[2021] FWC 6073
FAIR WORK COMMISSION

DECISION


Fair Work Act 2009
s.394—Unfair dismissal

Charles Calleja
v
Auswire Industries
(U2021/3133)

COMMISSIONER YILMAZ

MELBOURNE, 6 OCTOBER 2021

Application for an unfair dismissal remedy

[1] On 14 April 2021, Mr Charles Calleja filed an application in the Fair Work Commission (Commission) under s.394 of the Fair Work Act 2009 (Cth) (the Act) for a remedy, alleging that he had been unfairly dismissed from his employment with Auswire Industries (Vic) Pty Ltd atf The Thomas Wragg Family Trust (Auswire). Mr Calleja seeks a remedy of compensation.

[2] Auswire object to the application on the basis of the following jurisdictional grounds:

•  that the application was lodged out of time

•  that the dismissal was a genuine redundancy

•  that the business complied with the Small Business Fair Dismissal Code

•  that Auswire is a small business and Mr Calleja had not met the minimum employment period of 12 months

[3] Both parties were self-represented. Mr Calleja gave witness evidence and the witnesses for Auswire included:

•  Mr Sergio Caramanico, business owner; and

•  Ms Sandra Gannaway, accounts.

Background

[4] Mr Calleja was employed as a full-time spring maker from 16 March 2020 until his termination of employment on 24 March 2021. The current owners of Auswire were still new to the spring making industry when in March 2020 a retiring spring maker recommended Mr Calleja to the business. Auswire understood that while not a trade qualified spring maker, he had solid experience in the industry.

[5] Mr Calleja’s employment was without any major incident until he took ill in November 2020; first the illness was a diagnosis of a personal nature but was subsequently found to be a hernia which resulted in a WorkCover claim. It is not contested that during 2020 Mr Calleja took leave when he was ill and was required to isolate while testing for COVID on more than one occasion. Auswire referred to Mr Calleja’s absences in 2020 describing them as “unauthorised” and excessive and argued deduction of unauthorised leave reduced the minimum employment period.

[6] When Mr Calleja became aware that he had a hernia, he informed his employer that he would lodge a workers’ compensation claim. Auswire objected to the workers’ compensation claim and challenged Mr Calleja that it was not attributable to work, that it should not be responsible for the doctor’s initial misdiagnosis which in their view resulted in Mr Calleja returning to work and aggravating his injury and that he was aware of his medical condition and failed to comply with his health and safety obligation of reporting the injury. Auswire refused to accept the claim, and this set off a series of unpleasant, aggressive and disrespectful communication between Mr Calleja and primarily Mr Caramanico, the director of the business.

Medical condition and communication between the parties

[7] Early in the morning of 1 December 2020 Mr Calleja texted his employer advising that he was in hospital the day before (30 November 2020) and had a medical certificate for 3 days. 1 Mr Caramanico returned a text message “Tfhanks ok Charlie just get better frist [sic]”.2

[8] On Mr Calleja’s return to work on 3 December 2020 a medical certificate was produced covering the absence. 3

[9] Mr Caramanico gave evidence that Mr Calleja left work due to pain on 15 December 2020, and then received a telephone message on 17 December 2020 advising that he had developed two hernias and required an operation. Mr Calleja gave evidence that he phoned Mr Caramanico to advise him of the diagnosis and that he would be making a workers’ compensation claim.

[10] At 4:13 PM on 17 December 2020, Mr Caramenico emailed a letter to Mr Calleja in relation to the telephone message in the morning and challenged an entitlement to claim workers’ compensation. In doing so he referred to the reason for the earlier absence on 30 November, that no injury incident report was filed with Auswire and that Mr Calleja commented to his supervisor before he left the workplace that he had an infection and two small hernias. Mr Caramenico further referred to their Employment Rules and Conditions (ERC) document (referred to as the Auswire handbook) to support his contention that Mr Calleja had an obligation to report injuries. 4 Clause 4 of the ERC refers to the safety policy that outlines the employer’s responsibility and for employees to “report any accident or injury to health which arises in the course of, or in connexion with their work immediately.” The letter of 17 December 2020 was clear that it did not accept a workers’ compensation claim as it concluded with, “we therefore point out that you have no claim on workcover.”5

[11] Mr Caramenico formed the view that if the claim was genuine, that an event should have triggered or aggravated the hernia. It is on this basis that he disputes the work injury and in accordance with their policy Mr Calleja should have reported the incident at the appropriate time. 6

[12] In response to the letter of 17 December 2020, Mr Calleja emailed Mr Caramanico with the following messages: 7

“I obviously did it at work over the last month. I have been in severe pain and have worked through it as a concern to my job. I understand when you were first told about by John Bennett 2 weeks ago. You told him I was on the piss. What does that mean. I know my rights.” (17 December 2020 at 4:22:24 PM)

“I will take this further, and go through all the right channels. I know my rights. I did this at work. I gave you what the gp gave me as I got it. It’s a stragulated [sic] hernia. Look it up” (19 December 2020 at 8:25 PM)

[13] In addition to the emails, Mr Calleja sent the following text messages:

“I will be in tomorrow with all my paperwork. I am claiming it on work cover. I did it at work. I have rights.” (9:55PM)

“I know about your history. Such a good record don’t fuck with me.” (10:29 PM)

[14] In response, Mr Caramanico emailed Mr Calleja on 21 December advising that he put some paperwork in the mail and expected him to sign it and return to Auswire. The mailed document was a warning letter dated 20 December 2020. The letter states that it is a second warning regarding unwarranted and threatening texts to his mobile. The warning requires that Mr Calleja address correspondence in writing addressed to the company either posted or emailed. While it states that it gives Mr Calleja an opportunity to respond, there was no response nor a meeting between the parties for this to occur. 8

[15] On 21 December 2020, Mr Calleja attended the workplace and provided a group of medical documents regarding his medical condition. 9 The group of medical documents contain a report from the emergency department of Western Health in relation to his visit on 30 November 2020. This report addressed to Mr Calleja’s medical practice includes recommendations for treatment. Also attached to the group of documents were clinical notes with the conclusion containing a finding of hernias. Another report was a full blood examination, general biochemistry information and a referral dated 17 December 2020 from Mr Calleja’s doctor to a specialist for treatment of a hernia and this referral includes a list of current medications and past history. Mr Calleja gave evidence that he received the group of documents following a visit to his GP and he promptly proceeded to provide them to his employer. Mr Calleja confirmed that the only document he had in his possession on 30 November was the medical certificate of the same date from Western Health which he provided to Auswire when he returned to work.

[16] When Mr Calleja came in to provide the medical reports, a disagreement about his entering the workplace to collect his tools took place. Mr Caramanico states that he instructed him not to enter the workshop and could advise which were his tools to be collected for him. Mr Calleja gave evidence that the meeting was unpleasant with Mr Caramanico, “virtually laughing at his face” when he hand delivered the group of documents. He did state that despite the instruction not to enter the workshop he did so, greeting the staff as he collected his tools. Mr Calleja gave evidence that Mr Caramanico laughed at him, yelled, and bullied him off the premises 10 so he formed the view that due to Mr Caramanico’s response to his diagnosis and intention to lodge a workers’ compensation claim, that it was unlikely he would be returning to work.

[17] Mr Caramanico submits that on 21 December 2020, that he verbally warned Mr Calleja for disobeying a direct instruction. 11 I note the second written warning preceded the first written warning.

[18] After having examined the medical documents, Mr Caramanico concluded that Mr Calleja’s report of his medical condition in late November was at odds with the clinical notes which made reference to hernias. Mr Caramanico also identified in the report for the specialist reference to the use of the drug Effexor, and he states that had he known this drug was taken he would not have employed Mr Calleja, because in his opinion the drug should not be taken when operating machinery, a forklift or other electrical equipment. 12 The basis of this conclusion was because his office manager told him that was the case as he too had been prescribed the same drug. Mr Caramanico was also critical of Mr Calleja for failing to provide a medical certificate on commencement of employment and stated he asked three times for it.13

[19] Exhibit R3 and R4 (medical certificate and Western Health medical information) were incorrectly date stamped as 2021. Mr Wragg made statements to the effect that he stamped the documents on the day that they were received.

[20] After Mr Calleja handed in the bundle of medical documents to Auswire, he discovered that Mr Caramanico made comments to at least two employees that he was a chronic alcoholic and took drugs. This inflamed him and the subsequent texts and emails were his venting of anger. 14 Mr Calleja gave evidence that he acknowledged that he should not have sent the text messages or emails in the way that he had, but he was stressed, angry and felt discarded by his employer.

[21] Mr Calleja did lodge a workers’ compensation claim directly with the insurer because Auswire refused to accept it. Auswire confirmed that they did not receive the claim form and management of the claim was direct through their insurer.

[22] On 7 January 2021, a letter 15 was emailed to Mr Calleja that informed him that all communication is kept on record, that any harassment or threats not related to his illness will invoke an immediate dismissal and it addresses the medical information received on 21 December 2020. Specifically, Auswire criticises that the medical certificate cleared him to return to full duties on 3 December 2020, because it did not refer to any required modified duties. In relation to the referral to a specialist because it makes reference to a diagnosis of a hernia on 30 November 2020, it states that Mr Calleja failed disclose his injury consistent with his obligations as outlined in the ERC which prevented Auswire from assigning modified duties and most probably contributed to an aggravation of an injury. The letter from Auswire further draws the conclusion that Mr Calleja is taking harmful drugs and that he is a chronic alcoholic and therefore seeks from him full disclosure of all medications, information regarding his status as an alcoholic and a full examination before he returns to work. The letter also states that Mr Calleja has breached his duty of care and misled Auswire at the time of his employment. The letter further attached a third warning. This warning refers to unwarranted texts on 6 January and in relation to the medical documents that he had failed to disclose medications taken. Like the second warning there is a place for Mr Calleja to sign the document, but there was no meeting between the parties or an opportunity to respond.16

[23] Mr Caramanico gave evidence that he was advised by his lawyer that he could not dismiss Mr Calleja while on workers’ compensation, and had he not been on workers’ compensation he would have dismissed him on 7 January 2021. 17 In closing submissions Mr Wragg stated that they did not want Mr Calleja to return to work therefore they terminated his employment after obtaining legal advice.18

[24] The five text messages sent by Mr Calleja on 6 January 2021 state that he had sustained the injury at work, that Auswire cannot turn a blind eye, he goads Mr Caramanico into calling him if he has the “balls”, states that he knows why he was bankrupt more than 5 times, accuses Mr Caramanico of employing staff off the books and states that he has had legal advice and will take the matter all the way.

[25] Mr Calleja sent a further text message on 8 January 2021 after receipt of the third warning and stated:

Make it my 3rd. You degrade me calling me a alcoholic and drug addict. My lawyer will be in contact on Monday. You are messing with my head. I hurt my self at work because of your negligence and how you run your business. Nothing works and no safety procedures in place. Bring in OHS. 19

[26] Further text messages were sent on 13 January 2021 along similar lines, but also escalated to:

Bring it on Sergio. You have so much more to lose than me. I won’t rest you have so much to answer for (11:52PM)

If someone fuck you. Fuck them harder. My time will come. You bullied Donna, you bullied Bree. Your not going to bully me. I know my rights. (11:58PM)

[27] A further two similar texts were sent on 14 January 2021 at 12:08 AM and 12:19 AM. Auswire tendered these emails in evidence.

[28] Correspondence dated 19 February 2021 from the insurer was sent to Auswire informing them that the injury was accepted as a claim, and it nominated the date of injury as 15 November 2020. 20

[29] On 22 March 2021, Auswire gave evidence that they were contacted by WorkCover that Mr Calleja was fit to return to work on modified duties and informed them of their obligations to develop a return-to-work plan. Both Mr Caramanico and Ms Gannaway gave evidence that they formed the view that the workers’ compensation claim came to an end. 21

[30] On 24 March 2021, Auswire emailed to Mr Calleja a letter dated the same date, terminating his employment immediately with the reason of downturn in business. The letter states that “due to a downturn in our business we have to adjust our staffing levels, which means that we have no position available to you. As result we wish would advise you, that your employment is terminated as from today,” 22(sic) Auswire contend that Mr Calleja’s employment was terminated due to a genuine redundancy, therefore the dismissal cannot be unfair.

[31] Following receipt of the letter of termination Mr Calleja took exception to the statement and sent further communication about the allegations. Further colourful text messages were tendered by Auswire that do not contain a date, and in these Mr Calleja makes statements that Auswire are required to keep his job open for 52 weeks, an offer to settle is made and various other statements are made.

[32] It is not contested that the letter of termination of employment constitutes the notice of the dismissal. It is also not contested that the relevant industrial instrument is the Manufacturing and Associated Industries and Occupations Award 2020 (the Award).

[33] Mr Calleja submits that he was injured at work and dismissed while absent on WorkCover which is unlawful. At the hearing, Mr Calleja submitted that he was still recovering from his injury therefore he had not looked for alternative work since his dismissal and will not be in a position to do so until he is cleared fit for work. Mr Calleja confirmed that he was still on WorkCover payments at the time of the hearing.

[34] Auswire submit that it is a small employer with fewer than 15 employees. It submits that as a small employer Mr Calleja is not protected from unfair dismissal because he had not completed the minimum employment period of 12 months of continuous service. In calculating the period of continuous service Auswire deducted periods of absence that it says was unauthorised and this means that the minimum period of 12 months was not met. Mr Calleja disputes Auswire’s submissions regarding the periods deducted from the period of continuous employment. He also disputes that Auswire is a small business employer with fewer than 15 employees.

[35] Auswire submit that as a small business, it complied with the Small Business Fair Dismissal Code and therefore the application should be dismissed.

Initial matters to be considered in an unfair dismissal application

[36] Section 390 of the Act provides that the Commission may order a remedy if it is satisfied that the Applicant is protected from unfair dismissal and has been unfairly dismissed. However, s.396 requires consideration of initial matters which relate to whether a person is protected from unfair dismissal before turning to the merits of an application. The first being whether the application was made within the required period in subsection 394(2). Section 396 also requires consideration of whether the person is protected from unfair dismissal as provided by s.382 of the Act, whether the dismissal is consistent with the Small Business Fair Dismissal Code as provided in s.388 and whether the dismissal was a case of genuine redundancy as provided by s.389.

[37] The jurisdictional objections raised by Auswire go to the matters provided by s.396 to be initially considered.

[38] I will deal with the initial matters to be considered in the order raised by Auswire.

Was the application lodged out of time?

[39] In addition to the jurisdictional objections, Auswire states the application was made out of time. Subsection 394(2) provides that applications must be made within 21 days after the dismissal took effect, or a further period as the Commission allows.

[40] Admitted into evidence was the letter of termination of employment dated and effective from 24 March 2021. Also submitted was an employment separation certificate dated 24 March 2021 which provided that the period of employment was 16 March 2020 to 14 February 2021. 23

[41] Auswire confirmed that the notice of dismissal was the letter of termination dated and effective from 24 March 2021. The application was filed with the Commission on 14 April 2021. The application was lodged on the 21st day and therefore it is not lodged outside the statutory time limit. I find that the application was lodged within the 21-day statutory time limit.

Was the dismissal a case of genuine redundancy?

[42] Under s.389 of the Act, a person’s dismissal is a case of genuine redundancy if:

(a) the employer no longer required the person’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise; and

(b) the employer has complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy.

[43] Auswire’s reason for the dismissal was that it had to adjust staffing levels because of a downturn in business and this resulted in Mr Calleja’s redundancy. 24

[44] Mr Caramanico gave evidence that because of the downturn and due to the likely health and safety risk associated with the work performed by Mr Calleja, that it outsourced the work or turned away such work and it was no longer hiring additional staff. After Mr Calleja informed Auswire of his injury, the work performed by him was reallocated to the apprentice that was employed in May 2020 and other heavy aspects of the work was outsourced. 25

[45] Mr Calleja submits the reason for his dismissal is not genuine and he contested the logic that Auswire would outsource spring making work, given that the business is a spring making business.

[46] As late as 17 December 2020, correspondence from Auswire to Mr Calleja states that they are sorry to hear of his hernia and hope to see him back at work as soon as possible. 26 Over the course of 2020, there was no evidence that there was any downturn in work, despite the impact of COVID and just before Christmas in 2020, the business closedown and resumed in late January or early February 2021. No evidence was tendered of any downturn to affect Mr Calleja’s employment. The first reference to any downturn and redundancy arose with the letter of termination of employment.

[47] Auswire failed to provide evidence that Mr Calleja’s job was no longer required because of changes to operational requirements. For a person that is made redundant to not to have the protection of the unfair dismissal provisions in the Act, the employer must meet not only the first requirement of s.389, it is also required to meet the requirements of s.389(b).

[48] Section 389(b) relates to the employer’s obligations to comply with its consultation obligations as provided by the relevant modern award or enterprise agreement. It was not contested that Mr Calleja’s employment was covered by the Award. Clause 41 of the Award concerns consultation and provides:

41.1 Consultation regarding major workplace change

(a) Employers to notify

(i) Where an employer has made a definite decision to introduce major changes in production, program, organisation, structure or technology that are likely to have significant effects on employees, the employer must notify the employees who may be affected by the proposed changes and their representatives, if any.

(ii) Significant effects include termination of employment; major changes in the composition, operation or size of the employer’s workforce or in the skills required; the elimination or diminution of job opportunities, promotion opportunities or job tenure; the alteration of hours of work; the need for retraining or transfer of employees to other work or locations; and the restructuring of jobs. Provided that where this award makes provision for alteration of any of these matters an alteration is deemed not to have significant effect.

(b) Employers to discuss change

(i) The employer must discuss with the employees affected and their representatives, if any, the introduction of the changes referred to in clause 41.1(a), the effects the changes are likely to have on employees and measures to avert or mitigate the adverse effects of such changes on employees and must give prompt consideration to matters raised by the employees and/or their representatives in relation to the changes.

(ii) The discussions must commence as early as practicable after a definite decision has been made by the employer to make the changes referred to in clause 41.1(a).

(iii) For the purposes of such discussion, the employer must provide in writing to the employees concerned and their representatives, if any, all relevant information about the changes including the nature of the changes proposed, the expected effects of the changes on employees and any other matters likely to affect employees provided that no employer is required to disclose confidential information the disclosure of which would be contrary to the employer’s interests.

[49] If a person’s dismissal is a case of genuine redundancy, the person is not protected from the unfair dismissal provisions. To satisfy the test of genuine redundancy, the dismissal must meet both requirements of s.389, i.e. that the person’s job is not to be performed by anyone because of change to operational requirements and that the employer has complied with the Award’s consultation about redundancy clause.

[50] A downturn in the employer’s business requiring a reduction of staff because of a change in the composition or size in the workforce can be characterised as meeting operational requirements. While it is contested in this matter that the decision to dismiss Mr Calleja is due to a downturn in business combined with the decision to outsource the work, the requirements of s.389 requires Auswire to also comply with the Award’s consultation clause.

[51] Auswire provided no evidence of its compliance with clause 41.1 of the Award. In fact, the evidence is that “because of the threats” or hostility 27 there was no communication other than the letter of termination of employment. The employer must comply with the Award obligations to meet the requirements of the Act. The termination of Mr Calleja’s employment is captured by Clause 41 of the Award if Auswire made a definite decision to make major changes in production which affected his employment. The clause requires the employer to discuss the changes, the effects of the changes on employees and measures taken to avert the adverse effects of the changes. In addition to discussions as early as practicable, Auswire was required to consider matters raised by employees affected by the major change.

[52] Auswire admits that there was no discussion with Mr Calleja at all regarding the decision to make changes in employment because of a downturn in business dismiss his employment.

[53] To fulfil the obligations under the Award is necessary for the dismissal to be considered a genuine redundancy and if it does not then, the dismissal cannot be a genuine redundancy. 28

[54] On the evidence Auswire has not established that the dismissal was a genuine redundancy.

Had Mr Calleja completed the minimum employment period?

[55] Sections 382 and 383 of the Act provides that a person is protected from unfair dismissal if they have completed a minimum employment period of 12 months if a small employer, or 6 months if not a small employer. The relevant period is the period of continuous service as provided by sections 22, 383 and 384 of the Act. The Act provides for excluded periods and periods that may affect the period of continuity.

[56] The relevant sections of the Act are:

“382 When a person is protected from unfair dismissal

A person is protected from unfair dismissal at a time if, at that time:

(a) the person is an employee who has completed a period of employment with his or her employer of at least the minimum employment period; and

(b) one or more of the following apply:

(i) a modern award covers the person;

(ii) an enterprise agreement applies to the person in relation to the employment;

(iii) the sum of the person's annual rate of earnings, and such other amounts (if any) worked out in relation to the person in accordance with the regulations, is less than the high-income threshold.”

“383 Meaning of minimum employment period

The minimum employment period is:

(a) if the employer is not a small business employer - 6 months ending at the earlier of the following times:

(i) the time when the person is given notice of the dismissal;

(ii) immediately before the dismissal; or

(b) if the employer is a small business employer - one year ending at that time.”

“384 Period of employment

(1) An employee's period of employment with an employer at a particular time is the period of continuous service the employee has completed with the employer at that time as an employee.

[57] To advance an application under s.394, the applicant must be a person protected from unfair dismissal at the time of dismissal. Auswire submits that Mr Calleja does not qualify as a protected person as he did not satisfy s.383 concerning the minimum employment period.

[58] The minimum period of employment starts when the employee commences employment and finishes when the employee is notified of the dismissal or immediately before the dismissal, whichever occurs first. Mr Calleja commenced on 16 March 2020 and was dismissed on 24 March 2021. Based on the dates alone Mr Calleja had met both the 6-month period if the business is not a small business and 12 months if Auswire is a small business. However, Auswire submit that Mr Calleja took “unauthorised” absences which should be deducted from the period that makes up the minimum employment period.

[59] While an excluded period does not break continuous service, certain types of absences are considered excluded periods. Section 22 of the Act provides:

General meaning

(1)  A period of service by a national system employee with his or her national system employer is a period during which the employee is employed by the employer, but does not include any period (an excluded period) that does not count as service because of subsection (2).

(2)  The following periods do not count as service:

(a)  any period of unauthorised absence;

(b)  any period of unpaid leave or unpaid authorised absence, other than:

(i)  a period of absence under Division 8 of Part 2-2 (which deals with community service leave); or

(ii)  a period of stand down under Part 3-5, under an enterprise agreement that applies to the employee, or under the employee's contract of employment; or

(iii)  a period of leave or absence of a kind prescribed by the regulations;

(c)  any other period of a kind prescribed by the regulations.

[60] Auswire contends that Mr Calleja took periods of “unauthorised” leave while employed and that those periods should be deducted. I observe that in addition to the leave Auswire state was taken, Mr Calleja commenced a period of workers’ compensation prior to his dismissal. The period of workers’ compensation is not an excluded period even where payments are made direct by an insurer as they are made on behalf of the employer. 29

[61] Ms Gannaway gave evidence that Auswire has a policy that a leave form must be completed, otherwise employees risk not being paid, and while employees can be sloppy about completing forms, most often after they are spoken to, the forms are then forthcoming. The purpose of the form is that the leave is authorised by the manager or supervisor as she is in the workplace part-time. She gave evidence that since the issues with Mr Calleja, the business is stricter in relation to the completion of the leave form for payment to be made. 30 Ms Gannaway confirmed there are no consequences to not completing the form other than it being recorded on an employee’s file and not being paid. In relation to Mr Calleja’s attendance record, it was not noticed by her until it was brought to her attention for the purposes of these proceedings.31

[62] Ms Gannaway attached to her witness statement an extract from payroll of Mr Calleja’s absences since commencement of employment which is marked as SG-0 and which she says is the updated version referred to by Mr Caramenico in his witness statement. It is not contended that Mr Calleja did not contact his manager or leading hand on each occasion when absent from work.

[63] Ms Gannaway identified in SG-0 all absences (paid and unpaid personal leave, paid and unpaid annual leave and leaving work early over the course of Mr Calleja’s employment. To identifying the days to be deducted, Ms Gannaway gave evidence in relation to her payroll extraction SG-0, as it was the most accurate. Ms Gannaway described all of the leave that was “unauthorised” from among the absences which should be deducted from the period calculated for the purpose of minimum employment period. The following table shows the period of unpaid “unauthorised” leave and paid “unauthorised” leave:

[64] Ms Gannaway states that all leave that is not accompanied by a leave form that is signed by the manager or leading hand is unauthorised. Mr Calleja gave evidence that he knew he would not be paid so did not bother with completing the form.

[65] For the purposes of the Act, unauthorised leave is any period that is unauthorised, unpaid leave or unpaid authorised leave. The National Employment Standards (NES) set out the period of personal leave and annual leave entitlements for national system employees. The NES provides for 10 days of personal leave per year of service, and the leave is to be taken because the employee is not fit for work because of personal illness or injury. The notice requirements are contained in s.107 of the Act. Relevantly, s.107 provides:

Notice and evidence requirements

Notice

(1)  An employee must give his or her employer notice of the taking of leave under this Division by the employee.

(2)  The notice:

(a)  must be given to the employer as soon as practicable (which may be a time after the leave has started); and

(b)  must advise the employer of the period, or expected period, of the leave.

Evidence

(3)  An employee who has given his or her employer notice of the taking of leave under this Division must, if required by the employer, give the employer evidence that would satisfy a reasonable person that:

(a)  if it is paid personal/carer's leave--the leave is taken for a reason specified in section 97; or

…………

Compliance

(4)  An employee is not entitled to take leave under this Division unless the employee complies with this section.

[66] Therefore, consistent with s.107 of the Act and from Ms Gannaway’s evidence, the period for deduction from the minimum employment period is unpaid personal leave and absences without authority. This means that 15.5 hours is to be deducted from the minimum employment period. Ms Gannaway characterised leave that was unauthorised because Mr Calleja did not complete a leave form, she gave evidence that notice of leave was given and there was no evidence that the personal leave was taken for any reason other than personal injury or illness and there was no evidence that notice was not given as soon as practicable. From among the paid personal leave 24 hours was paid and Mr Calleja complied with the notice requirement. A total of 38 hours was paid as annual leave and 16 hours of personal leave was supported by a medical certificate. The NES provide the standards for the taking of personal leave and Mr Calleja complied with those standards. The additional Auswire requirement that a leave form is completed may be of assistance for administrative purposes but does not override the NES entitlement. The workers’ compensation claim was accepted effective from 15 November 2020, therefore all absences from that date are not to be excluded from the minimum employment period.

[67] If Auswire is a small business, even with a deduction of 15.5 hours of unpaid personal leave, Mr Calleja has still met the minimum employment period of 12 months.

Is Auswire a small business?

[68] Auswire submit that it employed 11 employees at the time of Mr Calleja’s dismissal and tendered in evidence a redacted payroll summary covering the period 18 March to 24 March 2021. Mr Calleja was terminated on 24 March 2021 and he was already removed from the payroll summary. Also not listed in the payroll summary were Ms Gannaway and Mr Caramanico. Ms Gannaway gave evidence that as directors they both receive director’s fees and are not employees. Mr Caramanico is directly involved in the operation of the business and Ms Gannaway while not working full time, manages the payroll function. There is no evidence that either volunteer their time, and no evidence was submitted that they are not employees. It is incorrect to assume because a person has the position of director that they are not employees.

[69] Mr Calleja disputes that Auswire employed fewer than 15 employees and provided a list in his outline of argument. The list provided by Mr Calleja identified 15 individuals, most names were incomplete and other individuals were identified solely by position.

[70] While Ms Gannaway gave evidence confirming the identity of 11 employees, with the inclusion of the two directors it brings the number to 13. However, Auswire contend that the sales representative was a sub-contractor and “John” is alleged to be a customer that uses the premises. Mr Calleja contends that John regularly performs work for Auswire. Auswire provided no evidence to support the position that neither John or the sales representative were not employees. Auswire was on notice that the onus to establish the jurisdictional objections rested on them, despite this in relation to the submissions of Mr Calleja, Auswire provided no evidence to support the argument that the salesman was a sub-contractor such as invoices or registration as an independent business, and no evidence from “John” that he did not perform work for Auswire. Mr Calleja gave evidence there were in his view additional employees that worked at the business, but he was not able to provide any particulars.

[71] A small business is defined as having fewer than 15 employees. Auswire raised the jurisdictional argument and therefore the onus rests on them to demonstrate evidence to support their position. In the absence of any evidence that the directors, the sales representative and “john” are not employees, I cannot be satisfied that Auswire employed fewer than 15 employees at the time Mr Calleja was dismissal. As I have not found that Auswire is a small business, there is no need to deal with the question whether it complied with the small business unfair dismissal code.

[72] I now intend to deal with the question whether Mr Calleja was unfairly dismissed.

Was the dismissal harsh, unjust or unreasonable?

[73] Section 387 of the Act provides that, in considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, I must take into account:

(a) whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees); and

(b) whether the person was notified of that reason; and

(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and

(d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and

(e) if the dismissal related to unsatisfactory performance by the person – whether the person had been warned about that unsatisfactory performance before the dismissal; and

(f) the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(h) any other matters that the Commission considers relevant.

[74] I am required to consider each of these criteria, to the extent they are relevant to the factual circumstances before me. 32

Consideration

Was there a valid reason for the dismissal related to conduct?

[75] In order to be a valid reason, the reason for the dismissal should be “sound, defensible or well-founded.” 33 Further it is the role of the Commission to consider the employer’s reasoning to assess whether that reasoning is valid.34

[76] I do not find that Auswire’s reason for termination of employment is sound, well founded and defensible.

[77] Auswire dismissed Mr Calleja for reasons of a downturn in business. The letter of termination on 24 March 2021 states: “I write to inform you that due to a downturn in our business we have had to adjust our staffing levels, which means that we have no position available for you. As a result we wish would advise you, that your employment is terminated as from today.” There is no further explanation regarding reasons for the dismissal, any consultation or action taken to mitigate the dismissal. Nor is there any notice given. The dismissal has not met the requirements of a genuine redundancy.

[78] Auswire presented evidence of email and text correspondence from Mr Calleja and characterised the correspondence as threatening in nature. While some of the texts and emails contained language that is inappropriate, not all of the material can be considered by any reasonable person to be threatening in nature. Auswire did not accept Mr Calleja’s workers’ compensation claim, and this was demonstrated by correspondence from Auswire and the evidence of Mr Caramanico. It is also apparent that Auswire formed the view that Mr Calleja caused the workers’ compensation claim because he returned to work after his hospital visit on 30 November aggravating a pre-existing condition. It is Auswire’s view that it should not bear the responsibility for the workers’ compensation claim. In fact, it refused to accept the claim or communicate with Mr Calleja about his injury, and this resulted in Mr Calleja bypassing his employer and dealing with the insurer direct. Since acceptance of the claim, the insurer has continued to manage the claim and administer payments because Auswire rejected responsibility for it. Further when it was contacted to arrange a return-to-work plan, it incorrectly formed the view that it had an opportunity to dismiss him.

[79] Auswire presented evidence of warnings and despite the reason of redundancy, it submits that had Mr Calleja not been on workers’ compensation he would have been dismissed immediately. All of the difficulties between the parties commenced after Mr Calleja informed his employer that he sustained a hernia and intended to file a workers’ compensation claim. I find that the evidence strongly favours a dismissal on the basis that Mr Calleja exercised his workplace right to submit a workers’ compensation claim and in response, Auswire rejected his claim and ultimately dismissed his employment.

[80] In my opinion on the weight of the evidence, I am of the view that Auswire’s real reason was a dismissal because of the workers’ compensation claim. It contrived a reason by its own admission, but in doing so adversely affected his employment in breach of a workplace right. It is disappointing that Auswire relies on its ERC to argue that Mr Calleja failed to adhere to his obligations as an employee, while at the same time it failed to observe its own obligations in respect to its own policy, its health and safety obligations in respect to providing a safe place of work, managing a claim and meeting its return—to-work obligations. In addition, Auswire’s behaviour gives rise to a likely breach of the general protections’ provisions of the Act.

[81] Mr Wragg, the office manager presented the case for Auswire and in closing submissions made the point that Auswire received legal advice that it would be easier to dismiss Mr Calleja for the reason of redundancy, rather than following a performance management process in relation to the emails and text messages. As mentioned earlier in this decision, I am not satisfied that that the dismissal was because of a genuine redundancy. Auswire rely on the decision of Deputy President Colman in Morovan v Laverton Cold Storage Pty Ltd 35 to justify its reasons to dismiss Mr Calleja.for aggressive behaviour while on workers’ compensation. I need not further repeat my reasons for my decision, suffice to say the circumstances of this matter are clearly distinguished.,

[82] In conclusion of the matter of valid reason, I am not satisfied that Auswire had a sound, defensible and well-founded reason to dismiss Mr Calleja. I find this consideration does not weigh in Auswire’s favour.

Was Mr Calleja notified of the valid reason?

[83] Notification of a valid reason for termination must be given to an employee protected from unfair dismissal before the decision is made to terminate their employment, 36 and in explicit37 and plain and clear terms.38

[84] Auswire submits that the real reason was the threats made by Mr Calleja and it is justified because of the warnings given. While Auswire did provide two written warnings that reference the communication which Auswire describe as abusive, threatening or hostile, the first warning was a verbal warning which Mr Caramanico attributed to failure to follow directives. As I noted earlier the verbal warning occurred on 21 December and the first written warning was dated 20 December 2020. In addition to issues concerning the order of warnings, it means the first verbal warning was for a reason other than the two written warnings. Further, the letter of termination provides a reason that is different to the previous warnings given. I further observe that the warning procedure adopted by Auswire is inconsistent with its own policy contained in the ERC. There was no evidence that Mr Calleja was notified of the reason for the dismissal.

[85] For the above reasons this consideration does not favour Auswire. Its reason was contrived and by its own admission it did not notify Mr Calleja of its reason of redundancy prior to his dismissal.

Was he given an opportunity to respond to any valid reason related to his conduct?

[86] An employee protected from unfair dismissal should be provided with an opportunity to respond to any reason for their dismissal relating to their conduct or capacity. An opportunity to respond is to be provided before a decision is taken to terminate the employee’s employment. 39

[87] The opportunity to respond does not require formality and this factor is to be applied in a common-sense way to ensure the employee is treated fairly. 40 Where the employee is aware of the precise nature of the employer’s concern about his or her conduct or performance and has a full opportunity to respond to this concern, this is enough to satisfy the requirements.41

[88] Mr Calleja was not given an opportunity to respond to the reason considered for his dismissal, neither in respect to the contrived redundancy or in relation to the alleged threatening texts and emails. Auswire submit it was not in a position to communicate verbally or in person with Mr Calleja because of his hostile conduct towards the director.

[89] The actual events concerning the meeting of 21 December 2020 when Mr Calleja came in to drop off medical information is contested. It is on balance evident that relations had broken down, largely because Auswire refused to accept the claim or accept any responsibility for its obligations regarding Mr Calleja’s injury. The subsequent response from Auswire was insensitive and callous. It took advantage of Mr Calleja’s naivety in providing detailed private medical information which it abused by telling at least two employees that he was a chronic alcoholic and used serious drugs. It is incorrect to have interpreted the medical material to form the view that Mr Calleja placed Auswire at risk because of a drinking condition in 2014 and because he used prescribed medication. Had Auswire even read the report correctly they would have noted on page 2 that Mr Calleja was identified as a non-smoker and non-drinker. It is unwise for an employer to make conclusions about medications without direct advice from a medical practitioner. The use of the information breached Mr Calleja’s privacy and placed at risk his wellbeing. Auswire foolishly took licence with the very private and sensitive information it had no right to have or demand and formed its own views by interpreting complex medical information which it had no skill or authority to do.

Did Auswire unreasonably refuse to allow the Applicant to have a support person present?

[90] Auswire did not refuse to allow a support person because it did not allow Mr Calleja the dignity of a meeting to discuss civilly the concerns about his workers’ compensation claim, its concerns with any conduct that he displayed to the director or any concerns about Mr Calleja safely performing his duties on the prescribed medication.

Was he warned about unsatisfactory performance before the dismissal?

[91] Performance is not a consideration in this matter. Auswire had no concerns in relation to Mr Calleja’s ability to perform his work, the issue was that he injured himself at work and wished to lodge a workers’ compensation claim.

To what degree would the size of the enterprise and degree of human resource expertise be likely to impact on the procedures followed in effecting the dismissal?

[92] While Auswire did not satisfy the Commission that it employed fewer than 15 employees, the reality is that it is not a large business, and it does not have the sophistication of a business with resources to manage its employment obligations. Auswire stated that it obtained legal advice, and if that was the case, the advice that it is easier to contrive a reason of redundancy was poor advice. In my view the relationship and its own obligations were improperly managed, and given the seriousness of the issues, Auswire would benefit from training and putting in place a process to access reliable employment relations advice.

[93] Auswire relied on their ERC to argue that Mr Calleja failed to observe his health and safety obligations, failure to provide medical information and a police check, failure to complete required paperwork, yet it failed to observe its own legal obligations and those it set for itself in the ERC. If Auswire expects employees to comply with their lawful policies, the responsibility of managing compliance rests with management. It cannot blame the employee for non-compliance when management has condoned the behaviour. Further, compliance by a business of its own established obligations will also be considered and balanced in such matters.

[94] While I agree that Mr Calleja’s conduct displayed in the emails and texts were inappropriate, it cannot be ignored that the behaviour stemmed from the outright refusal of Auswire to accept the workers’ compensation claim and to handle the matter professionally. An employer that does not consider that a workers’ compensation is genuine, does have a right to dispute it, but there are clear processes established for this to occur, and it is not in the form contained in Auswire’s communications.

[95] Auswire by virtue of its position as the employer has a balance of power tipped in its favour, for this reason it should have exercised its authority and responsibility more carefully.

What other matters are relevant?

[96] Section 387(h) requires the Commission to take into account any other matters that the Commission considers relevant.

[97] While I have found that Auswire did not have a valid reason and its process in my view on the evidence lacked fairness, I do observe that Mr Calleja’s position was not assisted with his own inappropriate conduct. What may have been a reasonable working relationship was destroyed by the actions of both parties. For this reason, there is no capacity to rebuild the working relationship.

[98] However, it cannot be ignored that the breakdown in the relationship was because Auswire took liberty with Mr Calleja’s personal and private information, it foolishly shared and interpreted medical information which it had no skill or authority to do, and it denied Mr Calleja his workplace right to protection under the workers’ health and safety and workers’ compensation system. The dismissal was not only unfair but is also likely to be in breach of general protections.

[99] Finally, Mr Calleja’s response for his failure to complete internal administrative processes was because he knew he would not be paid anyway. On this point where an employer has reasonable processes and they are duly administered, it is wise for an employee to comply with them. It should also be noted that absences should be supported by medical certificates or appropriate evidence when required, and material intended between medical practitioners is not advised to be shared with the employer.

Harsh, unjust or unreasonable?

[100] I have considered each matter specified in section 387 and in reaching my determination I have considered whether the dismissal was harsh, unjust or unreasonable. I have weighed up all of the circumstances of the case.

[101] I am satisfied that all of the circumstances do weigh in favour of finding that the dismissal was harsh, unjust or unreasonable.

Conclusion

[102] As the dismissal is unfair, I am required to consider the issue of remedy. I am of the view that reinstatement is not appropriate as the working relationship is irretrievable. Compensation is what Mr Calleja is seeking, however, to consider lost pay, s.392 requires consideration of a range of criteria. Mr Calleja was employed for a period just over 12 months and has been in receipt of workers’ compensation payments albeit as a reduced pay level than his pre-injury weekly earnings. I am conscious that Victoria’s WorkCover arrangements require the employer to keep the job open for 52 weeks and Auswire has not done this. Instead Auswire chose to dismiss Mr Calleja at the first opportunity when there was a modified capacity for Mr Calleja to return to work. Mr Calleja informed the Commission the current diagnosis is that he is required to undergo a second surgery followed by a recovery period. I estimate that based on the earlier assessment of the injury Mr Calleja may be capable to return to work within a period of six months. I do not consider that Mr Calleja would have remained in employment beyond that period because of the breakdown in the relationship and I note that Mr Calleja subsequently moved from Victoria.

[103] Mr Calleja confirmed that he was still on workers’ compensation payments and this will continue until he is cleared to return to work. Under the Victorian workers’ compensation system, the WorkCover payment drops to 80% of pre-injury weekly earnings after the first 13 weeks. Had Mr Calleja not been terminated his weekly payments would be the same, therefore he will not be at loss of wages over the next six months. There is no make-up pay entitlement under the Award to impact the quantum of weekly payments.

[104] However, in the first 13 weeks of the claim, Mr Calleja gave evidence that he received $5,677.00 in weekly payments from the insurer which falls short of the quantum he would have received had Auswire made payments at 95% of pre-injury weekly earnings.

[105] Mr Calleja is owed 10 days of weekly payments which was not made by Auswire. Auswire gave evidence that it considered part of the obligation was met with the leave paid in advance. This is incorrect as the leave paid and subsequently deducted from the final payment related to 2 sick leave days that it recognised it had an obligation to pay under the NES and two days were paid as annual leave. I have also considered the annual leave paid to Mr Calleja over the course of his employment and this quantum fell short of his entitlement. The payments to be made to Mr Calleja are the following:

•  $6,236.00 balance of weekly payments at 95% for 11 weeks

•  $720 reimbursement of 24 hours from the 10 days that should not have been deducted

•  $2,280.00 two weeks’ notice having completed just over 1 year service

•  $1,388.25 of annual leave and loading owing until the date of dismissal

•  $2,279.94 of annual leave and loading for the remaining 6 months

[106] In summary $12,904.19 (less applicable tax) is to be paid to Mr Calleja plus a superannuation contribution for the balance of weekly payments.

[107] In reaching this conclusion I have considered Mr Calleja’s length of service and the amount he would have received had he not been terminated, there is no evidence that the business has no capacity to make the payment as it remains a viable trading entity, Mr Calleja’s mitigation efforts include his compliance with medical treatment, the only earnings were the weekly workers’ compensation payments, misconduct is irrelevant and while Mr Calleja is seeking compensation for other matters such as distress, the Act makes no provision for this. I am satisfied there are no other considerations at arriving at this remedy

[108] For these reasons, I will issue an order separate to this decision, in respect to the compensation.

COMMISSIONER

Appearances:

Mr C. Calleja for himself

Mr L. Wragg for the Respondent

Hearing details:

2021
Melbourne (Video via Microsoft Teams)
7 July

Printed by authority of the Commonwealth Government Printer

<PR734629>

 1   Transcript recording at 21:25, Exhibit R3 medical certificate from Western Health and exhibit R2 text message of 1 December 2020 at 7:10am.

 2   Exhibit R2 text message of 1 December at 7:30am.

 3   Exhibit R3 medical certificate.

 4   Exhibit R6 Employment Rules and Conditions signed on 13 March 2020 and Transcript recording at 58:44.

 5   Exhibit R5 letter of 17 December 2020 from Auswire to Mr Calleja contained in Respondent’s bundle of documents sc-04.

 6   Transcript recording at 58:22.

 7   Bundle of documents attached to Respondent’s document bundle SC-04.

 8   Exhibit R7 warning letter in Respondent’s document bundle SC-08A.

 9   Exhibit R4.

 10   Exhibit A1 statement of evidence of Mr Calleja.

 11   Exhibit R1, witness statement of Mr Caramanico on page 2.

 12   Transcript recording at 33:55.

 13   Transcript recording at 44:10.

 14   Transcript recording at 2:05:58.

 15   Exhibit R5 letter of 7 January 2021 from Auswire to Mr Calleja marked in Respondent’s bundle of documents SC-08).

 16   Exhibit R8 third warning Respondent’s bundle of documents SC-08B.

 17   Transcript recording at 1:20:40.

 18   Transcript recording at 1:33:58.

 19   Respondent’s bundle of documents 3.12A text messages of 8 January 2021 at 8:22PM.

 20   Attachment to exhibit A1 statement of evidence of Mr Calleja.

 21   Witness evidence and respondent’s outline of argument- merit at Q6b.

 22   Letter of termination of employment contained in the Respondent’s document bundle.

 23   Employment Separation Certificate contained in the Respondent’s document bundle marked SC-11a.

 24   Letter of termination of employment contained in the Respondent’s document bundle.

 25   Transcript recording at 18:27.

 26   Exhibit R5 letter from Auswire to Mr Calleja dated 17 December 2020.

 27   Exhibit R1 witness statement of Mr Caramanico and transcript.

 28   Explanatory memorandum to the Fair Work Bill 2008 at para 1550; and UES (international) Pty Ltd v Harvey [2012] FWAFB 5241 (Acton SDP, Kaufman SDP, Bissett C, 14 August 2012) [(20120 215 IR 263].

 29   Workpac Pty Ltd v Bambach [2012] FWAFB 3206.

 30   Transcript recording at 12:51.

 31   Transcript recording at 13:47.

 32   Sayer v Melsteel Pty Ltd (2011) FWAFB 7498, [14]; Smith v Moore Paragon Australia Ltd PR915674 (AIRCFB, Ross VP, Lacy SDP, Simmonds C, 21 March 2002), [69].

 33   Selvachandran v Peterson Plastics Pty Ltd (1995) 62 IR 371, 373.

 34   Walton v Mermaid Dry Cleaners Pty Ltd (1996) 142 ALR 681, 685.

 35   Benjamin Morovan Pty Ltd, [2020] FWC 2999.

 36   Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137, 151.

 37   Previsic v Australian Quarantine Inspection Services Print Q3730 (AIRC, Holmes C, 6 October 1998).

 38   Ibid.

 39   Crozier v Palazzo Corporation Pty Ltd t/a Noble Park Storage and Transport Print S5897 (AIRCFB, Ross VP, Acton SDP, Cribb C, 11 May 2000), [75].

 40   RMIT v Asher (2010) 194 IR 1, 14-15.

 41   Gibson v Bosmac Pty Ltd (1995) 60 IR 1, 7.