Antonietta Petersen v Noahs Rosehill Waters Pty Ltd
[2019] FWC 8436
•16 DECEMBER 2019
| [2019] FWC 8436 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Antonietta Petersen
v
Noahs Rosehill Waters Pty Ltd
(U2018/13538)
COMMISSIONER WILLIAMS | PERTH, 16 DECEMBER 2019 |
Application for an unfair dismissal remedy.
[1] This decision concerns an application made by Mrs Antonietta Petersen (Mrs Petersen) under section 394 of the Fair Work Act 2009 (Cth) (the Act). The respondent is Noahs Rosehill Waters Pty Ltd (the Respondent or Noahs).
[2] Mrs Petersen was dismissed on 6 December 2018. She was provided with a termination of employment letter of the same date advising her position had been made redundant.
[3] The Respondent initially objected to the application on the grounds that the dismissal was a case of genuine redundancy within the meaning of section 389 of the Act and consequently as provided for in section 385 was not an unfair dismissal.
[4] By email dated 7 April 2019, the day before the listed hearing, the Respondent’s corporate counsel advised the Fair Work Commission (the Commission) that the Respondent was withdrawing this objection.
[5] Subsequently, at a later date the hearing proceeded. The Commission heard evidence from:
• Mr Anthony Perrin - Specialist Consultant
• Mr Bradley Nind – Development Manager at Noahs
• Ms Yuting (Sarah) Liu– Accountant Assistant at Noahs
• Mrs Antonietta Petersen – Applicant
• Mr Peter Burke – former Director of Noahs
• Michelle Kirk – Executive Director at Noahs
The evidence and factual findings
[6] Mrs Petersen was first employed in September 2016. She was employed as the full-time Office Manager.
[7] The job description provided in Ms Petersen’s evidence describes the job as that of “Personal Assistant/Office Manager” reporting to Ms Sandra Klarich (Ms Klarich) as well as undertaking duties as requested for Mr Peter Burke and Ms Ting Lee who were at that time both directors of Noahs.
[8] The job summary states that her duties include assisting Ms Klarich the then General Manager in addition to reception duties, mail duties, general office administration, some accounting duties assisting the accounts manager, some duties in relation to land developments and general operating management and control of all company resources.
[9] The job description includes a page and a half list of duties and essential job functions under the following headings:
• Personal Assistant
• Office Administration
• Reception
• Assisting Accounts Clerk
• Display Units
• Duties in Respect of Developments
• Duties in Respect of Sales
[10] As at 6 December 2018 Noahs had two employees being the full-time General Manager Ms Klarich and Mrs Petersen.
[11] The General Manager was also dismissed from her employment on 6 December 2018.
[12] Mrs Petersen says that on 6 December 2018, Ms Michelle Kirk (Ms Kirk) a Director of Noahs came into her office and “... flung a piece of paper which turned out to be a Letter of Termination at me saying, this is for you Annette”,and then walked out of the room with no further explanation nor meeting.
[13] Mrs Petersen then left the premises.
[14] Mrs Petersen says she was shocked because she had no idea this was coming. There was no warning, notice or consultation. This was the first time there was any mention of downsizing or redundancy to her.
[15] Noahs concede there was no consultation with Ms Petersen. 1
[16] The termination of employment letter states that Mrs Petersen has been given notice of the termination of her employment on the basis that her position has been made redundant.
“In accordance with clause 1.9 of the Employment Agreement, NRW will pay you in lieu of the applicable 2 weeks notice period, such that the effective date of termination of your employment will be today, subject to you completing a handover to Michelle Kirk.”
[17] Mrs Petersen did not complete a handover to Ms Kirk on 6 December 2018, nor at any later date notwithstanding a request by Ms Kirk to do so. 2
[18] Mrs Petersen believes that sometime after her position was made redundant other persons were engaged by Noahs who were doing duties contained in her job description. 3
[19] The evidence of Ms Kirk was that the business was the development and sale of residential land by way of subdivision. Stage 1 of Noahs subdivision was completed in 2018. Stage 2 was substantially complete by late 2018 but Noahs had not yet proceeded to finalise the subdivision and arrange for individual titles to be issued, pending completion of the sale of the majority of lots in Stage 1 which was still some time away. The development of further stages had been put on hold due to Noahs having no funds available to undertake further development until such time as sufficient lot sales had occurred to fund the development.
[20] Ms Kirk’s evidence was that accordingly the business no longer required two full-time employees to deal with the limited matters being carried out, pending the sale of sufficient residential lots to enable further stages to be developed. Her evidence was that while Noahs still requires somebody to oversee its remaining business, this would be someone at the General Manager level who has both managerial and industry specific experience.
[21] Ms Kirk’s evidence was that Mrs Petersen was the Personal Assistant/Office Manager to the General Manager. Her evidence was that because of the change in circumstances in the business by December 2018, Noahs no longer had a requirement for Mrs Petersen’s position and did not have the financial resources to continue to employ her. 4
[22] Ms Kirk’s evidence regarding the financial state of Noahs was as follows:
- The Company had cash of $63,884 at 31 December 2018.
- The Company had total current liabilities of $1,791,854 at 31 December 2018.
- The Company had a net asset deficiency of $9,232,174 at 31 December 2018.
- The Company made a loss for the six months to 31 December 2018 of $5,894,126.
[23] Her evidence was that of the cash held by the Company at 31 December 2018, the majority of that cash was held in a controlled monies account by the lawyers for the Company's secured creditor, and therefore could only be applied to make payments approved by the secured lender. Under the terms of the security, the secured lender is also required to approve (amongst other things) the appointment of any new employees.
[24] Her evidence at the hearing was that Mrs Petersen’s position was not replaced following her dismissal, nor has it since been replaced.
[25] Ms Kirk’s evidence was that while she and Ms Ting Lee can speak English, they generally prefer to speak Mandarin, which is their first language, and the third director Mr Lin, has Mandarin as his first language and he does not speak English nor read English. 5
[26] A number of other witnesses were called whose evidence was of limited relevance to the matters the Commissioner is required to determine.
[27] Mr Perrin who is a Specialist Consultant working for the project financiers gave evidence that he was engaged to prepare a report that amongst other things included what he felt was an appropriate staffing structure to run the project.
[28] From the middle of December, he was aware there were no employees at Noahs and that the directors at the time were the only people working on the project, which was dormant. 6
[29] His evidence was that as at the date of the hearing 1 July 2019, there were a number of external consultants and staff working at Noahs. 7
[30] Mr Perrin had no knowledge of what Mrs Petersen did. 8
[31] Mr Nind is a Development Manager employed by Noahs on 19 March 2019, originally for a period of three months but this had been extended. His role is to deal with the on-site civil contractor regarding construction issues, ensuring they are on program, dealing with design issues that arise and their progress claims.
[32] This contractor commenced on site late in April 2019. 9
[33] This part of his role takes 60% of his time. 10
[34] The balance of his time is spent dealing with other contractors on site regarding landscaping packages, he also deals with fencing contractors and maintenance contractors. He is the point of contact for consultants that are also involved who may be civil engineers, landscape architect’s town planners and surveyors.
[35] Evidence was also given by Ms Sarah Liu (Ms Liu) who was employed by Noahs on 31 January 2019, in the position of Account Assistant. Her duties involve recording financial transactions of the business, arranging payments of accounts, preparing and sending invoices, debtors and creditors and looking at MYOB, bank reconciliations and administration work as instructed. 11
[36] Ms Liu is fluent in the Mandarin language. Her evidence is that the directors of Noahs are all native speakers of Mandarin and some are not fluent in English. 12
[37] She says both directors, Ms Ting Lee and Ms Kirk, are fluent in English. 13
[38] Documents provided by Noahs to the Commission also demonstrate that as of 18 February 2019, Ms Kirk was employed by Noahs in the position of Executive Director, also a Mr Qiaoqi Chen was employed as of 12 March 2019 and is employed by Noahs in the position of Financial Manager.
[39] Ms Kirk under cross examination agreed that some of the contractors and employees that were engaged by Noahs in the months after 6 December 2018 probably do a little bit of the duties of Mrs Petersen. 14
[40] Ms Kirk in her evidence identified a range of duties in Mrs Petersen’s job description that are no longer being done by anyone. These included personal assistant duties to the general manager, establishing sales office/displays, ongoing stock control of refreshments for visitors, supervising office equipment repairs and maintenance, maintaining office first aid, answering the reception office telephone, arranging for couriers, greeting and making beverages for team and clients, actioning incoming mail on a daily basis and scanning to server, record and post outgoing mail, liaising with service providers to ensure maintenance of display units and display homes, liaising with accountants/solicitors regarding establishment of new companies and unit trusts and winding up of companies and unit trusts once developments are completed, monitoring and updating electronic spreadsheet of companies and trusts, liaising with banks regarding the establishment of accounts for new unit trusts, monitoring and updating electronic spreadsheets of development companies, open and set up files for new developments and update server with file folder, arranging public liability insurance, liaising with strata management companies, applying for council refunds, applying for developer rebates from builders, assisting the general manager arranging valuations for properties, assisting in staffing reception during open times, answering general enquiries if all sales team are unavailable, assist in the management of sales software, maintain and update sales spreadsheet with property details and liaising with agents for commission structure and invoicing agents for commission. 15
[41] Ms Kirk’s evidence in this regard was balanced in that she readily conceded throughout her consideration of the duties listed in Mrs Petersen’s job description without prompting, that some of the duties have continued to be done by contractors and staff subsequently engaged by Noahs.
[42] I accept Ms Kirk’s evidence regarding those duties in the job description that are no longer being done by anyone and those that are now being done by newly employed staff or contractors.
[43] Immediately after Mrs Petersen’s dismissal Ms Kirk agrees that she, who was in Perth at that time, came into the office to run the office and deal with the phones.
[44] Subsequent to the hearing the Respondent has advised that on 17 October 2019, voluntary administrators have been appointed.
The legislation
[45] Due to the lack of consultation, the Respondent is not able to argue that what occurred in this case was a genuine redundancy within the meaning of section 389 of the Act and so cannot be an unfair dismissal.
[46] Consequently, the Commission is required to determine whether the dismissal was harsh, unjust or unreasonable and take into account the matters set out in section 387, which are set out below.
“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.”
Consideration
[47] The evidence clearly demonstrates that Noahs business was struggling financially in the period leading up to Mrs Petersen’s dismissal and thereafter, notwithstanding its substantial landholding assets.
[48] Noahs on 6 December 2018, dismissed it’s only two employees one of whom was the applicant Mrs Petersen.
[49] The letter of termination given to her that day by Ms Kirk expressly stated that the basis for the termination of her employment was that her position had been made redundant.
[50] Mrs Petersen’s position was Personal Assistant/Office Manager. Her job description stated she was to be the personal assistant to Ms Klarich to whom she reported, and she was to assist her in all duties relating to the management and deliverance of Noahs land development known as Rosehill Waters.
[51] Ms Klarich was dismissed the same day as Mrs Petersen was dismissed and as at the date of the hearing a new general manager had not been appointed.
[52] The dismissal of Ms Klarich meant that immediately Noahs did not require anybody to be her personal assistant. Consequently, a significant proportion of Mrs Petersen’s duties were not required to be performed by anyone.
[53] The evidence also demonstrates that for a period of weeks immediately after Mrs Petersen’s dismissal Noahs had no employees. Any duties that were required to be done that were covered by Mrs Petersen’s job description were undertaken by the directors.
[54] From the end of January through to March 2019, Noahs progressively engaged a number of external consultants and employed a number of new staff. While some of the individual duties that are listed in Mrs Petersen’s job description were carried out by these people I have accepted Ms Kirk’s evidence that a further significant proportion of Mrs Petersen’s duties, in addition to the duties as the general manager’s personal assistant, were not required by Noahs to be performed by anyone.
[55] An employee’s position may still be redundant even where there are some of the employee’s duties still being performed by other employees. 16 This is commonplace.
[56] The decision to make Mrs Petersen’s position redundant was a pragmatic business decision made as a consequence of its poor financial performance. The engagement of consultants and the new staffing arrangements established in early 2019 are quite different from what was in place in December 2018. Noahs has self-evidently restructured its operations.
[57] Considering all the evidence I find that Noahs no longer required Mrs Petersen’s job to be performed by anyone because of changes in Noahs operational requirements.
[58] It is common ground that Noahs did not consult with Mrs Petersen prior to dismissing her.
[59] Given on the date of dismissal Noahs dismissed the only two employees in the business, there was no other position to which Mrs Petersen could have been redeployed.
[60] Due to the lack of consultation what occurred does not fall within the meaning of genuine redundancy in section 389 and accordingly the factors the Commission is required to take into account in deciding whether the dismissal was harsh, unjust or unreasonable are set out in section 387. These factors will be considered below.
Valid reason related to the employer’s capacity or conduct?
[61] Mrs Petersen’s position was made redundant through no fault of her own. There is no suggestion that the reason for her dismissal was related to her capacity or conduct. Consequently, there was no valid reason as those words are used in section 387 (a) of the Act.
[62] More colloquially however, there was a valid reason for Mrs Petersen’s dismissal which simply was that Noahs had decided because of changes in their operational requirements that they no longer required Mrs Petersen’s job, of Personal Assistant/Office Manager, to be performed by anyone.
Notification of the reason for dismissal
[63] Mrs Petersen was notified by letter on 6 December 2018, that the reason for her dismissal was that her position was redundant.
Opportunity to respond to a reason related to the capacity or conduct of the person
[64] This factor has no application because the reason for dismissal was not related to Mrs Petersen’s capacity or conduct.
Unreasonable refusal to allow the person a support person to assist discussions relating to dismissal
[65] There was no unreasonable refusal to allow a support person present and there were no discussions in any event relating to Mrs Petersen’s dismissal.
Warnings about unsatisfactory performance
[66] This factor has no application because the dismissal was not related to Mrs Petersen’s performance.
The size of the employer’s enterprise and the impact on the procedures followed
[67] Noahs was a very small business with only two employees and consequently was unsophisticated in its dealings with Mrs Petersen’s dismissal, which has adversely impacted the procedures followed in her dismissal.
The absence of dedicated Human Resource Management specialists or expertise in the enterprise and the impact on the procedures followed
[68] Noahs dismissed it’s only two employees on the same day, which in practice meant there was an absence of dedicated Human Resource Manager specialists or expertise in the enterprise, which did adversely impact the procedures followed in Mrs Petersen’s dismissal.
Other relevant matters
[69] Mrs Petersen had been employed for a little over three years at the time of her dismissal.
[70] Mrs Petersen gained employment with Mr Burke shortly after her dismissal however, at a lesser weekly rate.
[71] Noahs is a very small business.
[72] It is relevant that had Noahs taken advice before dismissing Mrs Petersen, they likely would have been advised to undertake what would have been a quite simple consultation process with her that met the requirements of whichever Modern Award applied to her employment, and consequently the Respondent’s jurisdictional objection would have been successful and the Commission’s decision would have been that Mrs Petersen’s application was rejected.
[73] My conclusion is that the dismissal of Mrs Petersen was not unjust nor was it unreasonable, but it was harsh. The dismissal was harsh for the reasons that she was given no warning she was to be dismissed and no opportunity to understand why her employer believed this was a necessary business decision. However, it is clear that had the employer consulted with her that process would have taken no more than one week and the outcome would in my view not have changed. All that would have occurred was that Mrs Petersen would have been employed for one week more than she was.
Remedy
[74] I am satisfied in the circumstances that reinstatement is not an appropriate remedy.
[75] Considering the requirements of section 392 regarding the remedy of compensation, whilst the Respondent has been in financial difficulty, there is no evidence before the Commission that an order for compensation would affect the viability of the enterprise.
[76] Mrs Petersen was employed for a little over three years.
[77] The remuneration Mrs Petersen would have received or would have been likely to receive if she had not been dismissed was one week’s remuneration.
[78] Mrs Petersen has properly sought and gained other employment and I am satisfied that she has made appropriate efforts to mitigate the financial loss she has suffered.
[79] The amounts of income Mrs Petersen has earned from employment since her dismissal is not relevant given my assessment that she would have been employed only for one more week had she not been dismissed.
[80] Consequently, my decision is that Mrs Petersen will be awarded one weeks’ compensation. Mrs Petersen’s final payslip indicates her weekly rate of pay was $1,346.15 gross.
[81] An order will be issued in conjunction with this decision requiring the Respondent to pay Mrs Petersen compensation of one weeks’ wages being $1,346.15 gross from which usual tax will be deducted.
Appearances:
Mr Peter Burke on behalf of the Applicant.
Mr David Sanders of Bennett & Co for the Respondent.
Hearing details:
2019.
Perth:
I July.
Final written submissions:
Applicant, 16 July 2019.
Respondent, 5 August 2019.
Printed by authority of the Commonwealth Government Printer
<PR715239>
1 PN251 – 254, PN427.
2 PN286 – 292.
3 PN267 and PN268.
4 Exhibit R3.
5 PN369 – 371.
6 PN114, PN120 – 121.
7 PN131.
8 PN153.
9 PN182, PN183.
10 PN185.
11 PN195.
12 PN207, PN208.
13 PN211 – 213.
14 PN442, PN460, PN461.
15 PN462 and PN479 – 481.
16 Dibb v Commissioner of Taxation [2004] FCAFC 126 at [43].
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