[2016] FWCFB 5520
The attached document replaces the document previously issued with the above code on 5 September 2016.
Typographical error have been fixed at paragraph 35
Helen Hamberger
Associate to Vice President Hatcher
Dated 5 December 2016.
| [2016] FWCFB 5520 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.604 - Appeal of decisions
VICE PRESIDENT HATCHER |
SYDNEY, 5 SEPTEMBER 2016 |
Appeal against decision [2016] FWC 4573 of Commissioner Wilson at Darwin on 14/07/2016 in matter number U2016/5227.
Introduction and background
[1] Titan Plant Hire Pty Ltd (Titan) has lodged an appeal, for which permission to appeal is required, against a decision of Commissioner Wilson issued on 14 July 2016 1 (Decision) concerning an unfair dismissal remedy application brought by Mr Shaun Van Malsen. In the Decision the Commissioner found that Mr Van Malsen was a person protected from unfair dismissal and that Titan’s dismissal of him was unfair, and ordered that Titan pay Mr Van Malsen compensation in the amount of $16,602, less applicable taxation. A separate order was issued giving effect to the Decision2 (Order). In its appeal, Titan challenges the finding that Mr Van Malsen was a person protected from unfair dismissal, the conclusion that the dismissal was unfair, and the Commissioner’s assessment of compensation.
[2] The facts of the matter were, for the most part, not in dispute. Mr Malsen is a trade-qualified heavy-duty fitter. He commenced employment with Titan on a casual basis on 11 August 2015 pursuant to a letter of offer from Titan dated 10 August 2015. This letter stated that “It is anticipated that after a successful trial period you will be offered a permanent position...”, identified the location of the employment as “Darwin” and his duties as “Repairs & Maintenance to all equipment (small engines to earthmoving equipment); and any other duties as requested by the Maintenance Manager”, and specified the hours of work as being 7.00am to 5.00pm Monday to Thursday and 7.00am to 4.00pm on Friday with total average hours comprising “38 ordinary hours and up to 9.5 additional hours per week based on operational requirements”. The letter added:
“Working on the weekend or outside the above stipulated hours will be on an as required basis and paid at your normal rate of pay. By accepting this offer of employment you agree that this number of hours is reasonable”.
[3] The letter also stated that Mr Van Malsen’s employment conditions would, in addition to those set out in the letter, be in accordance with “the attached Employee Collective Agreement”. The agreement referred to was the Titan Plant Hire Pty Ltd Employee Collective Agreement 2008 (Agreement). The Agreement included the following provision:
“Location of Employment
5.22 Employees shall initially be located at the site designated in their letter of offer. The employer is able to vary this location and shall provide them with reasonable notice of any location variation.”
[4] Mr Van Malsen worked every week from 11 August 2015 until 8 November 2015, and except for the first week his working hours were consistent with the letter of offer. He also worked some Saturdays.
[5] In a letter dated 9 December 2015 entitled “Completion of Probationary Period”, Mr Van Malsen was advised that he was made a permanent employee effective from 9 November 2015. The letter set out his conditions of employment, with his location, duties and hours of work being in expressed in terms identical to the 10 August 2016 letter. The provisions of the Agreement were incorporated in the same way. Mr Van Malsen signed his acceptance of this letter on 14 December 2015.
[6] Titan at this time held a maintenance contract at the Old Pirate Mine, which was located in the Tanami Desert approximately 1600 kms from Darwin (via Kununurra and Halls Creek). In January 2016 Mr Van Malsen was requested to work at the Old Pirate Mine for a period, which he agreed to do. He was required to drive there and return with his tools and other equipment. He left for the Old Pirate Mine on 10 January 2016 and finished there on 22 January 2016. While he was there he was required to work from 5.00am to 6.00pm for 13 days straight. Mr Nathan Stretton, who supervised Mr Van Malsen at the site, gave evidence criticising some aspects of Mr Van Malsen’s performance at the hearing, but there was no suggestion that Mr Van Malsen was warned or disciplined about this at the time.
[7] On 1 February 2016 Mr Van Malsen was requested to perform another stint at the Old Pirate Mine. He requested to be flown there, but this request was refused (owing to the time it would take to organise the flight and the need to convey tools and equipment to the site). Mr Van Malsen was concerned about this request due to its effect on his family responsibilities, but acceded to it. He left on 9 February 2016 and returned to Darwin on 19 February 2016. While he was at the Old Pirate Mine he worked 12½ hours per day for nine days straight.
[8] Titan raised an issue concerning the fact that Mr Van Malsen drove the entire return journey in a single day, but again there was no suggestion that he was disciplined or warned about this.
[9] On 1 March 2016 it was indicated that Mr Van Malsen might have to travel to the Old Pirate Mine site again. By the following day, 2 March 2016, this had firmed into a request that he drive to the site the next day, 3 March 2016, due to Titan’s substantive employee at the site having fallen ill. There was an evidentiary contest between Mr Van Malsen and Mr Jason Madalena, Titan’s Managing Director, about what exactly transpired in the communications involving himself, Mr Steve Walker, a supervisor, and Mr Van Malsen over the course of 1-2 March 2016. However it was not in dispute that at about noon on 2 March 2016 Mr Van Malsen was firmly requested to go to the Old Pirate Mine the following day, that by about 1.30pm he had definitely refused the request, and that at about 4.00pm he was handed a letter of dismissal. The letter, which was signed by Mr Madalena, relevantly stated as follows:
“I advise that your employment with Titan Plant Hire has been terminated. Termination is effective immediately.
Your employment is terminated for disobeying reasonable work requests and unsatisfactory work performance.
Refusal to carry out lawful and reasonable instructions that are consistent with your employment contract is grounds for summary dismissal.
Your final pay will include the hours that you worked on 02.03.16 plus all entitlements owed. A payslip will be been forwarded to you reflecting the above.
We wish you well in your future endeavours.”
The Decision
[10] The first issue which the Commissioner dealt with in the Decision was Titan’s contention that Mr Van Malsen was not a person protected from unfair dismissal because he had not completed the minimum employment period of six months required by s.382(a) and s.383(a) of the Fair Work Act 2009 (FW Act). The basis of this contention was the period of Mr Van Malsen’s casual employment from 11 August 2015 to 9 November 2015 could not be counted towards the minimum employment period under s.384(2)(a), with the result that his employment for the purpose of s.383(a) lasted less than six months. This was rejected by the Commissioner, who found that Mr Van Malsen’s casual employment was on a regular and systematic basis and gave rise to a reasonable expectation of continuing employment on a regular and systematic basis. 3 The Commissioner went on to say:
“[46] Mr Van Malsen was employed in August 2015 on a casual basis, but subject to a letter of offer. That letter of offer put forward that while a casual, it was anticipated that after a successful trial period that he would be offered a permanent position with Titan Plant Hire. It further stipulated weekly hours of work of 38 ordinary hours and up to 9.5 additional hours, based on the operational needs of the business. All that was offered, actually occurred. At no stage was continuous service broken.
[47] I therefore find that, at the time he was dismissed, Mr Van Malsen had completed the minimum employment period and that he was a person protected from unfair dismissal.”
[11] The Commissioner then dealt with the question of whether the dismissal was harsh, unjust or unreasonable, and initially considered whether, under s.387(a), there was “a valid reason for the dismissal related to the person's capacity or conduct...”. He made the following findings of fact in the course of his consideration:
[12] The Commissioner’s conclusions as to whether Mr Van Malsen’s refusal to travel to the Old Pirate Mine constituted a valid reason for dismissal included the following (footnotes omitted):
“[59] To the extent that such refusal is misconduct, I find that it occurred.
[60] However, I am unable to find that Mr Van Malsen’s refusal amounted to a valid reason for his dismissal.
[61] Mr Van Malsen’s refusal was not serious misconduct within the meaning of the definition provided for within the Fair Work Regulations 2009. Objectively, his behaviour was not “wilful or deliberate behaviour by an employee that is inconsistent with the continuation of the contract of employment”, and was not a case of an employee “refusing to carry out a lawful and reasonable instruction that is consistent with the employee’s contract of employment”. Although this was a deliberate refusal by Mr Van Malsen to carry out a lawful instruction, there is insufficient evidence before me to allow a finding that the instruction was consistent with his contract of employment. Further, objectively speaking, the evidence does not allow a finding that the instruction was reasonable. Mr Madalena may well be correct that there was an agreement made in December 2015 with Mr Van Malsen that he would be available to go to the Old Pirate Mine, and such is not disputed by Mr Van Malsen. There is no evidence that, contractually, such obliged Mr Van Malsen to do so at short notice, and irrespective of concerns he may hold.”
[13] The Commissioner then elaborated on the reasons why the direction to Mr Van Malsen was not reasonable, including that it was not authorised by his contract of employment. 8 The Commissioner accepted that Titan had a “genuine and urgent need” for an employee to go to the Old Pirate Mine at short notice on 2 March 2016, but said:
“[68] However, I consider that, in overall context, the direction was unreasonable since it did not take into account Mr Van Malsen’s circumstances, including that he had returned to Darwin about 2 weeks previously; that he had not expected or wanted to be traveling away from Darwin so much when he took the job with Titan Plant Hire; and that his family circumstances precluded him from doing so. Since his evidence is the only direct evidence of the conversation with his supervisor, Mr Walker, and it is capable of acceptance, I accept Mr Van Malsen’s evidence that Mr Walker agreed he could be paid more if he went to the site, but that he refused the request nonetheless for matters not connected with the question of payment.”
[14] The Commissioner stated the following conclusions in relation to s.387(a):
“[71] Dismissal of Mr Van Malsen for the primary reason of his refusal to go to the Old Pirate Mine site a third time, whether or not connected with the ancillary reasons advanced by Mr Madalena, was without warning and in any event was disproportionate to his conduct. Whether for the primary reason, or in connection with the ancillary reasons, Titan Plant Hire did not, at the time it dismissed Mr Van Malsen, have a valid reason for doing so.
[72] I find therefore that Mr Van Malsen’s dismissal was harsh, because the penalty of dismissal was disproportionate to his conduct; unjust, because the Respondent did not seek out or reflect upon his reasons for refusing to go; and unreasonable, because it sought to hold him to a direction which, in all the circumstances, and objectively viewed, was not reasonable for the company to make because it was made at short notice and without the opportunity for Mr Van Malsen to put forward reasons why he should not be compelled to comply.”
[15] The Commissioner then proceeded to consider and make findings about the matters referred to in paragraphs (b)-(h) of s.387, and stated the following conclusion:
“[83] Having considered all of the criteria within s.387, I am of the view that in all the circumstances Mr Van Malsen was unfairly dismissed by Titan Plant Hire. Accordingly, I turn to consider the question of remedy for his dismissal.”
[16] In relation to remedy, the Commissioner found that reinstatement would not be appropriate, and then gave consideration to an award of compensation. The Commissioner considered each of the matters required to be considered under s.392 of the FW Act. In relation to s.392(2)(c) (“the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed”) the Commissioner’s assessment was that Mr Van Malsen would have been employed for “a further ten weeks with the equal possibility that he may have resigned at that point; been dismissed for performance-related matters; or been dismissed for reason of genuine redundancy” 9 having regard to the deteriorating work relationship, Titan’s concerns about his work performance and the winding down of its volume of work. In relation to the latter consideration the Commissioner said:
“[96] While not directly related to Mr Van Malsen’s employment, it was also the case that, in early March 2016, Titan Plant Hire’s work at the Old Pirate Mine was beginning to reduce and that the work it had associated with production activities had concluded by the start of April 2016.
[97] Mr Madalena gave evidence that part of the reason Mr Van Malsen had been asked to be involved in work at the Old Pirate Mine had been to ensure that he was productively employed over the Darwin Wet season when work in the Darwin branch was otherwise reduced. It therefore cannot be ruled out that redundancy of Mr Van Malsen may have occurred, whether on the basis of the available work in Darwin after the conclusion of the Wet season or because of the influence on the Northern Territory branch of the loss of the work associated with the Old Pirate Mine.”
[17] In relation to s.392(3), which requires the Commission to reduce the amount of compensation it would otherwise order on account of any misconduct on the part of the employee which contributed to the employer’s decision to dismiss the employee, the Commissioner concluded:
“[119] I have found Mr Van Malsen’s refusal to go to the Old Pirate Mine the third time was misconduct, but not serious misconduct that warranted summary dismissal. As a result, I must reduce the amount of compensation by an appropriate amount.
[120] I consider Mr Van Malsen’s misconduct was a product of his own genuine beliefs, both about the reasonableness of his need to address his personal circumstances, as well as what he perceived to be the unreasonableness of what was being demanded of him by Titan Plant Hire to again go to the Old Pirate Mine at short notice.
[121] In all, I consider the severity of Mr Van Malsen’s misconduct to be at the lower end of the scale. Accordingly, I consider it appropriate to make a reduction of 5% to the amount of compensation I would otherwise order on account of his misconduct.”
[18] The amount ultimately ordered by the Commissioner was the amount of $16,602, calculated on the basis of 10 weeks’ pay at $1,596 per week, plus superannuation of 9.5%, less 5%.
Appeal grounds and submissions
[19] Titan, which was self-represented throughout the appeal, had difficulty in articulating with precision all of its grounds of appeal. However it was made clear enough in the appeal notice and Titan’s written and oral submissions that the appeal was advanced at least on the following bases:
[20] In relation to the assessment of compensation, Titan identified a number of matters which it would have raised at first instance had it been aware of considerations which the Commission was required to take into account under s.392(2). In relation to s.392(2)(a) (“the effect of the order on the viability of the employer's enterprise”), Titan’s notice of appeal referred, among other things, to the following matters:
“5. The downturn in mining and subsequent drop off in demand for mining services has placed significant pressure on our business.
6. Our business is capital intensive, we are highly geared and have significant finance remaining on machines that we have not been able sell or work.
7. We have significant finance owing on properties that have decreased in value because of the economic down turn. The bank is currently calling in some of the debt on these properties.
8. In order to continue as a going concern we have had to reduce all unnecessary expenditure and rationalize all our costs. We have sold significant numbers of machines and are doing basically whatever we can to remain afloat and competitive for any available work.
9. We have not replaced any employees that have left and both business owners (especially Jason) are wearing a number of hats to keep operations going.
10. We continue to try and keep as many people employed for as long as we can by working with us and utilizing them wherever we can. The alternative is that we will have to let them go. This is survival in the current economic environment.
11. We have a number of other unrelated legal cases ongoing at the moment. We are exposed to some liability here.
12. The business is currently making significant losses. An order of this magnitude will increase the loss, our viability to continue and the continuing employment of our remaining staff.”
[21] In relation to s.392(2)(c) (“the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed”) Titan’s notice of appeal stated:
“The Commissioner has estimated the period that Shaun would have remained employed if he wasn't dismissed to be a further 10 weeks.
We argue that this is completely unrealistic and excessive in the current economic environment and given our business circumstances.
If you review the below table you will note that at the at [sic] Shaun's date of termination that Titan Plant Hire had 20 people employed including the two business owners who are shown as employees for superannuation purposes only.
Since the 2/3/16 a further six employees have been terminated in Titan Plant Hire's system. We cannot keep people employed if we do not have any work for them.
Our work in Darwin is seasonal. Under normal circumstances we have very little work in Darwin during the period November to April which is the wet season. We operate on minimal staff during the wet. The down turn in the economy has made this even more prevalent for 2015-2016.
We were very fortunate in March 2015 to be awarded a small mining contract with ABM at Old Pirate Gold Mine in the Tanami Desert. However, the ABM contract finished around the end of April 2016 with the majority of employees finishing end of March/first week of April 2016.
Therefore, we had very limited hire work in Darwin and with no opportunity to deploy Shaun elsewhere it is unlikely that we would have been able to keep him employed at all.”
[22] We do not reproduce the table referred to in the above passage. It is sufficient to say that it identified each employee of Titan at the time of Mr Van Malsen’s dismissal by name (numbering 20 in total), and disclosed that two of these employees had been terminated on 14 April 2016, one on 21 April 2016, two on 28 April 2016 and one on 10 June 2016.
[23] Titan raised a range of other matters in its appeal notice and submissions which were, in substance, a plea for a different result rather than a contention of error.
[24] Mr Van Malsen (who was also self-represented) submitted that:
Consideration
[25] Titan’s appeal challenges three aspects of the Decision: first, the conclusion that Mr Van Malsen had served the requisite minimum employment period; second, the finding that the dismissal was unfair, and third, the assessment of compensation. We will deal with each of these in turn.
[26] In relation to the minimum employment period, we do not consider that Titan has established any error in the Decision. The contention now advanced that Titan is a small business employer, so that the longer minimum employment period of one year specified in s.383(b) applies, is entirely without merit. Titan did not contend before the Commissioner that it was a small business employer (as defined in s.23 of the FW Act), and its submissions before us positively advanced the proposition that it had 20 employees at the time of Mr Van Malsen’s dismissal. In relation to the initial period of casual employment, the Commissioner was undoubtedly correct in concluding that engagement on the basis of a requirement to work 38 ordinary hours per week and up to 9.5 additional hours gave rise to a reasonable expectation of continuing employment on a regular and systematic basis. The fact that casual employment consists, as a matter of legal analysis, of a series of discrete daily contractual engagements does not alter this position. As was stated in Shortland v The Smiths Snackfood Co Ltd 10, “The criteria in s.384(2)(a) make it clear that s.384 does not proceed on the basis that a casual employee’s period of employment for the purposes of the unfair dismissal remedy starts and ends with each engagement as understood in the common law of employment”.
[27] However we consider that the Commissioner erred in two respects in his consideration of whether the dismissal was harsh, unjust or unreasonable. First, he applied the wrong test, or asked himself the wrong question, in considering whether there was a valid reason for Mr Van Malsen’s dismissal based on his capacity or conduct. It is apparent that the Commissioner primarily approached the “valid reason” issue on the basis that misconduct was not sufficient to constitute a valid reason, but that serious misconduct, as defined in reg.1.07 of the FW Regulations, constituted the standard which had to be met. Thus although the Commissioner found that Mr Van Malsen had committed misconduct, because the misconduct was not serious and did not meet the definition in reg.1.07, he found that there was not a valid reason for dismissal under s.387. 11
[28] The following propositions concerning consideration as to whether there is a valid reason for dismissal for the purpose of s.387 are well established:
[29] The Commissioner’s analysis in respect of s.387(a) was inconsistent with the above propositions and as a result the Decision was attended by appealable error.
[30] Secondly, as part of his consideration under s.387(a) and before he had turned to s.387(b)-(h), the Commissioner made a finding that the dismissal was harsh, unjust and unreasonable. 17 That meant, in effect, that the Commissioner only took into account his conclusions with respect to s.387(a) in reaching the conclusion that the dismissal was harsh, unjust and unreasonable. This was contrary to the requirement in s.387 that the Commission must take into account all the matters specified in paragraphs (a)-(h) in considering whether it is satisfied that the dismissal was harsh, unjust or unreasonable. This constituted appealable error of a jurisdictional nature.
[31] In relation to the assessment of compensation, we detect no error in the process by which the Commissioner calculated the amount to be paid by Titan. However one of Titan’s complaints is that the Commissioner failed to give it advice as an unrepresented litigant about the matters concerning the assessment of compensation under s.392 that it was required to address, with the result that it made no submissions about these matters.
[32] A submission of this nature was upheld by the Full Bench in James Jones v Ciuzelis 18 as follows (footnotes omitted):
“[42] The second contention advanced by the appellant is that the Deputy President did not provide any opportunity for either party to make submissions in relation to the criteria set out in s.392(2). In particular, the appellant challenges the finding that Ms Ciuzelis would ‘have remained in employment for at least a 12 month period’.
[43] It is common ground that the Deputy President did not draw the attention of either party to the terms of s.392 and nor did she invite submissions as to the criteria in s.392(2). The transcript of the proceedings at first instance confirms this to be the case. As a consequence of the procedure adopted the Deputy President’s findings and decision in relation to the quantum of compensation to be awarded were made in a vacuum, without the benefit of submissions from either of the parties.
[44] In circumstances where a party is self represented it cannot be assumed that they will have a complete understanding of the relevant legislative provisions. The Commission has an obligation to provide a fair hearing to all parties and this includes the provision of appropriate assistance to parties in the presentation of their case, particularly self represented parties. In the context of this matter the appropriate course would have been for the Deputy President to direct the parties attention to the terms of s.392 and to invite their submissions as to the various criterion set out in that section. This course was not taken and instead the Deputy President proceeded to make findings in relation to the matters set out in s.392(2) without the benefit of any submissions and those findings provided the basis of the quantum of compensation awarded.
[45] We have concluded that the Deputy President failed to accord the parties procedural fairness in her consideration of the remedy to be awarded and accordingly this aspect of the decision subject to appeal manifests an injustice which attracts the public interest. We are satisfied that it is in the public interest to grant permission to appeal in relation to the challenge to the Deputy President’s decision on remedy. We grant permission to appeal on that limited basis only. We uphold the appeal against the award of compensation and quash this part of the Deputy President’s decision...”
[33] The transcript discloses that the following exchange occurred between the Commissioner and Mr Madalena, who appeared for Titan:
“THE COMMISSIONER: In respect of compensation, is there anything I need to know about the effect of an order that I might make on the viability of your business? The reason that comes about is that the very most compensation that can be awarded is 26 weeks' wages or half the high income threshold, whichever is the lower. In this case it would be 26 weeks', being the very most. Is there anything you want to say to me about the effect, if there were such an order, that that might have on your business?
MR MADALENA: Yes, obviously it will have an effect on our business. We're in tough economic times and we're not immune from the current economic climate. I'm sure it's well publicised what the current economic climate is.” 19
[34] The Commissioner here was evidently inviting Titan to make submissions about s.392(2)(a) (“the effect of the order on the viability of the employer's enterprise”). To that extent, Titan’s ground of appeal cannot be sustained. However the transcript discloses that the hearing then returned to the subject matter of the unfairness of the dismissal and the jurisdictional issue concerning the minimum employment period, and never returned to the s.392(2) considerations. In particular, Titan’s attention was never drawn to and it was not invited to make submissions about s.392(2)(b) (“the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed”). The Commissioner’s conclusion with respect to this issue, subject to the small deduction he made on account of misconduct under s.392(3), determined the amount of compensation that Titan was ultimately ordered to pay.
[35] It will not be necessary in every case involving an unrepresented party to draw their attention to the relevant provisions of the FW Act and invite submissions about them. Many unrepresented litigants such as large corporations and registered organisations are sophisticated parties with internal legal and/or workplace relations expertise. However Titan, although not a “small business employer” as defined in s.23, was nonetheless a small-sized business without any such expertise. It is apparent from the transcript that at a number of points during the hearing its representation had difficulty in following the issues at hand, and indeed their understanding of the proceedings appears to have been inferior to that of Mr Van Malsen. The Commissioner provided appropriate guidance to Titan at a number of stages. However no such guidance was provided with respect to s.392(2)(b), with the result that Titan was effectively deprived of the opportunity to make submissions about this critical consideration. This constituted a constructive denial of procedural fairness.
[36] We consider that the errors we have identified are significant in nature, affected the outcome of the matter and had the potential to result in injustice to Titan. We consider that it would be in the public interest to grant permission to appeal, and accordingly permission to appeal must be granted in accordance with s.604(2) of the FW Act. We uphold the appeal and quash the Decision and Order.
[37] In light of that outcome, we consider the appropriate course is to re-determine Mr Van Malsen’s unfair dismissal remedy application ourselves. Noting that we have not found any error of fact on the part of the Commissioner, we will proceed on the basis of the Commissioner’s findings of fact subject to the additional information which has been provided to us in the appeal.
Re-determination of Mr Van Malsen’s unfair dismissal remedy application
[38] On the basis of the Commissioner’s conclusions in the Decision and the rejection of Titan’s challenge to the Commissioner’s conclusion that Mr Van Malsen was a person protected from unfair dismissal, we find as follows:
(a) Mr Van Malsen’s application was made within the period required by s.394(2);
(b) Mr Van Malsen was a person protected from unfair dismissal;
(c) Titan was not a “small business employer” as defined in s.23 of the FW Act, so that the Small Business Fair Dismissal Code was inapplicable; and
(d) the dismissal was not a case of genuine redundancy.
Whether dismissal unfair
[39] It is then necessary for us to determine whether Mr Van Malsen’s dismissal was harsh, unjust or unreasonable having regard to the matters specified in s.387. We will deal with each of the s.387 matters in turn.
Whether there was a valid reason for the dismissal related to the person’s capacity or conduct (s.387(a))
[40] We find that there was no valid reason for Mr Van Malsen’s dismissal related to his capacity or conduct. To the extent that Mr Van Malsen was directed, as distinct from merely requested, to travel to the Old Pirate Mine, it was not a lawful or reasonable direction. It was not lawful because it fell outside the scope of Mr Van Malsen’s contract of employment. That contract, which was in writing, required him to work at Darwin within specified working hours and days. It did not require him to drive to a desert location 1600 kms away on demand and work extended shifts continuously for periods well in excess of a week at a time. We do not consider that the request made to him on 2 March 2016 constituted a variation of the working location on reasonable notice pursuant to clause 5.22 of the Agreement. The direction was also not reasonable in that it required Mr Van Malsen to leave Darwin for an undefined period at extremely short notice in a way which interfered with his family responsibilities. The fact that the illness of Titan’s substantive employee at the Old Pirate Mine meant that Titan was placed in difficulty in terms of discharging its contractual commitments there did not mean that it was entitled to make Mr Van Malsen solely responsible for the resolution of that difficulty.
[41] Mr Van Malsen was therefore not obliged to comply with the direction or request that he travel to the Old Pirate Mine site, and his refusal to comply did not constitute a sound, defensible or well-founded reason for his dismissal.
[42] We agree with and adopt the conclusions of the Commissioner with respect to the performance issues identified in the termination letter. Indeed, given that they related to Mr Van Malsen’s previous work and conduct in relation to the Old Pirate Mine site, the reliance on them in justifying a dismissal primarily based on Mr Van Malsen’s refusal of Titan’s request that he work at the site for a third time can fairly be described as bogus.
Whether the person was notified of that reason and was given an opportunity to respond to any reason related to the capacity or conduct of the person (s.387(b) and (c))
[43] Mr Van Malsen was not notified of the reason for his dismissal prior to him being given the letter of termination on 2 March 2016. He was therefore not given an opportunity to respond to that reason insofar as it related to his conduct.
Whether there was any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal (s.387(d))
[44] There were no discussions relating to Mr Van Malsen’s dismissal prior to him being given the letter of termination. Accordingly the issue of him being allowed a support person does not arise.
If the dismissal related to unsatisfactory performance by the person - whether the person had been warned about that unsatisfactory performance before the dismissal (s.387(e))
[45] Insofar as Mr Van Malsen was dismissed for unsatisfactory performance, he had not been given any prior warning about this.
The degree to which the size of the employer’s enterprise or 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(f) and (g))
[46] Titan was a small-sized business and did not have any dedicated human resource management specialists or expertise. We consider it likely that this affected the procedures it adopted in dismissing Mr Van Malsen.
Any other matters that the Commission considers relevant (s.387(h))
[47] We consider it relevant that, at the time of the hearing before the Commissioner, Mr Van Malsen had not been successful in obtaining any alternative employment. We infer therefore that the dismissal caused him financial loss.
Conclusion
[48] We conclude that Mr Van Malsen’s dismissal was harsh, unjust and unreasonable because there was no valid reason for the dismissal, he was denied procedural fairness, and the dismissal caused him financial loss.
Remedy
[49] We do not consider that reinstatement is an appropriate remedy. Mr Van Malsen does not wish to return to work at Titan, and Titan has no work for him to perform. We consider that the award of compensation to Mr Van Malsen would be appropriate given that his unfair dismissal has caused him financial loss.
[50] It is therefore necessary for us to assess the amount of compensation which should be ordered. In assessing compensation, it is necessary under s.392(2) of the Act to take into account all the circumstances of the case including the specific matters identified in paragraphs (a)-(g) of the subsection, and it is also necessary to consider the other relevant requirements of s.392. In undertaking this task, we shall use the established methodology for assessing compensation in unfair dismissal cases which was elaborated upon in the context of the FW Act in Bowden v Ottrey Homes Cobram and District Retirement Villages Inc. 20
Remuneration that would have been received if the dismissal had not occurred (s.392(2)(c))
[51] We accept that, if Mr Van Malsen had not been dismissed upon refusing to travel to the Old Pirate Mine, the continuation of his employment would only have extended for a limited time thereafter because of Titan’s business difficulties and the lack of available work in Darwin. We find persuasive in this context the information advanced by Titan in the appeal that it had terminated six employees since Mr Van Malsen’s dismissal, that five of them had been terminated on or before 28 April 2016, that it was significantly affected by a drop off in demand for mining services, and that the business had been downsizing in order to stay afloat. Having regard to those matters, our estimation is that Mr Van Malsen would only have been employed for a further period of eight weeks if he had not been dismissed on 2 March 2016.
[52] We calculate the remuneration he would have received over this period in accordance with the methodology used by the Commissioner 21 - that is, eight weeks’ pay is to be calculated on the basis of an income of $1747.60 per week (inclusive of superannuation). The remuneration that would have been earned was therefore $13,980.80.
Remuneration earned (s.392(2)(e)) and income reasonably likely to be earned (s.392(2)(f))
[53] There is no evidence of Mr Van Malsen having earned any income prior to the hearing before the Commissioner on 9 June 2016. Whether he has earned any income since then is not relevant since that period does not overlap with the period for which he may be compensated under s.392(2)(c).
Other matters (s.392(2)(g))
[54] We do not consider that there should be any further deductions for “contingencies”. In relation to taxation, compensation will be determined as a gross amount and we will leave it to Titan to deduct any amount of taxation required by law.
Viability (s.392(2)(a))
[55] There was information placed before us in the appeal which indicates that the viability of the business is at risk. Titan is currently sustaining significant losses, and it expressed a concern that the monetary order that was made by the Commissioner would further endanger its viability. We will therefore reduce the amount of compensation otherwise payable by 25% (that is, the amount will be reduced by two week’s pay or $3,495.20).
Length of service (s.392(2)(b))
[56] Mr Van Malsen’s short period of service does not justify any adjustment to the amount of compensation.
Mitigation efforts (s.392(2)(d))
[57] We agree with and adopt the Commissioner’s conclusion that Mr Van Malsen made reasonable efforts to mitigate his loss by seeking alternative employment. 22 There will be no adjustment on this score.
Misconduct (s.392(3))
[58] We do not consider that Mr Van Malsen committed any misconduct. As earlier stated, he had no obligation to comply with a direction that was not lawful or reasonable, so no misconduct was associated with his refusal to comply with this direction. Therefore no deduction is required under s.393(3).
Compensation cap (s.392(5))
[59] The amount of compensation we propose to order is below the compensation cap.
Instalments (s.393)
[60] Having regard to the state of Titan’s business as earlier described, we propose that the payment of compensation should occur in two equal instalments. The first shall be payable within seven days of the date of this decision, and the second shall be payable within a further 28 days.
Conclusion
[61] The amount of compensation which we derive having regard to the above considerations is $10,485.60, less deduction of any tax as required by law. Having regard to all the circumstances of the case, we consider that this is an appropriate amount of compensation. The amount shall be paid in two equal instalments as earlier discussed.
Orders
[62] We make the following orders:
(1) Permission to appeal is granted.
(2) The appeal is upheld.
(3) The Decision and the Order are quashed.
[63] A separate order will issue giving effect to our decision concerning the compensation to be paid to Mr Van Malsen for his unfair dismissal.
VICE PRESIDENT
Appearances:
J Madalena and C Madalena on behalf of Titan Plant Hire.
S Van Malsen on his own behalf.
Hearing details:
2016.
Sydney:
10 August.
3 Decision at [41]-[42]
4 Decision at [67]
5 Decision at [68]
6 Decision at [70]
7 Decision at [55]-[57]
8 Decision at [62]-[63]
9 Decision at [101]
10 [2010] FWAFB 5709, (2010) 198 IR 237 at [11]
11 Decision at [59]-[61]
12 Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371 at 373
13 Edwards v Giudice [1999] FCA 1836; (1999) 94 FCR 561 at [6]-[7]
14 Sharp v BCS Infrastructure Support Pty Limited [2015] FWCFB 1033 at [32]; Annetta v Ansett Australia (2000) 98 IR 233 at [9]-[10]
15 Sharp v BCS Infrastructure Support Pty Limited [2015] FWCFB 1033 at [32]; He v Lewin [2004] FCAFC 161; (2004) 137 FCR 266 at [15]
16 Sharp v BCS Infrastructure Support Pty Limited [2015] FWCFB 1033 at [33]-[34]; O'Connell v Wesfarmers Kleenheat Gas Pty Ltd [2015] FWCFB 8205 at [22]-[23]
17 Decision at [72]
19 Transcript PNs 269-270
21 Decision at [123]
22 Decision at [103]-[104]
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