1
[2013] FWCFB 1943
DECISION
Fair Work Act 2009
s.604—Appeal of decision
Steri-Flow Filtration Systems (Aust) Pty Ltd
v
Craig Erskine
(C2012/6681)
SENIOR DEPUTY PRESIDENT ACTON
DEPUTY PRESIDENT SMITH
COMMISSIONER ROE MELBOURNE, 24 APRIL 2013
Appeal against decision [[2012] FWA 10248] and order [PR532022] of Senior Deputy
President O’Callaghan at Adelaide on 10 December 2012 in matter number U2012/7362 -
Small Business Fair Dismissal Code - belief at dismissal - reasonable grounds.
Introduction
[1] Steri-flow Filtration Systems (Aust) Pty Ltd (SFS) has appealed a decision1 and order2
of Senior Deputy President O’Callaghan concerning an unfair dismissal remedy application
made to Fair Work Australia (FWA) by Mr Craig Erskine. On 1 January 2013 FWA was
renamed the Fair Work Commission (FWC).
[2] In the decision the Senior Deputy President concluded that he was not satisfied
Mr Craig Erskine’s dismissal by SFS was consistent with the Small Business Fair Dismissal
Code. His Honour also found that Mr Craig Erskine’s dismissal was harsh, unjust or
unreasonable, that his dismissal was unfair and that he should be paid four weeks’ pay less
taxation by SFS as compensation in lieu of reinstatement. The Senior Deputy President made
an order to that effect.
Relevant background
[3] SFS designs industrial filtration and separation systems and manufactures its patented
systems.
[4] SFS was registered as a company by Mr Gilbert Erskine, the father of Mr Craig
Erskine, in 1989. Mr Gilbert Erskine was Managing Director of SFS until he resigned on
31 August 2011.
[5] Around 2000, SFS suffered a major loss and sought an investor. In 2005, the Rosen
Group (RG) invested capital into SFS becoming a 25% shareholder and appointing a Mr Ian
Fong as a Director of SFS. Mr Gilbert Erskine’s other company, LGE Pty Ltd (LGE),
became a 75% shareholder in SFS and Mr Gilbert Erskine remained as Managing Director of
AUSTRALIA FAIR WORK COMMISSION
[2013] FWCFB 1943
2
SFS. Over time RG invested more capital into SFS. By 2008, RG was a 75% shareholder in
SFS and LGE a 25% shareholder.
[6] Mr Craig Erskine was first employed by SFS on 4 September 2003 and remained
employed by SFS until his dismissal on 13 April 2012.
[7] On 10 February 2009, Mr Gilbert Erskine set up and registered a company named
Steri-flow Technologies Pty Ltd (SFT). Mr Craig Erskine was made the sole shareholder and
director of SFT. However, it was Mr Gilbert Erskine who was “effectively in control of
[SFT] from the time of its registration”.3 At the time Mr Craig Erskine was an employee of
SFS. Mr Gilbert Erskine became a director of SFT in December 2012, resulting in Mr Craig
Erskine being the sole shareholder in SFT and he and Mr Gilbert Erskine being its two
directors.
[8] In January 2011, Mr Paul Draper, the General Manager of SFT, asked Mr Gilbert
Erskine for permission to use a mould owned by SFS to manufacture separator plates for a
Queensland customer of SFT to use in filtering lemon oil. Mr Draper had previously been an
employee of SFS. The mould was physically held by a manufacturing company called Gadac
Plastics Pty Ltd (Gadac) in South Australia. At the time Mr Gilbert Erskine was not only the
Managing Director of SFS but also “effectively in control of SFT”. Mr Gilbert Erskine, as
Managing Director of SFS, authorised SFT to so use the mould of SFS. However, the SFS
mould was not actually used by SFT to manufacture the separator plates until after Mr Gilbert
Erskine resigned as Managing Director of SFS. On becoming aware that Mr Gilbert Erskine
had resigned as Managing Director of SFS, Mr Draper did not consider it necessary to
confirm that SFT still had the permission of SFS to use the mould for the manufacture of the
separator plates.
[9] Mr Fong became Executive Director and Secretary of SFS on 1 September 2011.
[10] On 13 February 2012, Mr Fong sent an email to Mr Craig Erskine asking him for the
name of the supplier in Adelaide who manufactured the plates for SFS as SFS needed the
mould for the plates. On 14 February 2012, Mr Craig Erskine sent an email to Mr Fong
advising him that boxes of spare plates and the mould were at a store in Malaysia. Mr Fong
had this investigated and ascertained that the mould was not at the store in Malaysia.
Mr Fong subsequently discovered the mould was at Gadac and that the mould had been used
by SFT to manufacture separator plates in October 2011.
[11] On 13 March 2012, Mr Fong confronted Mr Craig Erskine about SFT using the mould
of SFS to have the separator plates made for SFT. Mr Craig Erskine told Mr Fong he had no
idea what Mr Fong was talking about.
[12] On 14 March 2012, Mr Fong sent a letter to Mr Craig Erskine as follows:
“Dear Craig,
Re: Unauthorized Use of Company Property for Personal Benefit
Thank you for meeting me in Adelaide yesterday.
As put to you, I have been told that you have been conducting secret business without the company’s
knowledge.
[2013] FWCFB 1943
3
I have also been told, and given documents, that your company Steri-flow Technologies Pty Ltd had
used the company’s tooling at Gadac Plastics to make our proprietary separator plates for a customer in
Queensland.
I have done a company search and note that you are a director and the sole owner of Steri-flow
Technologies Pty Ltd.
I have given you a copy of the documents. I also now enclose a detailed note of our conversation
yesterday as recorded by Albert Peng.
The company views unauthorized use of company assets and intellectual property for personal business
or benefit by an employee as a very serious offence. The action is tantamount to serious and gross
misconduct.
I note you have denied any knowledge of any of the allegations put to you above. I am giving you
another opportunity to submit your right of reply in writing.
Please respond to this letter by close of business next Wednesday 21th March 2012.
Yours sincerely
Steri-flow Filtration Systems (Aust) Pty Ltd
[Signature]
Ian Fong
Director and Company Secretary
encl”.4
[13] The enclosed detailed note of the conversation between Mr Fong and Mr Craig
Erskine was as follows:
“Record of Meeting between Ian Fong in his capacity as a director of Steri-flow Filtration Systems
(Aust) Pty Ltd and Craig Erskine in his capacity as an employee of Steri-flow Filtration Systems
(Aust) Pty Ltd.
Recorded by Albert Peng of Melrose Park, SA
Time 9:30am - 10:00am Tuesday 13/03/2012 at 71 Jetty Road Brighton SA
Ian: Everything well?
Craig: Everything is good.
Ian: I would like to talk to you about a couple of serious matters.
Craig: Yes?
Ian: I have been told you have been running a secret business behind the company's back.
Craig: No, I have no idea what you are talking about.
Ian: Are you sure? I have been told by a few people.
Ian: I also have some documents from Gadac Plastics to suggest you are.
Craig: I thought you came here to talk with me alone. I asked for an agenda and did not get any.
You said you would be coming alone yourself.
Ian: I was but this has become a very important matter and I need someone here to take notes.
[2013] FWCFB 1943
4
Craig: You told me you were going come along yourself but you came with a boy I don’t know.
Who's this boy?
Ian: He is employed by Steri-flow to upgrade our website. I asked him to come here to take some
notes. I am here talking to you as a director and you are an employee of the company. Iwill act in
the best interest of the company and I can bring anyone I see necessary.
Ian: Now can we get back to the subject? Are you doing secret business behind the company?
Craig: I have no idea. I don’t know what you are talking about.
Ian: I would like to show you some documents.
Ian: This is an email from Gadac saying that you owe them money.
Craig: I don’t know what you are talking about.
Ian: These are couple of invoices from Gadac to Steri-flow Technologies.
Ian: You are a director and the owner of Steri-flow Technologies.
Ian: I have been told you used our tooling to make separator plates for a job in Queensland.
Ian: The tooling belongs to the company, the separator plates are the company’s IP.
Craig: I have no idea what you are talking about.
Ian: Can you explain the invoices?
Craig: I don't have any explanation.
Ian: Can you explain any of these matters I have brought up? I need some explanation.
Craig: No idea.
Ian: Craig, this is a very serious offence. And I am giving you an opportunity to explain face to face.
Craig: I have nothing to say.
Ian: I would like an explanation from you. Are you sure you have nothing to say?
Craig: I didn't know this man would come with you.
Craig: You said you bring an agenda.
Ian: I have now told you what is it about and I am giving you every opportunity to respond.
Craig: I don't know what you are talking about.
Craig: You didn't sayanything about this last week.
Ian: I was only made aware of the invoices last week. You can see this Gadac email was sent to me
last week. They contacted me for money.
Craig: yes, the 7th of March, you could have told me before this.
Craig: I am not going to answer any more questions. Does he have to write it down word by word?
Ian: I need him to take notes of this meeting so we have accurate record and there is no dispute from
you in the future on what was said.
[2013] FWCFB 1943
5
Craig: Are you calling me a liar?
Ian: Well so far you haven’t been truthful to me in this matter.
Craig: How?
Ian: Look at this email. I asked you previously where the mould for the plates were, and you said that
the mould was at Summit, when you knew full well that it was at Gadac.
Craig: Well the plates were at Summit.
Ian: We are talking about the mould.
Ian: Perhaps you would like put a response to me in writing?
Craig: Maybe.
Ian: I believe this email and invoices are for you or your mum.
(Ian gives Craig the papers)
Ian: This is a company search of Steri-flow Technologies. This is my only copy. I am sure you
already know who the directors and owner of the company are.
Craig: Give it to me.
Ian: You would already have the details.
Craig: Ok, I’m leaving. Catch you.
Craig Erskine gets up and left the meeting at about 10.00am”.5
[14] On 15 March 2012, Mr Fong sent a letter to SFT as follows:
“Steri-flow Technologies Pty Ltd
Att: Mr Craig Erskine, Director and Mrs Lorna Erskine, Director
[Address]
(by email - original in post)
Dear Sir and Madam
Re: Unauthorized Use of Property Belonging to Steri-flow Filtration Systems (Aust) Pty Ltd
1. It has come to our attention that Steri-flow Technologies Pty Ltd has, without permission or
authority, used proprietary tooling belonging to Steri-flow Filtration Systems (Aust) Pty Ltd at
Gadac Plastics to make a number of separator plates for a job in Queensland. The
unauthorized use of our property is a serious offence.
2. We have pending patent application on our separation process and apparatus which includes
the separator plates. We take any infringement of our intellectual property very seriously.
3. We require Steri-flow Technologies Pty Ltd and its directors to immediately:
a) cease all work with your separation process and apparatus including the plates;
b) hand over your separation apparatus and plates;
c) hand over all documents relating to the use of the separation plates; and
d) disclose the identities of your customers who have used or trialed the process.
[2013] FWCFB 1943
6
4. We put Steri-flow Technologies Pty Ltd and its directors on notice that we reserve our rights to
all legal and financial remedies for the unauthorized use of our proprietary property, and for
potential breach of our intellectual property.
5. If an adequate response is not received from you by close of business Thursday 22nd March
2012, we will enforce our rights as we deem fit.
6. This notice is written without prejudice to our rights, all of which are hereby expressly
reserved.
Yours sincerely
Steri-flow Filtration Systems (Aust) Pty Ltd
[Signed]
Ian Fong
Director and Company Secretary”.6
[15] On 19 March 2012, Mr Craig Erskine sent an email to Mr Fong with a copy to
Mr Gilbert Erskine which contained the following:
“Dear Ian,
I have CC Gilbert in on this email.
Not only were you dishonest about meeting me, the notes of the meeting are not truthful.
I asked you for an agenda for the meeting, you said there was none. (this is incorrect you had
a set agenda).
I asked who was to be present, you said you and I. (this is incorrect; you brought a child to the
meeting).
I did not agree to a third party at the meeting taking notes.
The minutes you have provided are incorrect and not representative to the meeting.
The minutes show wording missing and words have been added.
The minutes show words that you said quoted as I said and I did not.
The minutes show quoted words that I was meant to have said, words I have never used in my
life.
The start time of the meeting is incorrect, as you were late.
The finish time of the meeting is incorrect, the meeting finished well before 10 am.
I do not agree on these minutes, I never gave consent in the first instance and the minutes are
false.
If you were honest and open about meeting me:-
I could have had relevant information.
I could have had personal attend, who could have helped.
It would have been a more productive meeting.
I wish you had just been open and honest and we could have met under more refreshing
circumstances and discussed and got to the bottom of your claims.
Before the meeting started you had put me in a disappointing frame of mind, due to you once
again, going back on your word. You had put me in an uncomfortable position by bringing
someone to the meeting, when you clearly said you will be alone.
As you never provided an agenda, my thoughts were that we were meeting to discuss me going
to Malaysia to help commission the plant and equipment, which I would have been happy to
do. Not for you or Hin Choong as you both show disrespect, aggression and hatred towards
[2013] FWCFB 1943
7
me, but I would have went for Mr. Yap and Gilbert even though they have both broken
promises to me, I did feel it would be respectful to them to complete the task.
Was this your intensions?
Is this another attempt by you to sack me without my redundancy, just like when you had me
followed, and just like your Malaysian partner telling me that I can quit but he is not going to
pay me out? I have more, but I will keep that for another day.
Another issue Ian is you bad mouthing me in Malaysia and Australia; this is a serious matter to
publically tell people incorrect information, lies.
What is this secret business?
You knew, Cheong knew and Mr. Yap knew about the business, so don't try this on now Ian.
The company is old.
The company was used to purchase equipment, which was utilized by Steri-flow Filtrations.
The company employed staff, which was utilized by Steri-flow Filtrations, when you would not
hire staff to undertake the jobs.
If it was not for the business then the plates, membrane and others would not have been
developed or manufactured.
Steri-flow Filtration is indebted to the business, as if it was not for the business then, Steri-flow
Filtration would not have been able to complete tasks.
I don't have any dealings or the running of the company, I have never worked for the company, I
merely use the company to purchase equipment, which was utilized by Steri- flow Filtration.
In-fact Ian you were offered to rent the equipment, when you shut Adelaide down and told us
you were considering moving Steri-flow Filtration R&D to Sydney, but you declined the offer,
you would remember this as this is the same time you tried to convince Paul and Jeff to travel to
Sydney to work.
This is the same equipment that Cheong asked me in a sneaky fashion to write and give him all
the information of the machines so you can repurchase for Sydney R&D, so you don't have to
pay rent to the business for the use of the machines.
Steri-flow Filtration used for the development of the plates and the membrane with no
compensation for the use of the company's equipment, personal or knowledge.
Regards, Craig”.7
[16] Mr Gilbert Erskine also sent an email to Mr Fong on 19 March 2012 as follows:
“Ian,
I have just read your email to Craig and I am nothing short of disgusted at your tone and actuations
towards him and the company.
There are a few facts that I will go through. The first one being, Paul Draper the then manager of Steri-
Flow Technologies approached me and asked if they could do some trials using the settling plates on a
waste material, to replace a DAF unit. If successful could have opened up a large market for Steri-Flow
Filtration.
As the Managing Director and 25% Shareholder of Steri-Flow Filtration, I had the authority and agreed
that it was a good opportunity; possibly even mean that Steri-Flow Filtration would remain here in
Adelaide. I am sure that Paul would have records of that. As it turned out the trials did not go well.
The other points that need to be stated are; Steri-Flow Filtration did not develop the plate design or the
small lumen membrane in their entirety.
[2013] FWCFB 1943
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As you were well aware, I took on the R&D team when you made them redundant well over three years
ago.
I paid their wages and salaries during the development of both the plates and the small lumen.
Craig purchased the equipment that was necessary to develop and produce the small lumen membrane.
I was perfectly within my rights to put the patents in the name of Steri-Flow Technologies, but chose
instead to register them in the name of Steri-Flow Filtration. This was done in good faith and belief that
the promises made by Mr. Yap to keep membrane manufacturing and the R&D here in Adelaide would
have been upheld.
Given the facts that those promises were not kept, the fact that you have moved everything off shore to
Malaysia, the way that you continue to conduct yourself has made me have a rethink.
I now intend to seek legal advice on challenging the legal ownership of those patents.
The whole re-site program has in my opinion been very poorly managed by you. If you had properly
engaged in conversation with me and had been open about what your intentions were from the start.
I would have been able to have had some input.
If it had been thought through, you would have been far better to have kept Adelaide running for
another few months, in that time you would have had access to the people that set-up the plant
originally. Following the set-up of the standard isostatic membrane production in Malaysia, could have
been the small lumen.
But you decided to close down Adelaide, sack everyone and that somehow you could get the plant all
set back up by using a process worker, working from memory, not the necessary knowledge or theory,
leaves me bewildered. You have in my belief risked the very survival of Steri-Flow Filtration and more
important you have risked Mr. Yap and LGE’s investment in Steri-flow Filtration.
This obviously has to be sorted out at a higher level than you and as such I have included Mr Yap and
Hin Choong Low in this correspondence.
Regards,
Gilbert”.8
[17] On 20 March 2012, Mr Fong responded to Mr Gilbert Erskine as follows:
“I am a director of Steri-flow Filtration Systems (SF) and I have a duty to act in the best interest of the
company and the shareholders. I had been told and given documents suggesting Steri-flow
Technologies, a company owned by Craig, and who lists Craig as a director, has been conducting
business and built a system for a project in Queensland and had used SF property without permission or
authority in doing so. I have a responsibility to confront him as an employee and ask for a proper
formal explanation. I have a responsibility to send Steri-flow Technologies a formal notice to cease
using SF property and deliver the system and other information for our assessment. This is a serious
matter and I had to bring a person to take notes. Shareholders would be disappointed if I did not carry
out my duty properly.
I have checked all the correspondences between us and this is the first you have told me about Steri-
flow Technologies. You had mentioned "Craig's company" in the past and told me he only used it to
purchased 2 second hand high temperature furnaces from Solatech at a significant discount to
replacement value with a view to selling it off to potential buyers in the UK for a significant profit. It
was not an operating company and there was no conflict of interest.
[2013] FWCFB 1943
9
Why would Paul Draper, as manager of Steri-flow Technologies, ‘approach’ you? Steri-flow
Technologies is owned by Craig, and Craig and Lorna are the directors of the company. Was Paul
Draper really an employee of Steri-flow Technologies? If so, could you provide his pay slip or the
PAYG statement of Steri-flow Technologies to let me verify your facts?
In relation to what the separator plates were used for, could you please provide me the name of the
customer and where the trials were conducted? Could you also produce a copy of the trial report for the
record? I would like to verify the facts and get to the bottom of the matter.
You were the Managing Director until you resigned on 31 August 2011. SF property was used and the
plates were produced by Gadac in September and October 2011 ie after you had resigned. With due
respect, you had no authority to give permission to Steri-flow Technologies to use SF property.
I have checked the patent application for the separator plates. The inventors are you, Craig and Jeff
Norton. Craig and yourself were full time employees of SF. I understand Jeff was an employee up until
2008 and subsequently did some work on an as required basis. I have emails advising SF indeed
reimbursed and paid for his hours through invoices from Paul Draper's company called Regal. A proper
audit will also show that SF paid for all other R&D costs - including materials, utilities, workspace rent,
furnace, people, repairs and maintenance, other equipment, lab costs and the use of the electron
microscope at Adelaide University.
I am not sure what equipment of Craig's was used by SF. I believe most of his equipment were not
used, they were not even commissioned. For example, the high temperature furnaces from Solatech
could not be used because there was not enough power at the workshop. I understand the machinery for
extrusion were modified, repaired and maintained using SF's funds and assets.
From your email it would seem there have been many related party transactions which you have not
disclosed to the company and directors which are now only surfacing? Could you provide a full list?
The patents were put under SF because SF funded the development. This is further supported by your
statutory confirmations to the various government bodies and tax office in the periodical commercial
ready grant updates and in annual R7D tax concession submissions.
As for your statements in relation to promises regarding retaining manufacturing and R&D in Adelaide,
the facts are this:
It was not viable to retain manufacturing in Adelaide as SF did not have any orders or any customers.
You yourself brought up and proposed the relocation of the manufacturing function to Malaysia in
December 2010 (check your email). This was followed by a meeting in Sydney·in January 2011. You
have a copy of the note (again please check your email).
The decision to establish a R&D division in Adelaide would have been upheld if SF had been able to
secure Jeff Norton's services. You advised me that he was the crucial factor as you had not been
involved in the development of the small lumen at all, and that Craig had been away in Malaysia for too
long and was not up to speed on the small lumen. With your agreement, I offered Jeff the same pay and
terms as when he was the R&D manager of SF. Unfortunately, he declined the offer. Secondly, we
agreed that it was going to be too costly to set up a short term facility for only a few months in Adelaide
- the new facility would cost over a hundred thousand and the landlord wanted a lease of 10 years.
Thirdly, it was not viable to have the R&D at the existing Lonsdale workshop as the lease was expiring
and it did not have the power to operate Craig’s equipment. Lastly, as the final effort, we asked you to
remain with the company to oversee R&D in Adelaide after the relocation but you yourself declined.
These are the facts and they can be supported by written correspondences.
I do believe it is time the whole matter is brought before the court system. The truth of the events of the
last 6 years can finally come out in the open under oath. The facts can finally be established and a
resolution to the whole matter can determined, one way or the other.
As for your accusations about the re-site being poorly managed, may I remind you that you were the
MD and you were responsible for and managed the relocation? You decided what machinery and
equipment went to Malaysia. You were responsible for the condition of the machinery and equipment
[2013] FWCFB 1943
10
that went to Malaysia. You were responsible for proper handover notes and drawings and operating
manuals. You recommended we hire Zac to go over to supervise and train. You told us that Craig was
going over to oversee the installation and commissioning. You gave your undertaking and commitment
to provide your assistance as and when required. All these elements are important as it underwrote any
risk of relocating the manufacturing to Malaysia. I have an email from you confirming that it should
not take more than 1 month to get production started.
As it turned out, the relocation was indeed badly managed. There was a long list of machinery and
equipment missing from Adelaide. There was machinery and equipment that was broken or needed
repair. In particular, the furnace was in a terrible condition with many broken parts. You had used the
furnace to conduct many R&D activities and left it is less than satisfactory condition. You asked Fauzi
to go over to Adelaide to get some training and you could not even do a production run and train him.
You knew Craig was not going to Malaysia yet let all the relocation plans for the installation and
commissioning to centre around him. You handed over drawings in PDF which our third party
manufacturers cannot understand and require the soft copies to interpret. When asked to provide
properly labeled and matching soft copies of drawings you told me that you have trouble getting hold of
Scott to do it - this when it seems Scott has been working for Craig and yourself all this time over the
last 6 months!
Contrary to what you claim, you are the one who is risking the very survival of Steri-flow and the
shareholders investment in the company. You gave your commitment and undertaking to provide your
assistance as and when required. Your advice recent advice that you will not provide assistance just
when the new factory is ready for commissioning unless we purchase your shares in SF to contra and
extinguish your personal loan is pure blackmail. Your undertaking to provide assistance should not be
used as leverage on this matter. You are effectively holding SF to ransom. The consequences of your
action will harm SF and shareholders and creditors will lose their investment in the company. Your
shares are worthless if the company does not have a operating manufacturing factory or if there are
delays in doing so. Hin Choong has already advised you that he is willing to meet and discuss the
matter of your shares and loans with you when you go to Malaysia for commissioning.
These are the real facts and supporting information are at hand.”9
[18] On 21 March 2012, SFT sent a letter to SFS as follows:
“Steri-flow Filtration Systems [Aust] Pty Ltd
[Address]
[by email - original in post]
Attention: Ian Fong
Dear Sir,
I am in receipt of your letter dated 15 March 2012.
Lorna Erskine is not a Director of Steri-flow Technology Pty Ltd and will not be responding to this
letter. You are well aware of this fact as you stated in your letter to me dated the 14 March 2012 that I
was a Director and the sole owner.
1. Steri-flow Technology Pty Ltd received permission and authority to use the toolong at Gadac
Plastics from a Director of Steri-flow Filtration Systems [Aust] Pty Ltd.
2. There was no infringement of Steri-flow Filtration Systems [Aust] Pty Ltd Intellectual
Property.
3. There is no need to hand over anything as permission and authority was given.
4. There is no need to put Steri-flow Technology Pty Ltd on notice as there was no unauthorised
use of property, and no potential breach of Intellectual Property.
5. Response sent.
[2013] FWCFB 1943
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6. Without Prejudice.
Yours faithfully,
[Signed]
Craig Erskine
Director”.10
[19] On 22 March 2012, Mr Craig Erskine sent an email to Mr Fong and Mr Gilbert
Erskine as follows:
“Dear Ian,
Just reflecting on your red reply below, and it brings a memory to mind in regards to Steri-flow
Filtration purchasing the equipment I went into dept for, for the development of the membrane, you will
remember as I go on.
There was a large dept that I had incurred personally for the benefit of Steri-flow Filtration, which you
are well aware off.
Just before one trip back to Australia from Malaysia, I had a meeting with Mr. Yap, and he had brought
up that I had paid for equipment for Steri-flow Filtration to use to help develop the small membrane.
Mr. Yap said that he appreciated my devotion to the company but it should be the company that pays
for the equipment not me personally and it was a large sum of money for someone as young as me.
Mr. Yap had said that upon my return to Adelaide, Ian will meet with me and talk about transferring the
money so the company owns the assets for the small membrane manufacturing.
A week later after returning to Adelaide, you had set up a time to meet with me in Adelaide. We both
got together in the board room to chat about your agenda, you had a few pages, which we worked
through except one of your items on your agenda list, you would remember this one now, the one item
on your agenda list that you never brought up was the equipment, in fact you skipped right over it, and I
remember the little smile on your face. I can see the event clear in my mind, as 1. Mr. Yap said it was
going to happen, 2. I was happy as I was so far in dept, it would have been a relief. I could see it on
your list, I could read your list from the side, and you might not have thought I could see it, but I did.
So you never brought it up and it was never discussed, even though it was on your list and Mr. Yap had
told you to talk to me about it.
Just on a different subject; I greatly appreciate the time I spend with Mr. Yap, listening and learning,
understanding business at a high level, and his knowledge; but you know out of all the wisdom and
knowledge Mr. Yap soaked into my mind, is he is a great believer of surrounding himself with the right
people to do the job, using the expertise of the skilled in their own rightful occupation to complete the
task's put before them, using the academics where there suited, the engineer where they have input, right
down to the girl that serves you coffee, use the people where they are skilled to finish the job.
Best regards, Craig”.11
[20] Mr Craig Erskine’s employment with SFS was terminated by a letter dated 13 April
2012. The letter was as follows:
[2013] FWCFB 1943
12
“Mr Craig Erskine
[Address]
By Post & Email:…
Dear Mr Erskine
Re: Termination of your Employment
I refer to our meeting on 13 March 2012, my letter to you dated 14 March 2012 (which enclosed a copy
of the Minutes of the meeting) and your email to me sent 19 March 2012.
I refer to your statement that I was dishonest about the meeting and that the notes of such meeting were
not truthful. I deny that I was dishonest about the meeting and further that the Minutes are not an
accurate record of the meeting. I note in this regard that during the meeting you complained about the
Minute taker writing down word for word what was being said by us at the meeting.
I confirm that it came to my attention in late February 2012 that a company known as Steri-flow
Technologies Pty Ltd (“Steri-flow Technologies”) had commissioned Gadac Plastics Pty Ltd
(“Gadac”) to produce 3,000 Separator Plates in October 2011 using Steri-flow Filtration Systems (Aust)
Pty Ltd (“the Company”) unique Separator Plate tooling which is held by Gadac at its workshop at
Camden Park. I confirmed this with Gadac. Please find enclosed copies of letter from Gadac dated
1 March 2012 and invoices to Steri-flow Technologies dated 5 and 13 October 2011.
I confirm that at the time that Gadac was commissioned to produce the Plates you were a director and
the sole owner of Steri-flow Technologies. I note that since the Plates were produced by Gadac, your
father, Gilbert has become a director of Steri-flow Technologies.
The use of the Company’s Separator Plate tooling by Steri-flow Technologies was done without any
proper authorisation from the Company. As you have been previously informed, this matter is extremely
serious as it involves the unauthorised use of the Company’s assets and intellectual property which was
not only of benefit to yourself but also detrimental to the Company.
As an employee of the Company you have strict common law duties of good faith and fidelity to at all
times act in the best interests of the Company and in particular not act in any way whatsoever to the
detriment of the Company. This is especially the case when such actions provide you with a potential
personal benefit. As an employee of the Company you also have strict obligations under Section 182 of
the Corporations Act 2001 not to improperly use your position to gain an advantage for yourself or
someone else or cause detriment to the Company.
You have clearly breached both your common law and statutory duties as an employee. Your conduct
amounts to serious and wilful misconduct.
At the meeting on 13 March 2012 you denied having any knowledge whatsoever about firstly Steri-flow
Technologies and secondly the production of the Plates for Steri-flow Technologies by Gadac. This is
even though I showed you the invoices from Gadac and also a company search of Steri-flow
Technologies which showed you as a director. Even in your subsequent email to me sent 19 March
2012 you refused to acknowledge your full involvement with Steri-flow Technologies and the
production of the plates by Gadac.
You then as a director of Steri-flow Technologies wrote a letter to the Company dated 21 March 2012.
In such letter you stated that Steri-flow Technologies had received permission and authority to use the
Separator Plate tooling from a director of the Company. I assume that reference is to your father,
Gilbert. Firstly as you are well aware Gilbert resigned as Managing Director of the Company on
31 August 2011. Since that time I have been the sole executive director of the company and you have
been required to report to me. The only person who could have validly given authorisation for use of
the Company’s Separator Plate tooling was myself. I have at no time ever given such permission.
Furthermore your father clearly had a conflict of interest.
[2013] FWCFB 1943
13
For you to suggest that Steri-flow Technologies was given proper authorisation to use the Company’s
Separator Plate tooling is nonsense. If you did in fact think that there was nothing wrong with
Steri-flow Technologies commissioning Gadac to make the Plates why did you not simply request my
permission to do so?
Both your conduct as a director and sole owner at the time of Steri-flow Technologies’ use of the
Company’s Separator Plate tooling and your subsequent conduct of refusing to admit to your
involvement with Steri-flow Technologies at our meeting on 13 March 2012 amounts to serious and
wilful misconduct.
The Company hereby summarily terminates your employment. I note that you have been paid salary up
to and including today. You will also receive payment for accrued annual leave for the period
1 September 2011 (when management of the Company was effectively taken over from your family) to
today. As the Company does not have any records as to your annual leave prior to such date it will not
be paying any further accrued annual leave until you provide satisfactory evidence that you are entitled
to the same. You will not receive payment for any long service leave.
Yours sincerely
Steri-flow Filtrations Systems (Aust) Pty Ltd
[Signed]
Ian Fong
Director and Company Secretary”.12
Relevant law
[21] Section 385 of the Fair Work Act 2009 (Cth) (FW Act) provides that a person has been
unfairly dismissed if the FWC is satisfied that:
“(a) the person has been dismissed; and
(b) the dismissal was harsh, unjust or unreasonable; and
(c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and
(d) the dismissal was not a case of genuine redundancy.
Note: For the definition of consistent with the Small Business Fair Dismissal Code: see section 388.”
[22] Section 387 of the FW Act concerns whether a dismissal was harsh, unjust or
unreasonable and provides as follows:
“(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
[2013] FWCFB 1943
14
(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.”
[23] Section 388 of the FW Act concerns the Small Business Fair Dismissal Code (the
Code) and provides as follows:
“(1) The Minister may, by legislative instrument, declare a Small Business Fair Dismissal Code.
(2) A person’s dismissal was consistent with the Small Business Fair Dismissal Code if:
(a) immediately before the time of the dismissal or at the time the person was given
notice of the dismissal (whichever happened first), the person’s employer was a small
business employer; and
(b) the employer complied with the Small Business Fair Dismissal Code in relation to the
dismissal.”
[24] The Code is as follows:
“Small Business Fair Dismissal Code
Commencement
The Small Business Fair Dismissal Code comes into operation on 1 July 2009.
Summary Dismissal
It is fair for an employer to dismiss an employee without notice or warning when the employer believes
on reasonable grounds that the employee’s conduct is sufficiently serious to justify immediate
dismissal. Serious misconduct includes theft, fraud, violence and serious breaches of occupational
health and safety procedures. For a dismissal to be deemed fair it is sufficient, though not essential, that
an allegation of theft, fraud or violence be reported to the police. Of course, the employer must have
reasonable grounds for making the report.
Other Dismissal
In other cases, the small business employer must give the employee a reason why he or she is at risk of
being dismissed. The reason must be a valid reason based on the employee’s conduct or capacity to do
the job.
The employee must be warned verbally or preferably in writing, that he or she risks being dismissed if
there is no improvement.
The small business employer must provide the employee with an opportunity to respond to the warning
and give the employee a reasonable chance to rectify the problem, having regard to the employee’s
response. Rectifying the problem might involve the employer providing additional training and
ensuring the employee knows the employer’s job expectations.
[2013] FWCFB 1943
15
Procedural Matters
In discussions with an employee in circumstances where dismissal is possible, the employee can have
another person present to assist. However, the other person cannot be a lawyer acting in a professional
capacity.
A small business employer will be required to provide evidence of compliance with the Code if the
employee makes a claim for unfair dismissal to Fair Work Australia, including evidence that a warning
has been given (except in cases of summary dismissal). Evidence may include a completed checklist,
copies of written warning(s), a statement of termination or signed witness statements.”
[25] The summary dismissal aspect of the Code was considered by a Full Bench of FWA in
Pinawin T/A RoseVi.Hair.Face.Body v Domingo.13 The Full Bench stated:
“[29] ... There are two steps in the process of determining whether this aspect of the Small Business
Fair Dismissal Code is satisfied. First, there needs to be a consideration whether, at the time of
dismissal, the employer held a belief that the employee’s conduct was sufficiently serious to justify
immediate dismissal. Secondly it is necessary to consider whether that belief was based on reasonable
grounds. The second element incorporates the concept that the employer has carried out a reasonable
investigation into the matter. It is not necessary to determine whether the employer was correct in the
belief that it held.
[30] Acting reasonably does not require a single course of action. Different employers may
approach the matter differently and form different conclusions, perhaps giving more benefit of any
doubt, but still be acting reasonably. The legislation requires a consideration of whether the particular
employer, in determining its course of action in relation to the employee at the time of dismissal, carried
out a reasonable investigation, and reached a reasonable conclusion in all the circumstances. Those
circumstances include the experience and resources of the small business employer concerned.”
[26] Section 396 of the FW Act requires the FWC to decide whether a dismissal was
consistent with the Code before considering the merits of an unfair dismissal remedy
application.
Senior Deputy President’s decision
[27] In respect of whether SFS had complied with the Code in relation to Mr Craig
Erskine’s dismissal, the Senior Deputy President said:
“[34] In general terms, where an employee engaged in research and development work, is found to
be the Director and sole shareholder of another company which could be shown to be using the
employer's property without express authorisation and, in effect, competing with it, is most likely
demonstrating serious and wilful misconduct.
[35] However, the facts of this particular case are somewhat unique. There is a complex corporate
structure with individuals appearing to operate without regard to the duties they owed to the differing
corporate entities. In effect, the boundaries have become blurred and the apparently poor
communication between the various parties has not assisted.
[36] I have concluded that it was most likely that Mr Fong was aware, for some time, of the
existence of at least one company in which Mr C Erskine had a financial interest and which had
research capabilities related to the SFS business. In this respect, I have noted Mr G Erskine’s advices of
February 2011 relative to the establishment of an independent company. I am satisfied that advice to
this effect was sent to an associate of Mr Fong's. I have noted that e-mail exchanges which included
Mr Fong, in April 2011 referred to equipment purchased by Mr C Erskine.
[2013] FWCFB 1943
16
[37] Thirdly, Mr G Erskine’s e-mail of 19 March 2012 clearly advises Mr Fong that he had
authorised the transactions of concern to Mr Fong whilst he was the SFS Managing Director. If
Mr Fong had residual concerns over the authorisation of the use of the moulds these could have been
easily clarified by simply confirming if Mr G Erskine had authorised that action during his tenure as
Managing Director.
[38] I have noted that the Checklist associated with the Small Business Fair Dismissal Code has not
been completed. Despite this, I have noted that Mr Fong gave Mr C Erskine an opportunity to respond
to his allegations. Mr C Erskine took up that opportunity but I have concluded that he did so in the
context of what he understood were known facts about the operation of ST. It is trite to say that it is a
great pity that he did not detail any of these understandings properly.
[39] In the particular circumstances of this case I have concluded that Mr Fong did not carry out a
reasonable investigation and that his conclusion could not be regarded as reasonable in all of the
circumstances. The acrimonious relationship between Mr Fong and Mr G Erskine and Mr Fong’s
dubious evidence about his knowledge of at least one other entity involving Mr C Erskine means that
more substantial investigation should reasonably have been undertaken in order to substantiate
Mr Fong's allegations.
[40] Hence, I am not satisfied that the termination of Mr C Erskine’s employment was consistent
with the Small Business Fair Dismissal Code.”14 [Endnotes omitted]
[28] The Senior Deputy President then turned to consider whether Mr Craig Erskine’s
dismissal by SFS was harsh, unjust or unreasonable. The Senior Deputy President said:
“Valid Reason
[42] I consider that Mr C Erskine’s continued directorship and ownership of a company which was,
by mid April 2012, clearly in conflict with his employer, represented a valid reason for the termination
of his employment. When considered objectively, the relationship was simply unsustainable given the
extent of the conflict between Mr Fong and the Erskine family, including Mr C Erskine.
[43] In dispute between the parties were issues of intellectual and other property ownership,
competition involving ST, with Mr C Erskine as its ‘owner’, the future of SFS and the inability of
Mr C Erskine and Mr Fong to agree on an ongoing employment arrangement in Malaysia. Any one, or
combination of these could represent a valid reason for the termination of employment but I am not
satisfied that they support summary dismissal.
[44] In effect, Mr C Erskine’s employment termination was the collateral damage emanating from
the disintegration of the Erskine-SFS relation. I am satisfied that this disintegration and Mr C Erskine’s
ownership of ST represented valid reasons for the termination of Mr C Erskine’s employment but I do
not think that Mr C Erskine’s behaviour as an employee could be described as serious and wilful
misconduct so as to warrant summary dismissal simply because, while that arrangement was approved
in Mr G Erskine’s time as Managing Director, it was not appropriate when Mr Fong became the
Managing Directors.
Notification of the reason
[45] The 13 April 2012 termination of employment letter detailed the basis for the termination of
Mr C Erskine’s employment. This letter specified a number of allegations which I have concluded
ignored the contrary advice which was available to Mr Fong relative to the actions taken by ST. In
particular, Mr Fong did not take account of the advice provided to him by Mr G Erskine.
Opportunity to Respond
[46] Mr Fong did give Mr C Erskine an opportunity to respond to the proposition that his
employment could be terminated. Mr C Erskine did not properly avail himself of that opportunity.
[47] This factor mitigates in favour of the termination of employment being fair.
[2013] FWCFB 1943
17
Unreasonable refusal to have a support person present
[48] Mr C Erskine did not actually request a support person. However, the manner in which the
13 March 2012 meeting was convened by Mr Fong, did not give him the opportunity to do so.
[49] To the extent that Mr G Erskine, through his emails of 19 and 20 March 2012 was acting as a
support person for his son, Mr G Erskine’s advice appears to have been largely ignored.
Unsatisfactory Performance
[50] There are no work performance issues as such at the heart of this matter.
Size of the employer’s establishment - procedures followed
[51] I have taken into account the small size of SFS and have concluded that there were no
established procedures relevant to this matter.
Size of the employer’s establishment - access to human resource management expertise
[52] I have concluded that Mr Fong had no access to human resource management expertise.
Other matters relevant
[53] Mr C Erskine argues that the termination of his employment was unfair because he was not
paid the majority of the accrued annual leave due to him and he was not paid his accrued long service
leave.
[54] The failure to make those payments may well be unfair and may breach the relevant statutory
obligations on the employer. However, I do not consider that these were factors that led to the
termination of employment decision or that they inherently make that decision unfair. It is open to the
applicant to pursue these payments in the appropriate jurisdiction.
Conclusion - harsh, unjust or unreasonable
[55] I have concluded that whilst there was a valid reason for the termination of Mr C Erskine’s
employment, this did not reflect the allegations against him and did not warrant summary dismissal.
Accordingly, the termination of Mr C Erskine’s employment was harsh, unjust or unreasonable and was
unfair for the purposes of s.390.”15
Consideration of the grounds of appeal
[29] As we have indicated, the Code provides that 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. In Pinawin a
Full Bench of FWA held that this involves consideration of:
whether the employer held a belief at the time of the dismissal that the
employee’s conduct was sufficiently serious to justify immediate dismissal, and
whether the belief was based on reasonable grounds, which incorporates the
concept that the employer has carried out a reasonable investigation into the
matter.
[30] SFS submits the Senior Deputy President erred in concluding that Mr Fong for SFS
did not carry out a reasonable investigation into the matter. As a result, the Senior Deputy
President erred in concluding that Mr Fong’s, and thereby SFS’s, belief at the time of the
[2013] FWCFB 1943
18
dismissal that Mr Craig Erskine’s conduct was sufficiently serious to justify his immediate
dismissal could not be regarded as reasonable. Further, the Senior Deputy President’s failure
to be satisfied the termination of Mr Craig Erskine’s employment was consistent with the
Code was affected by error. SFS further submits that permission to appeal is warranted in the
public interest because the Senior Deputy President’s error concerns the onus on small
business in the application of the Code. Moreover, SFS maintains the Senior Deputy
President’s error warrants the quashing of his Honour’s decision and order.
[31] Mr Craig Erskine opposes the granting of permission to appeal. He submits his
Honour’s conclusion that Mr Fong did not carry out a reasonable investigation and his
Honour’s finding that Mr Fong’s belief could not be regarded as reasonable in all the
circumstances, as well as his Honour’s failure to be satisfied the dismissal was consistent with
the Code, was amply justified on both the evidence and his Honour’s assessment of
Mr Fong’s credibility.
[32] We turn to consider this ground of appeal.
[33] In our view the letter of termination dated 13 April 2012 from Mr Fong of SFS to
Mr Craig Erskine provides the best evidence of Mr Fong’s belief at the time of Mr Craig
Erskine’s dismissal and the grounds for that belief, as the letter is contemporaneous with the
dismissal. It is apparent from that letter of termination that at the time of Mr Craig Erskine’s
dismissal Mr Fong believed that Mr Craig Erskine had engaged in conduct amounting to
serious and wilful misconduct warranting the summary termination of his employment. The
grounds for that belief were that SFT had used property of SFS in October 2011 while
Mr Craig Erskine was the sole owner and director of SFT and an employee of SFS. That the
SFS property was used by SFT without the proper authority of SFS as its use was authorised
by Mr Gilbert Erskine, the father of Mr Craig Erskine, who had a conflict of interest at the
time. That he, Mr Fong, had been the sole executive director of SFS since 31 August 2011
and he had not been asked to and had not authorised the use of the SFS property by SFT.
That SFT’s use of the SFS property was to the benefit of Mr Craig Erskine and the detriment
of SFS. That Mr Craig Erskine had refused to admit his involvement in SFT when confronted
by Mr Fong about it on 13 March 2012. And that, as a result, Mr Craig Erskine had breached
his common law and statutory corporations law duties.
[34] Mr Fong’s belief amounted to a belief by SFS at the time of Mr Craig Erskine’s
dismissal that Mr Craig Erskine’s conduct was sufficiently serious to justify immediate
dismissal.
[35] The grounds for the belief of Mr Fong were directly supported by or reasonable
inferences from the discussions and email exchanges between Mr Fong and Mr Craig Erskine,
the email exchanges between Mr Fong and Mr Gilbert Erskine, and Mr Fong’s interactions
with Gadac, as evidenced in the proceedings before the Senior Deputy President. For
example, in regard to the property in question being the property of SFS, in his email of
19 March 2012 to Mr Fong, Mr Gilbert Erskine conceded he had put the patents to the SFS
property in the name of SFS.
[36] Further, with respect to the conflict of interest, Mr Gilbert Erskine’s email of
19 March 2012 to Mr Fong revealed Mr Craig Erskine’s company, SFT, had asked Mr Craig
Erskine’s father, Mr Gilbert Erskine, whether SFT could use SFS’s property and Mr Gilbert
Erskine had alone authorised his son’s company to use the SFS property. SFT’s use of the
[2013] FWCFB 1943
19
SFS property confirmed that SFT’s business extended beyond the limits advised by Mr Craig
Erskine in his email to Mr Fong of 19 March 2012. That email suggested that SFT was
merely involved in purchasing equipment and engaging staff used by SFS. The advice in
Mr Gilbert Erskine’s email to Mr Fong of 19 March 2012 that the SFS property was used in
trials which if successful could have opened up a large market for SFS confirmed SFT’s
business extended to at least part of the type of business engaged in by SFS and the SFS
property was used by SFT in at least part of the type of business engaged in by SFS.
[37] In regard to the benefit and detriment to the respective parties, Mr Gilbert Erskine’s
email of 19 March 2012 to Mr Fong confirmed that the SFS property was used by Mr Craig
Erskine’s company and used in at least part of the type of business engaged in by SFS and
there was no suggestion in any of the exchanges that SFS was compensated for SFT’s use of
the SFS property.
[38] With respect to Mr Craig Erskine’s breach of his common law duties, in Concut Pty
Ltd v Worrell,16 Kirby J said:
“3. The ordinary relationship of employer and employee at common law is one importing implied
duties of loyalty, honesty, confidentiality and mutual trust. At common law:
‘[c]onduct which in respect of important matters is incompatible with the fulfilment of
an employee's duty, or involves an opposition, or conflict between his interest and his
duty to his employer, or impedes the faithful performance of his obligations, or is
destructive of the necessary confidence between employer and employee, is a ground
of dismissal. ... [T]he conduct of the employee must itself involve the incompatibility,
conflict, or impediment, or be destructive of confidence. An actual repugnance
between his acts and his relationship must be found. It is not enough that ground for
uneasiness as to its future conduct arises’…
4. It is, however, only in exceptional circumstances that an ordinary employer is entitled at
common law to dismiss an employee summarily. Whatever the position may be in relation to
isolated acts of negligence, incompetence or unsuitability, it cannot be disputed (statute or
express contractual provision aside) that acts of dishonesty or similar conduct destructive of
the mutual trust between the employer and employee, once discovered, ordinarily fall within
the class of conduct which, without more, authorises summary dismissal. Exceptions to this
general position may exist for trivial breaches of the express or implied terms of the contract of
employment. Other exceptions may arise where the breaches are ancient in time and where
they may have been waived in the past, although known to the employer. Some breaches may
be judged irrelevant to the duties of the particular employee and an ongoing relationship with
the employer. But these exceptional cases apart, the establishment of important, relevant
instances of misconduct, such as dishonesty on the part of an employee …, will normally
afford legal justification for summary dismissal. Such a case will be classified as amounting to
a relevant repudiation or renunciation by the employee of the employment contract, thus
warranting summary dismissal.” [Footnotes omitted]
[39] The grounds for Mr Fong’s belief at the time of Mr Craig Erskine’s dismissal that
Mr Craig Erskine’s conduct was sufficiently serious to justify immediate dismissal included,
in summary, that while an employee of SFS, Mr Craig Erskine was operating a company,
SFT, of which he was the sole owner and director. During the time he was both an employee
of SFS and the sole owner and director of SFT, SFT obtained from his father, Mr Gilbert
Erskine, the Managing Director of SFS, authority to use SFS property, but did not seek to
confirm that authority when his father resigned from SFS on 31 August 2011. In October
2011, while Mr Craig Erskine was still an employee of SFS and the sole owner and director of
SFT, SFT used the SFS property to the detriment of SFS and to the benefit of Mr Craig
[2013] FWCFB 1943
20
Erskine, and Mr Craig Erskine was not honest with Mr Fong about the matter when
confronted by Mr Fong about it in March 2012.
[40] The authority in Concut supports Mr Fong’s conclusion about Mr Craig Erskine’s
conduct and the common law.
[41] Mr Fong’s belief, at the relevant time, that Mr Craig Erskine’s conduct was
sufficiently serious to justify immediate dismissal was based on grounds directly supported by
or reasonably inferential from the investigation he had conducted, including that he had
conducted into the law. It is apparent from the letter of termination from Mr Fong to
Mr Craig Erskine that Mr Fong understood that Mr Gilbert Erskine had authorised SFT’s use
of the SFS property before he resigned from SFS. There is no sound basis for concluding that
further investigation by Mr Fong would have revealed the grounds for his belief were
mistaken. Mr Fong’s investigation was reasonable, resulting in reasonable grounds for his
belief.
[42] With respect, in the circumstances it was not open to the Senior Deputy President to
conclude Mr Fong did not carry out a reasonable investigation. The Senior Deputy
President’s conclusion that Mr Fong did not carry out a reasonable investigation was critical
to his Honour’s failure to be satisfied that the termination of Mr Craig Erskine’s employment
was consistent with the Code. His Honour’s failure to be so satisfied was therefore affected
by error. Given the nature and effect of the error made by the Senior Deputy President and
the issues it has raised about the application of the Code, we consider it is in the public
interest to grant permission to appeal. We do so. We will deal with Mr Craig Erskine’s
unfair dismissal remedy application.
The unfair dismissal remedy application
[43] There was no dispute before his Honour or us, and we accept, that Mr Craig Erskine’s
unfair dismissal remedy application was made within the requisite period,17 that he was
protected from dismissal,18 and that Mr Craig Erskine was dismissed.19 As to whether
Mr Craig Erskine’s dismissal by SFS was consistent with the Code, immediately before
the time of Mr Craig Erskine’s dismissal, SFS was a small business employer.
Mr Craig Erskine’s dismissal was a dismissal without notice or warning. We have earlier
indicated that at the time of Mr Craig Erskine’s dismissal, Mr Fong for SFS held a belief that
Mr Craig Erskine’s conduct was sufficiently serious to justify his immediate dismissal and the
grounds for that belief.20 We have also earlier indicated that the grounds for that belief were
reasonable grounds, being directly supported by or reasonably inferential from the reasonable
investigation Mr Fong for SFS had conducted, including that he had conducted into the law.21
Accordingly, we are satisfied that at the time of Mr Craig Erskine’s dismissal SFS believed on
reasonable grounds that Mr Craig Erskine’s conduct was sufficiently serious to justify his
immediate dismissal by SFS.
[44] We are, therefore, satisfied that SFS complied with the Code in relation to Mr Craig
Erskine’s dismissal and his dismissal was consistent with the Code. Further, we are not
satisfied Mr Craig Erskine’s dismissal was not consistent with the Code. Consequently, given
the provisions of s.385 of the FW Act, Mr Craig Erskine was not unfairly dismissed.
[2013] FWCFB 1943
21
Conclusion
[45] In this matter we have granted permission to appeal in the public interest. We have
also found that Mr Craig Erskine’s dismissal by SFS was consistent with the Code and he was
not unfairly dismissed. The granting of an unfair dismissal remedy is, amongst other things,
dependent on an applicant having been unfairly dismissed.22 As a result, we quash the Senior
Deputy President’s decision and order concerning Mr Craig Erskine’s unfair dismissal
remedy application and dismiss his application. An order23 giving effect to our decision is
being issued at the same time as this decision.
SENIOR DEPUTY PRESIDENT
Appearances:
A Manos, of counsel, for Steri-Flow Filtration Systems (Aust) Pty Ltd.
R Harms, of counsel, for Mr Craig Erskine.
Hearing details:
2013.
Melbourne and Adelaide (video hearing):
March 1.
Endnotes:
1 Craig Erskine v Steri-Flow Filtration Systems (Aust) Pty Ltd, [2012] FWA 10248.
2 Craig Erskine v Steri-Flow Filtration Systems (Aust) Pty Ltd, PR532022.
3 Appeal book in C2012/6681 at p279.
4 Appeal book in C2012/6681 at p361.
5 Appeal book in C2012/6681 at pp362-364.
6 Appeal book in C2012/6681 at p366.
7 Appeal book in C2012/6681 at p369.
8 Appeal book in C2012/6681 at pp390-394.
9 Ibid.
10 Appeal book in C2012/6681 at p381.
11 Appeal book in C2012/6681 at pp383-384.
12 Appeal book in C2012/6681 at pp397-398.
13 [2012] FWAFB 1359.
14 Craig Erskine v Steri-Flow Filtration Systems (Aust) Pty Ltd, [2012] FWA 10248.
15 Ibid.
16 (2000) 103 IR 160.
17 Fair Work Act 2009 (Cth), ss.394 and 396.
18 Fair Work Act 2009 (Cth), ss.389 and 396.
WORK CO MISSION AUSTRALIA SEAL OF FAIR THE
[2013] FWCFB 1943
22
19 Fair Work Act 2009 (Cth), s.385(a).
20 Steri-Flow Filtration Systems (Aust) Pty Ltd v Craig Erskine, [2013] FWCFB 1943 at [33]-[34].
21 Steri-Flow Filtration Systems (Aust) Pty Ltd v Craig Erskine, [2013] FWCFB 1943 at [35]-[41].
22 Fair Work Act 2009 (Cth), s.390.
23 Steri-Flow Filtration Systems (Aust) Pty Ltd v Craig Erskine, PR535579.
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