Applicant v Respondent
[2011] FWA 3636
•9 JUNE 2011
[2011] FWA 3636 |
|
DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Applicant
v
Respondent
(U2010/14898)
COMMISSIONER GOOLEY | MELBOURNE, 9 JUNE 2011 |
Application for unfair dismissal remedy.
[1] SS (Applicant’s name suppressed) was employed by the Respondent (name suppressed) from 2 January 2010 until his employment was terminated on 28 November 2010.
[2] SS lodged an application for relief pursuant to s394 of the Fair Work Act 2009 (FW Act) alleging that he was unfairly dismissed. The application was referred to conciliation on 5 January 2011, and then for hearing on 5 May 2011.
[3] SS represented himself and OD the owner of the Respondent appeared for the Respondent.
[4] The parties agreed to have the matter conducted by way of a conference. However all witnesses gave their evidence under oath and were able to be questioned by the other party.
[5] SS gave evidence on his own behalf and OD, RD and KD gave evidence for the employer.
Jurisdiction of Fair Work Australia
[6] There is no dispute that SS is a person who was protected from unfair dismissal. Further the employer was not at the time of the termination of SS’s employment a small business. However it was submitted that SS had been made redundant. Fair Work Australia has the jurisdiction to determine the application.
The Evidence
[7] SS was initially employed as a trades assistant and was paid $22.22 per hour plus entitlements. In March 2010 he commenced his plumbing apprenticeship and his wage rate did not alter.
[8] Work was performed in both the commercial building sector and the domestic building sector. Work performed in the commercial building sector was regulated by an enterprise agreement. Work performed in the domestic building sector was regulated by the relevant modern award.
[9] Employees who worked in both the commercial building sector and the domestic building sector where paid the higher commercial building sector rate for all work performed.
[10] SS performed work in both the commercial and domestic operations of the employer.
[11] OD gave evidence that in mid 2010 there was a downturn in the commercial sector and a decision was made to close down the commercial part of the business. 1 However they still had work to complete which would see the commercial part of the business shut down in November 2010.
[12] At the time they made the decision, they had a meeting with staff and notified them of the decision. 2 While SS described the information provided at the meeting as “wishy washy” he gave evidence that he knew about a week later that the commercial part of the business would be closed. 3
[13] OD gave evidence that employees were advised that if they wanted to continue working in commercial construction they would need to start looking for alternative work. Employees were also given the option of working in the domestic business but wages would be less. 4 There would be different conditions and rates of pay.5
[14] On 19 November 2010 a telephone conversation took place between SS and OD. OD gave evidence that he told SS that “the day has come. What are you going to do.” 6 SS was told if he worked in the domestic side of the business he would be paid $16.50 per hour. OD said that SS said he could not afford to work for that amount. OD gave evidence that he told SS that the decision had been made and that he had had a long time to prepare himself. He then sent SS a text message saying “from 22.50 per hour the new rate is this. Please call me on Monday to discuss further.”7 He denied terminating SS’s employment that day.
[15] SS’s version of events differs. He said he had a very short telephone conversation with OD about pay rates and he was advised that OD had made his decision and he would receive a text message. He states that the text message advised that his rate would drop to $16.18 per hour and he would lose his entitlements. 8 He said he wanted to discuss this with OD but he could not get through to him by phone. He then sought advice from a variety of sources about his legal rights.
[16] On 24 November 2010 he met with OD and KD and provided them with a letter in which he advised OD that any variation to his contract of employment must be by agreement. SS thought that the outcome of that meeting was that he would be able to negotiate his wage rate. However on 26 November 2010 he was advised that his employment was terminated and he subsequently received an email in which he was advised that his position was no longer available and he was given one week’s notice of termination. He was given the option of either working out his notice or not. SS opted not to return to work.
[17] The FW Act provides that a person has not been unfairly dismissed in cases of genuine redundancy.
[18] Section 385 of the FW Act provides:
“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) he 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] It was SS’s contention that his job was not redundant as he submitted he had already been redeployed to the domestic side of the business for months before his employment was terminated.
[21] The evidence showed that in the month prior to the termination of his employment SS worked in both the commercial and domestic sides of the business. However it is clear that throughout his employment he worked predominately in the commercial sector. It was not surprising given the winding down of the commercial work that SS did more work in the domestic side of the business in the lead up to the termination of his employment. I do not accept that he had been redeployed to the domestic side of the business at the time of the termination of his employment.
[22] It was clear from the evidence that the employer no longer required employees to work in both the commercial and domestic sectors and that the only jobs they had on offer, after the commercial part of the business was wound up, was in the domestic side of the business. It was also clear that this work was paid at a lower rate of pay. It is also clear from the evidence that after December 2010 the employer significantly reduced its workforce. In December 2010 there were 24 employees and in January 2011 there were 13 employees. That number had reduced to ten by March 2011.
[23] On the evidence it is clear that they no longer required the job done by SS to be done by anyone.
Did the employer meet its obligations under the agreement to consult with SS?
[24] The relevant enterprise agreement provided at clause 52 for consultation as follows:
“52. CONSULTATION
52.1 This term applies if:
52.1.1 the enterprise intends to make a decision to introduce a change to production, program, organisation, structure, or technology in relation to its enterprise; and
52.1.2 the change could have an effect on employees of the enterprise.
52.2 The enterprise must notify the relevant employees of the decision to introduce the major change.
52.3 The relevant employees will appoint a representative for the purposes of the procedures in this term. If:
52.3.1 a relevant employee appoints, or relevant employees appoint, a representative for the purposes of consultation; and
52.3.2 the employee or employees advise the enterprise of the identity of the representative; the enterprise must recognise the representative
52.4. When the enterprise intends to make its decision, the enterprise must.
52.4.1 discuss with the relevant employees
52.4.1 (a) the introduction of the change; and
52.4.1 (b) the effect the change is likely to have on the employees; and
52.4.1 (c) measures the enterprise is taking to avert or mitigate the Adverse effect of the change on the employees; and
52.4.2 for the purposes of the discussion - provide, in writing, to the relevant employees:
54.4.2 (a) all relevant information about the change including the nature of the change proposed; and
52.4.2 (b) information about the expected effects of the change on the employees; and
52.4.2 (c) any other matters likely to affect the employees.
52.5 However, the enterprise is not required to disclose confidential or commercially sensitive information to the relevant employees.
52.6 The enterprise must give prompt and genuine consideration to matters raised about the change by the relevant employees.
52.8 In this term, a change is likely to have a significant effect on employee if it results in:
52.8.1 the termination of the employment of employees; or
52.8.2 change to the composition, operation or size of the enterprise’s workforce or to the skills required of employees; or
52.8.3 the elimination or diminution of job opportunities (including opportunities for promotion or tenure); or
52.8.4 the alteration of hours of work; or
52.8.5 the need to retrain employees; or
52.8.6 the need to relocate employees to another workplace; or
52.8.7 the restructuring of jobs; or
52.8.8 any other matter pertaining to the employee/employer relationship.
52.9 In this term, relevant employees means the employees who may be affected by the change.”
[25] In this matter the evidence discloses that employees were told of the decision to shut down the commercial operations in June 2010 and advised that if they wished to work in the domestic operations they could do so on lesser terms and conditions. The evidence suggests however that if all the employees elected to work in the domestic side of the business there were not have been sufficient work for all the employees and some would have to have been made redundant.
[26] I do not accept SS’s evidence that this was not made clear to employees. OD’s evidence is consistent with KD’s evidence on this matter. While KD did not commence employment with the employer until after the decision was made to shut down the commercial business it was his evidence that employees were told that the commercial operations would end with a particular job and that employees were given time to look for other work or if they wanted to stay on they could do so in the domestic side of the business but that was at a lower rate of pay. 9
[27] There was no evidence that employees, or SS in particular, appointed anyone to represent them in discussions. Further, there was no evidence that SS sought to discuss this decision with his employer.
[28] While the employer did not provide the information in writing to the employees I consider that the employer did advise employees of the decision and the impact it was going to have on them. I also find that they took measures to mitigate the effect on employees by giving them approximately four months notice of the change and by offering them work in the domestic side of the business.
[29] SS did not accept the offer of a lower paid position in the domestic business. He wanted to negotiate a higher rate of pay. As a consequence his employer decided to terminate his employment.
Could SS have been redeployed?
[30] There is no doubt that SS could have been redeployed to the domestic side of the business. However SS did not accept that offer because of the lower rates of pay and conditions.
Conclusion
[31] I find that SS’s employment was terminated because of a genuine redundancy and therefore SS’s employment was not terminated unfairly and therefore the application is dismissed.
COMMISSIONER
Appearances:
The Applicant appeared on his own behalf.
OD appeared on behalf of the Respondent.
Hearing details:
2011.
Melbourne:
May 5.
1 Transcript PN 114
2 Ibid PN 118
3 Ibid PN 129
4 Ibid PN 151 and 153
5 Ibid PN 156
6 Ibid PN 187
7 Ibid PN 189
8 Exhibit A1 at [3]
9 Transcript PN 471 and 480
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