| [2019] FWC 8170 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s 394 - Application for unfair dismissal remedy
Miguel Ripoll
v
Fabaxa Pty Ltd t/a Onshoring
(U2019/3721)
DEPUTY PRESIDENT SAMS |
SYDNEY, 24 DECEMBER 2019 |
Application for an unfair dismissal remedy. – small business employer – minimum employment period – disputed dates of dismissal and commencement - consulting services prior to employment – minimum employment period not met – no jurisdiction - application dismissed.
[1] This decision will determine a jurisdictional objection lodged by Fabaxa Pty Ltd t/a Onshoring (‘Onshoring’), in response to the filing of an unfair dismissal application by Mr Miguel Ripoll, pursuant to s 394 of the Fair Work Act 2009 (the ‘FW Act’). Mr Ripoll seeks compensation for his alleged unfair dismissal, after having been employed by Onshoring as Operations Manager, for a ‘contested period’ of approximately one year. The letter terminating Mr Ripoll’s employment reads:
‘Dear Miguel
Termination of your employment by reason of redundancy
The purpose of this letter is to confirm the outcome of a recent review by Fabaxa Pty Ltd T/AS Onshoring and its resourcing requirements. As a result of a company restructure, your position of Operations Manager is no longer needed. Regrettably this means your employment will terminate. This decision is not a reflection on your performance.
Based on your length of service your notice period is 2 weeks. Therefore, your employment will end on 18th March 2019. Due to your employment ending you will be paid for your work during the notice period and any leave entitlements in accordance with our regular payment cycle.
You may seek information about minimum terms and conditions of employment from the Fair Work Ombudsman. If you wish to contact them you can call 13 13 94 or visit their website at www.fairwork.gov.au.
We thank you for your valuable contribution during your employment with us. Please contact me if you wish to obtain a reference in the future.’
[2] Onshoring’s submissions disclose that its objection to the unfair dismissal application is made on two bases; firstly, that as a small business, Mr Ripoll had not completed the minimum employment period, as set out in s 383 of the FW Act; and secondly, that the dismissal of Mr Ripoll was for reasons of genuine redundancy (s 385(d)). This decision will deal only with the minimum employment period objection. In [1] above, I have deliberately referred to a ‘contested period’ of approximately one year’, as Mr Ripoll’s commencement date and dismissal date are both crucial disputed matters for which a conference or hearing is necessary; see: s 397 of the FW Act.
[3] At this juncture, I set out below the definition of when a person is protected from unfair dismissal, as set out in s 382 of the FW Act:
‘382 When a person is protected from unfair dismissal
A person is protected from unfair dismissal at a time if, at that time:
(a) the person is an employee who has completed a period of employment with his or her employer of at least the minimum employment period; and
(b) one or more of the following apply:
(i) a modern award covers the person;
(ii) an enterprise agreement applies to the person in relation to the employment;
(iii) the sum of the person’s annual rate of earnings, and such other amounts (if any) worked out in relation to the person in accordance with the regulations, is less than the high income threshold.’
[4] Section 383 of the FW Act sets out the meaning of minimum employment period as follows:
‘383 Meaning of minimum employment period
The minimum employment period is:
(a) if the employer is not a small business employer -6 months ending at the earlier of the following times:
(i) the time when the person is given notice of the dismissal;
(ii) immediately before the dismissal; or
(b) if the employer is a small business employer- one year ending at that time.’
[5] It is common ground that Onshoring is a small business for the purposes of s 23 of the FW Act, being:
‘(1) A national system employer is a small business employer at a particular time if the employer employs fewer than 15 employees at that time.’
‘Particular time’ is referable to the date on which the applicant was dismissed. At that time, Onshoring had eight employees (it now only has two).
[6] Both parties were unrepresented. They engaged in numerous communications with Chambers about the process and procedure, including making complaints about each other and seeking changes to directions and to the listing of the matter. Ultimately, the best I can do with the rather ad hoc nature of the materials filed, is to rely on the documentary evidence filed by both parties and their submissions at the hearing. Both parties filed copies of the same documents, but the parties put their own interpretation of what a particular document disclosed (or in one case, it was suggested a document had been fabricated).
[7] Mr Ripoll provided a seven-page outline of submissions which was in the form of a witness statement and a chronology of events, with numerous annexures. Similarly, Ms Natalie Houlahan, Commercial Manager of the respondent, provided a witness statement in the form of a chronology and reply material, with numerous annexures. Mr Dion Huntley, Managing Director and Owner of Onshoring and Mr Abhi Sood, Chartered Accountant, each provided one-page statements.
[8] At the hearing on 23 September 2019, Mr Ripoll appeared for himself and Mr Huntley and Ms Houlahan appeared for Onshoring. Neither party required the other parties’ witnesses for cross examination. Doing the best I could in these circumstances, I accepted all the documentary material and during the hearing sought some clarification of particular matters.
[9] One of the more significant documents in this case was the letter of 5 March 2019 terminating the applicant’s employment; see [1] above. On one view, this was a notice of dismissal, in accordance with s 383 (a)(i) of the Act, which is why I had cause to advise the parties on 6 June 2019 as follows:
‘Dear Parties,
Had the applicant worked his notice period, his employment would have been terminated on 18 March 2019 as per the termination letter attached in below email. However, both the applicant and the respondent have confirmed that the applicant was, in fact, paid in lieu of notice for the period between 5 March and 18 March 2019 (see also the attached email).
In Siagian v Sanel Pty Ltd (1994) 122 ALR 333, an analogous situation arose, whereby payment in lieu of notice immediately terminates the employment relationship. At para [355], Wilcox CJ stated:
‘It seems to me that, in the absence of evidence of a contrary intention, it should usually be inferred that the employer intended the termination to take effect immediately. This conclusion not only reflects the more accurate meaning of the phrase “payment in lieu of notice”; it accords with common sense. An employer who wishes to terminate an employee’s services and is prepared to pay out a period of notice without requiring the employee to work, will surely usually wish to end the relationship immediately. If the employee is not to work, there is no advantage to the employer in keeping the relationship alive during the period for which payment is made; and there is the disadvantage that the employer will be burdened with employment related costs, such as workers’ compensation insurance, payroll tax, liability for leave payments etc. The employer also incurs the risk that some new burden will be imposed in respect of the employment during the period.’
Therefore, a presumption exists that if payment was made in lieu of notice, then the employment relationship ceased at the time the employee was notified of the termination of their employment, rather than the final date of the notice period. To clarify this issue, the Deputy President requests any payslips, receipt of the payment in lieu of notice, and/or any documentary evidence from either party as to when the employment relationship ceased.’
[10] On the other hand, the sentence ‘[t]herefore your employment will end on 18 March 2019’, might infer that Onshoring had not intended to end the employment relationship until that date. However, the following sentence begins, ‘[d]ue to your employment ending you will be paid for your work during the notice period….’. In other words, the employer agreed to pay Mr Ripoll the notice period, without requiring any further work to be performed by him from 5 March 2019. I prefer this interpretation.
[11] Mr Ripoll claims he continued to perform his sales duties beyond 5 March 2019, which included closing a sales deal, which did not require him to be in the office. He claimed the following email exchange the next day (6 March 2019) demonstrated this.
‘Message sent Wednesday 6 Mar – 1:37 pm
Hi dion (sic). I just wanted to talk about Force Fire. I was able to get our demo through. Can we talk about this please.
Message sent Wednesday 6 Mar – 2:59 pm
Hi Miguel, really appreciate what you are trying to do. Fingers crossed for ForceFire. If successful I’ll come back to you separately for sure. So do not worry about that part…. Thanks’
[12] In my view, this evidence is not compelling as to Mr Ripoll’s claim of ongoing work beyond 5 March 2019. There is no evidence of the sale being finalised and all the subsequent emails Mr Ripoll tendered concern his inquires as to when he was to receive his final payments and his dispute about the payment calculations.
[13] Significantly, on 7 March 2019, Mr Ripoll advised Ms Houlahan he had returned his office keys and electronic pass and took his personal belongings from the office. These actions confirm that Mr Ripoll considered himself to be no longer working for Onshoring. Further, it is relevant that two other employees were dismissed by letter dated 5 March 2019. Neither of them sought to work out their notice period. Other email evidence confirmed Mr Ripoll had been removed from the Company’s internal computer access around 11 March 2019, although he retained a Company provided laptop until it was returned on 21 March 2019.
[14] It is irrelevant to the date of dismissal that Mr Ripoll was later paid his notice and outstanding entitlements post 5 March 2019, or even after 18 March 2019. This is entirely unremarkable. There are many occasions where an employee’s final payments are not, or cannot, be made at the time of dismissal. Payment might be dependent on a pay cycle or may be disputed well past the dismissal date.
[15] Given this factual scenario and the authority identified in Siagian v Sanel Pty Ltd (1994) 122 ALR 333, and notwithstanding the 5 March 2019 letter might have been better and more clearly worded, I am satisfied that the termination of the applicant’s employment occurred on 5 March 2019.
[16] Given this finding, it will be apparent that Mr Ripoll’s application for an unfair dismissal remedy was lodged eight days out of time, pursuant to s 394 (2) of the FW Act. No submissions were made by the parties on this further jurisdictional issue. However, given my later determination of the minimum employment period objection, it will be unnecessary to deal with the issue of whether Mr Ripoll could establish ‘exceptional circumstances’, such as to satisfy the Commission to extend time for filing his application, pursuant to s 394(3) of the FW Act.
[17] Accordingly, for Mr Ripoll to have completed the minimum employment period with a small business, he would have been required to have commenced employment with Onshoring one year earlier than his dismissal date; namely, 5 March 2018. Any commencement date after 5 March 2018 would render his application as jurisdictionally barred.
[18] Answering this question is rather more problematic than the question of his dismissal date earlier decided. Reference was made to various documents, their interpretation and the contentions of the parties. Shortly stated, the objector insists Mr Ripoll commenced employment with Onshoring on Monday 18 March 2018; whereas Mr Ripoll contends he was effectively working for Onshoring, at least since January 2018, and commenced full time employment on 18 March 2018. The answer to the objection question lurks in a close scrutiny of the relevant documents between January 2018 and March 2018, and a sensible analysis of their common meaning and practical intent.
[19] Mr Huntley deposed that in December 2017 he met Mr Ripoll at the home of a former customer, Mr Antonio Munsayac (Mr Ripoll’s cousin). He had understood Mr Ripoll was the Manager of another company, known as Prodocom, at the time. Mr Munsayac suggested his cousin might be useful in a software company that he (Mr Huntley) was intending to start up. During January 2018, Mr Huntley had a couple of conversations with Mr Ripoll, although he believed he was still working full time at Prodocom. However, Mr Ripoll did undertake some consultancy work for him. Mr Ripoll had asked to be paid by invoice to a company, called Campaign HQ. During proceedings, Mr Ripoll said this company was owned by his wife and his cousin. Mr Huntley was overseas when Mr Ripoll commenced employment with Onshoring on 19 March 2018.
[20] An invoice, dated 4 March 2018, disclosed that:
• it was from Campaign HQ (ACN 619070656);
• the invoice number was #2018003;
• the Customer ID named ‘Onshoring’ as the customer;
• the services were described as ‘CONSULTING 01-16 March 2018 (Miguel Ripoll)’; and
• an amount of $1650, to be paid directly into Mr Ripoll’s bank account, included an amount of $150 for GST.
• accompanying email from Mr Ripoll reads:
‘Hello Natalie,
Please find attached invoice for 01 to 16 of March, 2018, due on the 19th of March (Monday).
I still don’t have the payment that was due 28th of February.
Kind regards,
Miguel Ripoll’
[21] It was Ms Houlahan’s evidence that a lease was signed for an office for Onshoring on 6 March 2018. During this week, she had set up the office for commencement on 19 March 2018 – the day Mr Ripoll commenced work as the Operations Manager.
[22] It was Mr Ripoll’s evidence that:
• ‘Sometime in December 2017 I met Dion Huntley in my cousin’s house during a Christmas dinner. We spoke about his business ideas in the field of IT and discussed the possibility of me joining his company and I showed interest.
• We then met on (sic) January 2018 to further discuss […] his company. I then learned it was called Onshoring and discussed what he needed for that Company.
• I then received an email dated 19 January 2018 offering me both part time [work] on [a trial] basis which then can lead to full time employment.’ This email reads:
‘Hi Miguel,
As mentioned I’ve been looking at budgeting for a consultant on a project trial basis, plus pathways to fulltime employment.
Listed here are fees and bonus’s (sic). Please review and let’s talk later today.
Also, for the part-time consulting role, are you able to start next week?
Part-time
• Project: x 1
• Function: Project coordination/ reporting & some client engagement
• Part time consulting fee $3000 per month including supper
• Duration: 3 months minimum/ 6 months maximum
Full Time:
• Function: Project coordination/ reporting, client engagement, leadership and management
• First year full-time income $80,000 per annum, includes super
• Review at 3 months stage: $90,000 per annum, includes Super
• 2nd year: 100,000 per annum, includes Super (Performance Review)
• 3rd year: 150,000 per annum, includes Super (Performance Review)
• 4th year: 200,000 per annum, includes Super (Performance Review)
• 5th year: Negotiated
1st year Bonus/ Commission:
• Projects up to 500k: 2000 at start & 3000 at finish
• Projects 500k up to 1mil: 3000 at start & 4000 at finish
• Project +1mill: 4000 at start & 5000 at finish
2nd year onwards Bonus/ Commission:
• Projects up to 500k: 3000 at start & 4000 at finish
• Projects 500k up to 1mil: 4000 at start & 5000 at finish
• Project +1mill: 5000 at start & 6000 at finish’
• ‘I accepted the part time position evidenced by the email I sent to [Mr Huntley] on the evening of 19 January 2018.’ This email reads:
‘Hi Dion,
I found an old resume in my archives. (see attached pdf)
This will give you an understanding of what I’ve done in the past.
Will I see you on Sunday for coffee?
Miguel
On Fri, Jan 19, 2018 at 10:48 PM, Miguel Ripoll <migsripoll@gmail.com> wrote:
Sunday works for me.
Lets have coffee in the morning.
Thanks.
Miguel
On Fri, 19 Jan 2018 at 9:27 pm, Dion Huntley <dionh@onshoring.com.au> wrote:
Hi Miguel,
Thank you for the reply. I’ll look out for you follow-up email.
It’s also my recommend that you to look at the part-time role to begin with.
Let’s try and discuss over the weekend when you have a minute, even if it’s over the phone - any time a��er
12pm tomorrow
is good for me.
PS: I’m also free Sunday morning if you have _me to meet for a coffee.
Thank you
Dion Huntley’
• ‘On several occasions from 21 January 2018 to 27 February 2018 I was verbally instructed to attending client meetings, and several meetings with the other employees of Onshoring. I was also tasked to finalise a lease agreement for housing and accommodation for overseas consultants, find a cleaning contractor, and a handyman for the said property.’
[23] Mr Ripoll said that on 30 January 2018, he phoned Ms Houlahan to inquire ‘how when (sic) will I get my wage.’ He claimed she replied that she required his bank and Tax File Number (‘TFN’) details to process the payment.
[24] On 15 February 2018, a bank entry records a transaction for $1050.00 from Fabaxa Pty Ltd - which Mr Ripoll said was for work performed in January 2018. The entry describes the transaction as ‘Consulting’.
[25] On 25 February 2018, Mr Ripoll sent an email to Mr Huntley which began:
‘Hello Dion,
Based on our discussions and planned activities for Onshoring, I am happy to offer you my services as a full-time employee for Onshoring, effective 19 March 2018.
I have enumerated below my understanding of what the role will entail:’
[26] Mr Ripoll claimed that on 7 March 2018, he received payment from Fabaxa Pty Ltd t/a Onshoring of $3,300.00 for work he had performed in February 2018. These details disclose the following:
‘07 Mar 2018 Direct Credit [number provided] FABAXA PTY LTD
Miguel Consulting’
[27] Mr Ripoll received a pay summary on 8 April 2018 which disclosed the payment of:
• ‘Salary & Wages’;
• ‘Tax’ (PAYG Tax);
• ‘Superannuation’;
• ‘Leave’ (Annual Leave in Hours); and
• ‘Payment Details’.
[28] Mr Ripoll claimed that there was no evidence that the owner or directors of Campaign HQ had any knowledge of an invoice being sent to Onshoring, or that Mr Huntley, or anyone else at Onshoring, had agreed to contract for services with Campaign HQ. Mr Ripoll relied on the definition of an employee in ss 5(1) and 5(3) of the Industrial Arbitration (Unfair Dismissal) Amendment Act 1991 (NSW).
[29] At the outset, it is necessary for me to comment on four matters arising from Mr Ripoll’s submissions and the evidence. Firstly, Mr Ripoll relied on the Industrial Arbitration (Unfair Dismissal) Amendment Act 1991 (NSW) (the ‘1991 Act’) as to the definition of an ‘employee’. This is an amending act to the Industrial Arbitration Act 1940 (NSW), which was later replaced by the Industrial Relations Act 1996 (NSW) (the ‘1996 Act’). There are no ss 5(1) and 5(3) in the 1991 Act, but there is relevantly in the 1996 Act. I assume therefore he means the 1996 Act. However, correcting this error does not assist Mr Ripoll’s case. Obviously, the definition of ‘employee’ under that Act is not relevant to an application filed under the FW Act. Reliance on the 1991 or 1996 Act in this matter are not open to Mr Ripoll. The definition of ‘employee’ under the FW Act is found at s 12 which reads:
‘employee is defined in the first Division of each Part (other than Part 1-1) in which the term appears.
Note 1: The definition in the Part will define employee either as a national system employee or as having its ordinary meaning. However, there may be particular provisions in the Part where a different meaning for the term is specified.
Note 2: If the term has its ordinary meaning, see further subsections 15(1), 30E(1) and 30P(1).
Note 3: See also Division 2 of Part 6-4A (TCF contract outworkers taken to be employees in certain circumstances).’
[30] Secondly, Mr Ripoll submitted that there was no evidence that Campaign HQ had entered into an arrangement to provide services to Onshoring. Of course, the converse is true, that is, there was no evidence Campaign HQ had not entered into an arrangement with Onshoring. However, neither proposition is to the point. It was unclear why Mr Ripoll sought to enter into this arrangement and he certainly offered no explanation. I think it is unlikely that if his wife is a Director/Owner of Campaign HQ, that he would not have at least informed her of what he intended to do. In any event, the fact is that Mr Ripoll used Campaign HQ to invoice for his ‘consulting services’ to Onshoring, prior to 5 March 2018. It was unnecessary for Onshoring to seek to have an arrangement with Campaign HQ, when it was Mr Ripoll who proposed that this was how he was to be paid and Onshoring agreed.
[31] Thirdly, the invoice, dated 4 March 2018, included a GST amount of $150.00. It is my understanding that only registered businesses with an annual turnover of $75,000.00 can charge GST for services provided, which must then be remitted to the Australian Tax Office. Obviously, it follows that employees cannot either register as a GST company, or claim GST for services provided to a customer. My own enquiries, pursuant to s 590 of the Act, reveal Campaign HQ is not a registered company for GST purposes at the time of this decision. There was no evidence that Campaign HQ is a GST exempt company. Therefore, it is unclear why Mr Ripoll charged GST in the name of Campaign HQ or whether the amount of GST ($150.00) was properly remitted to the ATO, or at all.
[32] Fourthly, Mr Ripoll’s accompanying email to the invoice describes the amount owed as being ‘the payment that was due’. It is not described as ‘wages due’ or ‘payment of wages due’.
[33] That said, while I accept there are some inferences which may have led Mr Ripoll to believe he was working part time prior to 19 March 2018, the preponderance of the evidence was to the contrary. In my view, this evidence, particularly the GST component of the 4 March 2018 invoice, disclose that he was in fact working in an ad hoc consultancy role, for which he invoiced Onshoring, until he agreed to enter a full time Operations Manager role on 19 March 2018. As was said by the Full Bench in Jiang Shen Cai trading as French Accent v Do Rozario [2011] FWAFB 8307, ‘the parties cannot deem the relationship between themselves to be something it is not’; see also: Stevens v Brodribb Sawmilling Company Pty Ltd [1986] HCA 1. It follows that Mr Ripoll commenced employment with the respondent on 19 March 2018. In light of my other conclusion, that he was dismissed on 5 March 2019, he has not met the minimum employment period, required by s 383(b) of the Act. Accordingly, the Commission has no jurisdiction to determine the merits of Mr Ripoll’s unfair dismissal application and the application must be dismissed.
[34] Lastly, on 26 September 2019, Mr Ripoll complained that he had not been provided with further documents sent to the Commission being confidential financial statements for Onshoring which were said to demonstrate his genuine redundancy. As this decision does not canvas, or determine that matter, it is unnecessary for this confidential material to be provided to him.
[35] I order that application U2019/3721 be dismissed.
DEPUTY PRESIDENT
Appearances:
The applicant appeared for himself.
Ms N Houlahan and Mr D Huntley for the respondent.
Hearing details:
2019.
Sydney:
23 September.
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