Andrew Mansell v Ripponlea Motors Pty Ltd T/A Ripponlea Mitsubishi

[2013] FWC 4017

[2013] FWC 4017

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Andrew Mansell
v
Ripponlea Motors Pty Ltd T/A Ripponlea Mitsubishi
(U2013/5697)

DEPUTY PRESIDENT GOOLEY MELBOURNE, 21 JUNE 2013

Application for unfair dismissal remedy.

[1] Mr Andrew Mansell (the Applicant) was employed by Ripponlea Motors Pty Ltd (the Respondent) from 26 March 2010 until his employment was terminated on 3 January 2013.

[2] The Applicant lodged an application for relief pursuant to s394 of the Fair Work Act 2009 (FW Act) alleging that he was unfairly dismissed.

[3] On 2 April 2013 the Respondent lodged an objection to the application on the grounds of genuine redundancy 1 and that the Applicant’s complaint was one of unpaid entitlements not unfair dismissal.

[4] Mr Maurice Addison, a legal practitioner, was given permission to appear for the Applicant and Mr Mark Weldon, from the Victorian Automotive Chamber of Commerce, appeared for the Respondent.

[5] The Applicant gave evidence on his own behalf and Mr Greg Wallace, one of the Respondent’s directors, gave evidence for the Respondent.

The Evidence

[6] The Applicant was employed as a Finance and Insurance Sales Executive. 2

[7] On 13 September 2012 St George Motor Finance Ltd (St George) decided to stop providing finance facilities to the Respondent. At the time this happened the Applicant was on annual leave. However the Respondent sent the Applicant an email on 14 September 2013 and told him what had occurred and advised that while the Respondent was effectively controlled by St George the company would operate as normal. 3

[8] The Applicant understood that he was being advised that his position was being made redundant. 4 While the email was not exhibited the Applicant said that the email advised him that if the Respondent went into liquidation his entitlements would be covered by GEERS.

[9] On 24 September 2012 the Applicant returned from annual leave and Mr Wallace told the Applicant that they would attempt to sell the business and that it would be business as usual until the company was sold. 5 The loss of financing meant that all new cars were returned to the manufacturer and no new cars were available for sale. All that was for sale were the used vehicles which were on hand.

[10] The Applicant said that upon returning from annual leave he was not able to get any straight answers from the Respondent about what was happening and he was not consulted about the situation. 6

[11] On 22 October 2012 there was an altercation between the Applicant and Mr Wallace and the Applicant went home. 7 The Applicant provided the Respondent with a medical certificate however no details of his condition or any return to work program was ever provided to the Respondent.8

[12] On 28 November 2012 the Applicant sent a letter to the Respondent as he was due to return to work on 4 December 212. In that letter, the Applicant set out his claim that he was owed three months commission and several weeks retainer. In that letter the Applicant stated that he had more than accommodated the Respondent’s lack of funds. He advised that he had contacted the Ombudsman and as a result Mr Wallace had called him on two occasions which he made some accusations and threatened legal action. He asked Mr Wallace if his position was redundant. 9

[13] Mr Wallace denied ever receiving this letter and it was his evidence that he did not see it until after he terminated the Applicant’s employment. 10

[14] The Respondent was unable to sell the business and on 21 December 2012 the Respondent received notification of Mitsubishi’s intention to terminate its franchise relationship.

[15] On 31 December 2012 the Applicant was advised that his workers compensation claim had been accepted. 11

[16] On 3 January 2013 Mr Wallace advised the Applicant by letter that all finance and insurance activities had ceased. 12 The Applicant accepted that this was a letter of termination.13 He understood that his position was redundant.14

[17] On 6 January 2013 the Applicant sent a letter of demand to the Respondent setting out his claim for underpayment and redundancy pay. 15

[18] The FW Act provides that a person has not been unfairly dismissed in cases of genuine redundancy:

“S385 What is an unfair dismissal

A person has been unfairly dismissed if FWA 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.”

[19] A genuine redundancy is defined as follows:

“S389 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.”

[20] The Applicant accepted that his position was redundant. 16

Did the Vehicle Manufacturing, Repair, Services and Retail Award 2010 (the Award) apply to the Applicant’s employment?

[21] Both the Applicant and the Respondent accepted that the Award applied. 17

Did the Respondent comply with its obligations to consult about the redundancy?

[22] The Award at clause 8 provides for consultation about major workplace change.

[23] The Respondent submitted that the Applicant was consulted about the change and that was evidenced by the email sent to the Applicant on 14 September 2012 and the conversation between the Applicant and Mr Wallace upon his return from leave.

[24] I accept that the Applicant did understand the position that the Respondent was in and that unless the business was sold, his position would be redundant. Once Mitsubishi withdrew the franchise agreement there was no prospect that the business would be sold. However there was no advice to the Applicant that this had occurred. Nor was he advised of the consequences for his position. Nor was there any consultation with him.

[25] I therefore find that there was no consultation as required by the Award and as such, there was no genuine redundancy.

Harsh, Unjust or Unreasonable?

[26] As there was no genuine redundancy it is necessary to determine if the termination of the Applicant’s employment was harsh, unjust or unreasonable.

[27] The criteria I must take into account when assessing whether the dismissal was harsh, unjust or unreasonable are set out at section 387 of the FW Act:

“387 Criteria for considering harshness etc.

In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the FWC must take into account:

(a) whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees); and

(b) whether the person was notified of that reason; and

(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and

(d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and

(e) if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal; and

(f) the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(h) any other matters that the FWC considers relevant.”

[28] The ambit of the conduct which may fall within the phrase ‘harsh, unjust or unreasonable’ was explained in Byrne v Australian Airlines Ltd [1995] HCA 24; (1995) 185 CLR 410 at 465 by McHugh and Gummow JJ as follows:

“.... It may be that the termination is harsh but not unjust or unreasonable, unjust but not harsh or unreasonable, or unreasonable but not harsh or unjust. In many cases the concepts will overlap. Thus, the one termination of employment may be unjust because the employee was not guilty of the misconduct on which the employer acted, may be unreasonable because it was decided upon inferences which could not reasonably have been drawn from the material before the employer, and may be harsh in its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct in respect of which the employer acted.”

Valid reason - s.387(a)

[29] The decision to terminate the Applicant’s employment was not related to the Applicant’s capacity or conduct.

[30] While the Applicant in his witness statement suggested that his employment was terminated because he was on WorkCover, this contention was not put to Mr Wallace during cross examination and was not actively pursued in submissions. I accept, as the Applicant accepted, that the reason for the termination was because his position was redundant.

[31] The Full Bench in UES International Pty Ltd v Leevan Harvey 18 considered the relevance of section 387(a) in such circumstance and the majority determined:

“[42] As we have already indicated, in our view the reasons for the dismissal of Mr Ball by UES were not related to his capacity or conduct (including its effect on the safety and welfare of other employees). Accordingly, there cannot have been and was not a valid reason for his dismissal related to his capacity or conduct (including its effect on the safety and welfare of other employees). In the circumstances of this case we regard it as a neutral matter with respect to our consideration as to whether Mr Ball’s dismissal was harsh, unjust or unreasonable.”

[32] Senior Deputy President Kaufman who was in the minority said as follows:

“[67] Although s 387(a) requires Fair Work Australia to consider whether there was a valid reason for the dismissal related to the person’s capacity or conduct, consideration of whether there was otherwise a valid reason is not precluded and, in my view, in appropriate circumstances, ought to be considered under s387(h).”

[33] I do accept that when the reason for the dismissal is not related to the employee’s conduct or capacity, the reason for the dismissal is a matter that should be taken into account under section 387(h). For example, a dismissal for an unlawful reason is not related to an employee’s conduct or capacity but would still be a relevant matter in deciding if the termination was harsh, unjust or unreasonable.

[34] In this case, as the decision to terminate that Applicant’s employment was not related to the Applicant’s conduct or capacity, I consider that this is a neutral criterion.

Notification of the valid reason - s.387 (b) and Opportunity to respond - s.387(c)

[35] Because I have determined that there was no valid reason related to the Applicant’s capacity or conduct these are also neutral criteria.

Unreasonable refusal by the employer to allow a support person - s.387 (d)

[36] Where an employee protected from unfair dismissal has requested a support person be present to assist in discussions relating to the dismissal, the employer should not unreasonably refuse that person being present. However in this case there was no request and no refusal.

Warnings regarding unsatisfactory performance - s.387 (e)

[37] As the termination was not due to unsatisfactory performance this criteria is neutral.

Impact of the size of the Respondent on procedures followed - s.387 (f)

[38] The size of the Respondent’s enterprise may have impacted on the procedures followed by the Respondent in effecting the dismissal.

[39] The Respondent is a small employer, having nine employees at the time of the dismissal. However, even small employers are required to have regard to their obligations under the Award.

Absence of dedicated human resources management specialist/expertise on procedures followed - s.387 (g)

[40] The Respondent had no dedicated human resource management specialists. There is no evidence that the Respondent sought any advice in relation to its decision.

Other relevant matters - s.387 (h)

[41] The reason for the Applicant’s dismissal was because he was employed as a Finance and Insurance Sales Executive and the Respondent no longer had any need for such a position. While I accept that the Applicant sold cars at times, this was incidental to his work and not his principal role. The Respondent’s reason for terminating the Applicant’s employment was sound, defensible and well founded. 19

[42] The Applicant submitted that regard should be had to the failure of the Respondent to pay the Applicant outstanding monies owed.

[43] It was put that the Applicant was owed outstanding annual leave because the annual leave he had used whilst on WorkCover had not been re-credited when his WorkCover claim was accepted and backdated. Further the Applicant was owed outstanding commission and retainer.

[44] The Respondent admitted that the Applicant was owed monies but there was no agreement about the amount owed. The Respondent advised that it would repay the monies but it had not had the capacity to repay the monies in full.

[45] I do not find that the Applicant’s employment was terminated because he was owed monies or because he had complained about not getting paid correctly. The reason for his termination was because his position was redundant.

[46] Had consultation occurred after the Respondent had made the decision that the business no longer needed a Finance and Insurance Sales Executive, the outcome would have been the same.

Conclusion

[47] While the Respondent could have handled this dismissal better, it cannot be said that the Applicant had no advice about what was happening. Once the Respondent was advised of the decision of St George in September 2012, it advised the Applicant. The Applicant was aware of the implications of that decision as he assumed he would be made redundant. But for the altercation between the Applicant and the Respondent in October 2012, the Applicant would have been at work when the Respondent realised that it could not sell the business as a going concern. The fact that the Applicant was on sick leave should not have prevented the Respondent from writing to the Applicant and advising him of the developments and inviting him, if he was well enough, to discuss the implications for the Applicant. However given my finding that this would not have changed the outcome, this failure does not make the dismissal harsh, unjust or unreasonable.

[48] While the Applicant was owed monies on termination, the reasons for the non-payment of those monies, was not related to the termination. In those circumstances the failure to pay the Applicant the unpaid monies does not make the termination of employment harsh.

Conclusion

[49] Having regard to all the matters set above and the need to ensure a fair go all around I have concluded that the termination of the Applicant’s employment was not harsh, unjust or unreasonable and therefore the application is dismissed and an order to that effect will be issued with this decision.

DEPUTY PRESIDENT

Appearances:

M Addison for the Applicant.

M Weldon for the Respondent.

Hearing details:

2013.

Melbourne:

5 June.

 1 See section 385(d) of the FW Act.

 2   Exhibit R2 at [3] and Exhibit A1 at AM1

 3   Exhibit R2 at [5]-[10]

 4   Exhibit A1 at [5]

 5   Ibid at [13]

 6   Exhibit A1 at [5]-[6]

 7  Ibid at [8]-[10]

 8   Exhibit R2 at [14]-[19]

 9   Exhibit A2

 10   Transcript PN 473

 11   Exhibit A3

 12   Exhibit A6

 13   Exhibit A1 at [15]

 14   Transcript PN 232

 15   Exhibit R1

 16   Transcript PN 536

 17   Outline of submissions on the Award by the Applicant at [1]-[18] and correspondence from the Respondent of 14 June 2013.

 18   [2012] FWAFB 5241

 19   Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371 at 373

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