| [2017] FWC 2019 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Carl Zielke
v
Pro-Built Engine Reconditioning Pty Ltd T/A Pro-Built Engine Reconditioning
(U2016/13432)
COMMISSIONER SIMPSON |
BRISBANE, 23 MAY 2017 |
Application for relief from unfair dismissal – Jurisdictional objections not an employee and employee not dismissed – Respondent did not comply with Small Business Fair Dismissal Code – Dismissal unfair – Compensation ordered.
[1] This matter concerns an application under s.394 of the Fair Work Act 2009 (the Act) by Mr Carl Zielke who alleges that the termination of his employment with Pro-Built Engine Reconditioning Pty Ltd T/A Pro-Built Engine Reconditioning (Pro-Built) was unfair. The matter proceeded as a determinative conference on 18 April 2017.
[2] Mr Zielke submitted he commenced full time employment at Pro-Built in approximately 2010. Mr Zielke submitted in April 2013 Mr Milos Pavlovic purchased the business at which time Mr Zielke was employed casually for a three month period, and from that time on worked on a full time basis. Mr Zielke was employed as an Automotive Engine Reconditioner until his employment ended on 18 October 2016.
[3] Mr Zielke submitted his dismissal was unfair because there was no valid reason for the dismissal, he was not afforded an opportunity to respond to the decision to terminate and was not afforded procedural fairness.
[4] Mr Zielke had been represented by Amanda Millar of Australian Dismissal Services however on Thursday 13 April a Form 54 Notice of representative ceasing to act was filed by Australian Dismissal Services. Mr Zielke represented himself at the hearing and Pro-Built was represented by its owner Mr Milos Pavlovic.
[5] Mr Zielke was the only person to give evidence in support of his application and filed two witness statements. 1 Mr Pavlovic gave evidence for Pro-Built and also called Mitchel Williams as a witness.
[6] Pro-Built raised a number of jurisdictional objections. The first objection was on the basis Mr Zielke was not an employee. Pro-Built submitted that Mr Zielke was a sub-contractor who worked from April 2013 on a part time basis and would only work as needed. Pro-Built raised a second jurisdictional objection on the basis Mr Zielke was not dismissed. Pro-Built submitted that Mr Zielke was never notified of a dismissal, and during the week of 22 October 2016 Mr Zielke came into the workplace, collected his belongings and left.
[7] Whilst it was not raised by Pro-Built, given that it was not contested that Pro-Built had less than 15 employees, if I am satisfied that the matter is otherwise within jurisdiction, I must also decide whether the dismissal was consistent with the Small Business Fair Dismissal Code.
Not an employee
[8] Pro-Built submitted that Mr Zielke was not an employee, rather “Was part time and agreement [sic] to work as work was needed, along the lines of sub contractor.” 2 Pro-Built submitted that Mr Zielke had performed cash in hand jobs for clients of Pro-Built whilst the owner was overseas.
[9] Mr Zielke disputed that he was not an employee of Pro-Built, or that he was part time, casual or a subcontractor. 3 Mr Zielke said he worked on a full time basis and was paid a net amount of $800 per week, each and every week and provided a series of bank statements to support this claim.4 Mr Zielke further submitted he was not required to fill in a timesheet.5 He said his normal start time was 7am and he would normally finish at 3pm or stay to 4pm depending on whether he had taken time off.6
[10] Mr Zielke submitted that he never issued any invoices to Pro-Built, and, albeit a number of payment summaries remain outstanding, had been issued with group certificates (payment summaries) during the course of his employment. 7 Mr Pavlovic accepted he had control of the work performed and a verbal agreement was made two years earlier about how much Mr Zielke would be paid per week.8 Mr Pavlovic accepted that Mr Zielke worked Monday to Friday.9
[11] Mr Zielke submitted that he had been repeatedly assured that taxation and superannuation contributions were being remitted on his behalf to the A.T.O. Mr Zielke provided a copy of a PAYG payment summary identifying the payer as Pro-Built Engine Reconditioning Pty Ltd for the 2012/2013 financial year, where it is clear tax was withheld. 10 Mr Zielke said he was paid superannuation of about $4400 in the 2013/2014 year but not since. Mr Pavlovic claimed he reached a verbal agreement with Mr Zielke after 2014 that he would just set a wage per week and Mr Zielke would pay his own tax and superannuation.11 Mr Zielke disputed that an agreement existed as asserted. 12 He claimed he would bring up his superannuation entitlements every second day and Mr Pavlovic would say he would get back to it and put it in the account.13
[12] Mr Zielke submitted he was under the control and direction of Pro-Built as to how his duties were performed, and that he undertook no other assignments or work for other employers or clients. Mr Zielke denied undertaking any work for cash as has been claimed by Pro-Built.
[13] Mr Zielke submitted he took limited periods of leave during the course of his employment, during which his salary payments continued to be paid. 14
[14] Mr Zielke holds the trade of engine reconditioner. 15 He did not have a separate place of work or advertise his work to the world at large. Mr Pavlovic accepted that all of the tools used were supplied by him.16 Mr Zielke did not delegate or sub contract any work.17
[15] There was no written contract between the parties. Mr Zielke said he wore shirts bearing the logo of Mr Pavlovic’s motorsport business sometimes but not always.
[16] Mr Pavlovic accepted that Mr Zielke did not spend his own money in the business. 18
[17] The Full Bench decision in Kimber v Western Auger Drilling Pty Ltd 19 addresses the factors/indicia this Commission needs to consider in assessing whether an Applicant was an employee or an independent contractor during the relevant period of employment. The Full Bench endorsed the general approach to distinguishing employees and independent contractors provided in Jiang Shen Cai T/A French Accent v Michael Anthony Do Rozario20 which follows;
“(1) In determining whether a worker is an employee or an independent contractor the ultimate question is whether the worker is the servant of another in that other’s business, or whether the worker carries on a trade or business of his or her own behalf: that is, whether, viewed as a practical matter, the putative worker could be said to be conducting a business of his or her own of which the work in question forms part? This question is concerned with the objective character of the relationship. It is answered by considering the terms of the contract and the totality of the relationship.
(2) The nature of the work performed and the manner in which it is performed must always be considered. This will always be relevant to the identification of relevant indicia and the relative weight to be assigned to various indicia and may often be relevant to the construction of ambiguous terms in the contract.
(3) The terms and terminology of the contract are always important. However, the parties cannot alter the true nature of their relationship by putting a different label on it. In particular, an express term that the worker is an independent contractor cannot take effect according to its terms if it contradicts the effect of the terms of the contract as a whole: the parties cannot deem the relationship between themselves to be something it is not. Similarly, subsequent conduct of the parties may demonstrate that relationship has a character contrary to the terms of the contract.
(4) Consideration should then be given to the various indicia identified in Stevens v Brodribb Sawmilling Co Pty Ltd and the other authorities as are relevant in the particular context. For ease of reference the following is a list of indicia identified in the authorities:
Control of this sort is indicative of a relationship of employment. The absence of such control or the right to exercise control is indicative of an independent contract. While control of this sort is a significant factor it is not by itself determinative. In particular, the absence of control over the way in which work is performed is not a strong indicator that a worker is an independent contractor where the work involves a high degree of skill and expertise. On the other hand, where there is a high level of control over the way in which work is performed and the worker is presented to the world at large as a representative of the business then this weighs significantly in favour of the worker being an employee.
“The question is not whether in practice the work was in fact done subject to a direction and control exercised by an actual supervision or whether an actual supervision was possible but whether ultimate authority over the man in the performance of his work resided in the employer so that he was subject to the latter’s order and directions.”“[B]ut in some circumstances it may even be a mistake to treat as decisive a reservation of control over the manner in which work is performed for another. That was made clear in Queensland Stations Pty. Ltd v Federal Commissioner of Taxation, a case involving a droving contract in which Dixon J observed that the reservation of a right to direct or superintend the performance of the task cannot transform into a contract of service what in essence is an independent contract.”
The right to the exclusive services of the person engaged is characteristic of the employment relationship. On the other hand, working for others (or the genuine and practical entitlement to do so) suggests an independent contract.
Where the worker’s investment in capital equipment is substantial and a substantial degree of skill or training is required to use or operate that equipment the worker will be an independent contractor in the absence of overwhelming indications to the contrary.
If the worker is contractually entitled to delegate the work to others (without reference to the putative employer) then this is a strong indicator that the worker is an independent contractor. This is because a contract of service (as distinct from a contract for services) is personal in nature: it is a contract for the supply of the services of the worker personally.
Typically, this will arise because the worker is required to wear the livery of the putative employer.
Employees tend to be paid a periodic wage or salary. Independent contractors tend to be paid by reference to completion of tasks. Obviously, in the modern economy this distinction has reduced relevance.
Such persons tend to be engaged as independent contractors rather than as employees.
It should be borne in mind that no list of indicia is to be regarded as comprehensive or exhaustive and the weight to be given to particular indicia will vary according to the circumstances. Features of the relationship in a particular case which do not appear in this list may nevertheless be relevant to a determination of the ultimate question.
(5) Where a consideration of the indicia (in the context of the nature of the work performed and the terms of the contract) points one way or overwhelmingly one way so as to yield a clear result, the determination should be in accordance with that result. However, a consideration of the indicia is not a mechanical exercise of running through items on a check list to see whether they are present in, or absent from, a given situation. The object of the exercise is to paint a picture of the relationship from the accumulation of detail. The overall effect can only be appreciated by standing back from the detailed picture which has been painted, by viewing it from a distance and by making an informed, considered, qualitative appreciation of the whole. It is a matter of the overall effect of the detail, which is not necessarily the same as the sum total of the individual details. Not all details are of equal weight or importance in any given situation. The details may also vary in importance from one situation to another. The ultimate question remains as stated in (1) above. If, having approached the matter in that way, the relationship remains ambiguous, such that the ultimate question cannot be answered with satisfaction one way or the other, then the parties can remove that ambiguity a term that declares the relationship to have one character or the other.
(6) If the result is still uncertain then the determination should be guided by “matters which are expressive of the fundamental concerns underlying the doctrine of vicarious liability” including the “notions” referred to in paragraphs [41] and [42] of Hollis v Vabu.” 21
[18] The Full Bench in Kimber further provided;
“The courts have developed a multi-factorial approach, in which there is no single decisive criterion to determine whether a contractual relationship is one of employment or one subject to a contract for services. This approach requires the consideration of the various indicia as summarised in French Accent set out above. It is also clear from the decision of the Full Bench of the Federal Court in ACE Insurance Limited v Trifunovski 22 and others, that no one single criterion will necessarily be determinative and that each matter will turn upon the particular circumstances of the case, with the decision maker weighing all the relevant factors.”23
[19] The ultimate question for the Commission as stated in Abdalla v Viewdaze Pty Ltd t/a Malta Travel 24 and endorsed in French Accent;
“… will always be whether the worker is the servant of another in that other’s business, or whether the worker carries on a trade or business of his or her own behalf: that is whether, viewed as a practical matter, the punitive worker could be said to be conducting a business of his or her own. This question is answered by considering the terms of the contract and the totality of the relationship.”
[20] The evidence indicated Mr Zielke was required to catch up on tasks after he returned from leave. He needed to consult Mr Pavlovic before taking leave. Mr Zielke had set hours of work and start/finish times. This supports the conclusion he was an employee.
[21] There no evidence to suggest Mr Zielke had another job or performed work for others except in his own time on weekends on work not associated with Pro-Built.
[22] Mr Zielke did not have a separate place of work and did not advertise his services.
[23] Pro-Built accepted that they supplied Mr Zielke all of his tools.
[24] The work was not delegated or subcontracted and the evidence suggests neither party foresee circumstances where anyone but Mr Zielke would be performing the work he performed for Pro-Built.
[25] There is no employment contract but the evidence supports the conclusion that the nature of the relationship between Mr Pavlovic and Mr Zielke and the degree of control exercised by Mr Pavlovic supports the conclusion Mr Pavlovic had the right to suspend or dismiss.
[26] Mr Zielke wore Mr Pavlovic’s racing business t-shirts from time to time.
[27] The 2012/2013 Payment Summary indicated tax was deducted from Mr Zielke’s income for an initial period and then stopped.
[28] Bank statements show a regular amount of $800 being deposited into Mr Zielke’s account each week, suggestive of employment.
[29] Mr Zielke received payment whilst on leave, suggestive of employment.
[30] Mr Zielke held the trade of engine reconditioner.
[31] There was no evidence that Mr Zielke was creating goodwill or a saleable asset for himself.
[32] Mr Pavlovic accepted Mr Zielke did not spend his own money on business expenses.
[33] Having considered the evidence I am satisfied Mr Zielke was an employee and not an independent contractor.
Not dismissed
[34] Mr Zielke argued there was no substance to the jurisdictional objection that he was not dismissed. He submitted that use of the phrases “you’re a replaceable prawn” and “time has come for u [sic] to part ways with me” indicates the message is clear Mr Zielke was being dismissed. Further, Mr Zielke submitted that the style and content of the message makes it clear the message was from Mr Pavlovic.
[35] The text message is not completely clear as to whether Mr Zielke was being dismissed. It could be read as being a threat of being dismissed. The message says “I’ll talk to you tomorrow” indicating there are things left to be discussed.
[36] Mr Zielke said that in early October 2016 Mr Pavlovic met with himself on the last day before Mr Pavlovic left for an overseas trip to advise him and others that Mr Zielke was in charge of the floor however Jasmine Borg was above Mr Zielke. Mr Pavlovic accepted that. 25
18 October
[37] Mr Zielke submitted he was dismissed by a text message sent by Mr Pavlovic on 18 October 2016. 26 The text message reads as follows:
“Carl I’m disappointed in you as u [sic] have been a back stabber for some time and I’ve known it for a while. I’m on my flight home as I write this and as hard as it is you’re a replaceable pawn u [sic] had a great opportunity and I let u [sic] get away with a lot, but time has come for u [sic] to part ways with me and I don’t want excuses and I don’t fucken [sic] care really. I’ll talk to you tomorrow and I’ll square up with you and next time u [sic] want to talk about me I’ll come over and show u [sic] what a piss weak cunt I am…”
[38] Pro-Built submitted that the text message was to explain that “things were not working out in the workplace.” 27 Pro-Built submitted that Mr Pavlovic “clearly stated in the message that he would speak to Carl the following day about the outcome that needed to happen.” Pro-Built submitted that he had not “offered an instant dismissal nor had he told him a date of departure.” Pro-Built submitted that on 18 October Mr Zielke came into the workplace, collected his belongings and left. Mr Pavlovic gave evidence in his statement that Mr Zielke refused to return to the workplace to resolve the conflict.28
[39] Mr Zielke submitted Mr Pavlovic’s belief he had given private information to his ex-wife was false. 29
[40] Mr Pavlovic said that the “straw that broke the camel’s back” was when Mr Zielke confronted Ms Borg the day before he sent the text message and said to her:
“Listen, I know Mick is going to find out, so I just want to come clean. But I spoke to Mick – Mick’s wife and her new partner”. 30
[41] The conversation referred to was one according to Mr Zielke where the partner of Mr Pavlovic’s ex-wife drove up alongside him on the wrong side of the road and was saying to him “pull over”. He said he decided to pull over straight away. Mr Zielke said the person in the other car was ‘Mal’, a former friend of Mr Pavlovic.
[42] Mr Zielke said he knew what ‘Mal’ wanted to ask about and said he refused to have a conversation with him as he was an employee and he had nothing to do with it. 31 It appears from the evidence that there was a dispute between Mr Pavlovic and Mal, about a race car that Mr Pavlovic had taken possession of as a result of Mal causing damage to a different race car that belonged to Mr Pavlovic. It appeared the conversation that Mal wanted to have pertained to the whereabouts of the race car that Mr Pavlovic had taken.
[43] It seems from the evidence of Mr Pavlovic believed that Mr Zielke may have disclosed information to Mal about the whereabouts of the race car, and this appeared to be his reason for sending the text message of 18 October. Mr Pavlovic accepted he had no evidence of what was said by Mr Zielke to Mal. 32
[44] Mr Zielke said he was concerned about Mr Pavlovic becoming aware that he had spoken to Mal, so after considering the matter he decided to tell Ms Borg he had spoken with Mal. He said he explained to Ms Borg that he had seen ‘Mal’ about a week earlier and the circumstances and that he had refused to answer Mal’s questions. 33
[45] Mr Pavlovic’s evidence was that he spoke to Ms Borg by phone when he was at an airport in the United States preparing to return to Australia, when he was made aware that Mr Zielke had spoken to his ex-wife and her new partner Mal. On being told this he said he instructed Ms Borg to go to Mr Zielke’s house and pick up the workshop keys. Mr Pavlovic claimed the reason he gave Ms Borg for asking her to do this was that he did not want Mr Zielke to have access to the workshop on his own anymore. He said he then sent the text message to Ms Borg who forwarded it to Mr Zielke. 34
[46] Mr Zielke said that shortly after he told Ms Borg about his conversation with Mal, Ms Borg walked out of the workshop. He said on his way home Ms Borg rang him and said:
“What’s your address, I’ve got to come and get the keys, I left my bankcard at the workshop”. 35
[47] He said Ms Borg came to his house and after she had left he looked at his phone and saw the text message. He said he was puzzled, then realised that Ms Borg had spoken to Mr Pavlovic. Mr Zielke said this was 18 October which was a Tuesday. He said he was hoping to receive a phone call but did not receive one so went to the workshop on the Friday morning 21 October to have a talk to Mr Pavlovic.
21 October
[48] Mr Pavlovic claimed that he tried to call Mr Zielke from the workshop phone he thought on 20 October which was the Thursday. He said he did not leave a message. He said he went to the workshop on the Friday and asked if anyone had seen Mr Zielke and they said no. Mr Pavlovic said he asked why he was not coming in and one of the ‘boys’ said because he already has another job. 36
[49] Mr Pavlovic claims that he did not receive a phone call from Mr Zielke until the following week when Mr Zielke asked if he could come in and get his toolbox, and Mr Pavlovic said yes no problem you’re more than welcome to come and grab it, and he said Mr Zielke came in and got the toolbox. Mr Pavlovic said he thought this was on a Wednesday. 37
[50] Mr Zielke submitted he attended the workplace on 21 October to speak with Mr Pavlovic. Upon arriving, Mr Zielke found that his tools were up-ended and his toolbox was overturned. Mr Zielke submitted he attempted to discuss the issues raised in the text message sent 18 October but Mr Pavlovic would not listen to what he was saying, and was rude to him. 38 Mr Zielke submitted that Mr Pavlovic told him to get his tools and get out.39 In his oral evidence his version was that Mr Pavlovic said to him “Get your stuff and get out. I don’t want to talk about it, see you later, don’t come back.”40
[51] In his additional statement Mr Zielke said that in the discussion he had with Mr Pavlovic on Friday 21 October, Mr Pavlovic said he had paid the superannuation but that was not true. Mr Pavlovic denied Mr Zielke’s version and said the dates were wrong. Mr Pavlovic accepted that he could not be specific that it was the Wednesday of the following week that Mr Zielke came into work, but maintained it was the middle of the following week. 41
[52] Mr Pavlovic said in his evidence that when Mr Zielke did come to the workshop Mr Zielke asked him if he could explain what happened with Mal. Mr Pavlovic said he told Mr Zielke he did not want to hear it, 42 and later he did not want to hear Mr Zielke’s side of the story.43
[53] The main fact in dispute is whether Mr Zielke attended the workplace on 21 October. Pro-Built has submitted Mr Zielke refused to attend the workplace on 21 October to discuss the issues raised in the text message. Mr Zielke submitted he went to the workplace and was told to “get out.” Mr Zielke was sure this occurred on Friday 21 October and said he started a couple of weeks work the following Monday.
[54] On the balance of probability I am satisfied that Mr Zielke was dismissed, and the dismissal had effect from Friday 21 October. His evidence on the particulars of the events and their times is consistent, and fits more comfortably with the evidence overall including the text message. Mr Pavlovic’s evidence about Mr Zielke coming into the workplace sometime in the middle of the following week is less plausible. Mr Pavlovic concedes that Mr Zielke wanted to have a conversation with him about what occurred with ‘Mal’ and that Mr Pavlovic refused to have such a conversation. If anything, this tends to support Mr Zielke’s version that Mr Pavlovic terminated him as it is apparent from the text message a few days earlier he intended to.
[55] In regard to the suggestion that Mr Zielke had said he had found other employment, there is no direct evidence from any witness to support Mr Pavlovic’s claim that Mr Zielke had told ‘the boys’ that he had another job. Mr Zielke denies having another job in the week ending on Friday 21 October. Mr Williams said he was not aware of Mr Zielke saying he had another job. 44I prefer Mr Zielke’s evidence that he did not say that to anyone.
[56] As neither of the first two jurisdictional objections have not been established I must now consider whether Mr Pavlovic complied with the Small Business Fair Dismissal Code.
Small Business Code
[57] It was not disputed that Pro-Built engaged less than 15 employees. On that basis, in accordance with s.23 of the Act the Small Business Fair Dismissal Code applies. If it is found that Pro-Built has complied that is the end of the unfair dismissal claim. If the employer has not complied with the Code than I will proceed to determine whether the dismissal was harsh, unjust or unreasonable.
[58] The dismissal was a summary dismissal. The code includes the following:
“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.”
[59] Mr Pavlovic’s primary position as set out above has been that Mr Zielke resigned. Having found that was not so, issues that Mr Pavlovic put as relevant for the purposes of providing justification for dismissal were:
● His concerns regarding whether Mr Zielke disclosed information to Mal, a former friend and partner of Mr Pavlovic’s ex-wife;
● Concerns that Mr Zielke had been paid in cash by clients of the business;
● Concerns that Mr Zielke had revealed financial details about Mr Pavlovic’s income and financial position to clients;
● Concerns that Mr Zielke had criticised the business to customers;
● An allegation that Mr Zielke offered drugs to another person in the workshop.
Disclosure of information to Mal
[60] On the first issue set out above there is no evidence to contradict Mr Zielke’s claims that he refused to discuss any matters with ‘Mal’. There is no evidence of any probative value to support the assertion that Mr Zielke provided any information to Mal that would provide Mr Pavlovic reasonable grounds to summarily dismiss Mr Zielke.
Paid cash by clients
[61] Mr Zielke said he never did any cash jobs. He said Mark from Classic Cars asked him to do a cash job once and he turned it down. Mr Pavlovic did not provide any specific evidence about this, but in any event he said he became aware of one client who he did not identify advising him of this several weeks after Mr Zielke had left. On that basis the issue cannot be one that Mr Pavlovic relied on at the time. I do not accept that issue gave Mr Pavlovic reasonable grounds to summarily dismiss Mr Zielke.
Revealed financial details
[62] This allegation seemed to be based on Mr Pavlovic’s concerns that certain persons had knowledge of his financial situation and the only way they could have had this knowledge was through Mr Zielke. There were no specifics put in regard to this vague allegation. Mr Zielke said he had no idea what the financial position of the business was. On the material available I cannot be satisfied it was a reasonable ground to summarily dismiss Mr Zielke.
Criticism of business
[63] Mr Pavlovic claimed that Mr Zielke had said to customers what he got paid and hated working for Pro-Built. Mr Pavlovic claimed he had pulled him up about it. Mr Pavlovic gave as examples Bart from Bart’s Mechanical and Mark from Classic Car Clinic. 45 Mr Pavlovic said Mr Zielke would tell these customers he didn’t want to do the job anymore and should be getting paid more. Mr Pavlovic could not be specific about when he said this occurred.
[64] Mr Zielke denied saying negative things about the business. Mr Zielke said he remembered the conversation with Bart, however Bart had become like a friend. He said he did have a conversation one day when he was annoyed about having asked for superannuation repeatedly and being told it would be paid and saying to Bart he was annoyed it had not been paid. Mr Zielke said that Bart was not just a client, he was a close friend of Mr Pavlovic’s. 46 Mr Zielke accepted that Mr Pavlovic spoke to him the next day and said not to do it again.
[65] Mr Pavlovic said there were other occasions involving Bart or Mark from Classic Car Clinic but he could not be specific about times or dates. He thought the last time he spoke to Mr Zielke about this issue was June or July 2016 which was several months before Mr Zielke was terminated. 47 Mr Pavlovic’s evidence concerning this issue was quite vague and the matter had not been raised for a considerable period as at 21 October 2016. I do not accept that issue gave Mr Pavlovic reasonable grounds to summarily dismiss Mr Zielke.
Allegation of offering drugs
[66] Mr Pavlovic said the reason that he did not want to speak to Mr Zielke after Mr Zielke picked up his toolbox was finding out that Mr Zielke was trying to sell ‘narcotics’ in his workshop and he had made up his mind why Mr Zielke was not allowed back in the shop. 48
[67] Mr Pavlovic claimed that Friday 21 October ‘the boys’ told him about this issue. He amended his evidence to say he was referring to Mitchel Williams and not more than one person. Mr Zielke said the allegation was fabricated. 49 Mr Williams claimed he was offered marijuana by Mr Zielke. He said he believed it was in October sometime. He could not be more specific. He did not raise it with anyone at the time.50 Mr Williams said Mr Pavlovic had asked whether Mr Zielke had been talking about anything inappropriate in the workplace and Mr Williams said he then told Mr Pavlovic. He said he could not remember when this happened.51
[68] I am somewhat sceptical about the evidence concerning this issue. It appears even if I was to accept that Mr Williams did speak about the matter with Mr Pavlovic, the conversation was not initiated by him, but when Mr Pavlovic approached him and asked him if he was aware of Mr Zielke having talked about anything inappropriate. The evidence was vague and did not involve a specific time or date and was not raised at the time. Mr Zielke strongly denies the allegation. I found Mr Zielke’s evidence broadly to be direct and consistent, including as between his written and oral evidence. Mr Pavlovic never raised the issue with Mr Zielke at the time and it appears to have arisen because Mr Zielke contested his termination. I am doubtful that it was an issue that motivated Mr Pavlovic to terminate Mr Zielke on Friday 21 October. I am far more inclined to the view that Mr Pavlovic terminated Mr Zielke for the matters that were the subject of the earlier text message. I am not prepared on the available evidence to accept that Mr Zielke offered drugs to Mr Williams or that that issue gave Mr Pavlovic reasonable grounds to summarily dismiss Mr Zielke.
[69] Having considered all of the issues I am not satisfied that Pro-Built has complied with the Small Business Fair Dismissal Code. On that basis I must now consider whether the dismissal was harsh, unjust or unreasonable.
[70] Section 387 reads as follows;
“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.”
[71] For Pro-Built to have a valid reason to dismiss Mr Zielke the reason must be ‘sound, defensible or well founded’. 52 I have addressed in detail each of the matters that were relied upon to justify termination earlier in this decision. I do not intend to repeat findings set out above but rely on those earlier findings to also find none of those matters were a valid reason for termination.
[72] Mr Zielke submitted he was notified of the reasons for termination of his employment on 18 October 2016 via text message. He further submitted on 21 October 2016 Mr Pavlovic shouted abuse at him calling him a “backstabber” surrounding the claim Mr Zielke gave information to Mr Pavlovic’s ex-wife.
[73] Mr Pavlovic’s own evidence is to the effect that he refused to engage in any meaningful discussion with Mr Zielke. On that basis I am not satisfied that Pro-Built notified Mr Zielke in plain and clear terms.
[74] Mr Zielke submitted he was not given an opportunity to respond to the decision to terminate his employment. He submitted he attended the workplace on 21 October to attempt to speak to Mr Pavlovic about the claims to no avail. Mr Zielke submitted that this was in fact after the termination had occurred so did not constitute an opportunity to respond.
[75] Pro-Built submitted that Mr Zielke would have been given an opportunity to respond on 21 October, but he failed to show up to resolve the conflict. I have preferred the evidence of Mr Zielke that he did attend the workplace on 21 October. It follows that I accept that an exchange occurred (which is not in dispute) where Mr Pavlovic refused to engage with Mr Zielke, and it occurred on 21 October. On that basis I accept that Mr Zielke was not given an opportunity to respond to the reasons for his termination.
[76] Mr Zielke submitted that as there was no meeting in relation to the termination of his employment, there was no opportunity to have a support person present, and that Pro-Built denied Mr Zielke procedural fairness. By Pro-Built failing to organise a proper meeting, Mr Zielke was denied an opportunity to have a support person present.
[77] Mr Zielke submitted there were never any discussions relating to his performance leading up to his termination. He further submitted he was never issued with any verbal or written warnings in the course of his employment. He did accept however he was spoken to by Mr Pavlovic on one occasion in regard to his complaining to Bart. He gave some context to this issue. In any event it was not clear he was given a warning his employment was in jeopardy over this issue. I am not inclined to accept this was in fact a significant issue in the decision to terminate his employment anyway.
[78] It was not contested that Pro-Built is a small business with less than 15 employees, and did not employ dedicated human recourse specialists.
[79] There are no other matters that I regard as relevant in determining the matter. I have weighed each of the matters I am required to under s.387 of the Act and am satisfied that the dismissal was harsh, unjust or unreasonable.
[80] As at the time of the determinative conference Mr Zielke submitted he has not been able to gain further employment.
[81] Mr Zielke does not seek reinstatement and I am satisfied that an order for reinstatement is inappropriate. It is therefore appropriate for me to consider the factors contained in s. 392.
“392 Remedy—compensation
Compensation
(1) An order for the payment of compensation to a person must be an order that the person’s employer at the time of the dismissal pay compensation to the person in lieu of reinstatement.
Criteria for deciding amounts
(2) In determining an amount for the purposes of an order under subsection (1), the FWC must take into account all the circumstances of the case including:
(a) the effect of the order on the viability of the employer’s enterprise; and
(b) the length of the person’s service with the employer; and
(c) the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed; and
(d) the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal; and
(e) the amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for compensation; and
(f) the amount of any income reasonably likely to be so earned by the person during the period between the making of the order for compensation and the actual compensation; and
(g) any other matter that the FWC considers relevant.
Misconduct reduces amount
(3) If the FWC is satisfied that misconduct of a person contributed to the employer’s decision to dismiss the person, the FWC must reduce the amount it would otherwise order under subsection (1) by an appropriate amount on account of the misconduct.
Shock, distress etc. disregarded
(4) The amount ordered by the FWC to be paid to a person under subsection (1) must not include a component by way of compensation for shock, distress or humiliation, or other analogous hurt, caused to the person by the manner of the person’s dismissal.
Compensation cap
(5) The amount ordered by the FWC to be paid to a person under subsection (1) must not exceed the lesser of:
(a) the amount worked out under subsection (6); and
(b) half the amount of the high income threshold immediately before the dismissal.
(6) The amount is the total of the following amounts:
(a) the total amount of remuneration:
(i) received by the person; or
(ii) to which the person was entitled;
(whichever is higher) for any period of employment with the employer during the 26 weeks immediately before the dismissal; and
(b) if the employee was on leave without pay or without full pay while so employed during any part of that period—the amount of remuneration taken to have been received by the employee for the period of leave in accordance with the regulations.”
Remuneration that would have been received
[82] I consider an order for the payment of compensation is appropriate. I have adopted the formula set out in Sprigg v Paul’s Licensed Festival Supermarket 53 to work out appropriate compensation.
[83] Firstly it is necessary to estimate the remuneration Mr Zielke would have received if he had not been dismissed. Mr Pavlovic said Pro-Built ceased to trade about two weeks after Mr Zielke’s employment ended as there was no one to replace him. 54Mr Pavlovic said he intended to proceed to wind up the business. Mr Pavlovic accepted the business would still be trading if Mr Zielke was still employed.55 Mr Zielke said if he was not terminated he would still be there as he has a mortgage.56
[84] Mr Zielke is currently working as a casual intermittently. He said he earned $840 in the week after he was terminated. He said he was then out of work for three weeks from 29 October to 18 November, and then he worked another week doing welding earning approximately $800 in that week of 21 November to 25 November. He said he then worked in welding and fabrication up to Christmas earning about the equivalent of his earning with Mr Pavlovic. He said he was out of work in January and early February 2017, and found casual work from mid-February to the time of the determinative conference doing fitter welding averaging approximately $600 per week. 57
[85] The relationship between Mr Zielke and Mr Pavlovic was not strong, though it is possible Mr Zielke could have put the personal issues aside and continued working for Mr Pavlovic. I am prepared to estimate that Mr Zielke would have remained in employment for another at least another 16 weeks which equates to $12,800. 16 weeks equals the period from 21 October is 10 February 2017. His evidence was that he earned approximately $4,840 dollars between his termination and Christmas and then did not find other employment until mid-February 2017. Deducting the amount of $4,840 (being what he earned between dismissal and the end of the anticipated period of employment) from $12,800 equals $7,960.
[86] I intend to make a deduction of 20% for contingencies given the very small nature of the business and that a decision was taken to no longer trade after the termination of Mr Zielke, being an indicator that there was a reasonable level of uncertainty about future employment. This reduces the figure to $6,368.
[87] The evidence concerning Mr Zielke’s length of service and his efforts to mitigate his loss do not provide a basis to further reduce the amount. I have not been satisfied there has been misconduct on the part of Mr Zielke that might otherwise provide a basis to further reduce the amount.
[88] Mr Zielke was employed by Pro-Built from April 2013 to 18 October 2016. I do not intend to reduce the amount of compensation on account of this length of service.
[89] I intend to issue an order separately and concurrently with this decision that Pro-Built Engine Reconditioning Pty Ltd pay to Mr Carl Zielke an amount of $6,368 gross taxed according to law plus 9.5% superannuation on that amount.
COMMISSIONER
Appearances:
Mr C. Zielke appearing on his own behalf
Mr M. Pavlovic appearing for the Respondent
Hearing details:
2017.
Brisbane:
18 April 2017
1 Exhibit 1, Statement of Carl Zielke dated 30 January 2017; Exhibit 2, Additional Statement of Carl Zielke dated 24 March 2017.
2 Form F3 Employer Response to Unfair Dismissal Application at 1.1.
3 Exhibit 1, Statement of Carl Zielke dated 30 January 2017 at [5].
4 Applicant’s Outline of Submissions at [6] and Annexure 2.
5 Exhibit 1, Statement of Carl Zielke dated 30 January 2017 at [3].
6 Transcript PN 34.
7 Applicant’s Outline of Submissions at [7] and Annexure 3; Transcript PN 34.
8 Transcript PN 40.
9 Transcript PN 58.
10 Applicant’s Outline of Submissions, Annexure 3.
11 Transcript PN 164.
12 Transcript PN 192.
13 Transcript PN 170.
14 Exhibit 1, Statement of Carl Zielke dated 30 January 2017 at [6].
15 Transcript PN 81.
16 Transcript PN 111.
17 Transcript PN 118.
18 Transcript PN 219.
20 Jiang Shen Cai T/A French Accent v Michael Anthony Do Rozario [2011] FWAFB 8307.
21 Ibid at [30].
22 [2013] FCAFC 3.
23 Ibid at [41].
24 (2003) 122 IR 215.
25 Transcript PN 226-PN 246.
26 Applicant’s Outline of Submissions at [3] and Annexure 1.
27 Exhibit 3, Statement of Milos Pavlovic (undated).
28 Exhibit 3, Statement of Milos Pavlovic (undated).
29 Exhibit 1, Statement of Carl Zielke dated 30 January 2017 at [14], Exhibit 2, Reply Statement of Carl Zielke at [6].
30 Transcript PN 273.
31 Transcript PN 331.
32 Transcript PN 292-PN 305.
33 Transcript PN 340.
34 Transcript PN 273.
35 Transcript PN 340.
36 Transcript PN 352.
37 Transcript PN 356.
38 Exhibit 1, Statement of Carl Zielke dated 30 January 2017 at [22] – [24].
39 Exhibit 1, Statement of Carl Zielke dated 30 January 2017 at [25].
40 Transcript PN 408.
41 Transcript PN 372-PN 380.
42 Transcript PN 384.
43 Transcript PN 398.
44 Transcript PN 623.
45 Transcript PN 477.
46 Transcript PN 497.
47 Transcript PN 517.
48 Transcript PN 532.
49 Transcript PN 566.
50 Transcript PN 613-PN 614.
51 Transcript PN 618.
52 Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371, 373.
53 (1998) 88 IR 21.
54 Transcript PN 688.
55 Transcript PN 715.
56 Transcript PN 793.
57 Transcript PN 783.
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