[2020] FWC 2957

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Yuening Fan
v
Integrated Pest Management Systems (Canberra) Pty Ltd
(U2018/12468)

DEPUTY PRESIDENT KOVACIC

CANBERRA, 11 JUNE 2020

Application for relief from unfair dismissal – jurisdictional objection – employer a small business employer and the dismissal was consistent with the Small Business Fair Dismissal Code – jurisdictional objection upheld – application dismissed. In the proceedings the Respondent also contended that the application should be struck out on the basis that it had been deregistered by the Australian Securities and Investments Commission – Corporations Act 2001 (Cth) does not preclude the application being determined by the Fair Work Commission.

[1] Ms Yuening Fan (the Applicant) lodged an application under s.394 of the Fair Work Act 2009 (the Act) which was received by the Fair Work Commission (the Commission) on 3 December 2018 alleging that she had been unfairly dismissed by Integrated Pest Management Systems (Canberra) Pty Ltd (the Respondent) on 24 November 2018.

[2] In its Form F3 – Employer Response to Unfair Dismissal Application the Respondent raised a jurisdictional objection to Ms Fan’s application, contending that it was a small business and the dismissal was consistent with the Small Business Fair Dismissal Code (the Code).

[3] Hearing of Ms Fan’s unfair dismissal application was delayed for a considerable period for several reasons, including health issues which affected the Respondent’s Director, Mr Christopher Smith, and visa issues which prevented the Applicant from returning to Australia. The Applicant now resides in China. The matter was eventually heard on 26 March 2020 by telephone. The Applicant appeared on her own behalf. Mr Smith attended the telephone hearing but did not enter an appearance on the basis that the Respondent had been deregistered by the Australian Securities and Investments Commission (ASIC) on 11 February 2019. 1

[4] For the reasons set out below, I am satisfied that firstly there is no impediment to the Commission determining Ms Fan’s unfair dismissal application as a result of the Respondent having been deregistered by ASIC and secondly that the dismissal was consistent with the Code. Accordingly, Ms Fan’s application will be dismissed.

Background

[5] The Applicant contends that she was initially employed by the Respondent on 13 October 2014 pursuant to a verbal contract of employment. In her application, Ms Fan stated that on 26 November 2018 she asked Mr Smith by text message if she could pick up her “things” from the office as she was on workers’ compensation and would be unable to attend work for a while. The text message exchange is set out below:

“Applicant: Hi, could I pick up my stuff from office please.

Mr Smith: Sorry its all been cleaned out. There was a jumper and a few bits and pieces. I know you had planned your timings for sometime for what you was doing, as you had made no previous attempt to obtain i disposed of it many weeks ago.

Applicant: All right, thanks

Applicant: If you do not mind, I still like to see what have been left. If there is nothing left, it is fine. I won’t blame you.

Mr Smith: It has all been removed you are no longer part of the team and therefore not appropriate you attend the property. I just advised you that it has all been removed, that’s the end of it.

Applicant: If I have been sacked, I need the letter. Even If I were sacked, I still have the right to come last time to pick up my things.

Mr Smith: A letter was sent out weeks ago regarding your dismissal. I have stated for the last time there is nothing there, you have had sometime long before this to obtain any belongings. You do not have any right to attend the property. It is normal practice the day you step out or dismissed your desk is cleared by either the employee or employer.

Clarissa [i.e. Ms Fan] I have told you very clearly so no further conversation regarding this. You are not welcomed to attend the property.

Applicant: I did not see the letter. Could you email me please.

Applicant: I do not know I have been dismissed.

Mr Smith: I will email it. Back around the beginning of October

Applicant: Okay, thanks” 2

[6] The Applicant also stated in her application that she thought that she had been dismissed because she was on workers’ compensation and because Legal Aid New South Wales (Legal Aid) had sent the Respondent an email on her behalf on 8 November 2018 alleging that she had been underpaid. The correspondence sent by Legal Aid contended inter alia that from early 2016 the Respondent did not regularly pay the Applicant for the work she performed and calculated the total of wages outstanding and owing to the Applicant as $72,342.60. 3

[7] Attached to the Respondent’s Form F3 were several documents, including two letters of employment dated 8 April 2015 from the Respondent to Ms Fan. One of those letters is for a Clerical Assistant position with an hourly rate of pay of $22.25 per hour. 4 The other letter relates to the position of Inhouse Accountant with an hourly rate of pay of $27.50 per hour.5 Both letters of employment provided for a 38 hour week and specified an effective date of 1 May 2015. The Applicant’s signature appears on both documents and in both instances is dated 29 April 2015. Also attached to the Respondent’s Form F3 was a letter of engagement dated 17 April 2015 from the Respondent to Ms Fan.6 The letter of engagement specified her position as “Inhouse Company Accountant” with remuneration of $54,340.00 per annum and was also signed by the Applicant on 29 April 2015.

[8] Among the other documents filed with the Respondent’s Form F3 were an affidavit by Mr Smith dated 11 July 2019 (the affidavit is discussed in further detail below) with several annexures, including a statement by Mr Smith dated 20 November 2018 which was made in the context of the Applicant’s workers’ compensation matter (the statement is also discussed below) and the termination letter dated 9 October 2018. The termination letter stated among other things that:

“It is disappointing to advise you of your dismissal effective immediately with further particulars set out herewith.

Employer: Integrated Pest Management Systems Canberra Pty Ltd.

Position: Clerical Assistant.

Division: National Employment Standards Fair Work Act 2009

Award Classification: Clerks and Administrative Employees (State) Award NSW

You have been given since your commencement of employment of 1^st May 2015 Employment contract “Letter of Employment”, of which was signed by myself and also you. It is a contractual agreement for the purposes of your employment with this company.

The grounds for your immediate dismissal are based on the following and are in accordance with “Small Business fair dismissal code” Fairwork Act, and Clause Termination of Employment of the Employment Contract (……if serious misconduct).

The following breaches of the said employment contract have been:

Clause:Your Obligation to the employer

Clause:Confidential Information

Clause: Intellectual Property and Moral Rights

Clause: Acting in the Company's Interest

The following actions leading to breaches of obligations under the Employment Contract:

It had become evident that on Friday 5th October, 2018 I made arrangements to collect what is known in the Business as the Office Mobile phone, and the property and filing cabinet keys and gate remotes from you. Upon meeting you at the Tuggeranong Library you did hand to me the mobile phone and no keys or remotes where handed to me. After a series of text messages you stated you had intentionally completed a reset of the phone. The phone belongs to the business, therefore you have breached your obligations to protect the interest of the employer and have interfered with the Intellectual property of the business, and you have acted in a way which is not in the company's best interest. (Immediate dismissal offense)

It had came to my attention that in your previous correspondence to the Fair Work complaints you obtained and used information including records and printed forms straight from the company's records in MYOB, to supply and use in external situations for your benefit. This is a breach of the Company's confidential and protected information, and you had no authority to use such information for the purpose you did, further by using such information you did not act in the Company's best Interest.(lmmediate dismissal)

According to computer file records on what was your computer in the office on or around the 28^thAugust 2018 it is apparent that you have created what appears to be a letter of reference which is on a letter head which is not the normal business letter head for "IPMS Canberra", and representing or purporting to be a letter confirming your employment with a Company which is Directed by myself, but you are not employed by. This is a breach of your obligations to your employer "IPMS Canberra", breach of confidential information, and breach of intellectual property and moral rights, and further with allegations of fraud from the company you allegedly work for. (Immediate dismissal)

It has become apparent that at a time prior to you going on worker's compensation leave, yourself being the only person to have keys to the filing cabinets, that upon the preparation of this dismissal letter as of today's date, I have discovered that the files in you employee folder are missing in their entirety, and further upon the perusing the server, and the cloud files, they files relating to your employment contract have all been removed. I believe that you have intentionally removed or destroyed files both in hard copy and electronic, these files are the property of the company, and your did not have the authority to remove use or destroy such files. You have breached your obligation to your employer, failed to act in the company's interest, and committed an act of intentional destruction of legal records. Committed a breach of clause 9 (9.3) of your employment contract. (Immediate dismissal)” 7 (Emphasis and formatting as per original)

[9] As noted above, the Applicant stated in her application that she was dismissed on 24 November 2018.

The statutory framework

[10] The Commission exercises its powers in relation to an application for an unfair dismissal remedy pursuant to Part 3-2 of the Act. Those provisions from Part 3-2 of the Act which are relevant in this case are set out below.

“385 What is an unfair dismissal

A person has been unfairly dismissed if the FWC is satisfied that:

(a) the person has been dismissed; and

(b) the dismissal was harsh, unjust or unreasonable; and

(d) the dismissal was not a case of genuine redundancy.

Note: For the definition of consistent with the Small Business Fair Dismissal Code: see section 388.

387 Criteria for considering harshness etc.

In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the FWC must take into account:

(a) whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees); and

(b) whether the person was notified of that reason; and

(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and

(d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and

(e) if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal; and

(f) the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(g) 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; and

(h) any other matters that the FWC considers relevant.

388 The Small Business Fair Dismissal Code

(1) The Minister may, by legislative instrument, declare a Small Business Fair Dismissal Code.

(2) A person’s dismissal was consistent with the Small Business Fair Dismissal Code if:

(a) immediately before the time of the dismissal or at the time the person was given notice of the dismissal (whichever happened first), the person’s employer was a small business employer; and

(b) the employer complied with the Small Business Fair Dismissal Code in relation to the dismissal.

[11] The Code declared by the Minister pursuant to s.388(1) of the Act is as follows:

“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.”

The Respondent’s case

[12] Other than its Form F3 and the documents attached to it the Respondent did not file any materials. At the hearing Mr Smith advised the Commission that the Respondent had been deregistered by ASIC on 11 February 2019 due to non-payment of annual fees. Mr Smith further stated that he was therefore no longer a Director of the Respondent and as such could not enter an appearance in the proceedings. Mr Smith also gave notice that he was formally withdrawing from the matter, though he continued to sit in on the proceedings and “just out of interest” made a number of comments in response to the Applicant’s submissions (see below). Mr Smith also posited that the matter could not proceed in circumstances where the Respondent had been deregistered and sought an order that the matter be struck out, adding that he did not believe the matter could lawfully proceed. Mr Smith further stated that another entity of which he was a Director, i.e. Integrated Pest Management Systems (IPMS), had recently been put into liquidation. Mr Smith described IPMS as a shelf company which was not trading and had no employees, adding that IPMS was a supplier to the Respondent. Mr Smith also noted that the Applicant was no longer residing in Australia.

[13] As previously mentioned, attached to the Respondent’s F3 was an affidavit by Mr Smith dated 11 July 2019. Key aspects of that affidavit included that:

• the Applicant was employed by the Respondent as a Clerical Assistant, adding that the Applicant had been interviewed after the Respondent had placed advertisements for a Clerical Assistant position;

• the Applicant was initially employed as a casual employee;

• when interviewed, the Applicant expressed a desire to obtain full-time employment by way of business sponsorship to qualify for a permanent residence in Australia;

• after some time working through the migration sponsorship process the Applicant was formally offered the Clerical Assistant position;

• in the course of progressing the sponsorship arrangements for the Applicant it was discovered that the Clerical Assistant position Letter of Employment dated 8 April 2018 was not going to meet the requirements for sponsorship, with the immigration agent engaged by the Respondent indicating that the position needed to be for an inhouse accountant with a minimum annual salary of $54,000 per annum;

• the Respondent advised the Applicant that it could not afford to pay her this amount for what was a basic bookkeeping role;

• the Inhouse Accountant position Letter of Employment dated 8 April 2015 was subsequently drafted, with that document the only employment contract provided to the then Department of Immigration and Border Protection (DIBP);

• the documents provided on 14 May 2015 by the migration agent 8 were only used for the purposes of the Applicant’s sponsorship application;

• it was agreed with Applicant that the Clerical Assistant position Letter of Employment was the actual agreement for the purposes of her employment with the Respondent;

• to compensate him/the Respondent for the costs incurred in respect of the sponsorship process the Applicant offered and it was agreed that she would pay him/the Respondent $10,000 once her 457 visa was approved and a further $10,000 upon being eligible to apply for permanent residence;

• to date he had only received $5,000 from the Applicant;

• neither the Respondent nor he had signed any paperwork once the sponsorship arrangement concluded;

• in August 2015, i.e. shortly after the employment contract had commenced, an issue stemming from the difference between the Inhouse Accountant and Clerical Assistant contracts was identified when preparing the Applicant’s annual PAYG pay summary;

• the Applicant’s solution to this issue was also used in 2016 and 2017 (that approach was not needed for 2018 as the sponsorship arrangement had concluded and the PAYG pay summary reflected the Clerical Assistant’s position remuneration);

• the Applicant subsequently indicated to him that the Respondent would also have to pay tax and superannuation on the higher income, with the Applicant indicating that she would repay the difference;

• the Applicant had not repaid the difference;

• the Applicant was from 1 May 2015 until the termination of her employment paid a gross amount of $983 per week, which in net terms amounted to $684 per week;

• the Applicant was never employed to be paid $54,300 per annum, positing that had an employee been underpaid to the extent contended by the Applicant/Legal Aid an employee would normally have resigned or initiated action prior to the level of underpayment alleged having been reached;

• the Applicant’s employment was immediately terminated on 9 October 2018, with the termination letter posted to the Applicant’s last known address;

• he subsequently discovered a document headed “Student Internship End Review” 9 which appears on Accountants Research Centre (ARC)10 letterhead on the computer used by the Applicant, adding that he had no knowledge of the internship which the Applicant allegedly had with IPMS and that he had not seen or had any knowledge of the document which includes a section completed by the ‘Supervisor’ (the document cites IPMS as the host company and Mr Smith at the supervisor/line manager);

• he also discovered another document on the computer, i.e. a statement of service/reference 11, which alleged that the Applicant had been employed by IPMS, adding inter alia that he had never seen or signed the document and that it contained false information; and

• bank records would show that the Applicant was at all times paid by the Respondent.

[14] In circumstances where the Respondent did not enter an appearance at the hearing, the affidavit was not tendered at the hearing.

[15] Mr Smith’s affidavit was broadly consistent with his statement of 20 November 2018 which he gave to the investigator regarding the Applicant’s workers’ compensation claim. In that statement Mr Smith stated among other things that:

• two workplace agreements were drawn up for the Applicant, one to satisfy immigration requirements and the other to reflect her actual employment as a clerical staff member;

• the workplace agreement prepared for immigration purposes provided for annual earnings of around $54,000, while her actual workplace agreement provided for agreed remuneration of around $42,000 per annum;

• at the end of every financial year the Applicant prepared false payment summaries for submission to the Australian Taxation Office (ATO) and DIBP; and

• he had posted a termination letter to the Applicant on or around the beginning of October 2018 citing breaches of clauses 9, 10 and 12 of her workplace agreement as reasons for her dismissal.

[16] Also at the hearing, Mr Smith made the following comments:

• the Applicant was notified of her dismissal by text message exchange on 16 October 2018, with the dismissal letter previously sent to her address;

• the statement of service/reference prepared by the Applicant was for the purpose of her seeking new employment, adding that he had not signed the document and first saw the document in early October 2018 when he was looking for documents on the Respondent’s “system” for the purposes of responding to the Applicant’s workers’ compensation claim;

• he disagreed that the Applicant would have continued in her employment for an indefinite period, positing that her employment would not have continued beyond 11 February 2019 when the Respondent was deregistered;

• the Respondent only employed two people;

• he admitted in his statement to the workers’ compensation investigator that there were two contracts regarding the Applicant’s employment, with the Applicant paid in accordance with the contract providing lower remuneration; and

• the Applicant received more in workers’ compensation payments than she would have in wages.

The Applicant’s case

[17] The Applicant submitted that she had been employed by the Respondent since 15 October 2014, highlighting among other things that by mid-September 2018 she had not been paid for 18 weeks. The Applicant further submitted that from 18 September 2018 she commenced a period of sick leave and later made a workers’ compensation claim which was accepted and resulted in her receiving gross weekly payments $755.25 for the first 13 weeks and $636.00 thereafter. More specifically, the Applicant contended that her dismissal was unfair because she had not been given a reason for her dismissal and had been dismissed without any prior notification. The Applicant also posited that she had not been paid her entitlements on termination. In her submissions, the Applicant relied on the decision in Mr Kazi Hasanuzzaman v Amrita Foods Pty Ltd. 12

[18] In her reply submissions the Applicant disputed a number of aspects of Mr Smith’s affidavit. Key aspects of the Applicant’s reply submissions included that:

• she had never seen the Clerical Assistant or Inhouse Accountant Letters of Employment annexed to Mr Smith’s Affidavit, adding that it appeared to her that the signature and date panel on the document had been cut and pasted from the Letter of Engagement she signed on 29 April 2015; 13

• after she obtained her 457 visa Mr Smith asked her for $10,000, adding that she paid him $5,000 as she was worried that her job and visa would be affected if she did not;

• in 2017 Mr Smith began to withhold her wages and when queried said that he was doing so to make up for the balance of the money he had asked for;

• she reported the matter to the Fair Work Ombudsman;

• there were not two employment contracts, the only contract was the one that specified annual remuneration of $54,340;

• she consulted Mr Smith before preparing her “PAYG payment summary – individual non-business” for the year ending 30 June 2016, adding that he recommended that she needed to make the claim according to the contract (i.e. $54,340) and he would have the accounting firm which he hired take care of it;

• the payment summaries for 2016 and 2017 were different, with the latter reflecting the amount she was actually paid;

• she never said to Mr Smith that the Respondent would also have to pay tax and superannuation on the higher income and that she would repay the difference she understood;

• Mr Smith prepared documents regarding her visa sponsorship with an immigration agent and without her input;

• she was not paid gross remuneration of $983.00 per week until July 2016;

• she did not breach her employment contract;

• she only became aware of her dismissal on 26 November 2018 via the text messages she exchanged with Mr Smith (see paragraph [5] above), adding that she did not receive the termination letter by post and saw it for the first time on 11 July 2019 when the Respondent lodged its Form F3 with the Commission;

• she did not believe the reasons cited in the termination letter warranted her dismissal and were not justified, adding inter alia that:

- she reset the work mobile phone before returning it to Mr Smith to remove personal information such as bank details and passwords,

- she only printed documents from MYOB for her records and not to provide to anyone else,

- the statement of service/reference annexed to the Respondent’s Form F3 had been signed by Mr Smith 14, adding that this reason for her dismissal was therefore untenable,

- she did not remove or destroy any company files, and

- she had never seen nor signed to two letters of employment annexed to the Respondent’s Form F3 (see paragraph [7] above);

• Mr Smith was aware of her internship as he had signed the acceptance letter on 1 June 2018 15, adding that she drafted the “Student Internship End Review”16 document which she showed to Mr Smith and that she sent the document to the ARC using the Respondent’s email so that Mr Smith knew that she had sent the documents to the ARC; and

• the abovementioned statement of service/reference cited the Australian Business Number (ABN) for IPMS as she had been told by Mr Smith that it would replace the Respondent’s ABN, adding that since early 2018 every invoice she issued was under IPMS’ ABN.

[19] Filed with the Applicant’s outline of submissions was a statement by her which largely reflected her outline of submissions. In her statement, the Applicant stated that Mr Smith contacted her in early November 2018 to ask her to return the office key and work mobile phone and to ask for her address. In circumstances where the Respondent was not formally represented at the hearing, the Applicant was not cross-examined regarding her statement nor was the statement entered into evidence by the Applicant.

[20] At the hearing, the Applicant reiterated aspects of her written submissions. Beyond that, key aspects of the Applicant’s oral submissions included that:

• Mr Smith exploited her, forged her signature on some contracts and should not be allowed to get away with it;

• she reset the office mobile phone to the manufacturer’s settings;

• the Respondent employed less than 15 persons;

• she learnt of her dismissal via her text message in late October 2018;

• she continued to receive workers’ compensation payments until August 2019;

• but for her dismissal she would have continued in her employment indefinitely;

• she returned to China in September 2019;

• following her dismissal she had provided her resume to some 100 prospective employers; and

• she almost secured alternative employment but it fell through when the employer heard she was on workers’ compensation leave, adding that she did not secure another job before returning to China.

Consideration of the issues

Mr Smith’s request that the application be struck out given that the Respondent has been deregistered by ASIC

[21] Section 601AD of the Corporations Act 2001 (Cth) (the Corporations Act) sets out the effect of deregistration of a company and provides as follows:

“601AD Effect of deregistration

Company ceases to exist

(1) A company ceases to exist on deregistration.

Note: Despite the deregistration, officers of the company may still be liable for things done before the company was deregistered.

Trust property vests in the Commonwealth

(1A) On deregistration, all property that the company held on trust immediately before deregistration vests in the Commonwealth. If property is vested in a liquidator on trust immediately before deregistration, that property vests in the Commonwealth. This subsection extends to property situated outside this jurisdiction.

Other company property vests in ASIC

(2) On deregistration, all the company's property (other than any property held by the company on trust) vests in ASIC. If company property is vested in a liquidator (other than any company property vested in a liquidator on trust) immediately before deregistration, that property vests in ASIC. This subsection extends to property situated outside this jurisdiction.

Rights and powers in respect of property

(3) Under subsection (1A) or (2), the Commonwealth or ASIC takes only the same property rights that the company itself held. If the company held particular property subject to a security or other interest or claim, the Commonwealth or ASIC takes the property subject to that interest or claim.

Note: See also subsection 601AE(3) – which deals with liabilities that a law imposes on the property (particularly liabilities such as rates, taxes and other charges).

(3A) The Commonwealth has, subject to its obligations as trustee of the trust, all the powers of an owner over property vested in it under subsection (1A).

Note: Section 601AF confers additional powers on the Commonwealth to fulfil outstanding obligations of the deregistered company.

(4) ASIC has all the powers of an owner over property vested in it under subsection (2).

Note: Section 601AF confers additional powers on ASIC to fulfil outstanding obligations of the deregistered company.

Company books to be kept by former directors

(5) The directors of the company immediately before deregistration must keep the company's books for 3 years after the deregistration.

(6) Subsection (5) does not apply to books that a liquidator has to keep under subsection 542(2), or subsection 70-35(1) of Schedule 2 (retention and return or destruction of books).

Note: A defendant bears an evidential burden in relation to the matter in subsection (6), see subsection 13.3(3) of the Criminal Code.

Strict liability offences

(7) An offence based on subsection (5) is an offence of strict liability.

Note: For strict liability, see section 6.1 of the Criminal Code.”

[22] Unlike s.500(2) of Corporations Act which provides that after the passing of a resolution for the voluntary winding up of a company, no action or other civil proceeding is to be proceeded with or commenced against the company except by leave of the Court, s.601AD of the Corporations Act does not refer to civil proceedings against a deregistered company.I note however that the legislative note at s.601AD(1) of the Corporations Act provides that “officers of the company may still be liable for things done before the company was deregistered.” This suggests that legal proceedings against a deregistered entity are possible. More particularly, there is nothing in s.601AD of the Corporations Act which explicitly precludes litigation/action against a deregistered entity or provides that any such litigation/action is automatically struck out as a result of deregistration. Despite this, I acknowledge the practical difficulties which are likely to be encountered by the Applicant in enforcing any order which the Commission may make in these proceedings.

[23] Having regard to the above analysis, I am satisfied that the Commission can determine Ms Fan’s unfair dismissal application despite the Respondent having been deregistered on 11 February 2019.

Was the dismissal consistent with the Code?

[24] It was not disputed that the Applicant was protected from unfair dismissal or that the Respondent was a small business employer, with the Respondent contending that Ms Fan’s the dismissal was consistent with the Code. It is also clear from the termination letter that the Applicant was dismissed with immediate effect, i.e. without notice. Accordingly, the Summary Dismissal section of the Code is relevant in this case. If the Commission finds that the Applicant’s dismissal was consistent with the Code, her application must be dismissed. If, however, the Commission finds to the contrary, then it will need to consider whether the dismissal was harsh, unjust or unreasonable as per s.385(b) of the Act having regard to the considerations set out in s.387 of the Act.

[25] The Full Bench in Grandbridge Limited v Mrs Diane Wiburd (Grandbridge) 17 set out the issue to be considered in determining whether a dismissal was consistent with the Summary Dismissal section of the Code as follows:

“The proper inquiry raised by the Code is relevantly, whether at the time of the dismissal the employer genuinely believes on reasonable grounds that the employee’s conduct is sufficiently serious to justify immediate dismissal. The Code focusses attention on the employer’s belief which must be based on reasonable grounds, not on whether the employee’s conduct as a matter of fact and law justified immediate dismissal.” 18

[26] The decision in Grandbridge drew on the decision in Jeremy Ryman v Thrash Pty Ltd t/a Wisharts Automotive Services (Ryman) 19 in which the Full Bench stated as follows:

“[41] In summary, drawing on the conclusions stated above and the ratio in Pinawin, we consider that the “Summary dismissal” section of the Code operates in the following way:

(1) If a small business employer has dismissed an employee without notice - that is, with immediate effect - on the ground that the employee has committed serious misconduct that falls within the definition in reg.1.07, then it is necessary for the Commission to consider whether the dismissal was consistent with the “Summary dismissal” section of the Code. All other types of dismissals by small business employers are to be considered under the “Other dismissal” section of the Code.

(2) In assessing whether the “Summary dismissal” section of the Code was complied with, it is necessary to determine first whether the employer genuinely held a belief that the employee’s conduct was sufficiently serious to justify immediate dismissal, and second whether the employer’s belief was, objectively speaking, based on reasonable grounds. Whether the employer has carried out a reasonable investigation into the matter will be relevant to the second element.” 20

[27] Drawing on the decisions in Grandbridge and Ryman, in determining the Respondent’s jurisdictional objection the Commission needs to decide whether the Respondent genuinely believed on reasonable grounds that the Applicant’s conduct warranted immediate dismissal. As also stated in Grandbridge, the question to be determined is not whether the Applicant’s conduct as a matter of fact and law justified immediate dismissal.

[28] The meaning of reasonable grounds was considered by Deputy President Sams in Peter Williams v P & J Cole Investments Pty Ltd t/a Savins Radiator Services (Savins) 21 where he observed as follows:

“[76] In my opinion, the meaning of ‘reasonable grounds’ in the Code is that the grounds are ‘reasonable’ when viewed from the standpoint of what a reasonable person would conclude as grounds which are credible, sensible, logical or plausible; see also: Construction, Forestry, Mining and Energy Union v HWE Mining Pty Limited [2011] FWA 8288 (‘HWE Mining’).” 22

[29] I respectfully agree with and adopt the approaches outlined in the above decisions.

[30] Before considering in detail whether the dismissal was consistent with the Code, it is clear from the outline of the parties’ respective cases above that much of the factual matrix in this case is disputed. In that regard, I would highlight that there are a number of inconsistencies between aspects of each party’s submissions/statements and the material before the Commission. For instance, Mr Smith stated in his affidavit that the Applicant was from 1 May 2015 until her termination paid a gross amount of $983 per week, which in net terms amounted to $684 per week. However, attached to the Applicant’s reply submissions were copies of bank statements which indicated that Ms Fan was only paid this net amount from the week ending 1 July 2016 (prior to that Ms Fan had been paid a net amount of $547.20 per week from 8 June 2015, with a lesser amount paid before that). 23 I also note that a gross weekly wage of $983.00 per week results in annual remuneration of just over $51,000, well in excess of the $42,000 per annum referred to by Mr Smith in his statement to the workers’ compensation investigator. Conversely, the Applicant’s contention that in 2017 Mr Smith began to withhold her wages to make up for the balance of the money he had asked for is not supported by the bank statements attached to her reply submissions. While those statements show that some weekly wage payments were delayed in June 2017, they show that the payments were all made in the last week of June 2017. Further, the Applicant’s contention that her signature on the Letters of Employment for the Clerical Assistant and Inhouse Accountant positions had been cut and pasted from the Letter of Engagement she signed on 29 April 2015 does not withstand closer scrutiny of the documents. This is because the Respondent’s name appears in bold text where the Applicant signed both Letters of Employment whereas in the Letter of Engagement the Respondent’s name is not in bold text where the Applicant signed the document.

[31] As a result, I have significant reservations about the reliability of the parties’ respective submissions/contentions.

[32] Turning more particularly to the questions of whether the Applicant’s dismissal was consistent with the Code, as can be seen from above the termination letter cited four reasons for the Applicant’s immediate dismissal:

(i) the Applicant’s conduct in resetting the office mobile phone;

(ii) the use of company records drawn from MYOB for use in external situations to the Applicant’s advantage;

(iii) the creation the statement of service/reference purporting that the Applicant was employed by IPMS and appeared on letterhead which was not IPMS’ normal letterhead; and

(iv) the removal/destruction of hard and soft copies of the Applicant’s employment contract.

[33] Mr Smith in his statement of 20 November 2018 to the workers’ compensation investigator contended that the termination letter he sent to the Applicant cited breaches of clauses 9, 10 and 12 of her workplace agreement as reasons for her dismissal.

[34] The two Letters of Employment attached to the Respondent’s Form F3 both provide as follows at clause 8.6:

“No notice if serious misconduct – The company may terminate your employment at any time without notice or without payment in lieu of notice in the case of your serious misconduct. Serious misconduct includes ( yet not limited to):

a. Breach of your obligations as set out as in this Contract

b. …” 24 (Formatting as per original)

[35] Further, at clause 9.3 those Letters of Employment provide as follows:

“Security – During your employment with the company, you must ensure secure custody of any Document containing Confidential Information in your possession or control or use your best endeavours to prevent any Person using or disclosing Confidential Information in a improper or unauthorised manner. You must notify the Company as soon as possible if you suspect any unauthorised use of Confidential Information by any Person. You must not remove any Confidential Information from the Company without the permission of the Company.” 25 (Underlining added)

[36] Clause 10 of the Letters of Employment deals with ‘Intellectual Property and Moral Rights’, while clause 12 deals with ‘Acting in the Company’s Interest’.

[37] While the Applicant contends that her signatures on the two Letters of Employment were cut and pasted from the Letter of Engagement she signed, as discussed above that contention is not supported by an examination of the documents. Further, I see no reason why Mr Smith would admit to the existence of the documents in his statement to the workers’ compensation investigator given the potential ramifications for the Respondent and himself as a result of the possible contraventions of migration laws involved with this arrangement. For these reasons, I am inclined to accept the validity/existence of the two Letters of Employment and that they were both signed by the Applicant.

[38] As to the first two reasons for dismissal set out in the termination letter, the Applicant did not dispute that she reset the office mobile phone, but contended that she did so to remove personal information such as bank details and passwords and that the phone was reset to the manufacturer’s settings. The Applicant did not explain why these details could not have just been deleted from the phone without the need to reset the phone. The Applicant also stated that she printed documents from MYOB but added that she did so for her records and not to provide to anyone else.

[39] In circumstances where it is not disputed that the Applicant reset the office mobile phone and that she printed documents from MYOB for her records, the Respondent’s view that these actions justified immediate dismissal appears reasonably based. Whilst not contended at the hearing, though alluded to in the termination letter, I note that the printing of the MYOB documents by the Applicant for her records is arguably also inconsistent with clause 9.3 of her Letter of Employment.

[40] As to the third reason cited by the Respondent, as previously noted, Mr Smith contended inter alia that he had not seen the statement of service/reference until early October 2018 when he was looking for documents on the Respondent’s “system” for the purposes of responding to the Applicant’s workers’ compensation claim. The Applicant acknowledged in her submissions that she did prepare the statement of service/reference but contended that the document had been signed by Mr Smith (a signed copy of the document was attached to the Applicant’s reply submissions 26). At the hearing, Mr Smith strongly denied having signed the document. In circumstances where the document appears on the letterhead of an entity (IPMS) which was not the Applicant’s employer and stated that Ms Fan had been employed by that entity since 13 October 2014 in the position of Inhouse Accountant27, I am inclined to the view that Mr Smith had not previously seen the document. I also note that the Applicant provided no probative material to support her explanation as to why the statement of service/reference appeared on IPMS letterhead, i.e. the document cited IPMS’ ABN because Mr Smith had told her that it would replace the Respondent’s ABN and that since early 2018 every invoice she issued was under IPMS’ ABN.

[41] Mr Smith also stated in his affidavit that he had no knowledge of the internship which the Applicant allegedly entered into with IPMS. However, the “Acceptance of Intern” document 28 attached to the Applicant’s reply submissions contradicts that statement. While the Applicant’s “Student Internship End Review” document was sent to ARC from “Integrated Pest” on 20 August 201829 as the Applicant stated in her reply submissions, I note that the email was not copied to Mr Smith. It is therefore not clear whether he would have seen the document. I also note that the “Student Internship End Review” document does not appear to require the signature of either the student or their supervisor. On balance, I am of the view that Mr Smith was aware of the internship but based on the material before the Commission am not satisfied that he saw the “Student Internship End Review” document until after the Applicant’s dismissal.

[42] Taken together, the above considerations support a view that the Respondent had a reasonable basis to conclude that Ms Fan’s actions in preparing the statement of service/reference and the “Student Internship End Review” document without its knowledge warranted immediate dismissal.

[43] Finally, in respect of the final reason for the dismissal cited by the Respondent, i.e. the Applicant’s removal and/or destruction of the hard and soft copies of her employment contract from the Respondent’s records, I note that the Applicant contends that she did not remove or destroy any company files. However, I also note an email from Mr Smith to my Chambers on 8 May 2019 (the email was copied to the Applicant) in which he stated inter alia that he had had “to remove the hard drives from the business sever [sic] and send them away to have deleted files recovered by a specialist technician which will form a major part of the respondent’s evidence.” The email while not probative gives some modest support to the Respondent’s contention regarding the Applicant’s conduct. I also note that the Respondent’s Form F3, to which the two Letters of Employment were attached, was received by the Commission on 11 July 2019, i.e. several weeks after the abovementioned email – the inference being that the documents had been recovered by the “specialist technician” used by the Respondent. In addition, I note that the Applicant sent an email to my Chambers on 9 May 2019 (i.e. the day after Mr Smith’s abovementioned email to Chambers) which among other things said “[h]owever, he requires more time to obtain evidence and needs help from IT experts. Therefore, it is reasonable to assert that the dismissal was unreasonable and unfair.” Surprisingly, the Applicant’s email does not question the need for the Respondent to seek assistance from a “specialist technician”. While the material before the Commission regarding this reason for the dismissal is scant, the limited material does give some credence to this reason for the dismissal. More specifically, given the terms of clause 8.6 and 9.3 of the abovementioned Letters of Employment, that view supports a finding that the Respondent genuinely believed on reasonable grounds that the Applicant’s conduct was sufficiently serious to justify her immediate dismissal.

[44] In summary, the above analysis points to the Respondent having genuinely held a belief that the Applicant’s conduct was sufficiently serious to justify immediate dismissal and that belief was based on reasonable grounds. Further, drawing on the decision in Savins, the material before the Commission points to the Respondent’s belief being credible or plausible.

Conclusion

[45] For all the above reasons, I am satisfied that firstly there is no impediment to the Commission determining Ms Fan’s unfair dismissal application as a result of the Respondent having been deregistered by ASIC and secondly that the dismissal was consistent with the Code. Accordingly, Ms Fan’s application will be dismissed. An Order to that effect will be issued in conjunction with this decision.

[46] Finally, I note that the Respondent’s Form F3 refers to undoubtedly questionable practices/arrangements having been adopted and/or agreed by the parties in this case in an effort to assist Ms Fan secure permanent residence in Australia. Those questionable practices/arrangements may potentially involve contraventions of either the Migration Act 1958 (Cth) or Migration Regulations 1994 (Cth) and/or the Income Tax Assessment Act 1936 (Cth) by either Mr Smith and/or the Applicant. Against that background, I have asked the Commission’s General Manager to bring the circumstances in this case to the attention of both the Department of Home Affairs and the ATO.

Appearances:

Y. Fan on her own behalf.
The Respondent did not enter an appearance, though G. Smith a former Director of the Respondent participated in the telephone hearing.

Telephone Hearing details:

Canberra, Royalla (NSW) and China.
2020:
March 26.

Printed by authority of the Commonwealth Government Printer

1 Attachment to Appellant’s [sic] Outline of Submissions

3 Ibid

4 Affidavit of Mr Christopher Robert Smith of 11 July 2019 at Annexure “A”

5 Ibid at Annexure “B”

6 Ibid at Annexure “C”

7 Ibid at Annexure “E”

8 Ibid at Annexure “C”

9 Ibid at Annexure “F”

10 According to its website ( the Accountants Resource Centre is a Registered Training Organisation which inter alia “facilitates practical in-house non-accredited TAX accounting and bookkeeping internships/training, for accounting graduates and students.”

11 Affidavit of Mr Christopher Robert Smith of 11 July 2019 at Annexure “G”

12 [2012] FWA 5409

13 Submissions in Reply to the Respondent at Attachment 1

14 Ibid at Attachment 8

15 Ibid at Attachment 9

16 Affidavit of Mr Christopher Robert Smith of 11 July 2019 at Annexure “F”

17 [2017] FWCFB 6732

18 Ibid at [14]

19 [2015] FWCFB 5264

20 Ibid at [41]

21 [2020] FWC 2174

22 Ibid at [76]

23 Submissions in Reply to the Respondent at Attachment 5

24 Affidavit of Mr Christopher Robert Smith of 11 July 2019 at Annexures “A” and “B”

25 Ibid

26 Submissions in Reply to the Respondent at Attachment 8

27 Ibid

28 Ibid at Attachment 9

29 Affidavit of Mr Christopher Robert Smith of 11 July 2019 at Annexure “F”

Yuening Fan v Integrated Pest Management Systems (Canberra) Pty Ltd