[2016] FWCFB 5520
The attached document replaces the document previously issued with the above code on 5
September 2016.
Typographical error have been fixed at paragraph 35
Helen Hamberger
Associate to Vice President Hatcher
Dated 5 December 2016.
1
Fair Work Act 2009
s.604 - Appeal of decisions
Titan Plant Hire Pty Ltd
v
Shaun Van Malsen
(C2016/4614)
VICE PRESIDENT HATCHER
DEPUTY PRESIDENT WELLS
COMMISSIONER JOHNS SYDNEY, 5 SEPTEMBER 2016
Appeal against decision [2016] FWC 4573 of Commissioner Wilson at Darwin on 14/07/2016
in matter number U2016/5227.
Introduction and background
[1] Titan Plant Hire Pty Ltd (Titan) has lodged an appeal, for which permission to appeal
is required, against a decision of Commissioner Wilson issued on 14 July 20161 (Decision)
concerning an unfair dismissal remedy application brought by Mr Shaun Van Malsen. In the
Decision the Commissioner found that Mr Van Malsen was a person protected from unfair
dismissal and that Titan’s dismissal of him was unfair, and ordered that Titan pay Mr Van
Malsen compensation in the amount of $16,602, less applicable taxation. A separate order
was issued giving effect to the Decision2 (Order). In its appeal, Titan challenges the finding
that Mr Van Malsen was a person protected from unfair dismissal, the conclusion that the
dismissal was unfair, and the Commissioner’s assessment of compensation.
[2] The facts of the matter were, for the most part, not in dispute. Mr Malsen is a trade-
qualified heavy-duty fitter. He commenced employment with Titan on a casual basis on 11
August 2015 pursuant to a letter of offer from Titan dated 10 August 2015. This letter stated
that “It is anticipated that after a successful trial period you will be offered a permanent
position...”, identified the location of the employment as “Darwin” and his duties as “Repairs
& Maintenance to all equipment (small engines to earthmoving equipment); and any other
duties as requested by the Maintenance Manager”, and specified the hours of work as being
7.00am to 5.00pm Monday to Thursday and 7.00am to 4.00pm on Friday with total average
hours comprising “38 ordinary hours and up to 9.5 additional hours per week based on
operational requirements”. The letter added:
1 [2016] FWC 4573
2 PR582561
[2016] FWCFB 5520
DECISION
E AUSTRALIA FairWork Commission
[2016] FWCFB 5520
2
“Working on the weekend or outside the above stipulated hours will be on an as
required basis and paid at your normal rate of pay. By accepting this offer of
employment you agree that this number of hours is reasonable”.
[3] The letter also stated that Mr Van Malsen’s employment conditions would, in addition
to those set out in the letter, be in accordance with “the attached Employee Collective
Agreement”. The agreement referred to was the Titan Plant Hire Pty Ltd Employee Collective
Agreement 2008 (Agreement). The Agreement included the following provision:
“Location of Employment
5.22 Employees shall initially be located at the site designated in their letter of offer.
The employer is able to vary this location and shall provide them with reasonable
notice of any location variation.”
[4] Mr Van Malsen worked every week from 11 August 2015 until 8 November 2015, and
except for the first week his working hours were consistent with the letter of offer. He also
worked some Saturdays.
[5] In a letter dated 9 December 2015 entitled “Completion of Probationary Period”, Mr
Van Malsen was advised that he was made a permanent employee effective from 9 November
2015. The letter set out his conditions of employment, with his location, duties and hours of
work being in expressed in terms identical to the 10 August 2016 letter. The provisions of the
Agreement were incorporated in the same way. Mr Van Malsen signed his acceptance of this
letter on 14 December 2015.
[6] Titan at this time held a maintenance contract at the Old Pirate Mine, which was
located in the Tanami Desert approximately 1600 kms from Darwin (via Kununurra and Halls
Creek). In January 2016 Mr Van Malsen was requested to work at the Old Pirate Mine for a
period, which he agreed to do. He was required to drive there and return with his tools and
other equipment. He left for the Old Pirate Mine on 10 January 2016 and finished there on 22
January 2016. While he was there he was required to work from 5.00am to 6.00pm for 13
days straight. Mr Nathan Stretton, who supervised Mr Van Malsen at the site, gave evidence
criticising some aspects of Mr Van Malsen’s performance at the hearing, but there was no
suggestion that Mr Van Malsen was warned or disciplined about this at the time.
[7] On 1 February 2016 Mr Van Malsen was requested to perform another stint at the Old
Pirate Mine. He requested to be flown there, but this request was refused (owing to the time it
would take to organise the flight and the need to convey tools and equipment to the site). Mr
Van Malsen was concerned about this request due to its effect on his family responsibilities,
but acceded to it. He left on 9 February 2016 and returned to Darwin on 19 February 2016.
While he was at the Old Pirate Mine he worked 12½ hours per day for nine days straight.
[8] Titan raised an issue concerning the fact that Mr Van Malsen drove the entire return
journey in a single day, but again there was no suggestion that he was disciplined or warned
about this.
[9] On 1 March 2016 it was indicated that Mr Van Malsen might have to travel to the Old
Pirate Mine site again. By the following day, 2 March 2016, this had firmed into a request that
he drive to the site the next day, 3 March 2016, due to Titan’s substantive employee at the site
[2016] FWCFB 5520
3
having fallen ill. There was an evidentiary contest between Mr Van Malsen and Mr Jason
Madalena, Titan’s Managing Director, about what exactly transpired in the communications
involving himself, Mr Steve Walker, a supervisor, and Mr Van Malsen over the course of 1-2
March 2016. However it was not in dispute that at about noon on 2 March 2016 Mr Van
Malsen was firmly requested to go to the Old Pirate Mine the following day, that by about
1.30pm he had definitely refused the request, and that at about 4.00pm he was handed a letter
of dismissal. The letter, which was signed by Mr Madalena, relevantly stated as follows:
“I advise that your employment with Titan Plant Hire has been terminated. Termination
is effective immediately.
Your employment is terminated for disobeying reasonable work requests and
unsatisfactory work performance.
Refusal to carry out lawful and reasonable instructions that are consistent with your
employment contract is grounds for summary dismissal.
Your final pay will include the hours that you worked on 02.03.16 plus all entitlements
owed. A payslip will be been forwarded to you reflecting the above.
We wish you well in your future endeavours.”
The Decision
[10] The first issue which the Commissioner dealt with in the Decision was Titan’s
contention that Mr Van Malsen was not a person protected from unfair dismissal because he
had not completed the minimum employment period of six months required by s.382(a) and
s.383(a) of the Fair Work Act 2009 (FW Act). The basis of this contention was the period of
Mr Van Malsen’s casual employment from 11 August 2015 to 9 November 2015 could not be
counted towards the minimum employment period under s.384(2)(a), with the result that his
employment for the purpose of s.383(a) lasted less than six months. This was rejected by the
Commissioner, who found that Mr Van Malsen’s casual employment was on a regular and
systematic basis and gave rise to a reasonable expectation of continuing employment on a
regular and systematic basis.3 The Commissioner went on to say:
“[46] Mr Van Malsen was employed in August 2015 on a casual basis, but subject to a
letter of offer. That letter of offer put forward that while a casual, it was anticipated
that after a successful trial period that he would be offered a permanent position with
Titan Plant Hire. It further stipulated weekly hours of work of 38 ordinary hours and
up to 9.5 additional hours, based on the operational needs of the business. All that was
offered, actually occurred. At no stage was continuous service broken.
[47] I therefore find that, at the time he was dismissed, Mr Van Malsen had completed
the minimum employment period and that he was a person protected from unfair
dismissal.”
[11] The Commissioner then dealt with the question of whether the dismissal was harsh,
unjust or unreasonable, and initially considered whether, under s.387(a), there was “a valid
3 Decision at [41]-[42]
[2016] FWCFB 5520
4
reason for the dismissal related to the person's capacity or conduct...”. He made the
following findings of fact in the course of his consideration:
Titan had a genuine and urgent need for an employee to go to the Old Pirate Mine at
short notice when it made the request to Mr Van Malsen on 2 March 2016.4
Mr Van Malsen had not wanted or expected to be traveling away from Darwin so
much when he took the job with Titan, and his refusal of the request on 2 March 2016
was based on his family circumstances.5
There was no evidence of Mr Van Malsen having been informed that the request to go
to the Old Pirate Mine was a direction non-compliance with which might lead to his
dismissal.6
The primary reason for the dismissal was Mr Van Malsen’s refusal to go to the Old
Pirate Mine, and the performance issues referred to in the termination letter were “not
much more than niggles in the employment relationship” and were “imperfections in
the employment relationship ... [which] Mr Madalena took into account as adding to
the reason for the dismissal”.7
[12] The Commissioner’s conclusions as to whether Mr Van Malsen’s refusal to travel to
the Old Pirate Mine constituted a valid reason for dismissal included the following (footnotes
omitted):
“[59] To the extent that such refusal is misconduct, I find that it occurred.
[60] However, I am unable to find that Mr Van Malsen’s refusal amounted to a valid
reason for his dismissal.
[61] Mr Van Malsen’s refusal was not serious misconduct within the meaning of the
definition provided for within the Fair Work Regulations 2009. Objectively, his
behaviour was not “wilful or deliberate behaviour by an employee that is inconsistent
with the continuation of the contract of employment”, and was not a case of an
employee “refusing to carry out a lawful and reasonable instruction that is consistent
with the employee’s contract of employment”. Although this was a deliberate refusal
by Mr Van Malsen to carry out a lawful instruction, there is insufficient evidence
before me to allow a finding that the instruction was consistent with his contract of
employment. Further, objectively speaking, the evidence does not allow a finding that
the instruction was reasonable. Mr Madalena may well be correct that there was an
agreement made in December 2015 with Mr Van Malsen that he would be available to
go to the Old Pirate Mine, and such is not disputed by Mr Van Malsen. There is no
evidence that, contractually, such obliged Mr Van Malsen to do so at short notice, and
irrespective of concerns he may hold.”
4 Decision at [67]
5 Decision at [68]
6 Decision at [70]
7 Decision at [55]-[57]
[2016] FWCFB 5520
5
[13] The Commissioner then elaborated on the reasons why the direction to Mr Van
Malsen was not reasonable, including that it was not authorised by his contract of
employment.8 The Commissioner accepted that Titan had a “genuine and urgent need” for an
employee to go to the Old Pirate Mine at short notice on 2 March 2016, but said:
“[68] However, I consider that, in overall context, the direction was unreasonable since
it did not take into account Mr Van Malsen’s circumstances, including that he had
returned to Darwin about 2 weeks previously; that he had not expected or wanted to be
traveling away from Darwin so much when he took the job with Titan Plant Hire; and
that his family circumstances precluded him from doing so. Since his evidence is the
only direct evidence of the conversation with his supervisor, Mr Walker, and it is
capable of acceptance, I accept Mr Van Malsen’s evidence that Mr Walker agreed he
could be paid more if he went to the site, but that he refused the request nonetheless
for matters not connected with the question of payment.”
[14] The Commissioner stated the following conclusions in relation to s.387(a):
“[71] Dismissal of Mr Van Malsen for the primary reason of his refusal to go to the Old
Pirate Mine site a third time, whether or not connected with the ancillary reasons
advanced by Mr Madalena, was without warning and in any event was
disproportionate to his conduct. Whether for the primary reason, or in connection with
the ancillary reasons, Titan Plant Hire did not, at the time it dismissed Mr Van Malsen,
have a valid reason for doing so.
[72] I find therefore that Mr Van Malsen’s dismissal was harsh, because the penalty of
dismissal was disproportionate to his conduct; unjust, because the Respondent did not
seek out or reflect upon his reasons for refusing to go; and unreasonable, because it
sought to hold him to a direction which, in all the circumstances, and objectively
viewed, was not reasonable for the company to make because it was made at short
notice and without the opportunity for Mr Van Malsen to put forward reasons why he
should not be compelled to comply.”
[15] The Commissioner then proceeded to consider and make findings about the matters
referred to in paragraphs (b)-(h) of s.387, and stated the following conclusion:
“[83] Having considered all of the criteria within s.387, I am of the view that in all the
circumstances Mr Van Malsen was unfairly dismissed by Titan Plant Hire.
Accordingly, I turn to consider the question of remedy for his dismissal.”
[16] In relation to remedy, the Commissioner found that reinstatement would not be
appropriate, and then gave consideration to an award of compensation. The Commissioner
considered each of the matters required to be considered under s.392 of the FW Act. In
relation to s.392(2)(c) (“the remuneration that the person would have received, or would have
been likely to receive, if the person had not been dismissed”) the Commissioner’s assessment
was that Mr Van Malsen would have been employed for “a further ten weeks with the equal
possibility that he may have resigned at that point; been dismissed for performance-related
matters; or been dismissed for reason of genuine redundancy”9 having regard to the
8 Decision at [62]-[63]
9 Decision at [101]
[2016] FWCFB 5520
6
deteriorating work relationship, Titan’s concerns about his work performance and the winding
down of its volume of work. In relation to the latter consideration the Commissioner said:
“[96] While not directly related to Mr Van Malsen’s employment, it was also the case
that, in early March 2016, Titan Plant Hire’s work at the Old Pirate Mine was
beginning to reduce and that the work it had associated with production activities had
concluded by the start of April 2016.
[97] Mr Madalena gave evidence that part of the reason Mr Van Malsen had been
asked to be involved in work at the Old Pirate Mine had been to ensure that he was
productively employed over the Darwin Wet season when work in the Darwin branch
was otherwise reduced. It therefore cannot be ruled out that redundancy of Mr Van
Malsen may have occurred, whether on the basis of the available work in Darwin after
the conclusion of the Wet season or because of the influence on the Northern Territory
branch of the loss of the work associated with the Old Pirate Mine.”
[17] In relation to s.392(3), which requires the Commission to reduce the amount of
compensation it would otherwise order on account of any misconduct on the part of the
employee which contributed to the employer’s decision to dismiss the employee, the
Commissioner concluded:
“[119] I have found Mr Van Malsen’s refusal to go to the Old Pirate Mine the third time
was misconduct, but not serious misconduct that warranted summary dismissal. As a
result, I must reduce the amount of compensation by an appropriate amount.
[120] I consider Mr Van Malsen’s misconduct was a product of his own genuine
beliefs, both about the reasonableness of his need to address his personal
circumstances, as well as what he perceived to be the unreasonableness of what was
being demanded of him by Titan Plant Hire to again go to the Old Pirate Mine at short
notice.
[121] In all, I consider the severity of Mr Van Malsen’s misconduct to be at the lower
end of the scale. Accordingly, I consider it appropriate to make a reduction of 5% to
the amount of compensation I would otherwise order on account of his misconduct.”
[18] The amount ultimately ordered by the Commissioner was the amount of $16,602,
calculated on the basis of 10 weeks’ pay at $1,596 per week, plus superannuation of 9.5%,
less 5%.
Appeal grounds and submissions
[19] Titan, which was self-represented throughout the appeal, had difficulty in articulating
with precision all of its grounds of appeal. However it was made clear enough in the appeal
notice and Titan’s written and oral submissions that the appeal was advanced at least on the
following bases:
the Commissioner erred in finding that Mr Van Malsen was a person protected from
unfair dismissal, in that Titan was a small business employer as defined in s.23 and
Mr Van Malsen had not been employed by Titan for a one-year period required by
s.383(b), or alternatively that Mr Van Malsen did not have the six months’ service
[2016] FWCFB 5520
7
required by s.383(a) because during his initial period of casual employment he did not
have a reasonable expectation of continuing employment on a regular and systematic
basis as required by s.384(2)(a)(ii);
the Commissioner erred in finding that the dismissal was unfair, in that the direction
for Mr Van Malsen to attend the Old Pirate Mine site was reasonable having regard to
his earlier agreement to do so, and his refusal to comply with this direction justified
his dismissal; and
the Commissioner erred in awarding excessive compensation to Mr Van Malsen, made
incorrect findings about the matters required to be taken into account under s.392(2) in
the assessment of compensation, and failed to give advice to Titan as an unrepresented
litigant about the matters pertaining to the assessment of compensation it was required
to address.
[20] In relation to the assessment of compensation, Titan identified a number of matters
which it would have raised at first instance had it been aware of considerations which the
Commission was required to take into account under s.392(2). In relation to s.392(2)(a) (“the
effect of the order on the viability of the employer's enterprise”), Titan’s notice of appeal
referred, among other things, to the following matters:
“5. The downturn in mining and subsequent drop off in demand for mining services has
placed significant pressure on our business.
6. Our business is capital intensive, we are highly geared and have significant finance
remaining on machines that we have not been able sell or work.
7. We have significant finance owing on properties that have decreased in value
because of the economic down turn. The bank is currently calling in some of the debt
on these properties.
8. In order to continue as a going concern we have had to reduce all unnecessary
expenditure and rationalize all our costs. We have sold significant numbers of
machines and are doing basically whatever we can to remain afloat and competitive
for any available work.
9. We have not replaced any employees that have left and both business owners
(especially Jason) are wearing a number of hats to keep operations going.
10. We continue to try and keep as many people employed for as long as we can by
working with us and utilizing them wherever we can. The alternative is that we will
have to let them go. This is survival in the current economic environment.
11. We have a number of other unrelated legal cases ongoing at the moment. We are
exposed to some liability here.
12. The business is currently making significant losses. An order of this magnitude
will increase the loss, our viability to continue and the continuing employment of our
remaining staff.”
[2016] FWCFB 5520
8
[21] In relation to s.392(2)(c) (“the remuneration that the person would have received, or
would have been likely to receive, if the person had not been dismissed”) Titan’s notice of
appeal stated:
“The Commissioner has estimated the period that Shaun would have remained
employed if he wasn't dismissed to be a further 10 weeks.
We argue that this is completely unrealistic and excessive in the current economic
environment and given our business circumstances.
If you review the below table you will note that at the at [sic] Shaun's date of
termination that Titan Plant Hire had 20 people employed including the two business
owners who are shown as employees for superannuation purposes only.
Since the 2/3/16 a further six employees have been terminated in Titan Plant Hire's
system. We cannot keep people employed if we do not have any work for them.
Our work in Darwin is seasonal. Under normal circumstances we have very little work
in Darwin during the period November to April which is the wet season. We operate
on minimal staff during the wet. The down turn in the economy has made this even
more prevalent for 2015-2016.
We were very fortunate in March 2015 to be awarded a small mining contract with
ABM at Old Pirate Gold Mine in the Tanami Desert. However, the ABM contract
finished around the end of April 2016 with the majority of employees finishing end of
March/first week of April 2016.
Therefore, we had very limited hire work in Darwin and with no opportunity to deploy
Shaun elsewhere it is unlikely that we would have been able to keep him employed at
all.”
[22] We do not reproduce the table referred to in the above passage. It is sufficient to say
that it identified each employee of Titan at the time of Mr Van Malsen’s dismissal by name
(numbering 20 in total), and disclosed that two of these employees had been terminated on 14
April 2016, one on 21 April 2016, two on 28 April 2016 and one on 10 June 2016.
[23] Titan raised a range of other matters in its appeal notice and submissions which were,
in substance, a plea for a different result rather than a contention of error.
[24] Mr Van Malsen (who was also self-represented) submitted that:
the Decision was not in error in any respect;
the Commissioner explained to the parties the principles upon which any decision
would be made, the matters which would be considered and how he would proceed;
Titan was allowed to call witnesses at the hearing despite not having previously
provided witness statements in accordance with the Commission’s directions;
[2016] FWCFB 5520
9
the grant of permission to appeal would not be in the public interest, as required by
s.400(1);
Titan had not identified any significant error of fact, as required by s.400(2);
the Commissioner inquired during the hearing how an order for compensation would
affect the business, and the response was limited to a statement to the effect that Titan
was in tough economic times;
his initial period of casual employment gave rise to a reasonable expectation of
continued employment on a regular and systematic basis, given that he was required to
work every day and was working an average of 46 hours per week; and
the decision that his dismissal was unfair, given that he was summarily dismissed for
refusing a direction to travel at short notice to a work location 1800 kms from his
contracted work location and work hours double that of his contracted work hours.
Consideration
[25] Titan’s appeal challenges three aspects of the Decision: first, the conclusion that Mr
Van Malsen had served the requisite minimum employment period; second, the finding that
the dismissal was unfair, and third, the assessment of compensation. We will deal with each
of these in turn.
[26] In relation to the minimum employment period, we do not consider that Titan has
established any error in the Decision. The contention now advanced that Titan is a small
business employer, so that the longer minimum employment period of one year specified in
s.383(b) applies, is entirely without merit. Titan did not contend before the Commissioner that
it was a small business employer (as defined in s.23 of the FW Act), and its submissions
before us positively advanced the proposition that it had 20 employees at the time of Mr Van
Malsen’s dismissal. In relation to the initial period of casual employment, the Commissioner
was undoubtedly correct in concluding that engagement on the basis of a requirement to work
38 ordinary hours per week and up to 9.5 additional hours gave rise to a reasonable
expectation of continuing employment on a regular and systematic basis. The fact that casual
employment consists, as a matter of legal analysis, of a series of discrete daily contractual
engagements does not alter this position. As was stated in Shortland v The Smiths Snackfood
Co Ltd10, “The criteria in s.384(2)(a) make it clear that s.384 does not proceed on the basis
that a casual employee’s period of employment for the purposes of the unfair dismissal
remedy starts and ends with each engagement as understood in the common law of
employment”.
[27] However we consider that the Commissioner erred in two respects in his consideration
of whether the dismissal was harsh, unjust or unreasonable. First, he applied the wrong test, or
asked himself the wrong question, in considering whether there was a valid reason for Mr Van
Malsen’s dismissal based on his capacity or conduct. It is apparent that the Commissioner
primarily approached the “valid reason” issue on the basis that misconduct was not sufficient
to constitute a valid reason, but that serious misconduct, as defined in reg.1.07 of the FW
Regulations, constituted the standard which had to be met. Thus although the Commissioner
10 [2010] FWAFB 5709, (2010) 198 IR 237 at [11]
[2016] FWCFB 5520
10
found that Mr Van Malsen had committed misconduct, because the misconduct was not
serious and did not meet the definition in reg.1.07, he found that there was not a valid reason
for dismissal under s.387.11
[28] The following propositions concerning consideration as to whether there is a valid
reason for dismissal for the purpose of s.387 are well established:
a valid reason is one which is sound, defensible and well-founded, and not capricious,
fanciful, spiteful or prejudiced;12
a reason would be valid because the conduct occurred and justified termination;
conversely the reason might not be valid because the conduct did not occur or it did
occur but did not justify termination (because, for example, it involved a trivial
misdemeanour);13
it is not necessary to demonstrate “serious misconduct” or misconduct sufficiently
serious to justify summary dismissal in order to establish a valid reason for
dismissal;14
the existence of a valid reason to dismiss is not assessed by reference to a legal right
to dismiss15 (so that, for example, where summary dismissal has occurred, it is not
necessary to determine whether the right of summary dismissal was legally available);
and
the criterion for a valid reason is not whether serious misconduct as defined in reg.1.07
has occurred, since reg.1.07 has no application to s.387(a) (although a finding that
misconduct of the type described might well ground a conclusion that there is a valid
reason for dismissal based on the employee’s conduct).16
[29] The Commissioner’s analysis in respect of s.387(a) was inconsistent with the above
propositions and as a result the Decision was attended by appealable error.
[30] Secondly, as part of his consideration under s.387(a) and before he had turned to
s.387(b)-(h), the Commissioner made a finding that the dismissal was harsh, unjust and
unreasonable.17 That meant, in effect, that the Commissioner only took into account his
conclusions with respect to s.387(a) in reaching the conclusion that the dismissal was harsh,
unjust and unreasonable. This was contrary to the requirement in s.387 that the Commission
must take into account all the matters specified in paragraphs (a)-(h) in considering whether it
11 Decision at [59]-[61]
12 Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371 at 373
13 Edwards v Giudice [1999] FCA 1836; (1999) 94 FCR 561 at [6]-[7]
14 Sharp v BCS Infrastructure Support Pty Limited [2015] FWCFB 1033 at [32]; Annetta v Ansett Australia (2000) 98 IR
233 at [9]-[10]
15 Sharp v BCS Infrastructure Support Pty Limited [2015] FWCFB 1033 at [32]; He v Lewin [2004] FCAFC 161; (2004) 137
FCR 266 at [15]
16 Sharp v BCS Infrastructure Support Pty Limited [2015] FWCFB 1033 at [33]-[34]; O'Connell v Wesfarmers Kleenheat
Gas Pty Ltd [2015] FWCFB 8205 at [22]-[23]
17 Decision at [72]
[2016] FWCFB 5520
11
is satisfied that the dismissal was harsh, unjust or unreasonable. This constituted appealable
error of a jurisdictional nature.
[31] In relation to the assessment of compensation, we detect no error in the process by
which the Commissioner calculated the amount to be paid by Titan. However one of Titan’s
complaints is that the Commissioner failed to give it advice as an unrepresented litigant about
the matters concerning the assessment of compensation under s.392 that it was required to
address, with the result that it made no submissions about these matters.
[32] A submission of this nature was upheld by the Full Bench in James Jones v Ciuzelis18
as follows (footnotes omitted):
“[42] The second contention advanced by the appellant is that the Deputy President did
not provide any opportunity for either party to make submissions in relation to the
criteria set out in s.392(2). In particular, the appellant challenges the finding that Ms
Ciuzelis would ‘have remained in employment for at least a 12 month period’.
[43] It is common ground that the Deputy President did not draw the attention of either
party to the terms of s.392 and nor did she invite submissions as to the criteria in
s.392(2). The transcript of the proceedings at first instance confirms this to be the case.
As a consequence of the procedure adopted the Deputy President’s findings and
decision in relation to the quantum of compensation to be awarded were made in a
vacuum, without the benefit of submissions from either of the parties.
[44] In circumstances where a party is self represented it cannot be assumed that they
will have a complete understanding of the relevant legislative provisions. The
Commission has an obligation to provide a fair hearing to all parties and this includes
the provision of appropriate assistance to parties in the presentation of their case,
particularly self represented parties. In the context of this matter the appropriate course
would have been for the Deputy President to direct the parties attention to the terms of
s.392 and to invite their submissions as to the various criterion set out in that section.
This course was not taken and instead the Deputy President proceeded to make
findings in relation to the matters set out in s.392(2) without the benefit of any
submissions and those findings provided the basis of the quantum of compensation
awarded.
[45] We have concluded that the Deputy President failed to accord the parties
procedural fairness in her consideration of the remedy to be awarded and accordingly
this aspect of the decision subject to appeal manifests an injustice which attracts the
public interest. We are satisfied that it is in the public interest to grant permission to
appeal in relation to the challenge to the Deputy President’s decision on remedy. We
grant permission to appeal on that limited basis only. We uphold the appeal against the
award of compensation and quash this part of the Deputy President’s decision...”
[33] The transcript discloses that the following exchange occurred between the
Commissioner and Mr Madalena, who appeared for Titan:
18 [2015] FWCFB 84
[2016] FWCFB 5520
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“THE COMMISSIONER: In respect of compensation, is there anything I need to know
about the effect of an order that I might make on the viability of your business? The
reason that comes about is that the very most compensation that can be awarded is
26 weeks' wages or half the high income threshold, whichever is the lower. In this
case it would be 26 weeks', being the very most. Is there anything you want to say to
me about the effect, if there were such an order, that that might have on your business?
MR MADALENA: Yes, obviously it will have an effect on our business. We're in
tough economic times and we're not immune from the current economic climate. I'm
sure it's well publicised what the current economic climate is.”19
[34] The Commissioner here was evidently inviting Titan to make submissions about
s.392(2)(a) (“the effect of the order on the viability of the employer's enterprise”). To that
extent, Titan’s ground of appeal cannot be sustained. However the transcript discloses that the
hearing then returned to the subject matter of the unfairness of the dismissal and the
jurisdictional issue concerning the minimum employment period, and never returned to the
s.392(2) considerations. In particular, Titan’s attention was never drawn to and it was not
invited to make submissions about s.392(2)(b) (“the remuneration that the person would have
received, or would have been likely to receive, if the person had not been dismissed”). The
Commissioner’s conclusion with respect to this issue, subject to the small deduction he made
on account of misconduct under s.392(3), determined the amount of compensation that Titan
was ultimately ordered to pay.
[35] It will not be necessary in every case involving an unrepresented party to draw their
attention to the relevant provisions of the FW Act and invite submissions about them. Many
unrepresented litigants such as large corporations and registered organisations are
sophisticated parties with internal legal and/or workplace relations expertise. However Titan,
although not a “small business employer” as defined in s.23, was nonetheless a small-sized
business without any such expertise. It is apparent from the transcript that at a number of
points during the hearing its representation had difficulty in following the issues at hand, and
indeed their understanding of the proceedings appears to have been inferior to that of Mr Van
Malsen. The Commissioner provided appropriate guidance to Titan at a number of stages.
However no such guidance was provided with respect to s.392(2)(b), with the result that Titan
was effectively deprived of the opportunity to make submissions about this critical
consideration. This constituted a constructive denial of procedural fairness.
[36] We consider that the errors we have identified are significant in nature, affected the
outcome of the matter and had the potential to result in injustice to Titan. We consider that it
would be in the public interest to grant permission to appeal, and accordingly permission to
appeal must be granted in accordance with s.604(2) of the FW Act. We uphold the appeal and
quash the Decision and Order.
[37] In light of that outcome, we consider the appropriate course is to re-determine Mr Van
Malsen’s unfair dismissal remedy application ourselves. Noting that we have not found any
error of fact on the part of the Commissioner, we will proceed on the basis of the
Commissioner’s findings of fact subject to the additional information which has been
provided to us in the appeal.
19 Transcript PNs 269-270
[2016] FWCFB 5520
13
Re-determination of Mr Van Malsen’s unfair dismissal remedy application
[38] On the basis of the Commissioner’s conclusions in the Decision and the rejection of
Titan’s challenge to the Commissioner’s conclusion that Mr Van Malsen was a person
protected from unfair dismissal, we find as follows:
(a) Mr Van Malsen’s application was made within the period required by s.394(2);
(b) Mr Van Malsen was a person protected from unfair dismissal;
(c) Titan was not a “small business employer” as defined in s.23 of the FW Act, so
that the Small Business Fair Dismissal Code was inapplicable; and
(d) the dismissal was not a case of genuine redundancy.
Whether dismissal unfair
[39] It is then necessary for us to determine whether Mr Van Malsen’s dismissal was harsh,
unjust or unreasonable having regard to the matters specified in s.387. We will deal with each
of the s.387 matters in turn.
Whether there was a valid reason for the dismissal related to the person’s capacity or
conduct (s.387(a))
[40] We find that there was no valid reason for Mr Van Malsen’s dismissal related to his
capacity or conduct. To the extent that Mr Van Malsen was directed, as distinct from merely
requested, to travel to the Old Pirate Mine, it was not a lawful or reasonable direction. It was
not lawful because it fell outside the scope of Mr Van Malsen’s contract of employment. That
contract, which was in writing, required him to work at Darwin within specified working
hours and days. It did not require him to drive to a desert location 1600 kms away on demand
and work extended shifts continuously for periods well in excess of a week at a time. We do
not consider that the request made to him on 2 March 2016 constituted a variation of the
working location on reasonable notice pursuant to clause 5.22 of the Agreement. The
direction was also not reasonable in that it required Mr Van Malsen to leave Darwin for an
undefined period at extremely short notice in a way which interfered with his family
responsibilities. The fact that the illness of Titan’s substantive employee at the Old Pirate
Mine meant that Titan was placed in difficulty in terms of discharging its contractual
commitments there did not mean that it was entitled to make Mr Van Malsen solely
responsible for the resolution of that difficulty.
[41] Mr Van Malsen was therefore not obliged to comply with the direction or request that
he travel to the Old Pirate Mine site, and his refusal to comply did not constitute a sound,
defensible or well-founded reason for his dismissal.
[42] We agree with and adopt the conclusions of the Commissioner with respect to the
performance issues identified in the termination letter. Indeed, given that they related to Mr
Van Malsen’s previous work and conduct in relation to the Old Pirate Mine site, the reliance
on them in justifying a dismissal primarily based on Mr Van Malsen’s refusal of Titan’s
request that he work at the site for a third time can fairly be described as bogus.
[2016] FWCFB 5520
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Whether the person was notified of that reason and was given an opportunity to respond to
any reason related to the capacity or conduct of the person (s.387(b) and (c))
[43] Mr Van Malsen was not notified of the reason for his dismissal prior to him being
given the letter of termination on 2 March 2016. He was therefore not given an opportunity to
respond to that reason insofar as it related to his conduct.
Whether there was any unreasonable refusal by the employer to allow the person to have a
support person present to assist at any discussions relating to dismissal (s.387(d))
[44] There were no discussions relating to Mr Van Malsen’s dismissal prior to him being
given the letter of termination. Accordingly the issue of him being allowed a support person
does not arise.
If the dismissal related to unsatisfactory performance by the person - whether the person had
been warned about that unsatisfactory performance before the dismissal (s.387(e))
[45] Insofar as Mr Van Malsen was dismissed for unsatisfactory performance, he had not
been given any prior warning about this.
The degree to which the size of the employer’s enterprise or the absence of dedicated human
resource management specialists or expertise in the enterprise would be likely to impact on
the procedures followed in effecting the dismissal (s. 387(f) and (g))
[46] Titan was a small-sized business and did not have any dedicated human resource
management specialists or expertise. We consider it likely that this affected the procedures it
adopted in dismissing Mr Van Malsen.
Any other matters that the Commission considers relevant (s.387(h))
[47] We consider it relevant that, at the time of the hearing before the Commissioner, Mr
Van Malsen had not been successful in obtaining any alternative employment. We infer
therefore that the dismissal caused him financial loss.
Conclusion
[48] We conclude that Mr Van Malsen’s dismissal was harsh, unjust and unreasonable
because there was no valid reason for the dismissal, he was denied procedural fairness, and
the dismissal caused him financial loss.
Remedy
[49] We do not consider that reinstatement is an appropriate remedy. Mr Van Malsen does
not wish to return to work at Titan, and Titan has no work for him to perform. We consider
that the award of compensation to Mr Van Malsen would be appropriate given that his unfair
dismissal has caused him financial loss.
[50] It is therefore necessary for us to assess the amount of compensation which should be
ordered. In assessing compensation, it is necessary under s.392(2) of the Act to take into
account all the circumstances of the case including the specific matters identified in
[2016] FWCFB 5520
15
paragraphs (a)-(g) of the subsection, and it is also necessary to consider the other relevant
requirements of s.392. In undertaking this task, we shall use the established methodology for
assessing compensation in unfair dismissal cases which was elaborated upon in the context of
the FW Act in Bowden v Ottrey Homes Cobram and District Retirement Villages Inc.20
Remuneration that would have been received if the dismissal had not occurred (s.392(2)(c))
[51] We accept that, if Mr Van Malsen had not been dismissed upon refusing to travel to
the Old Pirate Mine, the continuation of his employment would only have extended for a
limited time thereafter because of Titan’s business difficulties and the lack of available work
in Darwin. We find persuasive in this context the information advanced by Titan in the appeal
that it had terminated six employees since Mr Van Malsen’s dismissal, that five of them had
been terminated on or before 28 April 2016, that it was significantly affected by a drop off in
demand for mining services, and that the business had been downsizing in order to stay afloat.
Having regard to those matters, our estimation is that Mr Van Malsen would only have been
employed for a further period of eight weeks if he had not been dismissed on 2 March 2016.
[52] We calculate the remuneration he would have received over this period in accordance
with the methodology used by the Commissioner21 - that is, eight weeks’ pay is to be
calculated on the basis of an income of $1747.60 per week (inclusive of superannuation). The
remuneration that would have been earned was therefore $13,980.80.
Remuneration earned (s.392(2)(e)) and income reasonably likely to be earned (s.392(2)(f))
[53] There is no evidence of Mr Van Malsen having earned any income prior to the hearing
before the Commissioner on 9 June 2016. Whether he has earned any income since then is not
relevant since that period does not overlap with the period for which he may be compensated
under s.392(2)(c).
Other matters (s.392(2)(g))
[54] We do not consider that there should be any further deductions for “contingencies”. In
relation to taxation, compensation will be determined as a gross amount and we will leave it
to Titan to deduct any amount of taxation required by law.
Viability (s.392(2)(a))
[55] There was information placed before us in the appeal which indicates that the viability
of the business is at risk. Titan is currently sustaining significant losses, and it expressed a
concern that the monetary order that was made by the Commissioner would further endanger
its viability. We will therefore reduce the amount of compensation otherwise payable by 25%
(that is, the amount will be reduced by two week’s pay or $3,495.20).
Length of service (s.392(2)(b))
[56] Mr Van Malsen’s short period of service does not justify any adjustment to the amount
of compensation.
20 [2013] FWCFB 431
21 Decision at [123]
[2016] FWCFB 5520
16
Mitigation efforts (s.392(2)(d))
[57] We agree with and adopt the Commissioner’s conclusion that Mr Van Malsen made
reasonable efforts to mitigate his loss by seeking alternative employment.22 There will be no
adjustment on this score.
Misconduct (s.392(3))
[58] We do not consider that Mr Van Malsen committed any misconduct. As earlier stated,
he had no obligation to comply with a direction that was not lawful or reasonable, so no
misconduct was associated with his refusal to comply with this direction. Therefore no
deduction is required under s.393(3).
Compensation cap (s.392(5))
[59] The amount of compensation we propose to order is below the compensation cap.
Instalments (s.393)
[60] Having regard to the state of Titan’s business as earlier described, we propose that the
payment of compensation should occur in two equal instalments. The first shall be payable
within seven days of the date of this decision, and the second shall be payable within a further
28 days.
Conclusion
[61] The amount of compensation which we derive having regard to the above
considerations is $10,485.60, less deduction of any tax as required by law. Having regard to
all the circumstances of the case, we consider that this is an appropriate amount of
compensation. The amount shall be paid in two equal instalments as earlier discussed.
Orders
[62] We make the following orders:
(1) Permission to appeal is granted.
(2) The appeal is upheld.
(3) The Decision and the Order are quashed.
[63] A separate order will issue giving effect to our decision concerning the compensation
to be paid to Mr Van Malsen for his unfair dismissal.
22 Decision at [103]-[104]
[2016] FWCFB 5520
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VICE PRESIDENT
Appearances:
J Madalena and C Madalena on behalf of Titan Plant Hire.
S Van Malsen on his own behalf.
Hearing details:
2016.
Sydney:
10 August.
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Price code C, PR583929
