Note: An appeal pursuant to s.604 (C2012/3526) was lodged against this decision - refer to Full Bench decision dated 20 July 2012 [[2012] FWAFB 5679] for result of appeal.

[2012] FWA 2907

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FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Thomas Hobbs
v
Achilleus Taxation Pty Limited ATF The Achilleus Taxation Trust; Achilleus Accounting Pty Limited ATF The Achilleus Accounting Trust
(U2011/14851)

COMMISSIONER DEEGAN

CANBERRA, 4 APRIL 2012

Unfair dismissal - respondent non-compliance with directions - respondent absent from hearing - nonpayment of wages - constructive dismissal - compensation ordered.

[1] On 22 December 2011 an application was made under s.394 of the Fair Work Act 2009 (the Act) by Mr. Thomas Hobbs (the applicant) in relation to the termination of his employment with Achilleus Taxation Pty Ltd atf The Achilleus Taxation Trust and Achilleus Accounting Pty Ltd atf The Achilleus Accounting Trust (the respondent).

[2] The matter was listed for a conciliation conference on 12 January 2012. This listing was cancelled at the request of the respondent and relisted for 2 February 2012. This conference did not take place as the nominated representative of the respondent was not contactable at the time scheduled. The matter was then allocated for arbitration. The arbitration was listed for 27 March 2012 and directions were issued requiring the applicant to lodge an outline of submissions and witness statements with Fair Work Australia (FWA) by 24 February 2012. The applicant lodged the necessary documentation in accordance with the directions.

[3] The Directions required the respondent to lodge an outline of submissions in response and witness statements by 16 March 2012. The respondent has not lodged any documentation with FWA.

[4] Repeated efforts were made by my Chambers to contact the respondent concerning the non-compliance with the Directions. Six telephone calls were made, messages were left and two emails were sent between 16 March and 27 March. The messages left with the receptionist requested that the Respondent’s nominated contact person contact FWA as a matter of urgency. The calls were not returned and the emails remain unanswered. The receptionist who took the calls was advised of the urgency of the matter.

[5] Arbitration of the matter went ahead on 27 March 2012 in accordance with the listing. The applicant appeared in person: there was no appearance for the respondent. A copy of the applicant’s employment contract revealed that the employer was incorrectly named on the application. The application was amended in accordance with s. 586 of the Act.

[6] Subsequent to the hearing on 28 March 2012 a phone call was received from a representative of the respondent. The representative was advised to contact my chambers in writing if the respondent wished to make any representations concerning the matter as the hearing had proceeded in the absence of the respondent and a decision was imminent. At the date of the decision no further representations have been received from the respondent.

[7] It was the unchallenged evidence of the applicant that he had been employed by the respondent from 1 July 2010 as an under-graduate accountant, working approximately 40 hours per week. While the respondent initially paid the applicant on time and the correct amount, a pattern of irregular payment of the applicant’s wages emerged. The applicant suspected that the respondent had cash-flow problems and believed that his wages would be paid eventually. However, as time progressed the payments became more irregular, and when payments were made they were made for only some of the amount owed.

[8] The Applicant produced pay slips to show that between 20 July 2011 and 2 November 2011 he had earned $11,647.75. He also produced documentation to demonstrate that in the same period he had received only $3,570.00 of that amount from the respondent. On numerous occasions between 2 November 2011 and 29 November 2011 the applicant raised with the respondent the non-payment of his wages. He sent the respondent emails and text messages and made a number of telephone calls. The only replies received from the respondent did not address the issue of the applicant’s unpaid wages.

[9] On 29 November the applicant, having decided that he had little prospect of recouping his unpaid wages, provided a letter to his employer giving two weeks’ notice of his resignation together with a letter of demand for his unpaid wages.

[10] It was the evidence of the applicant that he was owed annual leave entitlements by his former employer and that no superannuation payments had ever been made on his behalf.

[11] The applicant submitted that as he had been forced to resign as a consequence of the unpaid wages, he had been constructively dismissed pursuant to s.386(1)(b) of the Act.

Consideration

[12] I accept the evidence of the applicant that he resigned his employment as a result of the respondent’s failure to pay his wages in full and on time. On the evidence it is clear that the applicant was forced to resign by the conduct engaged in by his employer. The applicant could not be expected to continue to provide services to his employer in a situation where the employer did not pay his wages. Clearly the applicant was dismissed for the purposes of s. 386 of the Act.

[13] In order to determine whether the dismissal of the applicant was unfair I must have regard to s.385 of the Act.

[14] Section 385 of the Act provides:

385 What is an unfair dismissal

A person has been unfairly dismissed if FWA is satisfied that:

(a) the person has been dismissed; and

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

(c) the dismissal was not consistent with the Small Business Fair Dismissal Code; 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.

[15] As noted I am satisfied that the applicant was dismissed.

[16] I am also satisfied that the dismissal was harsh, unjust and unreasonable as, on the unchallenged evidence of the applicant:

• There was no valid reason for his dismissal;



• He was not notified of any reason for the dismissal; and



• He was given no opportunity to respond to any reason for the dismissal.

[17] It was the evidence of the applicant that no reason was given to him by his employer for the non-payment of his wages. There was no evidence of any unsatisfactory performance. It was apparent on the evidence that the employer is a small business with no dedicated human resources expertise. There was no evidence that this lack of human resources expertise impacted on the procedures followed in effecting the dismissal. The employer is an accountancy business with sufficient expertise to prepare and provide pay slips to the applicant, and to account for payments made to him. Such a fundamental breach of the contract of employment as a failure to pay wages is unlikely to stem from any lack of expertise in human resources on the part of the respondent.

[18] As the respondent is a small business I must find whether the dismissal was consistent with the Small Business Fair Dismissal Code 1 in order to determine whether the dismissal was unfair.

[19] Section 388 of the Act provides:

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.

[20] As, on the evidence, the applicant’s dismissal was not a case of summary dismissal for misconduct, and the applicant was not given any reason for the dismissal or any warnings, it is apparent that there was no compliance with the Small Business Fair Dismissal Code.

[21] Similarly there was no evidence to suggest that this was a case of genuine redundancy.

Conclusion

[22] In all the circumstance, on the evidence before me, I find that the termination of the applicant’s employment was harsh, unjust and unreasonable, and the applicant was unfairly dismissed.

Remedy

[23] I am satisfied that the applicant is a person protected from unfair dismissal 2 and that he was unfairly dismissed. The applicant has made an application under s.394 of the Act. I am satisfied that the reinstatement of the applicant in the circumstances of this matter is inappropriate. I consider an order for compensation to be appropriate in all the circumstances of the case.

[24] In determining the amount of compensation that should be awarded I have had regard to the following matters:

• There is no evidence before me that any award of compensation would have an effect on the viability of the respondent’s business;



• The applicant was employed by the respondent from July 2010 until 13 December 2011;



• The applicant’s evidence was that he earned, on average, about $1000.00 (gross) per week and there was no evidence to suggest that he would not have continued to earn a similar amount had he not be dismissed;



• It was the applicant’s evidence that he had made efforts to mitigate his loss but had been unable to obtain alternative employment until March 2012;



• According to the applicant he earned no income from work between giving notice of his resignation on 29 November 2011 and about 12 March 2012.

[25] I have also taken into account the manner in which the termination of the applicant’s employment occurred. Clearly the applicant put a great deal of trust in his employer in continuing to perform work despite the employer’s failure to pay his full entitlements. As his employer had previously been tardy with the payment of his wages, but had paid them in full as at the time the applicant took annual leave in June 2011, the applicant apparently expected that he would be paid in full at some stage.

[26] There was no evidence of any misconduct on the applicant’s part.

[27] I find that I should make an order for compensation in this matter. I intend to order that the applicant be compensated by the respondent by the payment of an amount of money equal to 15 weeks salary at the rate of $949.40 per week (the average of his weekly earnings for the 15 weeks from 25 July 2011 until the receipt of his final payslip on 6 November 2011).

[28] The applicant is pursuing the underpayment of his wages and other entitlements in the appropriate jurisdiction. This compensation relates solely to the unfair dismissal, including the remuneration lost as a consequence of the dismissal. It does not exceed the statutory compensation cap set out in s.392(5) of the Act.

[29] An order for the payment of the compensation in the amount of $14,241 (gross) is published separately.

COMMISSIONER

Appearances:

The applicant in person.

No appearance for the respondent.

Hearing details:

2012.
Canberra:
27 March.

 1   Fair Work Act 2009 s.388

 2   Fair Work Act 2009 s.390(1)

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