1
Fair Work Act 2009
s.394—Unfair dismissal
Hung Pham
v
Supreme Caravans Pty Ltd
(U2012/9893)
COMMISSIONER RYAN MELBOURNE, 10 JULY 2013
Termination of employment - remedy - reinstatement and lost remuneration.
[1] On 7 March 2013 I gave a decision in transcript in which I found that the Applicant’s
dismissal from his employment with the Respondent was harsh unjust or unreasonable and
advised the parties that I would hold a further hearing to deal with the issue of remedy.
[2] The Respondent appealed that decision. A Full Bench of the Commission refused
permission to appeal and dismissed the appeal1.
[3] The matter was relisted before me for hearing in relation to remedy. Directions were
issued to the parties on the 14 May 2013 and the matter was listed for hearing on 30 May
2013.
[4] On 14 May 2013 the Applicant’s union representative filed a submission as to remedy.
On 17 May 2013 Mr Addison of M Addison and Associates filed a Notice of Representative
Commencing to Act for the Respondent. In the earlier proceedings before me and before the
Full Bench the Respondent had been represented by its General Manager, Mr Josip Markovic.
[5] On 21 May 2013 the Respondent, through Mr Addison filed a submission as to
remedy. In that submission the Respondent sought to reopen the case which was the subject of
the decision by me on 7 March 2013 and of the Full Bench on 22 May 2013. The Respondent
contended as follows:
“3. The Respondent was not represented in either its preparation or the hearing before
Commissioner Ryan. It is clear from the transcript that the Respondent vehemently
disagreed with significant amounts of the evidence provided by the applicant and the
AMWU. So much is clear from the cross examination carried out by the Company’s
representative Mr Markovich (sic).
4. It is submitted that the Respondent was unaware that the material filed before the
Commission needed to be substantiated and tested in cross-examination to give the
evidence its full weight and effect. It is further submitted that had the Respondent been
aware of this requirement upon it, it would have called the witnesses from whom
[2013] FWC 4561
DECISION
AUSTR FairWork Commission
[2013] FWC 4561
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statement had been filed, the failure of the Respondent to call such witnesses has been
extremely detrimental to its case.
5. It is submitted that prior to the Commission determining remedy the Respondent
should be given a further opportunity to call evidence from its witnesses. Particularly, it
is submitted that it is important the Commission have a full understanding of the
Company policy that prohibits theft and that the allegations of the Applicant that he in
the past had received permission to take company property be tested.
6. To that end, the Company requests the permission of the Commission to reopen its
case to lead evidence particularly from the supervisors whom it is alleged give
permission to the Applicant to take company property. It is submitted that the request is
fair and reasonable in the circumstances and also affords procedural fairness to the
Respondent. The reopening of the case for the Respondent would conform with the
requirements under section 577 of the Act which states: –
“Performance of functions etc. by the FWC
The FWC must perform its functions and exercise its powers in a manner that:
(a) is fair and just; and
(b) is quick, informal and avoids unnecessary technicalities; and
(c) is open and transparent; and
(d) promotes harmonious and cooperative workplace relations.
7. As this matter is scheduled for further oral submissions in addition to the written
submissions it is submitted that a reopening of the case is practical and able to be
completed in a reasonable timeframe.
8. The Respondent seeks to demonstrate that the Applicant is a serial offender in
relation to theft of company property. It is submitted that on the Applicant’s own
evidence he has removed product from the company’s premises (that is not scrap) and
the Respondent seeks to properly deal with that matter. Also, the Applicant
manufactured the comportment that he sought to remove from the Company premises.
The Applicant manufactured the component by using Company equipment for which he
was neither trained nor qualified. To demonstrate this point the Company seeks to call
evidence.”
[6] By email to my Chambers on 24 May 2013 Mr Addison again sought permission “to
reopen the evidentiary case for the Respondent so as to clear up some matters that we
consider important to your consideration of remedy”. In response to a query from my
Chambers Mr Addison, again by email on 24 May 2013 clarified his request as follows:
“The evidence that I am referring to is evidence as to remedy. I do not propose to re-
agitate the question of merits as the full bench has refused to allow that. It is however
our view that the Commissioner ought to allow evidence directly and specifically
related to honesty (generally but not related to the taking of the item the subject of the
proceeding, as this has already been determined by him) and adherence to policy as
these matters are directly related to the question of remedy. The evidence is essentially
that set out in Para’s 5 and 6 of our written submissions. Could you please advise if this
is acceptable.
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[7] On 27 May 2013 my Chambers advised Mr Addison by email that I would allow the
admission of “further evidence directly related to remedy”.
[8] On 29 May 2013 Mr Addison filed 3 witness statements he sought to rely on.
[9] On 30 May 2013 the AMWU on behalf of the Applicant filed a response submission
in which they strongly opposed the addition of further evidence from the Respondent if it
went beyond remedy matters.
[10] The Commission conducted a hearing and a conference on 30 May 2013. At the
hearing Mr Addison sought to introduce the contents of the 3 witness statements and the
AMWU strongly opposed most of the contents of the 3 witness statement. In an attempt to
settle the matter I adjourned into conference with the parties. Further proceedings were
adjourned on the basis that the parties would consider the possibility of settling the matter
without the involvement of the Commission. These attempts at settlement were unsuccessful
and the matter was brought on for further hearing in relation to remedy on 14 June 2013.
[11] At the hearing on 14 June 2013 Mr Addison for the Respondent sought to have
admitted the entire contents of the 3 witness statements for Mr Markovic, the Respondent’s
General Manager, Mr Daryl Jacobs, Services/Warranty Manager and Mr Mite Karadulev,
Leading Hand filed on 29 May 2013 save for one paragraph in Mr Markovic’s statement. Ms
Moloney of the AMWU for the Applicant strenuously opposed the admission of most of the
contents of the 3 witness statements. After hearing the respective arguments from both sides I
determined that some of the material in each witness statement could be admitted but that
much could not as much of the contents of the witness statements sought to lead evidence on
matters that had already been determined by the Commission in the first decision.
[12] Mr Karadulev’s witness statement comprised 10 paragraphs. I determined that I would
admit paragraph 1, the last sentence in paragraph 2 and the last 26 words of paragraph 10. The
amended witness statement was admitted and was marked as Exhibit E1.
[13] Mr Jacobs’ witness statement comprised 14 paragraphs. I determined that I would
admit paragraph 1, paragraph 11 except for the last 19 words and paragraph 14 except for the
first 13 words. The amended witness statement was admitted and was marked as Exhibit E2.
[14] Mr Markovic’s witness statement comprised 13 paragraphs and 5 attachments. I
determined that I would admit paragraphs 1, 2, 5, 10, 12 and 13 and the first 3 sentences of
paragraph 11 and attachment JM2 which was referred to in paragraph 5 of the witness
statement. The amended witness statement was admitted and was marked as Exhibit E3.
[15] Once the 3 witness statements had been amended and exhibited Ms Maloney for the
Applicant advised that the Applicant would not challenge the amended witness statements and
that the Applicant did not seek to cross examine each witness. None of the three witnesses for
the Respondent were called to give evidence, even for the limited purpose of adopting their
amended witness statements, and their amended witness statements were admitted unsworn.
[16] The Applicant had also filed a witness statement. No challenge was made as to its
contents but the witness statement was not adopted by Mr Pham when he gave oral evidence
and I did not mark the witness statement as an exhibit.
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[17] Mr Pham gave evidence both as to his desire to be reinstated and his willingness to
work for the Respondent and in relation to income he had earnt since his dismissal. Mr Pham
was extensively cross examined in relation to all of his evidence.
The Relevant Statutory Provisions
[18] The relevant provisions of the Fair Work Act 2009 are to be found in Division 4 of
Part 3-2 of the Act and comprise sections 390 to 393.
[19] A finding that a dismissal is unfair does not mean that the Commission must award a
remedy. The grant of a remedy for an unfair dismissal is at the discretion of the Commission.
There are no statutory criteria for determining when a remedy should be granted and when a
remedy should not be granted. Having considered all of the circumstances of this matter I am
of the view that it is appropriate to grant a remedy to the Applicant.
[20] Once the Commission has determined that a remedy is appropriate then s.390 directs
the Commission in its initial consideration of a remedy.
“390 When the FWC may order remedy for unfair dismissal
(1) Subject to subsection (3), the FWC may order a person’s reinstatement, or the
payment of compensation to a person, if:
(a) the FWC is satisfied that the person was protected from unfair dismissal
(see Division 2) at the time of being dismissed; and
(b) the person has been unfairly dismissed (see Division 3).
(2) The FWC may make the order only if the person has made an application under
section 394.
(3) The FWC must not order the payment of compensation to the person unless:
(a) the FWC is satisfied that reinstatement of the person is inappropriate; and
(b) the FWC considers an order for payment of compensation is appropriate in
all the circumstances of the case.
Note: Division 5 deals with procedural matters such as applications for remedies.
[21] Whilst the language of s.390(3) is expressed in the negative the result of the operation
of s.390(3) is that the Commission must first consider the appropriateness of the remedy of
reinstatement.
Reinstatement as an Appropriate Remedy
[22] The Applicant’s case on reinstatement was relatively simple.
[23] Ms Moloney for the Applicant put it this way:
“PN1778 ......So the question is: is reinstatement inappropriate? We say,
Commissioner, that it’s not inappropriate in these circumstances. You’ve seen all the
evidence and the evidence is that the applicant wants reinstatement. He’s physically
able to return to work, he’s mentally prepared and able to return to work despite these
proceedings - he wants to return to work despite anything that the respondent has put
to him, he still wants to return to work.
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PN1792. ... we say that as I’ve just demonstrated, based on the evidence, the alleged
loss of trust and confidence is not soundly and rationally based. Of course, it’s going
to be difficult for the respondent to change its views that a wrong has occurred. That’s
just - that’s natural. We accept that it’s a challenge, but we say it’s not enough to
render reinstatement as inappropriate.
PN1795. If - we say if the respondent is at all fair minded, these problems will go
away. We say that the applicant can return to work and, hopefully, within a matter of
weeks, all is forgotten - as he said, he just wants to go back to work and do his job.
PN1799. The respondent has raised the issue that there may be police or criminal
proceedings on foot that they planned to attempt to lay charges based on the conduct.
There’s no evidence that any charges have been laid. The evidence is that phone call
was received some months ago and that nothing really has come of it.
PN1800. The respondent can maintain that they’re going to press these criminal
charges - the charges, but we say that they can’t escape liability for reinstatement
because of it. The applicant says himself that he’s not worried by any of these
proceedings and we doubt that there’s any merit in any event. We say that the
Commission should find that these matters should not, in themselves, be considered to
fatal to our claim for reinstatement.”
[24] The Respondents case as to why reinstatement was inappropriate was put by Mr
Addison as follows:
“PN1892. MR ADDISON: And it’s not necessary to have absolute trust and
confidence for the establishment of an employer relationship. What’s required is
sufficient trust and confidence to make the relationship viable, to make the
relationship productive. We say in all the circumstances of this case that reinstatement
is not appropriate. We say that on the basis of the evidence that’s before you, and on
the views of the people who would ultimately need to supervise Mr Pham. The
applicant’s advocate puts a proposition that Mr Pham wants to return to work and on
that basis he should.
PN1893. The unchallenged evidence of all of the respondent’s witnesses who were in
the box today - weren’t in the box today, but could have been - the unchallenged
evidence is that the relationship of trust and confidence has broken down; that none of
the supervisors trust Mr Pham; that the supervisors would need to spend considerable
amounts of time supervising and ensuring that Mr Pham complied with company
policies and acted honestly.
PN1894. Now, that’s evidence that you allowed in, Commissioner, and it was not
challenged by my friend. My friend was invited to cross-examine those witnesses and
she declined to do so. So we say that the evidence from the respondent’s witnesses
must be accepted by the Commission as correct in relation to this matter. If they
weren’t correct, it would have been challenged.
PN1895. Commissioner, the question of - the question of determining whether the
statements that we don’t trust the person are objectively based is a matter that we
discussed earlier. We say that there are indisputable matters before the Commission
[2013] FWC 4561
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that lead to the proposition of a lack of trust and confidence. Firstly, it is clear that the
company’s view is that Mr Pham is dishonest. It is the company’s view that Mr Pham
stole from them. It is clear, and it’s been put to the Commission, in a clear a way as it
can be, that the company are pursuing criminal charges against Mr Pham.
PN1896. The evidence is in Mr Markovich’s witness statement. It’s been accepted into
evidence this morning and, again, not challenged. There’s a submission that we don’t
know, but that was never put to Mr Markovich. It is unchallenged evidence from the
general manager of the company that he has been discussing the matter with the
Craigieburn Police and the company intends to pursue criminal charges.
PN1897. So, Commissioner, that alone, in my submission, would make it impossible
for the re-establishment of a relationship of sufficient trust and confidence that would
make the employer/employee relationship productive. It is, in my submission,
impossible when the company’s senior supervisors and general manager think an
employee is a thief that the relationship can be re-established.
PN1898. Now, Commissioner, that’s the first point. The second point is should the
police not charge, the company will pursue civil charges against Mr Pham. We’ve
heard evidence from Mr Pham - it’s probably evidence we’d all give to some extent -
but Mr Pham says he will fight those charges, and that’s his right. He will fight them,
he’s also given evidence that that would be his priority.
PN1899. Commissioner, in my submission, in those circumstances, how is it possible
for the requisite level of trust and confidence to be established in the work place when
there is an ongoing dispute and an ongoing contest with regards to the company
pursuing damages against Mr Pham on the one hand, or the company supporting
criminal charges on the other. We say, in all the circumstances, it’s not credible to
think that there would be a possibility of the relationship being re-established.
PN1900. Further, we say that the admitted misconduct of the employee in that he - I
think you said earlier, Commissioner, stole time.
PN1902. MR ADDISON: Yes, theft of time. We say that that’s clearly before the
Commission. It’s also clearly before the Commission that Mr Pham used machinery
and that the use of that machinery and the theft of that time was one of the reasons for
the dismissal.”
[25] On the basis of this Submission Mr Addison contended that the Commission should
come to the conclusion that reinstatement was inappropriate.
[26] Both parties have taken me to the appropriate case law. In Perkins v Grace Worldwide
(Aust) Pty Ltd 2, a Full Court of the Industrial Relations Court of Australia set out the
principles applicable to a consideration of the issue of loss of trust and confidence in relation
to a possible remedy of reinstatement:
“(ii) Principles
Trust and confidence is a necessary ingredient in any employment relationship. That is
why the law imports into employment contracts an implied promise by the employer
not to damage or destroy the relationship of trust and confidence between the parties,
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without reasonable cause: see Burazin v Blacktown City Guardian Pty Limited
(Wilcox CJ, von Doussa and Marshall JJ, 13 December 1996, not yet reported). The
implication is not confined to employers, it extends to employees: see for example
Blyth Chemicals Ltd v Bushell [1933] HCA 8; (1933) 49 CLR 66 at 81-2 and North v
Television Corporation Ltd (1976) 11 ALR 599 at 609. So we accept that the
question whether there has been a loss of trust and confidence is a relevant
consideration in determining whether reinstatement is impracticable, provided
that such loss of trust and confidence is soundly and rationally based.
At the same time, it must be recognised that, where an employer, or a senior officer of
an employer, accuses an employee of wrongdoing justifying the summary termination
of the employee’s employment, the accuser will often be reluctant to shift from the
view that such wrongdoing has occurred, irrespective of the Court’s finding on that
question in the resolution of an application under Division 3 of Part VIA of the Act.
If the Court were to adopt a general attitude that such a reluctance destroyed the
relationship of trust and confidence between employer and employee, and so made
reinstatement impracticable, an employee who was terminated after an accusation of
wrongdoing but later succeeded in an application under the Division would be denied
access to the primary remedy provided by the legislation. Compensation, which is
subject to a statutory limit, would be the only available remedy. Consequently, it is
important that the Court carefully scrutinise any claim by an employer that
reinstatement is impracticable because of a loss of confidence in the employee.
Each case must be decided on its own merits. There may be cases where any
ripple on the surface of the employment relationship will destroy its viability. For
example the life of the employer, or some other person or persons, might depend on
the reliability of the terminated employee, and the employer has a reasonable doubt
about that reliability. There may be a case where there is a question about the
discretion of an employee who is required to handle highly confidential information.
But those are relatively uncommon situations. In most cases, the employment
relationship is capable of withstanding some friction and doubts. Trust and
confidence are concepts of degree. It is rare for any human being to have total
trust in another. What is important in the employment relationship is that there
be sufficient trust to make the relationship viable and productive. Whether that
standard is reached in any particular case must depend upon the circumstances
of the particular case. And in assessing that question, it is appropriate to consider
the rationality of any attitude taken by a party.
It may be difficult or embarrassing for an employer to be required to re-employ a
person the employer believed to have been guilty of wrongdoing. The requirement
may cause inconvenience to the employer. But if there is such a requirement, it will be
because the employee’s employment was earlier terminated without a valid reason or
without extending procedural fairness to the employee. The problems will be of the
employer’s own making. If the employer is of even average fair-mindedness, they are
likely to prove short-lived. Problems such as this do not necessarily indicate such a
loss of confidence as to make the restoration of the employment relationship
impracticable.” (emphasis added)
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[27] I adopt the observation made by a Full bench of the Australian Industrial Relations
Commission in McVinish v Flight West Airlines:
“[28] Emphasised in that way, the passage is a reflection of what we consider to be the
essential ingredient of the principles applied by the Court in Perkins in assessment of
the practicality of reinstatement against a consideration of loss of trust or confidence by
the employer in the employee, or by either the employer or the employee in the
employment relationship.” 3
[28] The contention of the Respondent in this matter is that the Respondent has made a
complaint to the police that the Applicant stole from the Respondent and that the Respondent
wants the Applicant prosecuted by the police and that if that doesn’t occur then the
Respondent will take civil action against the Applicant.
[29] The unsworn evidence of Mr Markovic is that he has made a complaint to the police
and that he was advised by the police that they will be proceeding and will lodge formal
charges against the Applicant. Against this is the sworn oral evidence of the Applicant4 where
he identified that the police had contacted him and asked the Applicant to come and see them.
The Applicant didn’t visit the police and they contacted a second time and “they said it’s not
really important, but if we do want to speak with you, we will contact you again”. The
Respondent didn’t challenge the truthfulness of this evidence from the Applicant.
[30] The submission made by Mr Addison for the Respondent that “should the police not
charge, the company will pursue civil charges against Mr Pham”5 was a matter that was not
contained in the filed written submissions of the Respondent nor was it contained in the
witness statement of Mr Markovic. The submission on potential civil action has all the
appearances of the Respondent trying, on the run, to bolster its case as to loss of trust and
confidence.
[31] I have no doubt that Mr Markovic is maintaining his rage against the Applicant whilst
these proceedings are underway even to the extent of introducing a threat to take civil action
against the Applicant.
[32] Mr Markovic’s complaints of theft made to the police and his threat of civil action
against the Applicant relate to items which only came to the attention of Mr Markovic through
the open and honest evidence of the Applicant and in circumstances where the Applicant has
given sworn evidence as to how those items came into his possession.
[33] It would appear from the Applicant’s evidence that the police are not pursuing the
complaint made by Mr Markovic with the earnestness with which Mr Markovic attributes to
the police.
[34] I sense a reasonable degree of irrationality in the attitude adopted by Mr Markovic
against the Applicant. But, whether rational or irrational, it is clear that Mr Markovic is
disinclined at present to trust the Applicant. As the decision in Perkins makes clear “What is
important in the employment relationship is that there be sufficient trust to make the
relationship viable and productive.” In making an assessment as to what effect Mr Markovic’s
attitude will have on the viability and productiveness of the employment relationship if
reinstatement occurred I note that Mr Markovic is not the direct supervisor of the Applicant.
[2013] FWC 4561
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[35] In his unsworn witness statement Mr Markovic says that if Applicant was reinstated “I
would be forced to make sure that the supervisors spent considerable time monitoring him to
ensure compliance with company rules.” I note that both Mr Karadulev and Mr Jacobs say in
their witness statements that “I do not believe that I would be able to successfully work with
him in the future as I have no trust and confidence in him”. Given the intensity of views
expressed by Mr Markovic I am not surprised that a manager and leading hand who give
unsworn evidence on behalf of the Respondent will echo the view of the General Manager.
[36] Against all of this is the evidence of the Applicant that he wants to return to work and
that should the police or the Respondent initiate any legal action against him, whether civil or
criminal, he will deal with it if it ever arises. The Applicant is happy to work with his leading
hand, manager and the Respondent.
[37] In the circumstances where Mr Markovic is not directly supervising the Applicant but
has two layers of supervision between the Applicant and himself I am of the very strong view
that the expressed attitudes of Mr Karadulev and Mr Jacobs are no real impediment to the
reestablishment of a productive and viable employment relationship between the Applicant
and the Respondent. Mr Markovic’s complaint that “I would be forced to make sure that the
supervisors spent considerable time monitoring him to ensure compliance with company
rules” could, in all of the circumstances of this matter, be an initial positive move to overcome
the degree of irrationality in Mr Markovic’s assessment of the level of trust and confidence
between himself and the Applicant.
[38] The proven misconduct of the Applicant relates to using a company machine during
work hours for personal benefit. This is not sufficient to prevent reinstatement being an
appropriate remedy.
[39] Having considered all of the circumstances of this matter I am satisfied that
reinstatement is appropriate.
[40] It was not in contest that if reinstatement was the appropriate remedy then an order
should be made under s.391(1)(a).
[41] The Applicant also seeks orders under s.391(2) and (3) of the Act.
[42] I consider it appropriate in all of the circumstances of this matter to make an order
under s.391(2) of the Act.
[43] I also consider it appropriate that I make an order under s.391(3) to cause the employer
to pay to the Applicant an amount for the remuneration lost because of the dismissal. Pursuant
to s.391(4)(a) the Applicant has given evidence that his earnings since being dismissed
amount to $1200. I am required by s.391(4)(b) to also take into account any remuneration
likely to be earned by the Applicant up to the date of reinstatement. I will of necessity need to
make a calculated guess as to what this additional amount will be and based on the material
before the Commission as to the earnings of the Applicant since being dismissed I will
attribute another $500 as potential earnings up to the actual date of reinstatement.
[2013] FWC 4561
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[44] The appropriate orders to give effect to this decision will be issued separately.
COMMISSIONER
Appearances:
J. Maloney for the Applicant
M. Addison for the Respondent
Hearing details:
2013.
Melbourne:
May 30
June 14
Printed by authority of the Commonwealth Government Printer
Price code C, PR538769
1 [2013] FWCFB 3016
2 (1997) IRCA 15
3 Print R9672 at para 28
4 Transcript at PN1525 - PN1534
5 Transcript at PN1898
OF FAIR WORK . ... AUSTRAI LY THE SEAL
