Year: 2020

Tax agent deregistered after overlooking personal affairs

In the recent matter of Madz and Tax Practitioners Board [2019] AATA 4773, the Administrative Appeals Tribunal upheld a decision of the Board after it cancelled a tax agent’s registration for overlooking his personal affairs.

Mr Stephen Madz was a tax practitioner, who in May 2019 had his registration terminated by the Tax Practitioners Board for breaching the Code of Professional Conduct pursuant to section 30-30 of the Tax Services Act 2009. Mr Madz was also prevented from applying for registration for a period of 18 months pursuant to section 40-25(1) TASA. Mr Madz subsequently applied to the AAT seeking that he be reinstated.

In doing so, Mr Madz contended that his failure to lodge two income tax returns was the result of a ‘perfect storm’ of events, which ensued after he moved house in November 2015. Namely, upon his move, Mr Madz had no telecommunications facilities for 57 days and thereafter, continued to suffer poor connectivity until early November 2019. Further, there was a period in which Mr Madz did not receive mail from the ATO, as it was being sent to his former address. Mr Madz emphasized that he continued to lodge his clients returns during this period.

The Tribunal accepted that Mr Madz had serious telecommunications difficulties which affected his ability to conduct his business after his move. In doing so, it acknowledged that this resulted in him reasonably prioritising meeting the needs of his clients and the requirement of the ATO in relation to those clients.

However the Tribunal relied on Su v Tax Agent’s Board of South Australia (1982) 13 AR 192, noting that this could not excuse his failure to appropriately conduct his own affairs. In Su, the court noted that:

“If a doctor is convicted of a serious offence relating to drugs, his name may be struck from the register because the offence is inconsistent with the task which medical practitioners perform. If a tax agent is convicted of an offence of tax evasion, his name may be taken from the register, for tax evasion is inconsistent with the role which tax agents are called upon to perform.”
As such, the Tribunal held that the Board was justified in cancelling Mr Madz’s registration, noting that his non compliance was exacerbated by his failure to comply with an Outstanding Lodgement Order issued by the ATO pursued to s 30-20 of the code and that the outstanding returns and BAS’s had still not been lodged by the date of the hearing.

Despite this, the Tribunal reduced the period for which Mr Madz was prohibited from reapplying for registration from 18 months to 12 months.

by James Conomos Lawyers

Redundancy and the redistribution of duties

Under the Fair Work Act 2009 (Cth) (the Act), a business cannot simply make an employee redundant without cause. The redundancy must be genuine and the employer must comply with their obligations under the Act and any employment agreement. In assessing whether a redundancy is genuine regard is to be had to section 389 under which there are three general criteria:

1. The employer must no longer require the employee’s job to be performed by anyone because of changes in operational requirements;
2. The employer must comply with any consultation obligations it has under a modern award or enterprise agreement; and
3. Redeployment within the employer’s business or an associated entity must not be reasonable in the circumstances.

An example of the assessment of redundancy procedures by the Fair Work Commission (FWC) is the case of Broudou v Eurolinx Pty Ltd [2019] FWC 4469. In this case a Technical Service Manager challenged his redundancy alleging that it was an unfair dismissal on the basis that the redundancy was not genuine. The employee claimed that given duties of his role still existed within the business, as demonstrated by the redistribution of tasks to other employees, there could be no redundancy.

The employer responded that the redundancy was a result of a downturn in business, a 15% reduction in sales and a 15.7% reduction in service activity, which necessitated a reorganisation of the business. As a result, the employee’s duties were distributed amongst four other employees rendering the technical service manager role redundant. The basis for this decision was nothing more than ensuring the sustainability of the business in face of the commercial challenges.

Deputy President Boyce held that section 389 is not concerned with whether duties survive, rather it is concerned with whether the job performed by the employee exists. Whilst a job is “a collection of functions, duties and responsibilities entrusted, as part of the scheme of the employers’ organisation, to a particular employee”, where a redistribution results in no continuing need for someone to perform a job, that job will not be required by the employer.

The Deputy President stated:

“The law more-or-less permits an employer to structure their business as they see fit. In this instance, the Fair Work Commission can take no recourse against what is clearly within the bounds of managerial discretion.”

On this basis, and in the absence of evidence that the employer did not comply with any obligations regarding redundancy or that there were reasonable redeployment or retrenchment options, the Deputy President concluded that the redundancy was genuine.

by James Conomos Lawyers

Mind Your Language

In the recent case of Boris v Metcash Trading Limited T/A Metcash [2019] FWC 3993, the Fair Work Commission assessed an unfair dismissal claim by an employee who claimed that his swearing in a formal meeting was “conversational swearing”, effectively that when he did swear in conversations it was not directed at anyone and that the workplace was one where “people use intemperate language and tensions.”

The employee was a part-time store person for Metcash working 20 hours and was dismissed for serious misconduct; namely his conduct at a meeting regarding a confrontation he had with a supervisor several days earlier.

The employee had failed to comply with a supervisor’s instruction to attend a debrief meeting later that day. The employee recorded this instruction despite the supervisor’s instruction not to, claiming that the recording was done to demonstrate requests for advanced notice and time to arrange a representative to attend. Evidence from other Metcash staff provided that there was historical antagonism between the employee and this supervisor.

In accordance with the wishes of the employee the performance review was held several days later. In arranging this meeting, the supervisor texted the employee and called him three times on his day off without leaving a message.

Metcash claimed the employee was aggressive, intimidating and his discourse was laden with expletives, at one point saying to his supervisor: “Under no circumstances are you to contact me out of work hours for any reason whatsoever. If you ever harass me out of work hours again, I will tell you exactly what I think of you and your mother.” This conduct in conjunction with the prior confrontation and poor behaviour were used as the basis for termination.

At the hearing the employee admitted to the swearing and making the reference to the supervisor’s mother. The employee however submitted that the swearing was not directed at anyone and that the workplace was one that permitted swearing. The employee further submitted that the reference to the supervisor’s mother was borne of frustration with the supervisor’s conduct toward him. The employee admitted that while his language and comments warranted censure and discipline, this did not constitute a sound reason for dismissal in light of all the case facts.

Deputy President Beaumont noted that:

“Apparently, ‘conversational swearing’ appears to be dialogue punctuated by the occasional or perhaps often cited profanity … I assume that the reference to ‘conversational’ is because the offensive words are buffered by a tone and voice volume that would otherwise be considered ‘conversational’. Hence, to speculate, such profanities become accepted part of the meeting vernacular because they are couched in such a way.”

However, this argument was rejected:

“I do not accept that ‘conversational swearing’ … is acceptable conduct in a meeting where conduct issues are being discussed, or allegations are being traversed, or a person has been asked to show cause. Whether that person is the employee against whom allegations are made, or the person facilitating or running the meeting, makes no difference.”

On this basis, the employee’s conduct was held to be in breach of the Metcash Code of Conduct which constituted a valid reason for dismissal.

In the contrasting case of Matthews v San Remo Fisherman’s Co Operative [2019] FWC 4877, the FWC did not find that swearing by an employee during a confrontation with a general manager was aggressive, abusive, or enough to constitute a valid dismissal.

In that case the employee, a pelican feeder, had been approached by the Co-Op general manager on several occasions to request details about revenue raised from badge sales by a separate entity known as the Pelican Research Group, of which the employee was a member. The employee denied these requests each time until he was asked a similar question by a visitor. The employee subsequently confronted the general manager concerned that this was a set up.

During the confrontation the employee said to the general manager “what you did was very f***ing disrespectful”, to which the general manager replied that it was “effing offensive that you would make such an accusation”. The employee was subsequently dismissed by email due to his refusal to disclose information about the badge sale, his offensive accusation toward the general manager and his conduct in swearing at the general manager.

Commissioner Gregory was not satisfied any of the above reasons constituted a valid reason for dismissal. On the point of the employee’s swearing, the Commissioner found that the employee’s language was used in frustration and not directed with any aggression or threat, and it was in the context of a robust discussion between employees who otherwise had a good relationship. In addition, Commissioner Gregory held that there was little distinction between the terms “f***ing” and “effing” and that it was simply an exercise in hair splitting to suggest that the general manager’s language was somehow more restrained or differing in intent.

From these cases we can see that the general workplace culture, as well as the relationship between employees and/or employers and the context of any conversation, will determine what is and isn’t acceptable conduct. Notwithstanding this, it is very apparent that abusive or threatening language is wholly unacceptable and will not be accepted in any circumstances.

Whilst swearing may be an aspect of certain workplace cultures, it does not excuse inappropriate or abusive swearing directed at others and is a valid reason for dismissal as concluded by the Fair Work Commission (FWC) in Pridham and Rose v Viterra Operations Pty Ltd T/A Viterra [2019] FWC 1018.

by James Conomos Lawyers