Cauchi v Metal Coat [2010] FMCA 971

1. There was some measure of controversy as to what was said and done on 9 September 2009. Such conflicts of evidence as there were were made more difficult by the fact that Mr Cauchi represented himself and very understandably put but little in the way of cross-examination. Nonetheless, I think that the pattern of events is fairly clear.
2. It is clear that early on 9 September 2009, probably at about 8 am or shortly thereafter, Peter McCormack, who is the managing director and business owner of the respondent, approached Mr Cauchi and they had a discussion. Although the affidavits filed by Mr Cauchi and

Mr McCormack put the conversation in slightly different terms, it is clear that there was a discussion between them about various aspects of Mr Cauchi's employment performance that were thought not to be wholly satisfactory. 3. It is Mr Cauchi's evidence that Mr McCormack swore at him and otherwise said things that caused him to feel humiliated.

Mr McCormack puts the conversation at a much lower level of tension, denies abusing Mr Cauchi and says that if anything it was Mr Cauchi who was rude to him. 4. Although another witness, Mark Harris, supports the proposition that Mr Cauchi was swearing at McCormack, it is not necessary ultimately to form a final view about this dispute. It is clear on any view that

Mr Cauchi was upset by the end of that interview. 5. Shortly thereafter Mr Cauchi on any version of the events spoke to Jason Bird, who was his foreman (in substance if not in name), about the matters that had been raised with Mr McCormack. 6. It was Mr Cauchi's evidence that he was very upset, that he told

Mr Bird he was too upset to concentrate, felt sick and was going home. Mr Bird's affidavit evidence was that "Phil became upset and quite suddenly said, 'Tell Peter I won't come back'." 7. In evidence-in-chief, Mr Cauchi said that he had said to Mr Bird,

"I won't be back today." Clearly the addition of the extra word "today" might put the conversation in a very different light. Mr Cauchi stood by the proposition that he was ill. He said that he told Mr Bird he was sick and he also said that "it was obvious that I was sick." 8. Mr Cauchi stuck by his affidavit evidence that Mr Bird had offered him five minutes' break to console himself and said that he was still visibly disturbed and got more emotional, notwithstanding this offer. 9. Mr Bird and Mr Harris both denied under cross-examination that

Mr Cauchi had told them that he was sick. They also denied that

Mr Cauchi had said anything more than words to the effect "Tell Peter I won't be coming back." 10. All of the witnesses involved in this interchange gave their evidence with conviction and were clearly telling the truth as they saw it. Nonetheless, I accept the version contended for by Mr Bird and

Mr Harris. I note that in his evidence Mr Cauchi said that it was obvious that he was sick, but while it was clearly obvious that he was upset it was not obvious that he was medically unwell. 11. Furthermore the contemporaneous reaction of both Mr Bird and

Mr Harris was the same. Mr Bird observed that Mr Cauchi walked to the lunch room and picked up his lunch box and bag and left, these being the only possessions he had at work. He formed the conclusion that Mr Cauchi had quit his job. He discussed the matter with

Mr Harris, who had formed the same conclusion. 12. It was this conclusion that caused Mr Bird to inform Mr McCormack by telephone that Mr Cauchi had told him to tell Mr McCormack that he would not be back. It is quite clear that Mr Bird and Mr Harris formed the view at the time that Mr Cauchi had indeed abandoned his employment and walked permanently off the job. 13. That conclusion is not consistent with Mr Cauchi's assertion that it was made clear to them and in express terms that it was ill health or sickness that was causing him to leave. In all the circumstances it is more probable than otherwise that Mr Cauchi walked off the job saying words to the effect of, "Tell Peter I won't be coming back." 14. Mr McCormack's evidence was that he was stunned to receive this information from Mr Bird. He said he did not wish to lose Mr Cauchi, who was a good employee. Nonetheless, on being made aware of this at about what appears to have been 2 pm, he caused the wages clerk to make up Mr Cauchi's final pay, which was forwarded to him in due course. 15. In the meantime, Mr Cauchi had gone home, explained his distress to his wife and visited a doctor. His wife delivered a sickness certificate later in that afternoon, probably at about 3 pm. 16. Curiously, given that Mr Cauchi was alleged to be a good employee, Mr McCormack did nothing to contact Mr Cauchi. In a sense equally curiously, Mr Cauchi did nothing to contact Mr McCormack. 17. At some point there was a meeting between Mr McCormack and

Mr Cauchi's union representative, a Mr Cooper. Mr Cooper was not called to give evidence. Whatever the discussion may have been between them it is clear it did not cause Mr Cauchi's employment to recommence.

1. By his application, filed on 12 November 2009, Mr Cauchi expressly elected not to deal with his case under the Court's Small Claims procedures. In the claim form filed contemporaneously, he confirmed that the section of the Act upon which he relied was s.352 - temporary absence or illness. He claimed compensation but expressly he did not claim the imposition of a pecuniary penalty.
2. In the respondent's response and in its material subsequently filed, the respondent has treated the application as being one alleging a contravention of s.772 of the Act and referred to the reverse onus of proof that arises under s.783 of the same legislation.
3. In the circumstances, in my view, nothing turns upon which of these sections it might be said that Mr Cauchi relies.
4. Mr Cauchi did seek at a very late stage to transfer his application to the Small Claims Division of the Court. In my view there was no power to accede to this application, as his application was not one to which s.548 of the Fair Work Act applied. He did not seek an imposition of a civil penalty and his claim was not otherwise for breaches of award conditions or the like.
5. Even if I were wrong in this regard, his application to transfer the application to the Small Claims Division was made far too late and would have had only the effect of excluding the legal representation of the respondent, an outcome that would not have been fair in all the circumstances.
6. Mr Cauchi's application and his evidence amount to the following, namely:

1. he never resigned and never had any intention of doing so; 2. he provided a medical certificate to his employer shortly after lunch on 9 September advising of incapacity to work from 9 to 11 September inclusive;

1. he had not been paid one week's pay in lieu of notice, nor the money that he lost until he recommenced work in his new employment at an all but identical salary with Gunns Limited on 26 October 2009. Essentially he sought seven weeks' pay.

1. Mr Cauchi abandoned his employment by walking off the job; 2. as a result of that the employer did not dismiss Mr Cauchi;

1. if the employer did dismiss Mr Cauchi it was not because of a prohibited reason, namely a temporary absence because of sickness or injury.

1. In Randall v Greyhound Australia Pty Ltd [2008] FMCA 1191, a case conducted under the Workplace Relations Act, Wilson FM found that before the reverse onus of proof can be brought into play, the employee has to prove certain basal elements of his or her claim. These were said to be:
   1. that the respondent terminated the employment;
   2. that there are facts sufficient to prove as an objective fact that the prescribed reason relied on in that subsection (see Randall at [118]).
2. In relation to the reverse onus of proof, I refer with respect to the judgment of Gordon J in Stevenson v Murdoch Community Services Inc [2010] FCA 648 at [99], where her Honour said:
   • [99] Section 659 of the WR Act is a "reverse onus" provision: see ss 664 and 809 of the WR Act.
   • [100] As a result:
   • 1. where there is an allegation of termination of employment by an employer for a proscribed reason, it is sufficient for it to be presumed that the conduct was engaged in for that reason unless the employer proves to the contrary: see, by way of example, Rojas v Esselte Australia Pty Ltd (No 2) [2008] FCA 1585; (2008) 177 IR 306 at [46]-[51]; Greater Dandenong City Council v Australian Municipal, Clerical and Services Union [2001] FCA 349; (2001) 112 FCR 232 at [7]; Davids Distribution Pty Ltd v National Union of Workers [1999] FCA 1108; (1999) 91 FCR 463 at [109] (dealing with the predecessor to s 298V of the WR Act); Maritime Union of Australia v Geraldton Port Authority [1999] FCA 899; (1999) 93 FCR 34 at 68. That presumption is rebuttable: Geraldton Port Authority [1999] FCA 899; 93 FCR 34 at 68;
   • 2. however, notwithstanding that presumption, an applicant must prove the existence of objective facts which the applicant contends provide a basis for the respondent's contravening conduct: see Construction, Forestry, Mining and Energy Union v Coal and Allied Operations Pty Ltd [1999] FCA 1531; (1999) 140 IR 131 at [161]-[162]. The presumption "simply ... alleviate[s] the evidentiary difficulty facing the applicant of providing proof of the intent or reason which motivated, or formed part of the motivation for, the respondent's conduct following the absence of the employee from work" (emphasis added);
   • 3. if an applicant proves those facts and alleges that the conduct was carried out for a prohibited reason, then the onus shifts to the respondent to prove, on the balance of probabilities, that it was not motivated by a proscribed reason: Geraldton Port Authority [1999] FCA 899; 93 FCR 34 at 68. Why? Because, as Nicholson J stated, "[t]he reversal of the onus in respect of proof of the reasons for the conduct is a recognition that 'the circumstances by reason of which an employer may take action against an employee are, of necessity, peculiarly with the knowledge of the employer'"; and
   • 4. where the onus has shifted, an employer will usually need to adduce evidence of the real reason for the dismissal, consistent with the absence of a prohibited reason, to rebut the presumption: Rojas 177 IR 306 at [46]-[51] and Seymour v Saint-Gobain Abrasives Pty Ltd [2006] FCA 1452; (2006) 161 IR 9 at [29]."

1. Here what occurred was something in the nature of an altercation between Mr Cauchi and first Mr McCormack and then possibly to a lesser extent Mr Bird. Mr Cauchi uttered the words, "Tell Peter I'm not coming back," collected his (albeit meagre) possessions and walked off the job. The employer certainly treated it as a resignation. It was so assumed to be by Mr Bird and Mr Harris, who communicated that conclusion to Mr McCormack, who adopted it.
2. In Ngo v Link Printing Pty Ltd (1999) 94 IR 375, the Full Bench of the then Australian Industrial Relations Commission reviewed some of the authorities and at [12] set out the following passage, with which I would agree.
   • "We have had regard to the various decisions to which we were referred relating to resignations of employment. In particular we have considered the decisions that assert the existence, in certain circumstances, of a duty to clarify a resignation. The position was referred to by Murphy JR in Minato v Palmer Corporation Ltd (1995) 63 IR 357 at 361-362 as follows:
     • "The legal position was set out in the case of Sovereign House Security Services Ltd v Savage [1989] IRLR 115 where at 116 May LJ said:
       • 'In my opinion, generally speaking, where unambiguous words of resignation are used by an employee to the employer direct or by an intermediary, and are so understood by the employer, the proper conclusion of fact is that the employee has in truth resigned. In my view tribunals should not be astute to find otherwise...
       • However, in some cases there may be something in the context of the exchange between the employer and the employee or, in the circumstances of the employee him or herself, to entitle the tribunal of fact to conclude that notwithstanding the appearances there was no real resignation despite what it might appear to be at first sight.'
     • Those comments were considered in another case: Kwik-Fit (GB) Ltd v Lineham [1992] ICR 183 where at 188 Wood J said that he saw no difference in principle between words or actions of resignation. At 191 he set out the position as follows:
       • 'If words of resignation are unambiguous then prima facie an employer is entitled to treat them as such, but in the field of employment personalities constitute an important consideration. Words may be spoken or actions expressed in temper or in the heat of the moment or under extreme pressure ("being jostled into a decision") and indeed the intellectual make-up of an employee may be relevant: see Barclay v City of Glasgow District Council [1983] IRLR 313. These we refer to as "special circumstances". Where "special circumstances" arise it may be unreasonable for an employer to assume a resignation and to accept it forthwith. A reasonable period of time should be allowed to lapse and if circumstances arise during that period which put the employer on notice that further inquiry is desirable to see whether the resignation was really intended and can properly be assumed, then such inquiry is ignored at the employer's risk. He runs the risk that ultimately evidence may be forthcoming which indicates that in the "special circumstances" the intention to resign was not the correct interpretation when the facts are judged objectively."
3. One of the difficulties of course that arises is that some of those observations arose in circumstances that contemplated unfair dismissal applications. This is not an unfair dismissal application (see Sallehpour v Frontier Software Pty Ltd [2005] FCA 247 at [38]). The sole issue with which the Court is concerned here is whether the dismissal was or was not because of the proscribed reason.
4. The state of mind of the employer and its agents is by no means determinative of what occurred.
5. In my opinion Mr Cauchi certainly never intended to resign. He went and got a medical certificate straightaway and he was plainly unwell as a result of what had occurred earlier in the day. Looked at objectively, notwithstanding the superficially clear words uttered by Mr Cauchi, given the fact that he was clearly upset, as both Mr Bird and Mr Harris concede, the proper conclusion is not that he resigned.
6. Accordingly, one has to consider what was the true cause of the termination of the employment (see Mohazab v Dick Smith Electronics Pty Ltd (No 2) (1995) 62 IR 200).

What was it that in truth brought the employment to an end?

1. The employer in the person of Mr McCormack had Mr Cauchi's pay made up straightaway. He was never thereafter requested to return nor permitted to do so (bearing in mind that he submitted a number of sickness certificates thereafter).
2. Messy factual circumstances such as these do not perhaps give rise to overly easy legal analysis, but I think that the better conclusion is that the decision of Mr McCormack to have Mr Cauchi's final pay made up is inconsistent with any other conclusion than that this constituted a definite decision that the employment would not continue. This was what brought the employment to an end. Mr Cauchi was, therefore, dismissed by the employer.

1. While it is clear that Mr Cauchi was temporarily absent because of illness on the day that his employment was terminated, it is equally clear that the dismissal did not take place because of the proscribed reason. Mr McCormack simply did not know at the time he dismissed Mr Cauchi that Mr Cauchi was ill. He dismissed Mr Cauchi because he thought Mr Cauchi had abandoned his employment. Indeed, he did not himself think that he was actually dismissing him.
2. In the circumstances, I think that the respondent has discharged the reverse onus of proof cast upon it by the legislation. It follows that the application must be dismissed.

I certify that the preceding thirty-eight (38) paragraphs are a true copy of the reasons for judgment of Burchardt FM