathy for the situation Mr Liu finds himself in. It is difficult for him to understand a system which permits a company to go into liquidation without being required to meet its obligations to him, whilst at the same time the “business” continues to operate. Nevertheless, I am unable to redress this injustice in an unfair dismissal application.

[38] I have found that Mr Liu would have remained in employment for another 4 weeks. I make no deduction for contingencies. As he has not earned any income from employment no other deductions are necessary.

[39] For the above reasons, Timryl is ordered to pay Mr Liu $2,676.92 within 14 days of the making of this order.

DEPUTY PRESIDENT

Appearances:

Mr S. Liu representing himself.

Hearing details:

2014;

Melbourne:

5 May.

 1   PR940508.

 2   See Bruce v Fingal Glen Pty Ltd [2013] FWC 2704.

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