Legal

Caravan builder ordered to pay $15,000 for dismissing a worker who was on an overseas trip

Emma Koehn /

Small businesses are being urged to wait until employees return from leave if they need to discuss a termination, after a Melbourne caravan producer was ordered to pay $15,000 in compensation to a worker who says he was fired via a phone call when he was on leave in Malta.

Last week the Fair Work Commission threw out a claim for costs made by the former employee, but the Commission had decided in March that the dismissal of the employee in 2016 was harsh, unjust and unreasonable.

The employee who brought the unfair dismissal case was employed as a caravan finisher at Billabong Custom Caravans between 2010 and 2016. The worker alleged that while he was on annual leave in Malta in June 2016, he received a text message from a colleague that informed him “apparently u [sic] might go…”. After hearing this, the worker said he contacted the director of the company and was informed his employment had been terminated.

There were two main points of contention in the case: whether the worker was on authorised annual leave at the time, and whether he had actually been previously given notice of termination in May of that year.

The company claimed the worker had been originally informed of the termination of employment in a meeting in May, and that he did not complete a formal request to management to take annual leave.

However, the Commission found on balance that the employer was aware of the worker’s request for leave, and at no point was the worker informed that the request had been denied.

When reviewing the suggestion the employee had actually been dismissed in May, the Commission found the meeting that was said to have led to the termination had been initiated by the employee, and “it would seem odd that the 7 May 2016 meeting, which was initiated by the applicant, would be the vehicle through which notice of employment would be given”.

The worker submitted that this May meeting was actually about a request for increase in pay, which was refused.

Ultimately, Fair Work deputy president Val Gostencnik found the dismissal was unfair, and there was “a failure to adopt the most basic of fair procedures in effecting the dismissal”.

The Commission observed the way the employee was terminated via phone call was unreasonable, and the employee did not engage in the conduct that the employer alleged led to the dismissal.

The business was ordered to pay $15,051 plus 9.5% superannuation to the former employee.

“Wait until employees return”

Athen Koelmeyer, managing director at Workplace Law, told SmartCompany it’s important SMEs develop a simple and clear process for leave applications.

“Annual leave [should] only be taken at a time that’s agreed upon, so some sort of calendar that’s available to everyone showing who is going to be off and when is really useful, particularly for small businesses,” she says. 

Formulating a standard leave application form for employees to submit well in advance can ensure workers know their obligations and any refusals of leave have a clear paper trail, Koelmeyer says.

“Make sure your process is really clear, that there’s a discussion about whether or not the annual leave is feasible, and make sure there’s no misunderstanding around the record of leave forms,” she says.

However, small businesses need to be vigilant about not terminating a worker because they have requested leave that they are entitled to, as they could potentially be vulnerable to an adverse action claim.

“If someone is accessing their right to take leave either under the National Employment Standards or their award, while it can be very difficult for small enterprises if it doesn’t suit the business operations, in Australia we do have a long history of providing this kind of leave,” Koelmeyer says. 

If a worker is on leave and a dispute or situation arises that could affect their employment, the best course of action is to wait until they return to the office and then act on the issue swiftly. Waiting until a worker is back on site or in the office can ensure clarity and could prevent confusion or disputes down the line, Koelmeyer says.

I think it can be a very difficult situation, but the FWC has said for a long period of time that face-to-face termination meetings are preferable to any other form of termination. While everyone does want to act on things quickly, wait until someone comes back to the country, for example — particularly if they’re coming back from a period of annual leave.” 

SmartCompany contacted Billabong Custom Caravans for comment but did not receive a response prior to publication. SmartCompany could not contact the former employee of the business prior to publication.

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Emma Koehn

Emma Koehn is a former senior journalist at SmartCompany.

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