Aleksandra Cvejic v Academy Services Pty Ltd

[2015] FWC 5905

[2015] FWC 5905 [Note: An appeal pursuant to s.604 (C2015/7007) was lodged against this decision and the order arising from this decision - refer to Full Bench decision dated 17 December 2015 [[2015] FWCFB 8264] for result of appeal.]

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Aleksandra Cvejic
v
Academy Services Pty Ltd
(U2015/5932)

DEPUTY PRESIDENT HAMILTON MELBOURNE, 7 OCTOBER 2015

Application for relief from unfair dismissal - genuine redundancy - operational reasons, consultation, redeployment.

[1] On 15 June 2015 Ms Cvejic (the Applicant) lodged an application pursuant to s.394 of the Fair Work Act 2009 (the Act) in relation to the termination of her employment with Academy Services Pty Ltd (Academy or the Respondent). This application was referred to me for determination. It was the subject of a hearing in Adelaide on 25 August 2015.

[2] At this hearing Ms Cvejic was represented by Mr Blewett of United Voice and Academy by Mr (John) Hoffman, Academy’s Administration Manager.

[3] At the time of Ms Cvejic’s termination of employment she worked as a commercial cleaning operator servicing a cleaning contract in Adelaide for the Australian Taxation Office (ATO). The Applicant commenced employment with the Respondent on 24 June 2013. She was employed on a permanent part time basis. Ms Cvejic’s employment was covered by the Academy Services and LHMU Clean Start Union Collective Agreement 2008.

[4] Witness statements and other documents were filed.

[5] I have had regard to all the submissions and evidence.

Genuine Redundancy

[6] The Act provides:

“385 What is an unfair dismissal

A person has been unfairly dismissed if the FWC is satisfied that:

(a) the person has been dismissed; and

(b) the dismissal was harsh, unjust or unreasonable; and

(c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and

(d) the dismissal was not a case of genuine redundancy.

Note: For the definition of consistent with the Small Business Fair Dismissal Code: see section 388.

389 Meaning of genuine redundancy

(1) A person’s dismissal was a case of genuine redundancy if:

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

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

(2) A person’s dismissal was not a case of genuine redundancy if it would have been reasonable in all the circumstances for the person to be redeployed within:

(a) the employer’s enterprise; or

(b) the enterprise of an associated entity of the employer.”

Submissions

[7] The applicant is a person protected from unfair dismissal within s.392. However, the employer objected to the application on the grounds that it was a genuine redundancy. The letter of termination dated 25 May 2015 stated that the termination was due to a reduction in the contracted areas and allocated hours, resulting in a modified roster and the subsequent determination that her position was no longer required. The Respondent further advised that no other positions were available at this time to offer alternative employment at a different site.

[8] In this case it is agreed that the employer did not comply with the consultation requirements of the agreement or the award. The extent of the consultation was a conversation with the applicant then a letter of termination on 25 March 2015. The requirements of s.389(1)(b) were therefore not met, and this was also a matter of agreement. The matter was therefore not a genuine redundancy within the meaning of the Act.

Section 387 – Harsh, unjust or unreasonable

[9] It was agreed that there was no valid reason related to the capacity or conduct of the applicant, and therefore that there was no valid reason within s.387(a). This was a matter of agreement. The employer sought to make the applicant redundant and termination was not for another reason. There was also therefore no notification of that valid reason within s.387(b). The applicant was not given an opportunity to respond to any reason related to the capacity or conduct of the person within s.387(c), because there was no such reason. There was no unreasonable refusal to allow a support person within s.387(d). The dismissal did not relate to unsatisfactory performance within s.387(e). The business was not a small business but lacked specialists in human resources, which was relevant to the method of termination within s.387(f), (g). I have taken into account all matters including that the employer sought to make the employee redundant for various reasons, and the impact on the employee given that this was her first and only job in Australia. I find that the termination was harsh, unjust or unreasonable.

Remedy

[10] Turning to deal with remedy, the applicant sought reinstatement pursuant to s.391 which was opposed by the employer. The applicant sought reinstatement to either her previous position or another position on terms and conditions no less favourable 1. She put a variety of submissions on the issue, to the effect that she could have replaced a casual employee on her old work site, and in the alternative that there were other jobs in Adelaide which were available. However, Mr Mark Hoffman gave evidence about the nature of the employment of the casual which was in fact regular employment. I do not think it would be equitable or consistent with the agreement to replace one regular employee with another, and there is not enough evidence to justify such a step. I accept the evidence of Mr Hoffman, which was the subject of extensive cross examination. I also accept the evidence of Mr Hoffman about the difficult nature of the company’s operations in Adelaide and do not believe that it would be appropriate in the circumstances where orders are being lost and have been lost, which threatens the employment of others, to order reinstatement to another position in Adelaide. I therefore refuse to make such an order.

[11] In the alternative I am required (s.392) to consider an order of compensation in lieu of reinstatement. The applicant sought 6 months pay. She submitted that she would have been employed beyond the period of 2-3 weeks during which consultation pursuant to the agreement or award would have taken place and that in the circumstances employment would not have ceased at the cessation of the consultation period. She submitted that there was much to discuss including shorter hours of other employees, alternative employment areas, the nature of the productivity test used to select the applicant for redundancy, and other matters. However, Mr Hoffman gave evidence that I accept. I do not believe that there is a sufficient evidentiary basis for finding that employment would have continued beyond the 2-3 week consultation period. Mr Hoffman gave convincing evidence about the nature of the employment difficulties that the company had, the restrictions of the agreement, the prospects of alternatives to redundancy for the applicant, and other matters.

[12] In Brett Haigh v Bradken Resources Pty Ltd T/A Bradken 2the Commission said:

[10]The frequently quoted case on compensation calculations is Sprigg v Paul Licensed Festival Supermarket in which a Full Bench of the Australian Industrial Relations Commission (AIRC) confirmed the following steps in determining compensation under the unfair dismissal provisions of the Workplace Relations Act:

“1. Estimate the amount the employee would have received or would have been likely to receive if the employment had not been terminated,

2. Deduct monies earned since termination,

3. Deductions for contingencies,

4. Calculate any impact of taxation,

5. Apply the legislative cap.”

[11]The legislation has been amended since that time by permitting a reduction in an amount otherwise payable if an employee’s misconduct contributed to the employers decision to dismiss. The Full Bench decision in Sprigg has also been the subject of comment by other Full benches. In Smith v Moore Paragon a Full Bench of the AIRC said:

“COMMENT IN RELATION TO THE GUIDELINES IN SPRIGG

[32] It seems to us that the amounts arrived at by the application of the guidelines in Sprigg in the present matter are on their face manifestly inadequate for employees with the length of service of the Appellants, the circumstances of their dismissal and their poor prospects for future employment. This causes us to sound a warning in relation to the application of Sprigg. The guidelines laid down in Sprigg and refined in Ellawala v Australian Postal Commission are clearly designed to serve the proper and desirable purpose of fostering uniformity and consistency in decision-making by individual members of the Commission when assessing compensation pursuant to s.170CH(6). However, those guidelines are not a substitute for the words of the Act29. By virtue of s.170CH(2), any remedy ordered by the Commission must be a remedy that the Commission considers “appropriate” having regard to all the circumstances of the case including the matters set out in s.170CH(2). Section 170CH(6) confers a general discretion “if the Commission considers it appropriate in all the circumstances of the case” to “make an order requiring the employer to pay the employee an amount ordered by Commission in lieu of reinstatement” subject to the Commission having regard “to all the circumstances of the case including” the matters listed in s.170CH(7) - the same list of matters set out in s.170CH(2) - and subject also to the `cap’ provided for in s.170CH(8) and (9). If an application of the guidelines in Sprigg yields an amount which appears either clearly excessive or clearly inadequate, then the member should reassess any assumptions or intermediate conclusions made or reached in applying the guidelines so as to ensure that the level of compensation is in an amount that the member considers appropriate having regard “to all the circumstances of the case” including the matters listed in s.170CH(7) and subject to the `cap’ provided for in s.170CH(8) and (9). In this context it should be borne in mind that the result yielded by an application of the Sprigg guidelines may vary greatly depending upon particular findings in relation to the various steps including, in particular, step one, which necessarily involves assessments as to future events that will often be problematic.” [footnotes omitted]

[13] In relation to s.392(2)(a) it is agreed that although the company is experiencing a downturn, an order of compensation will not adversely affect the viability of the enterprise, the length of service of the applicant was 1 year and 11 months within s.292(2)(b), the employee would have received only another 3 weeks remuneration pursuant to ss.292(2)(c), (f), (g) and had not received other remuneration since termination, had made efforts to mitigate loss within s.292(2)(d). I have taken into account all matters within s.292(2)(g). There was no misconduct.

[14] In the circumstances I consider, consistent with Bradken, that an amount additional to the period in which the employee would have been employed should be ordered. I will order that 4 weeks pay be paid. An order requiring Academy Services Pty Ltd to pay to Ms Cvejic four weeks remuneration, taxed according to law, is issued in conjunction with this decision, in PR572619.

DEPUTY PRESIDENT

Appearances:

S Blewett representing the applicant.

J Hoffman (and M Hoffman) for the respondent.

Hearing details:

2015:

Adelaide

August 25

Final written submissions:

9 September 2015, applicant submission in reply

 1   Exhibit C1 paragraphs 46-49, C2

 2   [2014] FWCFB 236

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