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- Gibby v The Finlaysons IT Pty Ltd[2023] QIRC 261
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Gibby v The Finlaysons IT Pty Ltd[2023] QIRC 261
Gibby v The Finlaysons IT Pty Ltd[2023] QIRC 261
QUEENSLAND INDUSTRIAL RELATIONS COMMISSION
CITATION: | Gibby v The Finlaysons IT Pty Ltd [2023] QIRC 261 |
PARTIES: | Gibby, Michael (Applicant) v The Finlaysons IT Pty Ltd (Respondent) |
CASE NO: | B/2022/58 |
PROCEEDING: | Application for payment of proportionate long service leave |
DELIVERED ON: | 5 October 2023 |
HEARING DATES: | 4, 5 and 8 May 2023 (Hearing) 9 June 2023 (Applicant written closing submissions) 3 July 2023 (Respondent written closing submissions) 10 July 2023 (Applicant written closing submissions in reply) |
MEMBER: | McLennan IC |
HEARD AT: | Brisbane |
ORDERS: |
|
CATCHWORDS: | INDUSTRIAL LAW – RECOVERY OF PRO RATA LONG SERVICE LEAVE – whether applicant is entitled to payment of proportionate long service leave upon cessation of his employment – where employment was terminated for reasons other than conduct, capacity or performance – where dismissal was unfair – legal representation – general powers |
LEGISLATION & OTHER INSTRUMENTS: | Acts Interpretation Act 1954 (Qld) s 24AA Industrial Relations Act 2016 (Qld) s 95, s 316, s 320, s 451, s 475, s 484, s 530, s 545, s 921 Industrial Relations (Tribunals) Rules 2011 (Qld) r 70 |
CASES: | Blackwood v Egan [2014] ICQ 020 Dawson v State of Queensland (Department of the Premier and Cabinet) [2021] QIRC 436 Degiorgio v Dunn (No 2) (2005) 62 NSWLR 284 Gambaro v Workers' Compensation Regulator [2017] ICQ 005 General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 House v The King (1936) 55 CLR 499 Kanan v Australian Postal Telecommunications Union (1992) 43 IR 257 Latoudis v Casey (1990) 170 CLR 534 Lemoto v Able Technical Pty Ltd & Ors (2005) 63 NSWLR 300 MIM Holdings Limited v Automotive, Metals, Engineering, Printing and Kindred Industries Industrial Union of Employees Queensland (2000) 164 QGIG 370 Northern Territory v Sangare (2019) 265 CLR 164 Re Christina Hatchett v Bowater Tutt Industries Pty Ltd (No 3) (1991) 39 IR 31 Yousif v Workers' Compensation Regulator [2019] ICQ 10 |
APPEARANCES | Mr T. O'Brien of Counsel instructed by Mr D. Quinn, Holding Redlich for the Applicant Mr R. Finlayson for the Respondent |
Reasons for Decision
- [1]Mr Michael Gibby worked for Mr Ren Finlayson's IT company for 9 years.
- [2]Mr Gibby's managerial responsibilities increased over time, as Mr Finlayson expressed his intention to cut back his own involvement in the running of the business.
- [3]The pandemic hit. The financial position of the company deteriorated.
- [4]Mr Gibby floated some options with Mr Finlayson for either starting a new business or buying him out.
- [5]At first, Mr Finlayson was receptive to Mr Gibby's overtures, saying "Buy me out how much and what?" Negotiations ensued.
- [6]Though things soon soured after Mr Gibby's offered $40,000 to buy Mr Finlayson's "life's work".
- [7]Mr Finlayson told Mr Gibby that he proposed to terminate his employment - but gave him a chance to resign. Mr Gibby refused.
- [8]Further offers to buy the business were put by Mr Gibby. Further invitations to resign were made by Mr Finlayson.
- [9]Exchanges between the pair waxed and waned, finally culminating in the unceremonious sacking of Mr Gibby by email.[1]
- [10]Mr Gibby then initiated proceedings to recover payment of his proportionate long service leave.
- [11]Whether or not Mr Gibby is entitled to be paid out his accrued long service leave turns on why his employment with the company ended.
Relevant Legislation
- [12]Section 95 of the Industrial Relations Act 2016 (Qld) (IR Act) relevantly provides (emphasis added):
95 Entitlement—employees other than seasonal employees
…
(3) An employee who has completed at least 7 years continuous service is entitled to a proportionate payment for long service leave on the termination of the employee's service.
(4) However, if the employee's service is terminated before the employee has completed 10 years continuous service, the employee is entitled to a proportionate payment only if—
…
- the termination is because the employer—
…
- dismisses the employee for another reason other than the employee's conduct, capacity or performance; or
- unfairly dismisses the employee; …
- [13]Section 475 of the IR Act relevantly provides (emphasis added):
475 Power to recover unpaid wages and superannuation contribution etc.
- On application by a person under section 476, the commission may order payment of the following for the period of 6 years before the date of the application—
- an employee’s unpaid wages;
- an apprentice’s unpaid tool allowance under section 137;
- remuneration lost by an apprentice or trainee because the employer has contravened section 371(2);
- contributions to the approved superannuation fund payable for an eligible employee that are unpaid.
- A presidential member may, either before or after the start of a hearing, remit the application to a magistrate if the presidential member considers the application could be more conveniently heard by a magistrate, having regard to, for example, costs or the difficulty or expense of producing witnesses.
- If the application is remitted to a magistrate, the magistrate may hear and decide the application as if it had been brought before the commission, and the magistrate’s decision is taken to be a decision of the commission.
- [14]Sections 316 and 320 of the IR Act relevantly provides (emphasis added):
316 When is a dismissal unfair
A dismissal is unfair if it is harsh, unjust or unreasonable.
320 Matters to be considered in deciding an application
- In deciding whether a dismissal was harsh, unjust or unreasonable, the commission must consider—
- whether the employee was notified of the reason for dismissal; and
- whether the dismissal related to—
- the operational requirements of the employer’s undertaking, establishment or service; or
- the employee’s conduct, capacity or performance; and
- if the dismissal relates to the employee’s conduct, capacity or performance—
- whether the employee had been warned about the conduct, capacity or performance; or
- whether the employee was given an opportunity to respond to the claim about the conduct, capacity or performance; and
- any other matters the commission considers relevant.
- Without limiting subsection (1), the commission may decide a dismissal was not harsh, unjust or unreasonable if—
- the dismissal related to conduct of the employee while at work or otherwise in connection with the employee’s employment; and
- the employee’s conduct was, wholly or partly—
- unlawful; or
- sexual harassment or sex or gender-based harassment.
- [15]Section s 921(1)(d)(ii) of the IR Act relevantly provides (emphasis added):
921 Improper conduct towards member, magistrate or registrar
- A person must not—
…
- by writing or speech, use words intended to—
…
- improperly influence a witness before an industrial tribunal; or
…
Questions to be Decided
- [16]The questions to be decided are:
- Is Mr Gibby entitled to proportionate payment for long service leave upon cessation of his employment?
- If so, what amount of proportionate payment for long service leave is Mr Gibby entitled to?
Summary of Findings
- [17]For the reasons that follow, I find that:
- Mr Gibby is entitled to proportionate payment for long service leave upon cessation of his employment;
- The amount of proportionate payment for long service leave that Mr Gibby is entitled to is $13,621.16;
- The amount ordered is to be paid to Mr Gibby within 28 days of this decision being issued.
Witnesses
- [18]The witnesses for the Applicant's case were:
- Mr Michael Gibby, the Applicant himself; and
- Ms Paula Westin.
- [19]The witness for the Respondent's case was:
- Mr Ren Finlayson.
- [20]In addition, Dr David Engel was contacted on the final day of the Hearing to confirm that Mr Finlayson was fit to participate via Zoom.
- [21]The evidence provided by Mr Gibby was clear, direct, cogent, consistent and sufficiently detailed to be of assistance to the Commission in this case.
- [22]Mr Gibby's account was supported by the documentary evidence in these proceedings, and also by the testimony of Ms Westin.
- [23]Ms Westin also delivered her evidence to the Commission in a similarly straightforward and uncluttered manner. I found her too to be a most credible witness.
- [24]My assessment of Mr Finlayson was that he had a most lackadaisical approach to the truth. The unfortunate combination of Mr Finlayson's conduct, demeanour and testimony at the Hearing resulted in a lack of confidence in the veracity of his version of events. I adopt the below helpful summary of some aspects of Mr Finlayson's sworn evidence that was demonstrably false or unable to be accepted:[2]
- regarding his own affidavit, "Although the – in that particular instance, you know, it was like a really ridiculous situation. Five minutes before I supposed to hand it in, he's making me print, you know, pages and it was a terribly – the whole thing is terribly confusing"[3] and "I had 5 minutes to sign this affidavit before he sent it"[4]. As such the Commission would be loathed to rely on it;[5]
- he was employed by AAPT as their lead technician, however was in fact employed in internet technical support;[6]
- when he sent a Telegram message to the Applicant, reading in part "You have four weeks notice, and Jason has two" he gave evidence he had not sacked the Applicant, which is manifestly false;[7]
- he spent 18 hours per day "reading and studying" which is manifestly false;[8]
- "There's never anything wrong with my memory"[9], "I've just been savaged by you lot for the past year that my memory is 20/20"[10], and yet, "I don't remember anything. I'm not answering any questions by anyone in here"[11] and "I can't even remember Friday, mate"[12];
- "[The Applicant] has two or three siblings. He had a very troubled and violent upbringing. His parents had a very abusive relationship. A lot of drugs and violence were involved. They hated each other. One sibling drank himself to death"[13] which is manifestly untrue;
- "The phone call did not end with you saying to Michael, "I am recording this call", did it? – Well, yes, it did."[14]
…
"And just after you said that to Mr Gibby in that call, he said, "I do not agree to you recording this call", didn't he? – Well, yes."[15]
…
"And you cut that out of the recording that you tendered into evidence, didn't you? – No."[16]
…
"You cut it off early before the end of the call, didn't you? – No. That's just your imagination."[17]
- "They are not your words, are they? – They are not my words? Well –
You wouldn't write about yourself in the third person, would you? No.
No? – Oh, well, I don't –
They're not your words - ? – actually. Sometimes I –
--- are they? – On the – actually, now I think about it, I've just spent the past month writing about myself in the third person and sending you guys emails.
You wouldn't talk about yourself in the third person in an affidavit, would you, Mr Finlayson? – Quite possibly."[18]
- he would provide medical evidence from a psychiatrist and a general practitioner on 8 May 2023, and failed to do so;[19]
- the Applicant was employed partly pursuant to a written contract from 2015[20], yet no such contract was produced;[21]
- contained a significant volume of evidence that was unquestionably irrelevant, scandalous, and vexatious;[22]
- was directly inconsistent with the documentary evidence.[23]
- [25]Further, I consider that Mr Finlayson's conduct in these proceedings undermined his credibility because his representation of the Respondent was:
… littered with unreasonable acts, including but not limited to:
- playing possum regarding his health;
- failing to attend on days one and three; and
- tendering evidence after hours on day one …[24]
- [26]In addition to the above, Mr Finlayson's credibility was infected by such conduct as:
- Making assorted, baseless accusations against the Applicant's instructing solicitor and counsel;
- Pretending he was too sick to attend the final day of Hearing - before being discovered out and about, and a medical practitioner confirming his participation via zoom to be "totally reasonable";[25]
- Forwarding a persistent barrage of emails requiring responses from the Commission and/or Applicant's representative;
- Failing to disclose a recorded telephone conversation between Mr Gibby and himself until the actual Hearing of the matter;
- Representing the recorded telephone conversation between Mr Gibby and himself as something other than an entirely unsophisticated (and ultimately unsuccessful) attempt to goad the Applicant into resigning during a frustratingly circular hour-long conversation, in order to avoid payment of his long service leave entitlements;
- Persistently obfuscating matters relevant to the two questions to be determined at the Hearing with theories and other musings;
- Seeking an extension of time because his cat bit him, complete with various photographs of same.
- [27]For these reasons, I have preferred the evidence of Mr Gibby or Ms Westin wherever Mr Finlayson's account differs from theirs.
- [28]I would also observe that Mr Finlayson was not assisted at the Hearing by the actions of his partner, Ms Sonia Kumar. Ms Kumar sent a text message to Ms Westin[26] when she was giving her evidence, that the witness affirmed she felt threatened by.[27] While Mr Finlayson confirmed that Ms Kumar was sitting beside him and talking to him at the relevant time, he denied knowing she had texted the message to Ms Westin until after the first day of the Hearing had concluded.[28] Although Mr Finlayson further offered "… still not understanding what's wrong with it anyway, to be honest with you."[29]
Evidence and submissions
- [29]In a Directions Order dated 8 May 2023, written closing submissions were directed in the order Applicant - Respondent - Applicant (in reply, on issues of law only).
- [30]The Applicant's written closing submissions were filed on 9 June 2023. A further Affidavit of Mr David Quinn was filed on 12 June 2023.
- [31]The Respondent's written closing submissions were filed on 3 July 2023.
- [32]The Applicant's reply submissions were filed on 10 July 2023.
- [33]The evidence of the witnesses and 7 Exhibits tendered at the Hearing, together with the written closing submissions of each Party, were considered in this Decision.
Chronology
- [34]A chronology of some significant events follows:
Date | Event |
7 January 2013 | Mr Gibby commenced employment with the company. |
16 July 2014[30] | Mr Gibby and Mr Reason "received an email from Julie … in which she says "just thought I'd go over some employment thingy's", goes on to list various employment entitlements, and states: "As you are both aware we do not have a regimented employee contract, but just to confirm your salary is …"[31] Mr Gibby affirmed that "At no time during my employment did either (Mr Finlayson) or Julie propose that we enter into a written employment contract and correspondingly I never refused to sign a contract."[32] |
14 May 2018[33] | Mr Finlayson transferred 1 share in the company to Mr Gibby.[34] |
Early January 2022 | Ms Westin emailed Mr Finlayson and Mr Gibby that the company did not have the income to pay the BAS and continue to operate. She advised that the bank account was getting low and the company would be broke in a few weeks, without more money coming in.[35] |
25 January 2022 | Mr Gibby and Mr Finlayson discussed the state of the company's finances by Telegram messages and the potential for Mr Gibby to take over the business in some form. Mr Finlayson was receptive to Mr Gibby's overtures, stating "Buy me out how much and when?"[36] |
25 January 2022 | Mr Gibby contacted Mr Clinton Bosworth, Spectrum Accountants, for help to set up a company to buy The Finlaysons IT Pty Ltd.[37] |
25 January 2022 | Mr Gibby suggested to Mr Jason Reason that he join with him in a new business to replace The Finlaysons IT Pty Ltd.[38] |
27 January 2022 | Mr Gibby registered SEQ IT Services Pty Ltd as the company for the new business, with the assistance of Mr Bosworth.[39] |
25 - 31 January 2022 | Mr Gibby and Mr Finlayson negotiated various options for buying out the company.[40] |
31 January 2022 | Mr Gibby formalised the offer to buy out Mr Finlayson, who then suggested Mr Gibby "have a word with Ron"[41]. Mr Gibby contacted Mr Platt and explained his proposal to buy the company from Mr Finlayson. After speaking with Mr Platt, Mr Gibby messaged Mr Finlayson to report that Mr Platt would assist them with the business documents. Mr Finlayson replied "Awesome"[42] |
31 January 2022 | Later that afternoon, Mr Platt emailed Mr Gibby and Mr Finlayson a draft business sale contract and confirmed that he had already discussed it with Mr Finlayson.[43] |
1 February 2022 | At 11:33 am,[44] Mr Finlayson terminated Mr Gibby's employment by Telegram message stating "You have 4 weeks notice and Jason has two."[45] Mr Gibby replied "okay, can you email it to me please it has to be in writing."[46] Mr Finlayson confirmed "For sure" "I have already arranged all that. Mark Bunch[47] will be taking care of it."[48] |
1 February 2022 | At 11:54 am,[49] Mr Finlayson messaged Mr Gibby saying "Would you like to tender your resignation then?" To which Mr Gibby replied "no, you are firing me."[50] |
2 February 2022 | Mr Finlayson made an amateurish attempt to record Mr Gibby over the telephone resigning from his employment, to avoid payment of proportionate long service leave.[51] |
3 February 2022 | Mr Finlayson asked Ms Westin to contact Mr Mark Bunch via email, having told her that "he was getting advice from an 'employment guru' who knew his [Ren's] rights."[52] Mr Bunch asked Ms Westin whether there were employment contracts for either Mr Gibby or Mr Reason. She advised that there wasn't any to her knowledge. Ms Westin and Mr Finlayson conducted a thorough search to ascertain whether or not there were employment contracts, but could not find any. Mr Finlayson then called Mr Bunch in Ms Westin's presence. Ms Westin recalled that "… Ren explained that we could not find a contract for Michael. Ren and Mark agreed that Mark would draft an employment contract and that it would be drafted to cover Michael's employment with FIT retrospectively. I remember that issue about retrospectivity clearly because when I heard that I thought to myself that after all that had just happened there was no chance that Michael would sign a contract that operated retrospectively. The conversation moved into Mark giving me instructions about how to calculate the termination payments."[53] |
3 February 2022 | By this date at the latest, Mr Finlayson was certainly aware that Mr Gibby would be entitled to proportionate long service leave in certain circumstances. Between 8:42 and 8:44, Ms Westin provided the following advice to Mr Finlayson: "Looks like there's a pro-rata pay out for employees who worked there before 7-10 yrs …" "Go through all this with Mark. It's really quite complex. Also came across this" "https://www.fwc.gov.au/unfair-dismissals-benchbook/what-is-dismissal/forced-resignation" "Keep all in mind in your strategic movements". "Dear Michael This is your first and final official written warning regarding your work performance for The Finlaysons IT Pty Ltd. I request that you provide evidence by 5 pm today (3 February 2022) of the work you have generated in the past week. If this is not provided, this will result in your employment dismissal. Kind regards Ren Finlayson" "Is that ok?" "Pays are generated over night and I really want this to be the last one" "Does Mark not want you to send warning letter???" "I think you still have to do that?"[54] |
3 February 2022 | At 10:24 am, Mr Finlayson messaged Mr Gibby to ask "Are you going to resign?", to which Mr Gibby replied "no". Mr Finlayson then stated "Fair enough", "I honourably gave you that opportunity", "That is the last time I do that for you".[55] |
3 February 2022 | At 10:51 am, Mr Gibby messaged Mr Finlayson stating "if you want me to split, im happy to do so amicably", "I can hand back shares", "just do what is right by me and we can part ways." Mr Finlayson replied "That's why I asked to resign." Mr Gibby responded "I will not resign", "if I resign I fuck myself from any loans point of view", "sack me, we can part ways amicably and try to move on without any drama", "ill accept the sacking without any fair work issues."[56] |
3 February 2022 | Mr Finlayson sent an email to Mr Gibby at 4:09 pm, subject headed "Michael Gibby termination of employment". It read:[57] Dear Michael WITHOUT PREJUDICE With reference to your recent texts today 3/2/22 at 10:57 am, in order to end any future claims and to execute an Employment Separation Deed, I would like to proceed upon your agreement to the following:
Please advise asap and I will have the Deed drafted. The Deed would contain usual terms as to confidentiality, non-disparagement and release in favour of the business from any future claims. Kind regards Ren Finlayson |
3 February 2022 | Mr Gibby sent an email reply to Mr Finlayson at 5:06 pm, subject headed "Michael Gibby termination of employment". It read: I will agree to submit a resignation with immediate effect and thereby release you from long service leave obligations on the condition that you agree to waive the notice period. I do not agree to any employment separation deed as I strongly deny any misconduct. On the payment of my full annual leave entitlements, I will sign the shares over to you for $1. Let me know if you agree to this and I will submit my resignation thereafter.[58] |
3 February 2022 | At 6:22 pm, Mr Finlayson replied to Mr Gibby that the proposal "does seem reasonable to me …"[59] At 6:24 pm, Mr Finlayson messaged Mr Gibby "Talk to you in the morning. I don't expect you to work if you don't want to tomorrow." To which Mr Gibby replied "Why would I leave you in the lurch and not work"[60] |
"On or around 3 February" 2022[61] | Mr Finlayson called Ms Westin to discuss her "future with the business". They "agreed there was no money and (she) was no longer required but that (she) would tidy up Xero, finalise the bank reconciliations, the BAS and give (Mr Finlayson) a run-down of all the bills due for payment and do the termination payments for Michael and Jason following Mark's instructions."[62] |
4 February 2022 | Mr Gibby and Mr Finlayson exchanged messages about suggested terms of the without prejudice proposal.[63] Though Mr Gibby made clear that he would not sign any restraint of trade provision.[64] |
4 February 2022 | That morning, Mr Finlayson called Ms Westin and asked her to draw up a termination email for Mr Gibby and Mr Reason, as per Mr Bunch's instructions.[65] |
4 February 2022 | At 12:19 pm, Mr Finlayson messaged Mr Gibby stating "If we can't progress through this quickly I'm going to terminate your appointment and you can take it up with the fair work commission with all the evidence provided." Mr Gibby replied that "I have no contract with you ren, Im aware of my rights. Im happy to refer people back to you but im not signing any restraint of trade document." Mr Finlayson then asked "Do you think it is then preferable that we just do that now so I can move on?" Mr Gibby replied "its your call mate."[66] |
4 February 2022 | At 12:24 pm, Mr Gibby messaged Mr Finlayson that "I have to be careful not to have any restraint of trade man. I have no employee contract and am free to resign with notice and do whatever I want. You were already pushing things by strong arming me with this letter, which I am very much aware of but thought I'd come to the table and just part ways amicably, and hand the shares over." "If you remove that portion in the deed it's fine." Mr Finlayson's response included that "You're indicating that you do not have a employee contract so that entitles you to be able to contact the clients", "It appears that you are using this as leverage."[67] Hours of circular arguments via text message continued. |
4 February 2022 | At 1:23 pm, Mr Finlayson stated to Mr Gibby that "It's going to make a big difference you telling me because then I can decided whether I need to proceed with this termination …" Mr Gibby replied "lol im done with this bullshit", "you will have my resignation shortly". Mr Finlayson responded that "No I don't accept your resignation until we meet an agreement which seems like that is not possible so I will continue with plan a if you would like."[68] |
4 February 2022 | At 1:33 pm, Mr Gibby texted Mr Finlayson that "all im seeing is you bullying an employee mate, you are pressuring me and thats not cool", "if you want this over the line, remove the restraint of trade and you have a deal". Mr Finlayson denied that was the case.[69] |
4 February 2022 | By 3:19 pm, Mr Gibby messaged Mr Finlayson "this was just a couple of brothers having a biff over a girl thats all" "lol"[70] |
4 February 2022 | Mr Gibby sent an email to Mr Finlayson at 3:38 pm, subject headed "FW: Michael Gibby termination of employment". It read:[71] Hi Ren, Here is what we discussed on the phone if you agree I will submit my resignation.
Please advise asap and I will have the Deed drafted. The Deed would contain usual terms as to confidentiality, non-disparagement and release in favour of the business from any future claims. |
4 February 2022 | At 3:41 pm, Mr Finlayson emailed Mr Gibby's message proposing some amendments to the suggested deed terms to Ms Westin.[72] |
4 February 2022 | Ms Westin had a telephone conversation with Mr Finlayson "one last time" "to ensure this was the choice he was finally making about Michael. I wanted to be sure after all the back and forth changing of his mind between sell or terminate. Ren said yes, and I sent the termination email to Michael."[73] |
4 February 2022 | At 6:21 pm, Mr Gibby received an email terminating his employment "effective immediately". It read:[74] Dear Michael As yourself & Ren Finlayson have not been able to come to an Employment Separation agreement as shown in the email chain below and based on work performance, non-compliance & misconduct, The Finlaysons IT Pty Ltd terminates your employment, effective immediately. Your annual leave entitlements (299.426hrs) will be paid in full within 7 Days. Once you have transferred your personal shares back to Ren Finlayson for $1 and present relevant documentation proving this, we will paid in a lump sum within 7 days, 4 wks wage as an ex-gratia (taxed as an ETP). If any existing clients of The Finlaysons IT contact you, it would be expected that you would uphold the same high ethical values, morals & respect that The Finlaysons IT Pty Ltd prides themselves for and advise clients that you are no longer working at The Finlaysons IT. Refer them to contact Ren Finlayson direct on 07 5527 3323 and under no circumstances engage in any marketing with our clients. All property of The Finlaysons IT, Intellectual Property, data and any equipment owned by the company, remains the property of The Finlaysons IT. To avoid further distress to our Director, Mr Ren Finlayson, we would appreciate future correspondence regarding your employment with The Finlaysons IT Pty Ltd to be cc'd to myself as the Accounts & HR Manager. Kind regards Paula Westin – Accounts Manager |
"On about 5 February" 2022[75] | Mr Gibby "contacted (Ms Westin) and asked if (she) was ok. He said he was intending to start a business with (Mr Reason) and asked if (she) would be interested in helping them eventually. (Mr Gibby) said to (her) that he would not poach FIT's clients, but would allow them to come to him if (Mr Finlayson) did not give them support. (She) said that (she) was interested in working with (Mr Gibby) if he reached the point of needing a bookkeeper."[76] |
15 February 2022 | At 1:17 pm, Ms Westin messaged Mr Finlayson saying: "Hey Ren Michael called me to find out if you're keen to come to an agreement and wants to know what you're wanting to settle on …" To which Mr Finlayson replied to Ms Westin: "I'm sure he does. Being methodical and measured taking into the evidence at hand often takes longer than he likes." "Not my first rodeo" |
Late February 2022 | Mr Finlayson became aware that Mr Gibby had created SEQ IT[77][78] |
"On about 18 March 2022"[79] | Ms Westin commenced working as an employee of SEQ IT Pty.[80] |
Is Mr Gibby entitled to proportionate payment for long service leave upon cessation of his employment?
Applicant's submissions
- [35]
- he was dismissed for a reason other than "conduct, capacity or performance"; or
- his dismissal was unfair.
- [36]
- "the Respondent has been unable to provide any evidence of misconduct by the Applicant beyond mere assertions, which are, in any case, inconsistent with the evidence of Ms Westin and the Applicant";
- "Mr Finlayson gave sworn evidence that he was not aware of the Applicant creating SEQ IT until late February 2022";[83]
- "the Telegram messages of 1 February 2022 annexed to the Applicant's affidavit sworn 13 January 2023 at pages 108 to 186 make clear that the Respondent held no genuine concerns about any alleged misconduct";
- "the termination letter also provides the Termination was because "yourself and Ren Finlayson have not been able to come to an Employment Separation agreement";
- "advice given by Ms Westin to Mr Finlayson regarding the LSL"; and
- "the failure by the Respondent to produce a signed employment contract or even evidence that any proposed employment contract had ever been provided to the Applicant".
- [37]In response to Mr Finlayson's late submission that Mr Gibby was not entitled to proportionate payment of long service leave under s 95(4)(d) of the IR Act, the Applicant noted that is "irrelevant as those provisions are not at issue in the matter."[84]
- [38]The Applicant submitted that Mr Gibby's dismissal on 4 February 2022 for purported "work performance, non-compliance and misconduct" was unfair because it occurred:[85]
- without warning;
- without opportunity to respond to the purported concerns;
- without any evidence of work performance, non-compliance and misconduct being identified, then or since;
- without the Respondent having any reasonable basis for belief of any misconduct by Mr Gibby, after appropriate investigation.
- [39]The Applicant submitted that the above criterion would persuade the Commission that Mr Gibby's termination was unfair, pursuant to s 320(1)(c) of the IR Act.[86]
Respondent's submissions
- [40]Mr Finlayson contends that Mr Gibby is not entitled to the payment because:
- he was dismissed for "conduct, capacity or performance" reasons; and
- his dismissal was not unfair.
- [41]The Respondent submitted that:
- "… Michael Gibby's employment with The Finlaysons IT was terminated, after warnings, and with no alternative, for serious misconduct and criminal conduct. In premediated collusion and aided and abetted by Jason, Paula and Clinton."[87]
- "Michael Gibby, whilst employed was running the business into the ground by not performing his duties. He would avoid doing invoicing whilst making unauthorised charges to the business. At the same time he engaged in a coordinated campaign of deception and coercion trying to blackmail me into selling my business that was paying everyone's wage …" Mr Finlayson stated that "easily qualifies as serious misconduct."[88]
- "… original screenshots and my text extracts clearly identifying the multiple warnings and chances not to mention opportunities at reform that I afforded Michael Gibby prior to being forced into terminating his employment due to his reluctance in doing anything that could remotely be conceived as beneficial for the business and his insistence on not resigning even after creating a directly competing business with Jason with the express intent to steal and engage in fraudulent activities …"[89]
- On Thursday 3 February 2022 4:09 pm, Mr Finlayson sent Mr Gibby a 'without prejudice' email setting out terms for a proposed Employment Separation Deed. Then at 5:06 pm, "Mr Gibby suddenly wants to resign without notice CLEARLY waiving his rights to LSL now that he realised he had been given his warnings and an abundance of other opportunities to change course and actually do some work."[90]
- Mr Finlayson stated that "Two days later – Whilst still employed", Mr Gibby contacted Ms Westin to ask if she "would be interested in helping them eventually" on or about 5 February.[91]
- "Determining that … Mr Gibby is somehow entitled to proportionate long service leave would set a dangerous precedent and example to other employers the catastrophic risks faced when trying to give people a job and a livelihood."[92]
- Mr Gibby was "given multiple opportunities, to desist his sabotaging the business and to perform his duties as instructed, to work together as a cohesive team with the best interests of The Finlaysons IT in mind."[93]
Whilst no references to a particular Exhibit or transcript were made in the submission, Mr Finlayson asserted his contention was supported by various statements he had made to Mr Gibby such as:
"If you do your job there is no need to fire you. If you want to start a new business then you resign."[94]
"I know that I've already given you two warnings that we need to be a cohesive team and do our jobs. That's not firing you that is a warning."[95]
- "… I in fact did not terminate Mr Gibby's employment so I could destroy my own business, and go about spending a year and a half fighting for survival just to avoid LSL claim in the QIRC."[96]
- written employment contracts exist and have since been found.
Mr Finlayson stated that he "went to lengths to source the originals from Aitken Legal" and provided them so there "could NOT be in delusion or confusion about its existence."[97]
"The employment contracts were recovered from the accounts mailbox which can be independently forensically verified." Mr Finlayson asserted that "…there is evidence of tampering in regards to the mailboxes which Mr Gibby had access to including deleting emails in the hope it would destroy evidence. The Account Manager Paula who was managing the accounts mailbox also claimed there was no contract to be found after her search. Which was a lie."[98]
Mr Finlayson concluded "Why would The Finlaysons IT go to the considerable effort and expense to procure employment contracts for no reason?"[99]
- Mr Gibby had no intention of continuing work with The Finlaysons IT Pty Ltd for 10 years because he had registered a competing business.
Mr Finlayson stated that the Telegram messages revealed that Mr Gibby wanted to take over The Finlaysons IT Pty Ltd.
Therefore Mr Finlayson asserted that Mr Gibby was not entitled to proportionate payment of long service leave under s 95(4)(d) of the IR Act because there was "no reasonable expectation that their employment with the employer would be continuing at least 10 years", in circumstances where he had just registered a competing business "with another employee in collaboration with the accounts manager and the accountant."[100]
Consideration
- [42]
- [43]On 1 February 2022, Mr Finlayson had messaged Mr Gibby[103] "You have 4 weeks notice and Jason has two". In response to the latter's request for it to be put in writing, Mr Finlayson stated "For sure" "I have already arranged all that. Mark Bunch will be taking care of it."
- [44]Despite the clear intent so baldly communicated, neither Mr Finlayson or Mr Gibby behaved as though a termination had actually occurred at that point.
- [45]
- [46]I do not believe Mr Gibby genuinely thought his employment had been terminated by Mr Finlayson on 1 February 2022, but instead considered it all part of Mr Finlayson's posturing for a better deal.
- [47]The messages reveal both Mr Gibby and Mr Finlayson engaged in an intense campaign to cajole, flatter, position and otherwise persuade the other to resolve the future of the company and their respective places in it, to their own advantage.
- [48]I accept Ms Westin's evidence that around the end of January 2022 Mr Finlayson told her he was getting advice from an "employment guru", Mr Bunch, who knew his rights.[106]
- [49]The documentary evidence also makes clear that by 3 February 2022 (at the latest), Mr Finlayson was aware of the particular circumstances in which he was required to pay Mr Gibby's proportionate long service leave upon the cessation of his employment.
- [50]For those reasons, it is clear that Mr Finlayson knew that Mr Gibby had to either resign or be sacked for "conduct, capacity or performance", in order to evade making the payment to him.
- [51]Mr Finlayson very nearly succeeded in getting Mr Gibby to resign after a rather transparent, yet torturous, one-hour telephone conversation and the exchange of messages that flowed from it on 3 - 4 February 2022. In the end, Mr Gibby refused to resign under terms that included a restraint of trade clause.
- [52]
Mr Finlayson: If we can't progress through this quickly I'm going to terminate your appointment and you can take it up with the fair work commission with all the evidence provided.
Mr Gibby: I have no contract with you Ren, I'm aware of my rights. I'm happy to refer people back to you but I'm not signing any restraint of trade document.
- [53]I observe that Mr Finlayson did not contest Mr Gibby's assertion about having "no contract" at that time.
- [54]The evidence of Ms Westin was that she and Mr Finlayson had conducted a search for any contract but none could be found. She affirmed that a conversation took place between Mr Finlayson, Mr Bunch and herself about what could be done about that. Ms Westin stated that:
… Ren and Mark agreed that Mark would draft an employment contract and that it would be drafted to cover Michael's employment with FIT retrospectively.
I remember that issue about retrospectivity clearly because when I heard that I thought to myself that after all that had just happened there was no chance that Michael would sign a contract that operated retrospectively.[108]
- [55]I believe Ms Westin's account and further note it is supported by Mr Gibby's assertion that there was no contract.
- [56]Mr Finlayson could have called Mr Bunch to give evidence in this matter, yet he chose not to do so. It is open for me to draw the inference then that Mr Finlayson chose not to do so because calling Mr Bunch as a witness would not have assisted his cause.
- [57]Notwithstanding the above, Mr Finlayson asserted that the contract had been found in his closing submissions:
The employment contracts were recovered from the accounts mailbox which can be independently forensically verified. Further to that there is evidence of tampering in regards to the mailboxes which Mr Gibby had access to including deleting emails in the hope it would destroy evidence. The Account Manager Paula who was managing the accounts mailbox also claimed there was no contract to be found after her search. Which was a lie. To further substantiate the evidence, I went to lengths to source the originals from Aitken Legal. Both exhibits were submitted and directly emailed to Mr Quinn so he, his clients, or anyone else, could NOT be in delusion or confusion about its existence. Why would The Finlaysons IT go to the considerable effort and expense to procure employment contracts for no reason?[109]
- [58]With respect to Mr Finlayson's commentary above, he sent an email to the Industrial Registry and Mr Quinn on 9 May 2023. That contained an email exchange between Mr Bunch and Ms Julie Finlayson dated 29 June 2015 to 1 July 2015, in which Mr Bunch wrote:
Hi Julie
Attached are the first drafts of the contracts for Michael and Jason. Please take a look over them and let me know if you have any questions or require any changes. Information to be completed is highlighted in yellow …[110]
- [59]These documents were not tendered in evidence at the Hearing. However, even if I had been asked to make the documents exhibits, at its highest what it shows is that on 1 July 2015 Mr Bunch emailed Ms Julie Finlayson two draft contracts. There is no evidence before me that anything further was done about it.
- [60]That conclusion is consistent with Mr Gibby's evidence that "At no time during my employment did either (Mr Finlayson) or Julie propose that we enter into a written employment contract and correspondingly I never refused to sign a contract."[111]
- [61]In the assessment of witness credit elaborated above, I have explained why I do not prefer Mr Finlayson's evidence where it differs from either Ms Westin's or Mr Gibby's.
- [62]In that respect, I agree with the Applicant's submissions that the Respondent failed:
… to produce a signed employment contract or even evidence that any proposed employment contract had ever been provided to the Applicant.[112]
… to tender into evidence a signed copy, or indeed a complete unsigned copy, of any employment contract or evidence demonstrating that a written contract of any sort, draft or otherwise, was ever provided to the Applicant. The conclusion must be that there was never any written contract of employment between the parties.[113]
- [63]In his closing submissions, Mr Finlayson has posed the question "Why would The Finlaysons IT go to the considerable effort and expense to procure employment contracts for no reason?" The only conclusion I can reasonably draw is: to avoid paying Mr Gibby his proportionate long service leave entitlements and a potential costs order.
- [64]
Mr Finlayson: Do you think it is then preferable that we just do that now so I can move on?
Mr Gibby: its your call mate
Mr Finlayson: Ok. Thanks
Mr Gibby: I'm not signing any restraint of trade. am happy with everything else if you want it all done.
- [65]The impasse was finally broken when the Respondent issued the termination email on 4 February 2022.
- [66]The contentious matter of a restraint of trade provision was attempted to be retrofitted into the termination letter as follows:[115]
If any existing clients of The Finlaysons IT contact you, it would be expected that you would uphold the same high ethical values, morals & respect that The Finlaysons IT Pty Ltd prides themselves for and advise clients that you are no longer working at The Finlaysons IT. Refer them to contact Ren Finlayson direct on 07 5527 3323 and under no circumstances engage in any marketing with our clients. All property of The Finlaysons IT, Intellectual Property, data and any equipment owned by the company, remains the property of The Finlaysons IT.
- [67]In my view, that paragraph was inserted into the termination letter because Mr Finlayson knew there was no contract of employment in place with Mr Gibby. The evidence of both Mr Gibby and Ms Westin confirm that was the case. Neither did Mr Finlayson refute Mr Gibby's claim that was the case in their message exchange of 4 February 2022. It was only later that Mr Finlayson claimed an employment contract was in place and submitted an email from Mr Bunch after the conclusion of the Hearing. I further note that Mr Finlayson did not call Mr Bunch to be a witness in these proceedings.
- [68]Given Mr Gibby would not resign, it remained for the Respondent to terminate his employment on the grounds of "conduct, capacity or performance",[116] if it were to avoid paying out Mr Gibby's proportionate long service leave entitlements. With respect to the chronology and reasoning above, Mr Finlayson knew that by 3 February 2022 at the latest.
- [69]The termination letter provided that:[117]
As yourself & Ren Finlayson have not been able to come to an Employment Separation agreement as shown in the email chain below and based on work performance, non-compliance & misconduct, The Finlaysons IT Pty Ltd terminates your employment, effective immediately.
- [70]The interminable Telegram messages exchanged between Mr Finlayson and Mr Gibby abundantly evidence that the pair were ultimately unable to come to an agreement about separation terms, most notably with respect to the restraint of trade provision. As I have explained above, Mr Finlayson's solution to that problem was to attempt to cover it off in the termination letter provided to Mr Gibby.
- [71]The contemporaneous documentary evidence of the termination letter and Telegram messages are most significant in my assessment of the real reasons for Mr Finlayson's decision to terminate Mr Gibby's employment. That evidence showed that:
- Ms Westin had raised the alarm that the company was fast running out of money.
- While Mr Finlayson shared some theories about jobs that might yet come in, he did state that "The reality is if we're not getting money through we're going down the gurgler".[118]
- Mr Gibby was clearly worried about his immediate future. He messaged Mr Finlayson that "I'm trying to ask questions man. It might be OK for you because you are in a better situation that me but I'm staring down the barrel of in 3 weeks time will I even get paid, with a wedding in 4 weeks time."[119]
- Mr Gibby offered to buy Mr Finlayson out, as a solution to the company's money woes.
- Mr Finlayson expressed initial interest in that suggestion: "Buy me out how much and what?"[120] - and Mr Gibby said that he would "… offer as much as I can literally afford without ruining myself financially. I'll give as much as possible because I want you to be happy."[121]
- Ultimately though Mr Finlayson was offended by the amount offered by Mr Gibby to buy the company.[122]
- Mr Finlayson perceived that Mr Gibby thought the company was better off without him.
- Given the tenor of the unusual relationship between the pair, the messages exchanged became peppered with expressions of hurt and betrayal.
- Mr Finlayson decided not to sell the company to Mr Gibby after all.
- Mr Finlayson told Mr Gibby that he would terminate his and Mr Reason's employment.
- Mr Finlayson then tried to get Mr Gibby to resign instead. He refused.
- Mr Finlayson and Mr Gibby attempted to negotiate terms for an employment separation agreement. That failed because Mr Gibby would not consent to Mr Finlayson's proposed restraint of trade provision.
- Then on 4 February 2022, the Respondent terminated Mr Gibby's employment. That correspondence began "As yourself & Ren Finlayson have not been able to come to an Employment Separation agreement …" That is supported by the extensive record of Telegram messages exchanged and the hour-long telephone conversation between the pair.
- The termination letter of 4 February 2022 went on to add that Mr Gibby's employment was further terminated because of "work performance, non-compliance & misconduct".
- [72]On the above point, the Applicant submitted that "the Respondent has been unable to provide any evidence of misconduct by the Applicant beyond mere assertions, which are, in any case, inconsistent with the evidence of Ms Westin and the Applicant" and "the Telegram messages of 1 February 2022 annexed to the Applicant's affidavit sworn 13 January 2023 at pages 108 to 186 make clear that the Respondent held no genuine concerns about any alleged misconduct."[123] I accept the Applicant's submission - that is clearly the case.
- [73]The reasoning above also informs a finding that Mr Gibby's dismissal was unfair.
- [74]The termination letter provided to Mr Gibby on 4 February 2022 set out the stated reasons for his dismissal. As noted above, the Respondent has been unable to provide any evidence of misconduct beyond mere assertions - and the messages exchanged are most revelatory of Mr Finlayson's actual problem with him.
- [75]Further, Mr Gibby was not warned about the conduct, capacity or performance. Nor was Mr Gibby provided opportunity to respond to any allegations in a procedurally fair, proper process.
- [76]Mr Finlayson submitted that he had little motive to try to avoid the payment to Mr Gibby, colourfully asserting that:
… the applicant attempts to suggest that, even after seeking Legal advice from Employment lawyer, Paula being the one taking the lead and providing me advice in line with her role as accounts and hr manager, that after a month of Michael Initiating a coup, engaging in coercion and extortion under the pretence of buying the business, and after telling me I would get no entitlements myself, and as is well understood, had created SEQ already, after pleading with him to stop destroying my business, that I would terminate his position, pay him out thousands of dollars in perceived entitlements, then spend thousands on initiating a DCQ case just to avoid $11 extra grand in LSL?
…
An obvious conclusion that any rational mind would be able to easily determine, is that I in fact did not terminate Mr Gibby's employment so I could Destroy my own business, and go about Spending a year and a half fighting for survival just to avoid LSL claim in the QIRC …[124]
- [77]In order to accept Mr Finlayson's argument, one would have to also accept that:
- the amount of the proportionate long service leave payment otherwise owed to Mr Gibby was but a trifling concern; and
- Mr Finlayson acted rationally in the period leading up to the termination of Mr Gibby's employment.
- [78]I do not accept either of those propositions because:
- The evidence before me is that the company was fast running out of money. It follows then that the spectre of any liability - "$11 extra grand in LSL" - would take on much heightened significance in those circumstances. It appears that Mr Finlayson thought he could avoid paying the money to Mr Gibby, and did so.
- The evidence of both the incessant Telegram messages, and the hour-long telephone conversation recorded by Mr Finlayson without Mr Gibby's consent, persuade me that Mr Finlayson was not acting in a measured or reasoned manner.
- [79]In light of the explanation above, I find that Mr Gibby's employment was terminated for reasons other than "conduct, capacity or performance".
- [80]Even if I were to be wrong on that point, I also find that Mr Gibby's dismissal was unfair.
- [81]It follows that Mr Gibby is owed payment for proportionate long service leave upon the termination of his employment.
- [82]The amount of proportionate payment for long service leave that Mr Gibby is entitled to is $13,621.16. By the time of the Hearing, that figure had been conceded by the Applicant and was no longer in dispute.[125]
The power to award costs
- [83]Section 545 of the IR Act provides a general power to award costs against a party or a representative of a party in certain circumstances:
545 General power to award costs
- A person must bear the person's own costs in relation to a proceeding before the court or commission.
- However, the court or commission may, on application by a party to the proceeding, order—
- a party to the proceeding to pay costs incurred by another party if the court or commission is satisfied—
- the party made the application or responded to the application vexatiously or without reasonable cause; or
- it would have been reasonably apparent to the party that the application or response to the application had no reasonable prospect of success; or
- a representative of a party (the represented party) to pay costs incurred by another party to the proceeding if the court or commission is satisfied the representative caused the costs to be incurred—
- because the representative encouraged the represented party to start, continue or respond to the proceeding and it should have been reasonably apparent to the representative that the person had no reasonable prospect of success in the proceeding; or
- because of an unreasonable act or omission of the representative in connection with the conduct or continuation of the proceeding.
- The court or commission may order a party to pay another party an amount reasonably payable to a person who is not a lawyer, for representing the other party.
- [84]Rule 70 of the Industrial Relations (Tribunal) Rules 2011 (Qld) provides:
70 Costs
- This rule applies if the court or commission makes an order for costs under section 545 of the Act.
- The court or commission, in making the order, may have regard to—
- for a proceeding before the commission — the costs payable on the scale of costs for Magistrates Courts under the Uniform Civil Procedure Rules 1999, schedule 2; or
…
- any other relevant factor.
- The court may order that costs be assessed by the registrar and, in assessing costs, the registrar may have regard to the Uniform Civil Procedure Rules 1999, chapter 17A.
Should an order for costs be made?
- [85]
- [86]The Applicant submitted that:
If the Commission accepts the submissions of the Applicant herein, then it follows that the Respondent has concocted allegations of misconduct against the Applicant in an attempt to avoid payment of proportionate long service leave.
It follows that the Commission has jurisdiction to award the Applicant all costs arising from the application pursuant to section 545(2)(a) of the Act, on the basis that the Respondent's response to the Applicant's application itself was vexatious, and or alternatively, without reasonable cause.
Further, Mr Finlayson represented the Respondent in the application. His conduct in so representing the Respondent was littered with unreasonable acts, including but not limited to:
- playing possum regarding his health;
- failing to attend on days one and three; and
- tendering evidence after hours on day one;
thus enlivening the Commission's jurisdiction to award costs against him personally pursuant to section 545(2)(b) of the Act.
Costs ought to be awarded against the Respondent, and Ren Finlayson, jointly and severally.[127]
…
Total costs for the Applicant in the application…are as detailed in the Further Affidavit of David Quinn …[128]
- [87]The Respondent submitted:
I will provide a detailed list of costs and damages at the earliest. It is mind boggling the amount of hours and resources this has cost me to defend. I can say however that I generally like to cook my own lunch so I will be leaving out fast food expenses.
If I had more pages allocated for my submission. I could continue.[129]
- [88]In reply, the Applicant submitted that:
Where the Applicant is able to discern submissions on behalf of the Respondent regarding costs, it is clear that there is no statutory basis for an award of costs in its favour.
Loss of income is not recoverable, particularly so where there is no evidence of same.
The Respondent has failed to identify a statutory basis for its claim for costs, and further failed to provide evidence of any costs incurred.[130]
Consideration
- [89]In deciding to award costs against the Applicant in Dawson v State of Queensland (Department of the Premier and Cabinet), Vice President O'Connor cited the following (citations omitted):[131]
Martin J observed in Blackwood v Egan, that an order for costs is a quintessential exercise of discretion and that the principles in House v The King will apply. The principles that govern an award of costs are well established. In Latoudis v Casey, Mason CJ wrote:
It will be seen from what I have already said that, in exercising its discretion to award or refuse costs, a court should look at the matter primarily from the perspective of the defendant. To do so conforms to fundamental principle. If one thing is clear in the realm of costs, it is that, in criminal as well as civil proceedings, costs are not awarded by way of punishment of the unsuccessful party. They are compensatory in the sense that they are awarded to indemnify the successful party against the expense to which he or she has been put by reason of the legal proceedings.
His Honour the Chief Justice further stated:
Most of the arguments which seek to counter an award of costs against an informant fail to recognize this principle and treat an order for costs against an informant as if it amounted to the imposition of a penalty or punishment. But these arguments only have force if costs are awarded by reason of misconduct or default on the part of the prosecutor. Once the principle is established that costs are generally awarded by way of indemnity to a successful defendant, the making of an order for costs against a prosecutor is no more a mark of disapproval of the prosecution than the dismissal of the proceedings.
McHugh J said:
The rationale of the order is that it is just and reasonable that the party who has caused the other party to incur the costs of litigation should reimburse that party for the liability incurred. The order is not made to punish the unsuccessful party. Its function is compensatory.
- [90]I am minded to entertain the Applicant's costs application in this matter.
- [91]In making this decision, I note the relevant legislation provides that the default position is for each party to bear its own costs. However, a departure from this practice may be exercised at my discretion.
- [92]Having considered those relevant legislative provisions, together with the circumstances of this case, I will disturb the usual practice so prescribed.
- [93]I have found both that Mr Gibby's employment was not terminated on the grounds of "conduct, capacity or performance" and that his termination was unfair. In such circumstances, Mr Gibby is entitled to be paid proportionate long service leave. That payment was not made.
- [94]Instead of paying the entitlement owed to Mr Gibby, Mr Finlayson chose to embark on a campaign to resist the Applicant's legitimate claim. In doing so, Mr Finlayson contrived various allegations of purported misconduct by Mr Gibby over the course of employment, and since. Each of those assorted theories of misconduct alleged against Mr Gibby were groundless. The Respondent's response to Mr Gibby's application was without reasonable cause.
- [95]The meaning of the term 'without reasonable cause' has been considered in several decisions.
- [96]In Kanan v Australian Postal Telecommunications Union, his Honour Justice Wilcox provided (emphasis added, citations omitted):[132]
It seems to me that one way of testing whether a proceeding is instituted 'without reasonable cause' is to ask whether, upon the facts apparent to the applicant at the time of instituting the proceeding, there was no substantial prospect of success. If success depends upon the resolution in the applicant's favour of one or more arguable points of law, it is inappropriate to stigmatise the proceeding as being 'without reasonable cause'. But where it appears that, on the applicant's own version of the facts, it is clear that the proceeding must fail, it may properly be said that the proceeding lacks a reasonable cause.
- [97]In Yousif v Workers' Compensation Regulator, his Honour Justice Martin considered s 563 of the Workers' Compensation and Rehabilitation Act 2013 (Qld). That section presents precisely the same question as s 545(2)(a) of the IR Act. In that matter, while considering the term 'without reasonable cause', his Honour said (emphasis added, citations omitted):[133]
The test to be applied is not simply whether or not the application was unsuccessful. It is whether the application could not succeed at the time when it was made.
- [98]It has been held that the test imposed by the expression 'without reasonable cause' is comparable to the one applied by a court on an application for the exercise of summary power to stay or strike out proceedings.[134] In that regard, Chief Justice Barwick provided (emphasis added, citations omitted):[135]
The test to be applied has been variously expressed; 'so obviously untenable that it cannot possibly succeed'; 'manifestly groundless'; 'so manifestly faulty that it does not admit of argument'; 'discloses a case which the Court is satisfied cannot succeed'; 'under no possibility can there be a good cause of action'; 'be manifest that to allow them' (the pleadings) 'to stand would involve useless expense'.
At times the test has been put as high as saying that the case must be so plain and obvious that the court can say at once that the statement of claim, even if proved, cannot succeed; or 'so manifest on the view of the pleadings, merely reading through them, that it is a case that does not admit of reasonable argument'; 'so to speak apparent at a glance'.
As I have said, some of these expressions occur in cases in which the inherent jurisdiction was invoked and others in cases founded on statutory rules of court but although the material available to the court in either type of case may be different the need for exceptional caution in exercising the power whether it be inherent or under statutory rules is the same. Dixon J. (as he then was) sums up a number of authorities in Dey v. Victorian Railways Commissioners [1949] HCA 1; (1949) 78 CLR 62 VOL CXII-9 where he says (1949) 78 CLR, at p 91; 'A case must be very clear indeed to justify the summary intervention of the court to prevent a plaintiff submitting his case for determination in the appointed manner by the court with or without a jury. The fact that a transaction is intricate may not disentitle the court to examine a cause of action alleged to grow out of it for the purpose of seeing whether the proceeding amounts to an abuse of process or is vexatious. But once it appears that there is a real question to be determined whether of fact or law and that the rights of the parties depend upon it, then it is not competent for the court to dismiss the action as frivolous and vexatious and an abuse of process.'
- [99]Further, I entirely agree with the Applicant's submission that Mr Finlayson's conduct in these proceedings more than warrant an order for costs against him personally, pursuant to s 545(2)(b) of the IR Act.
- [100]I consider that Vice President O'Connor's conclusion that a costs order ought be made in Dawson v State of Queensland (Department of the Premier and Cabinet), is most apt in the circumstances of this case also (emphasis added):[136]
[23] Notwithstanding the various submissions made by the Respondent and efforts made to explain to the Applicant the situation in which he was placed, the Applicant continued on an erroneous path. Even on the hearing of this application for costs, the Applicant continued to rehearse submissions which had failed in respect of the substantive application.
[24] In exercising the discretion, I have considered the fact that the Applicant was self‑represented. However, as the authorities suggest, that alone should not be a basis upon which a successful party should be denied their costs.
[25] In Northern Territory v Sangare, the High Court observed:
In point of principle, it is basic justice that a successful party should be compensated for expenses it has incurred because it has been obliged to litigate by the unsuccessful party. That consideration of basic justice does not lose its compelling force simply because the successful party happens to be wealthy: the successful party, whether rich or poor, did not ask to be subjected to the expense of unmeritorious litigation. The statutory power . to order costs affords the successful party necessary protection against unmeritorious litigation; and unmeritorious litigation is no less unmeritorious because it is pursued by a person who is poor or who is a litigant in person.
[26] The Applicant's case was one without any prospects of success. In short, the Applicant failed to identify a breach of the IR Act or an industrial instrument under the Act; and never made an application that would have empowered the Commission to grant the relief sought by the Applicant. Those failures were fatal to his application.
[27] Equally, the application was brought to the Commission on a footing which was misconceived and doomed to fail. The case advanced by the Applicant was on any view of the material, 'so lacking in merit or substance as to be not fairly arguable'.
- [101]I observe that the Respondent was warned that costs would be sought.
- [102]As it transpired, the Respondent was wholly unsuccessful at Hearing.
- [103]Mr Finlayson wasted the Commission's time, and caused the Applicant unnecessary expense, on several occasions.
- [104]I have earlier observed that Mr Finlayson's evidence was not credible. As both a witness and as a representative, I found the approach adopted by Mr Finlayson to be most unhelpful and discursive.
- [105]For the reasons above, I will exercise my discretion to award costs to the Applicant against both the Respondent company and Mr Finlayson as its representative in these proceedings.
The amount of costs
- [106]My consideration now turns to the appropriate amount of costs to be awarded.
- [107]The Commission is empowered to award an amount of costs. The precise quantum of the costs awarded is discretionary, though discretion must be exercised judicially. The amount of costs may be informed by the Magistrates Court scale and other relevant matters.[137] Costs should be fixed if possible.[138] It is open to the Commission to make an order which best fits the circumstances of the case.
- [108]The Applicant argued costs should be awarded against the Respondent and Mr Finlayson, jointly and severally.
- [109]An affidavit of Mr David Quinn, instructing solicitor of Holding Redlich, set out details of the Applicant's costs totalling $52,091.93 (including GST). Mr Quinn affirms that:
The total costs of this application for Mr Gibby as calculated in that manner are $47,356.33 plus GST of $4,735.60.[139]
- [110]Mr Quinn's affidavit sets out the basis upon which those conservative calculations have been made.
- [111]I accept the Applicant's legal costs were for a reasonable amount and reasonably incurred for pursuing his proportionate long service leave claim. Mr Quinn's affidavit has comprehensively set out all the relevant matters. As I have earlier noted, the Commission must fix costs if possible.
- [112]For all the reasons above, I find the circumstances of this case require an order that the Respondent and Mr Finlayson jointly and severally pay to Mr Gibby costs in the amount of $52,091.93 (including GST) within 28 days.
Further matters
- [113]This Decision was released to the parties on 7 September 2023. It was published on 8 September, and then removed on 11 September 2023 because it was discovered that there is no capacity for the Commission to make a costs order under s 545 of the IR Act, having regard to the provisions of s 530(2)(b).
- [114]Notwithstanding both parties were legally represented at the commencement of these proceedings before the Commission, the Respondent's legal representative withdrew just prior to the first scheduled date of Hearing. That then resulted in the determination to reschedule the Hearing accordingly.
- [115]The provisions of s 530(2)(b) state that (emphasis added):
However, the person or party must not be represented by a lawyer–
…
- (b)in proceedings before the commission under section 403 or 475; or
…
- [116]The words "must not be represented by a lawyer" permit no exercise of the Commission's discretion to grant leave for legal representation. Nor is it relevant whether or not the parties consent.
- [117]The terms of s 530(2) of the IR Act mandates the exclusion of legal representation in only a few limited circumstances. The recovery of unpaid wages under s 475 - in this case, the proportionate payment of long service leave that I have found was due to Mr Gibby upon the cessation of his employment with The Finlaysons IT Pty Ltd - is one such circumstance.
- [118]As lawyers are not permitted to appear at the Commission in these types of matters, the Commission has no power to award costs for doing so.
- [119]That means the last order of my 7 September 2023 Decision to award costs against Mr Finlayson could not stand.
- [120]Having discovered the error, the Decision was removed on 11 September 2023. Three Mentions were held in the period 11 - 12 September 2023, during which the prohibition of legal representation for s 475 matters was raised with the parties.
- [121]The parties were advised that s 484 of the IR Act permitted the Commission to reopen proceedings to "revoke or amend a decision … made by it" "on application by a person mentioned in s 485 (including "a party to the proceedings" or "a person who is bound or affected by, or dissatisfied with, the proceedings"). That meant that such application may be made by either Mr Gibby or Mr Finlayson.
- [122]I foreshadowed that I would hear the parties as to the making of such an application under s 484, for the purposes of amending the decision of 7 September 2023.
- [123]Some exertions were made for a global resolution of all matters, outside the Commission processes, that was again without success.
- [124]The Commission was advised that "… if the remaining matters are resolved without the direct involvement of the Commission, we will confirm any such settlement as appropriate." No advice has been provided by either party that the disputes between them have been so resolved.
- [125]Ultimately though, neither party determined to make such s 484 application.
- [126]There was no ability then to correct the costs order made in my decision of 7 September 2023 through that particular legislative pathway.
- [127]By email dated 13 September 2023, Mr Gibby did not concede that he is not entitled to the cost order made in my 7 September 2023 decision, "but concedes the potential relevance of s 24AA of the Acts Interpretation Act 1954 (Qld) to these matters."[140]
- [128]That section states:
24AAPower to make instrument or decision includes power to amend or repeal
If an Act authorises or requires the making of an instrument or decision –
- (a)the power includes power to amend or repeal the instrument or decision; and
- (b)the power to amend or repeal the instrument or decision is exercisable in the same way, and subject to the same conditions, as the power to make the instrument or decision.
- [129]Later that day,[141] the orders made in my 7 September 2023 Decision were stayed until further hearing of the matter or further order of the Commission.
- [130]In circumstances where legal representation was not permitted, but a costs order was made - and neither party has determined to make an application under s 484 that would permit me to revoke that particular order - I must correct the error by exercising the Commission's general powers. Section 451 of the IR Act provides:
451General powers
- (1)The commission has the power to do all things necessary or convenient to be done for the performance of its functions.
- (2)Without limiting subsection (1), the commission in proceedings may –
- (a)give directions about the hearing of a matter; or
- (b)make a decision it considers appropriate, irrespective of the relief sought by a party; or
- (c)make an order it considers appropriate.
…
- [131]In the course of the three Mentions held between 11 and 12 September 2023, and in subsequent email correspondence, I have heard the parties' positions with respect to the Commission's ability or otherwise to have made a costs order against the Respondent in this case.
- [132]In the period between 13 September 2023 and today, the parties have not advised whether or not "the remaining matters are resolved without the direct involvement of the Commission …"
- [133]Mindful of my obligations to provide for the timely and efficient conduct of matters before the Commission, I am compelled to exercise the general powers under s 451 of the IR Act at my own initiative then, in order to revoke the costs order contained in the 7 September 2023 decision.
- [134]I order accordingly.
Orders:
- Mr Gibby was entitled to proportionate payment for long service leave upon cessation of his employment with the Respondent.
- That, within 28 days, the Respondent is to pay to Mr Gibby $13,621.16 in proportionate long service leave.
Footnotes
[1] 4 February 2022.
[2] Applicant's closing submissions, filed 9 June 2023, [8].
[3] T 3-16, lines 40-44.
[4] T 2-6, line 19.
[5] Further, in Exhibit 2, [4](d) and [21], Mr Finlayson's affidavit described Mr Jason Reason as both his former wife Julie's "cousin" and then later as his "nephew, by marriage".
[6] T 3-18, line 21 to T 3-19, line 17.
[7] T 3-33, lines 26-31.
[8] T 3-38.
[9] T 3-40, line 40.
[10] T 3-40, lines 43-45.
[11] T 3-15, lines 38-39.
[12] T 3-18, line 17.
[13] T 3-24, lines 28-31.
[14] T 3-26, lines 4-5.
[15] T 3-26, lines 44-46.
[16] T 3-26, line 48-T 3-27, line 1.
[17] T 3-27, lines 9-10.
[18] T 3-30, lines 1-14.
[19] T 2-32, lines 4-20; T 3-3.
[20] Exhibit 2, [38] and [38](a).
[21] T 3-19, lines 19-48; T 3-20, lines 1-31; Exhibit 1, page 291, [61]-[73].
[22] Exhibit 2, [24]-[26], [30]-[33], [41]-[49], [52]-[53], [59].
[23] Exhibit 2, [74] cf Exhibit 1, page 244; Exhibit 2, [27](b) and [38] cf Exhibit 1, page 309.
[24] Applicant's closing submission filed 9 June 2023, [20].
[25] T 3-12, line 25.
[26] Exhibit 7.
[27] Ibid.
[28] T 2-2, lines 24-46; T 2-3, lines 1-15; T 2-12, lines 1-47; T 2-13, lines 1-20.
[29] T 2-12, lines 46-47; That separate and distinct matter has been referred to Vice President O'Connor under s 921(1)(d)(ii) of the IR Act.
[30] Exhibit 1, 309.
[31] Exhibit 1 295, [9]; Exhibit 1, 309.
[32] Exhibit 1, 295 [10].
[33] Exhibit 2, [1](h).
[34] Exhibit 1, 7 [35].
[35] Ibid 8 [39]-[41].
[36] Ibid 9 [49].
[37] Ibid [50]; Exhibit 1, MG3, page 250.
[38] Exhibit 1, 9 [52].
[39] Ibid [54].
[40] Ibid [53]-[65].
[41] Mr Ron Platt was a business lawyer at Paramount Legal.
[42] Exhibit 1, 12 [65].
[43] Ibid [64]; Exhibit 1, MG6, 271.
[44] Exhibit 1, MG2, 16.
[45] Exhibit 1, 13 [66]; Exhibit 1, 161.
[46] Exhibit 1, 161.
[47] Mark Brunch is a local employment law solicitor; Exhibit 1, page 13, [68]
[48] Exhibit 1, 161.
[49] Ibid MG2, 162.
[50] Ibid 162.
[51] Exhibit 3; Exhibit 1, 189.
[52] Exhibit 4, 9; Exhibit 1, 291, [61].
[53] Exhibit 1, 291, [65]-[73].
[54] Exhibit 4.
[55] Exhibit 1, MG2, 208.
[56] Ibid 211.
[57] Ibid MG7, 273.
[58] Exhibit 4.
[59] Exhibit 1, 217.
[60] Ibid.
[61] Exhibit 1, 292 [82].
[62] Exhibit 1, 292 [82].
[63] Ibid 14 [73].
[64] Exhibit 1, MG2, 223.
[65] Exhibit 1, 292.
[66] Exhibit 1, MG2, 225.
[67] Ibid 226.
[68] Ibid 242.
[69] Ibid 244.
[70] Ibid 246.
[71] Exhibit 1, MG8, 275.
[72] Exhibit 1, MG9, 278.
[73] Exhibit 1, 292, [76]-[77].
[74] Exhibit 1, MG9, 278; Exhibit 1, 15 [78].
[75] Exhibit 1, 292 [83].
[76] Ibid.
[77] T 3-32, lines 4-6.
[78] The Applicant submitted that "Not that merely making preparations for a future business while still employed is a breach of an employee's duties …"; Applicant's closing submissions filed 9 June 2023, 5.
[79] Exhibit 1, 293 [84].
[80] Ibid.
[81] Application for proportionate payment of long service leave, filed 27 July 2022, Schedule 1, [15]-[17].
[82] Applicant's closing submissions filed 9 June 2023, [10].
[83] Given that date, the Applicant submitted that "It cannot have had bearing on the reason for termination. Nor can such "after acquired knowledge" provide a valid reason for termination, as preparations for a future venture, especially in the context of the negotiations then taking place for the sale of the business, are not in breach of the Applicant's relevant contractual or equitable obligations."; Applicant's submissions in reply, filed 10 July 2023, [6].
[84] Applicant's closing reply submissions filed 10 July 2023, [5].
[85] Applicant's closing submissions filed 9 June 2023, [11]-[13].
[86] Ibid [11]-[14].
[87] Respondent's closing submissions filed 3 July 2023, 3.
[88] Ibid 4-5.
[89] Respondent's closing submissions filed 3 July 2023, 5.
[90] Ibid 6.
[91] Ibid 7.
[92] Ibid 3.
[93] Ibid 2.
[94] 3:43 pm, 1 February 2022; Exhibit 1, 174; Respondent's closing submissions filed 3 July 2023, 2.
[95] 3:47 pm, 1 February 2022; Exhibit 1, 175; Respondent's closing submissions filed 3 July 2023, 2.
[96] Respondent's closing submissions filed 3 July 2023, 3.
[97] Respondent's closing submissions filed 3 July 2023, 1.
[98] Ibid.
[99] Ibid.
[100] Ibid 2.
[101] On 1 February 2022, Mr Finlayson messaged Mr Gibby "You have 4 weeks notice and Jason has two."
[102] T 1-5, lines 8-9; Exhibit 1, MG9, 278; Exhibit 1, 15 [78].
[103] 11:33 am.
[104] Exhibit 1, 217.
[105] The key exchanges have been summarised in the above chronology.
[106] Exhibit 1, 291.
[107] Ibid 225.
[108] Exhibit 1, 291.
[109] Respondent's closing submissions filed 3 July 2023, 1.
[110] Copies of emails between Mr Bunch and Ms Julie Finlayson in the period 29 June 2015-1 July 2015, with draft employment contracts for Mr Gibby and Mr Reason attached.
[111] Exhibit 1, 295 [10].
[112] Applicant's closing submissions filed 9 June 2023, [10](f).
[113] Applicant's closing reply submissions filed 10 July 2023, [4].
[114] Exhibit 1, 225.
[115] Exhibit 1, MG9, 278; Exhibit 1, 15 [78].
[116] Industrial Relations Act 2016 (Qld) s 95(4)(c)(ii).
[117] Exhibit 1, MG9, 278; Exhibit 1, 15, [78].
[118] Exhibit 1, 24.
[119] Ibid 30.
[120] Ibid 38.
[121] Ibid 40.
[122] Exhibit 1, 75.
[123] Applicant's closing submissions filed 9 June 2023, [10].
[124] Respondent's closing submission filed 3 July 2023, 3.
[125] T 1-6, lines 3-4; Respondent's outline of submissions filed 2 March 2023, 6 [7].
[126] T 3-47, lines 30-33.
[127] Applicant's closing submission filed 9 June 2023, [18]-[21].
[128] Ibid [23].
[129] Respondent's closing submissions filed 3 July 2023, 9.
[130] Applicant's closing reply submissions filed 10 July 2023, [13]-[15].
[131] Dawson v State of Queensland (Department of the Premier and Cabinet) [2021] QIRC 436, citing Blackwood v Egan [2014] ICQ 020; House v The King (1936) 55 CLR 499; Latoudis v Casey (1990) 170 CLR 534.
[132] Kanan v Australian Postal and Telecommunications Union (1992) 43 IR 257, 29.
[133] Yousif v Workers' Compensation Regulator [2019] ICQ 10, [31], citing MIM Holdings Limited v Automotive, Metals, Engineering, Printing and Kindred Industries Industrial Union of Employees Queensland (2000) 164 QGIG 370, 371.
[134] Re Christina Hatchett v Bowater Tutt Industries Pty Ltd (No 3) (1991) 39 IR 31, [8] followed in Walker v Mittagong Sands Pty Limited T/A Cowra Quartz (2011) 210 IR 370.
[135] General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125, 129-130.
[136] Dawson v State of Queensland (Department of the Premier and Cabinet) [2021] QIRC 436, citing Gambaro v Workers' Compensation Regulator [2017] ICQ 005; Northern Territory v Sangare (2019) 265 CLR 164; Degiorgio v Dunn (No 2) (2005) 62 NSWLR 284; Lemoto v Able Technical Pty Ltd & Ors (2005) 63 NSWLR 300.
[137] Industrial Relations (Tribunals) Rules 2011 (Qld) r 70.
[138] Industrial Relations Act 2016 (Qld) Schedule 2, paragraph 9.
[139] Affidavit of Mr David Quinn, filed 12 June 2023, [7].
[140]Email correspondence from Mr D. Quinn dated 13 September 2023.
[141]13 September 2023.