Todd Hutchinson v National Aboriginal Solutions (Aboriginal Corporation)

[2015] FWC 4021

[2015] FWC 4021

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Todd Hutchinson
v
National Aboriginal Solutions (Aboriginal Corporation)
(U2015/3705)

SENIOR DEPUTY PRESIDENT O’CALLAGHAN ADELAIDE, 17 JUNE 2015

Application for relief from unfair dismissal - employee or volunteer - dismissal - redundancy - time for making of application - small business fair dismissal code - findings of credibility.

[1] On 5 March 2015 Mr Hutchinson lodged an application pursuant to s.394 of the Fair Work Act 2009 (the FW Act). In that application Mr Hutchinson alleged that he had been unfairly dismissed by National Aboriginal Solutions (Aboriginal Corporation). In this decision, I have referred to National Aboriginal Solutions (Aboriginal Corporation) as NAS.

[2] Mr Hutchinson’s application was unable to be resolved through the conciliation process and was referred to me for determination. It was the subject of a directions conference on 29 April 2015. At this conference, I noted that the Employers Response to the application (the Form F3) indicated objections to the application on the basis that Mr Hutchinson was not an employee, that he was not dismissed and other, unspecified grounds. The Form F3 stated:

“Todd Hutchinson was a former employee of National Aboriginal Solutions (Aboriginal Corporation) and was not dismissed. There was a discussion over his performance and personal matters, Todd Hutchinson did not contact Aboriginal Solutions after this discussion.

The first occasion National Aboriginal Solutions (Aboriginal Corporation) was made aware of Todd Hutchinson leaving the organisation was from correspondence sent by the Fair Work Commission (the Commission).” 1

[3] At this directions conference I confirmed that the initial issues to be determined involved:

● the date of the termination of Mr Hutchinson’s employment,
● the extent to which the application was lodged within the 21 day time limit specified in s.394 of the FW Act,
● whether the termination of Mr Hutchinson’s employment was at the initiative of the employer, and
● whether the Small Business Fair Dismissal Code had application and, if so, whether the termination of Mr Hutchinson’s employment was consistent with that Code.
[4] Both parties were directed to file and serve material to allow consideration of these issues.

[5] The application was the subject of a determinative conference on 11 June 2015. At this conference Mr Hutchinson was represented by Mr Crocker, of counsel pursuant to an unopposed grant of permission made under s.596(2)(a) of the FW Act. Mr Keily, the Chief Executive Officer of NAS represented NAS. A substantial quantity of material was provided to me by the parties. Notwithstanding this, there is significant scope for disputation over the authenticity of certain of the evidence provided to me.

[6] I have summarised the background to the matter in the following terms. NAS provides services to aboriginal communities. It utilises volunteers in this respect. Mr Hutchinson was, in 2011, injured at work whilst working for a different employer. He subsequently received ongoing workers compensation payments. The amount of those workers compensation payments varied over the next three years depending on the WorkCover assessment of his employment standing. Mr Hutchinson also received various additional payments relative to his workplace injury. Mr Hutchinson commenced tertiary studies in February 2012. The time commitment associated with those studies is not altogether clear to me.

[7] NAS does not dispute that it engaged Mr Hutchinson as a part-time employee from September 2012. On 14 October 2013 Mr Hutchinson and Mr Keily signed a comprehensive employment agreement 2 which provided that Mr Hutchinson would be appointed to the position of National Project Development Manager with NAS commencing on 21 October 2013. That employment contract specified an annual salary of $75,000, the provision of a mobile telephone and laptop computer and superannuation payments. I have concluded that Mr Hutchinson’s employment was under a re-employment training initiative known as RISE funded by the South Australian WorkCover scheme. I have concluded that, after the commencement of the operation of that employment contract on 21 October 2013, the weekly workers compensation payments to Mr Hutchinson ceased.3 Various other workers compensation payments and reimbursements were made to Mr Hutchinson after that time.4

[8] Mr Hutchinson’s evidence was that over the entire duration of his work with NAS he was paid a total of approximately $3000 and that, with the exception of one cash payment of $1000, these payments were made in small irregular cash payments. Evidence of payments to Mr Hutchinson was not provided by NAS. The NAS position was that cash payments to Mr Hutchinson were made on a weekly basis. From late in 2013, Mr Hutchinson lived with Mr Keily and his family.

[9] The evidence is that Mr Hutchinson participated in various meetings and discussions and was involved in the pursuit of additional funding and commercial partners for NAS.

[10] Mr Hutchinson’s position is that he was an employee and that, notwithstanding that remuneration consistent with the employment contract from 21 October 2013 was not paid to him, he was promised that these amounts would be paid when funding and/or commercial partners for NAS were obtained. Mr Hutchinson’s position is that his employment was terminated at the initiative of NAS on 12 February 2015 in the course of an argument he had with Mr Keily. In the course of that discussion Mr Hutchinson asserts that Mr Keily told him he was no longer employed by NAS. Mr Hutchinson moved out of Mr Keily’s home that day. Mr Hutchinson denies that he was ever advised at an earlier time that he was made redundant or that he ever agreed to work on a voluntary basis.

[11] The NAS position is that prior to 21 October 2014 Mr Hutchinson was an employee. Further, that on 30 September 2014 Mr Keily, Mr Hutchinson and part-time volunteers met to discuss the economic uncertainty facing NAS. After, or as part of this discussion, Mr Hutchinson was given unsigned correspondence from Mr Keily which advised that his employment was terminated, by reason of redundancy, with effect from 21 October 2014. This letter stated that redundancy pay of $2884.64, representing two weeks pay would be paid to Mr Hutchinson. There is no dispute that this amount was not paid to him. NAS assert that Mr Hutchinson agreed to continue working as a volunteer after that date and that he did so until he voluntarily abandoned that function on 12 February 2015.

[12] Whilst I have taken into account all of the evidence before me, I have briefly summarised the witness evidence as it becomes particularly relevant to my conclusions in this matter.

[13] Mr Hutchinson’s evidence went to his employment history and the work that he undertook with NAS. His evidence went to the impact of that work on his study and on his WorkCover payments. Mr Hutchinson asserted that he was initially engaged on a part-time basis at an agreed rate of $19.75 per hour. His evidence went to the employment contract as agreed to on 14 October 2013. However, his evidence was that no payments were made into his bank account but that he was aware of certain pay advices sent by NAS to the WorkCover Claims Agent. Mr Hutchinson’s evidence was that he was never told that he was redundant but that he was advised that, when various Government grants were ultimately received and/or a proposed profit-making subsidiary of NAS became operational, he would then receive the payments due to him. Mr Hutchinson detailed the argument that he had with Mr Keily on 12 February 2015 and his understanding that his employment was terminated from that date.

[14] Mr Hutchinson’s evidence is at best, barely credible. That he accepted and continued to work for NAS without any significant payments for over 2½ years almost defies belief. His evidence was that he relied on food and accommodation provided to him by Mr Keily and Ms Matko and accepted various small cash payments generally made to him on weekends. Further, that he lived on the weekly WorkCover payments whilst these were made and subsequent workers compensation payments as they were received as well as family funds. He advised that he considered making a complaint about payments due to him to the Fair Work Ombudsman but did not actually do so. Whilst I could have concluded that Mr Hutchinson was simply exceptionally naive in not seeking payments, I think the more appropriate conclusion is that Mr Hutchinson actually believed that the monies that would be achieved by NAS from government grants and its commercial enterprises would compensate him for the absence of payments over that period of time. I think it likely that Mr Hutchinson was aware that NAS was receiving funding through the RISE Scheme even though it was not paying him. Acting on Mr Keily’s instructions, Mr Hutchinson provided to the WorkCover Claims Agent, clearly false pay advices relative to his own employment. 5

[15] If Mr Hutchinson’s evidence is barely credible, Mr Keily’s evidence is of a substantially lower standard again.

[16] Mr Keily’s evidence went to the circumstances of his employment of Mr Hutchinson and his assertion that, on 30 September 2014, he advised Mr Hutchinson that he would be made redundant and provided him with correspondence to this effect. Mr Keily advised that he developed that letter based on templates available to him. Mr Keily advised that he showed that letter to another volunteer, Mr Whittington soon after 14 October 2014. Mr Keily conceded that no redundancy payments were made to Mr Hutchinson and did not seriously dispute Mr Hutchinson’s evidence that he received only sporadic cash payments. Mr Keily’s evidence was that Mr Hutchinson agreed to continue working as a volunteer after 30 September. Mr Keily asserted that various other volunteers would confirm that Mr Hutchinson had continued to work as a volunteer.

[17] An unsigned witness statement was provided for Mr Whittington. I have concluded that this was prepared by Mr Keily. Mr Whittington gave evidence by phone and confirmed that he was a volunteer for NAS. His evidence went to ongoing discussions over the operations of NAS. He was not aware that Mr Hutchinson was ever an employee and was never shown a letter relating to his employment arrangements.

[18] Witness statements in nearly identical terms were provided by Mr Keily for his partner, Ms Matko, Mr Fazzari and Mr Dawe. Telephone evidence was given by Ms Matko and Mr Fazzari. Their evidence was that they were volunteers and they understood that Mr Hutchinson was also a volunteer. In Ms Matko’s case, I have concluded that she must have been aware that Mr Hutchinson, who lived with her and Mr Keily, was engaged as an employee and that she also benefited from the WorkCover RISE scheme payments made to NAS on the basis that Mr Hutchinson was an employee.

Findings

[19] I have concluded that Mr Keily wrote the witness statements for the other NAS witnesses. Those statements were all expressed in near identical terms so as to suit Mr Keily’s assertions. None of those witnesses were able to support Mr Keily’s assertions. I have accepted Mr Hutchinson’s evidence that he was not paid as an employee and certainly did not receive a wage in accordance with the employment contract of 21 October 2013. Further, I have concluded that Mr Keily concocted the redundancy advice dated 30 September 2014 and that there was no discussion on that day between he and Mr Hutchinson where Mr Hutchinson agreed to remain with NAS as a volunteer. Mr Hutchinson’s evidence is that he was in Queensland on that day. The letter itself is inconsistent with a normal redundancy advice and the proposition that Mr Hutchinson would accept a redundancy with two week’s pay when he had not been paid over the past year, and happily work on as a volunteer is simply too far-fetched. Finally, Mr Whittington’s evidence comprehensively discredits Mr Keily’s evidence about the redundancy letter. Had Mr Hutchinson been made redundant on 14 October 2014, I think Mr Keily would have referred to this in the Employer’s Response (Form F3). I think it most likely that Mr Keily concocted the letter dated 30 September 6 at some time after the application was made. I accept Mr Hutchinson’s evidence that he first saw this letter when he received the submissions and materials from NAS prior to the determinative conference.

[20] Consequently, I simply do not believe that Mr Hutchinson was told that he was being made redundant on 21 October or that there was any other advice of a redundancy.

[21] I have concluded that the relationship which Mr Hutchinson had with NAS concluded on 12 February 2015 when he had a heated argument with Mr Keily and subsequently moved out of Mr Keily’s and Ms Matko’s home. That is consistent with Mr Hutchinson’s evidence and is compatible with the evidence of Ms Matko and Mr Keily.

[22] The more difficult issue to be determined goes to whether Mr Hutchinson was, at that time, an employee. I have concluded that, as at 12 February he was undertaking activities intended to benefit NAS in terms of gaining grant funding or access to commercial opportunities. He was doing so on the basis that he was living in Mr Keily’s home where food and keep was provided. He had accepted that he was not being paid under the terms of his employment contract and his description of his employment arrangement to Mr Keily and Ms Matko, on 12 February 2015, as a “scam” in terms of the WorkCover RISE payments, clearly indicates that he was aware that monies were being paid to NAS on the basis that he was employed. Mr Hutchinson was clearly hoping that either or both the achievement of additional grant funding or a commercial venture would enable substantial payments to be made to him.

[23] It is difficult to apply the normal employment tests to this situation. 7 Mr Hutchinson was engaged under an employment contract. He worked under the direction of Mr Keily. There is no information available to me about his working hours. The sporadic payments made to Mr Hutchinson are inconsistent with both the employment contract and normal employment arrangements. I have concluded that, as he was only paid sporadically, there was no tax deducted by NAS. Mr Hutchinson was the beneficiary of accommodation and keep provided by Mr Keily and Ms Matko and, in that respect there was some consideration for his services. On balance, I have concluded that he was an employee but that he was also aware of a scam to achieve WorkCover funding whilst he pursued other perceived lucrative funding sources through NAS.

[24] Notwithstanding Mr Hutchinson’s employment contract and the extent to which he had agreed to forgo or at least delay wages due to him under this contract, the fact that he received some limited payments and board and lodging further contributes to the conclusion that he must be regarded as an employee.

[25] On this basis I have concluded that he was an employee who was protected from unfair dismissal. He had been employed on a regular and systematic basis for over 12 months and received payments well below the threshold level.

[26] There is no dispute that NAS is a small business for the purposes of the FW Act. Section 386 therefore establishes that the Small Business Fair Dismissal Code has application. That Code states:

“The Code

Summary Dismissal
It is fair for an employer to dismiss an employee without notice or warning when the employer believes on reasonable grounds that the employee’s conduct is sufficiently serious to justify immediate dismissal. Serious misconduct includes theft, fraud, violence and serious breaches of occupational health and safety procedures. For a dismissal to be deemed fair it is sufficient, though not essential, that an allegation of theft, fraud or violence be reported to the police. Of course, the employer must have reasonable grounds for making the report.

Other Dismissal
In other cases, the small business employer must give the employee a reason why he or she is at risk of being dismissed. The reason must be a valid reason based on the employee’s conduct or capacity to do the job.

The employee must be warned verbally or preferably in writing, that he or she risks being dismissed if there is no improvement. The small business employer must provide the employee with an opportunity to respond to the warning and give the employee a reasonable chance to rectify the problem, having regard to the employee’s response. Rectifying the problem might involve the employer providing additional training and ensuring the employee knows the employer’s job expectations.

Procedural Matters
In discussions with an employee in circumstances where dismissal is possible, the employee can have another person present to assist. However, the other person cannot be a lawyer acting in a professional capacity. A small business employer will be required to provide evidence of compliance with the Code if the employee makes a claim for unfair dismissal to Fair Work Australia, including evidence that a warning has been given (except in cases of summary dismissal). Evidence may include a completed checklist, copies of written warning(s), a statement of termination or signed witness statements.”

[27] The circumstances of the termination of Mr Hutchinson’s employment on 12 February are such that it must be categorised as a summary dismissal. However, it arose from a disagreement between Mr Hutchinson and Mr Keily. I accept the evidence of Mt Hutchinson in terms of that disagreement. Mr Hutchinson’s evidence went to the disagreement 8 he had with Mr Keily on 12 February 2015. I am unable to characterise this disagreement as a form of serious misconduct which would enable Mr Keily to form a reasonable view that Mr Hutchinson’s behaviour warranted summary dismissal for two reasons.

[28] Firstly, all of the circumstances of the employment of Mr Hutchinson must be taken into account. In this case those circumstances gave rise to reasonable concerns on the part of Mr Hutchinson. Secondly, I have formed the view that Mr Hutchinson’s concerns about the credibility of the NAS enterprise had a clear foundation such that he was entitled to express concern that NAS represented a scam without that assertion resulting in his dismissal on the basis of serious misconduct. In reaching these conclusions I have not considered the letter of 30 September 2014 9 because I think that letter was fabricated after the event by Mr Keily and was, in any event, not given to Mr Hutchinson.

[29] Consequently, I am not satisfied that the termination of Mr Hutchinson’s employment was consistent with the Small Business fair Dismissal Code.

Conclusion

[30] I have concluded that Mr Hutchinson was an employee before 12 February 2015 and that he was summarily dismissed on that day. He was a person who was protected from unfair dismissal. Accordingly, I am not satisfied that he is prevented from pursuing this application because of a volunteering arrangement, or a redundancy or the Small Business Fair Dismissal Code. His application was lodged within the statutory time limit. Accordingly, Mr Hutchinson is able to pursue this application. An Order (PR568359) to this effect will be issued.

[31] Whether Mr Hutchinson should further pursue this application given my reservations about his credibility and that of Mr Keily is a matter that only Mr Hutchinson can determine. I recommend that Mr Hutchinson obtains advice about the extent to which he may be complicit in arrangements to defraud WorkCover and, separately, the extent to which he may have effectively consented to a change in his employment contract arrangements.

[32] To this extent the parties may wish to consider reaching an agreed alternative to the continued pursuit of this application.

[33] Notwithstanding this, the application will be listed for a further determinative conference to consider the merits pursuant to s.387 of the FW Act.

Appearances:

D Crocker counsel for the applicant.

P Keily appearing for the respondent.

Hearing (Determinative Conference) details:

2015.

Adelaide:

June 11.

 1   Form F3, para 2.2

 2   Exhibit A2, Attachment D

 3   Exhibit A3

 4   Exhibit A4

 5   Transcript, Sound Recording, 11 June 2015, 2.10 pm

 6   Exhibit R2

 7   See Abdullah v Viewdaze Pty Ltd, PR927021

 8   Exhibit A2, paras 73 - 96

 9   Exhibit R2

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