Ashleigh Francis v Entegra (Aust) B I Pty Ltd T/A OBT Accounting and Tax Bribie Island
[2023] FWC 1896
•19 SEPTEMBER 2023
| [2023] FWC 1896 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Ashleigh Francis
v
Entegra (Aust) B I Pty Ltd T/A OBT Accounting and Tax Bribie Island
(U2023/1907)
| COMMISSIONER HUNT | BRISBANE, 19 SEPTEMBER 2023 |
Application for an unfair dismissal remedy – jurisdictional objection of genuine redundancy – failure to consult in accordance with modern award – award of compensation.
On 8 March 2023, Miss Ashleigh Francis made an application to the Fair Work Commission (the Commission) under s.394 of the Fair Work Act 2009 (the Act) alleging that she had been dismissed from Entegra (Aust) B I Pty Ltd T/A OBT Accounting and Tax Bribie Island (the Respondent), and that her dismissal was harsh, unjust or unreasonable.
On 31 March 2023, the Respondent filed a Form F3 Employer Response to the application in which it asserted it is a small business employer, having employed three employees at the time of Miss Francis’ dismissal. The Respondent further objected to the application on the jurisdictional grounds that the dismissal was a case of genuine redundancy.
Directions were issued for the filing of evidence and submissions, and the matter was listed for hearing on 15 June 2023. Miss Francis appeared and represented herself. The Respondent was granted leave to be represented by Mr Clint Kanther, Director of Kanther Law, and Mr Rudolph Hopfner, Director of the Respondent. Due to the nature of the matter, I considered it appropriate to conduct the matter as a determinative conference.
I granted leave for the Respondent to be represented on account of there being a number of issues, including the jurisdictional issue of genuine redundancy. I was satisfied that granting leave would assist with the efficiency of the matter being heard, and that it was sufficiently complex to warrant representation.
Background
Miss Francis commenced employment with the Respondent on 6 July 2021 as a Reception/Administration Assistant. Her responsibilities included, but were not limited to:
· Scheduling appointments;
· Answering phones;
· Greeting visitors;
· Corresponding with employees and managers;
· Onboarding of new employees;
· Bookkeeping;
· Organisation and maintenance of file systems;
· Maintaining social media accounts;
· Research for upper management;
· Setting up meeting rooms for upcoming meetings.
The Respondent confirmed that the Clerks – Private Sector Award 2020 (the Award) covered Miss Francis in her role.
Miss Francis was informed of her dismissal on 3 March 2023 and was issued with the following termination letter:
“Dear Ashleigh Francis.
As you are aware we have lost a significant part of our client business base at OBT Accounting and Tax (OBT). As a result we have had to make decisions in relation to restricting the business to cope with the client losses financially.
Part of that restricting is that we can no longer afford a receptionist at OBT. Accordingly, we have made the decision to terminate your employment effective immediately. It is instructive to note that no other accounting firm on Bribie Island has a full-time receptionist, to our current knowledge.
Accordingly, we ask that you immediately hand over all company property in your possession, especially keys for the OBT office and Post Box, and any copies of the keys you may hold.
We remind you of your obligations agreed by you in your employment agreement, especially confidentiality which requires you to immediately cease any contact with clients whether initiated by you or the clients.
Your pay and pay-in-lieu of notice will be paid on your next weekly pay-date. We reserve the right to delay this payment if you breach your agreement or have not returned OBT property and we have confirmation that you have not accessed or retain company records or files or email etc between now and that pay date.
We thank you for your past service and wish you well for the future.
Yours faithfully
R R Hopfner
Faob of OBT Accounting and TaxDATED 3 March 2023”
Relevant Legislation
Section 394 of the Act provides:
“394 Application for unfair dismissal remedy
(1) A person who has been dismissed may apply to the FWC for an order under Division 4 granting a remedy.
Note 1: Division 4 sets out when the FWC may order a remedy for unfair dismissal.
Note 2: For application fees, see section 395.
Note 3: Part 6 1 may prevent an application being made under this Part in relation to a dismissal if an application or complaint has been made in relation to the dismissal other than under this Part.
(2) The application must be made:
(a) within 21 days after the dismissal took effect; or
(b) within such further period as the FWC allows under subsection (3).
(3) The FWC may allow a further period for the application to be made by a person under subsection (1) if the FWC is satisfied that there are exceptional circumstances, taking into account:
(a) the reason for the delay; and
(b) whether the person first became aware of the dismissal after it had taken effect; and
(c) any action taken by the person to dispute the dismissal; and
(d) prejudice to the employer (including prejudice caused by the delay); and
(e) the merits of the application; and
(f) fairness as between the person and other persons in a similar position.”
Further, ss.385 and 387 provides as follows:
“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.”
“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.”
Section 389 of the Act provides as follows:
“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.”
Preliminary conference and associated entities
On 19 April 2023, I convened a preliminary conference by telephone.
On 4 May 2023, the Respondent filed its material pursuant to the Directions issued by me.
Within one hour, Miss Francis emailed and suggested she did not want to pursue her application any further, citing her inability to afford petrol from Bribie Island to Brisbane to attend an in-person hearing.
Shortly after receiving Miss Francis’ email, I caused the following email to be sent to the parties:
“Dear Parties,
The Commissioner acknowledges receipt of the below correspondence from the Applicant, together with the material of the Respondent as per the issued directions.
The Commissioner is concerned the email from the Applicant has been received in an extremely short period since receipt of the Respondent’s material. The Commissioner does not accept that the email sent by the Applicant constitutes a withdrawal of her application before the Commission, especially as the Commission can accommodate further hearings by way of telephone or video, with the leave of the Commissioner. Accordingly, there should be no cost to the Applicant if the Applicant holds concerns regarding travelling to the Brisbane CBD.
The Commissioner notes that the Respondent’s material did not address any associated entities of the Respondent. Section 389(2) of the Act considers whether it would have been reasonable in all the circumstances for the Applicant to have been redeployed within the Respondent’s enterprise or the enterprise of an associated entity of the Respondent. It appears that there are associated entities of the Respondent, however the Respondent has not provided evidence of its various associated entities. It will be required to do so.
The Applicant is requested to advise whether she does wish to pursue her application, or if she wishes to withdraw her application. If the Applicant wishes to pursue her application, the Respondent will be tasked with providing evidence of all associated entities, the number of employees within each, and any available positions each entity had prior to the Applicant’s termination.
If the Applicant does wish to withdraw her application, the Commissioner will consider the matter discontinued.
The Applicant is requested to advise her position by no later than 4:00pm (AEST) on Tuesday, 9 May 2023.”
During the preliminary conference, it had been discussed that the Respondent had paid to Miss Francis one week’s notice and one week’s ‘severance’ payment, even though it did not consider it had an obligation to do so as it considered itself to be a small business. On 5 May 2023, the Respondent wrote to Miss Francis to inform her that it was paying to her an additional one week of notice on account of her period of service between one and three years, and a corresponding entitlement to two weeks’ notice.
On 26 May 2023, the Respondent provided information relevant to its associated entities and the redeployment opportunities within each entity:
JHT Holdings Ltd (ACN 164 889 481)
·One employee who is an executive assistant working across all associated entities.
·The Respondent submitted that it was not appropriate to redeploy Miss Francis in this business as there was no role Miss Francis could fill within this business having regard to the business’ needs and Miss Francis’ training, qualifications and experience.
Cinch Advisors (FAB) Pty Ltd t/a FABsolutions (ACN 645 395 106)
·One administration officer and one accountant.
·Located in Hervey Bay, a distance of 3.5 hours from the Respondent.
·An onsite accounting firm.
·The Respondent considered it was not appropriate to redeploy Miss Francis in this entity as there was no role Miss Francis could fill within this business having regard to the business’ needs and Miss Francis’ training, qualifications and experience in addition to the location of the business.
Drew Stephenson Pty Ltd (ACN 109 670 653)
·Located in Hervey Bay, a distance of 3.5 hours from the Respondent.
·Two administrative officers, four accountants and one auditor.
·An onsite accounting firm.
·The Respondent considered it was not appropriate to redeploy Miss Francis in this business as there was no role Miss Francis could fill within this business having regard to the business’ needs and Miss Francis’ training, qualifications and experience in addition to the location of this business.
Entegra (Aust) GP Pty Ltd T/A Latitude Tax (ACN 656 095 733)
·Located in Gympie, a distance of 1.5 hours from the Respondent.
·One administration officer and two accountants.
·An onsite accounting firm.
·The Respondent considered it was not appropriate to redeploy Miss Francis in this business as there was no role Miss Francis could fill within this business having regard to the business’ needs and Miss Francis’ training, qualifications and experience in addition to the location of this business.
Entegra (Aust) GP Pty Ltd T/A Avance Gatton (ACN 661 220 828)
§Located in Gatton, a distance of 2 hours from the Respondent.
§One administration officer/bookkeeper and one accountant.
§An onsite accounting firm.
§The Respondent considered it was not appropriate to redeploy Miss Francis in this business as there was no role Miss Francis could fill within this business having regard to the business’ needs and Miss Francis’ training, qualifications and experience in addition to the location of this business.
JTBS (Qld) Pty Ltd ATF NAFS Franchising Group Trust (ABN 50 614 402 891)
·This entity does not have any employees. Accounting franchisees are run within this entity.
Save time Services (Ops) Pty Ltd (ACN 656 473 246)
·This entity has one employee who works remotely and will have franchisees, when complete, who will provide services such as mowing, maintenance and cleaning.
·The Respondent considered it was not appropriate to redeploy Miss Francis in this business as there was no role Miss Francis could fill within this business having regard to the business’ needs and Miss Francis’ training, qualifications and experience.
Is the Respondent a small business?
Having regard to the Respondent’s evidence in respect of its related entities, I note that the Respondent has:
· 3 employees employed by the Respondent at the time of Miss Francis’ dismissal;
· 1 employee employed by JHT Holdings Ltd;
· 2 employees employed by Cinch Advisors (Fab) Pty Ltd t/a FABsolutions;
· 7 employees employed by Drew Stephenson Pty Ltd;
· 3 employees employed by Entegra (Aust) GP Pty Ltd t/a Latitude Tax;
· 2 employees employed by Entegra (Aust) GT Pty Ltd t/a Avance Gatton;
· 0 employees employed by JTBS (Qld) Pty Ltd ATF NAFS Franchising Group Trust; and
· 1 employee employed by Save time Services (Ops) Pty Ltd.
Overall, the Respondent and its related entities employed 18 employees at the time of Miss Francis’ dismissal. Pursuant to s.23 of the Act, the Respondent is not a small business.
EVIDENCE AND SUBMISSIONS OF THE RESPONDENT
Evidence of Mr Rudolf Hopfner
A statutory declaration of Mr Hopfner was filed prior to the provision of information relating to the Respondent’s associated entities. Mr Hopfner is the Director of the Respondent. He is an Accountant.
The Respondent employed Miss Francis as a Reception/Administration Assistant from 6 July 2021 until 3 March 2023. She was employed in accordance with the Award.
Mr Hopfner stated that Miss Francis was terminated due to redundancy on 3 March 2023. She was paid her accrued annual leave, one week’s salary in lieu of notice and an additional one-week redundancy payment.
Mr Hopfner considered the Respondent at the time to be a small business and paid the one week as a gratuity.
At the time when Mr Hopfner purchased the Respondent, in or around July 2021, the Respondent had three employees, including Miss Francis. As of the date of the redundancy, in addition to Miss Francis, the Respondent employed Mr Grelito Simval Gador, qualified accountant and Mr Caelen Cook, trainee accountant.
Mr Hopfner advised that both Mr Gador and Mr Cook are employed on a part time basis with Mr Gador working Monday to Wednesday from 9:00am to 2:00pm and Mr Cook working Monday to Wednesday from 9:00am to 5:00pm.
On occasion, the Respondent would utilise the services of three qualified accountants on a contracting basis to assist with various accounting services of the business. The use of these three accountant contractors was infrequent and on an ad-hoc basis.
In the first 12 months after Mr Hopfner purchased the Respondent business, the former business owner, Mr Peter O’Brien and his daughter, Ms Natalie O’Brien, remained on as staff and the business continued to operate. From 1 July 2022, Mr O’Brien ceased working in the business.
Between 1 July 2022 and the date of Miss Francis’ redundancy, the Respondent lost over 30 clients amounting to approximately a third of its revenue, estimated to be a loss of approximately $180,000.
As a result of this loss of clientele and revenue, Mr Hopfner said the Respondent was required to restructure which resulted in Miss Francis’ position being made redundant.
Prior to advising Miss Francis of the redundancy, Mr Hopfner held three meetings with Miss Francis to advise her of the downturn in work and the likelihood of positions within the Respondent being made redundant.
The first of these meetings occurred on 13 December 2023 (the First Meeting). During this meeting, Mr Hopfner informed Miss Francis that following Mr O’Brien and Ms O’Brien leaving the Respondent, a number of clients had started leaving the business and if this was to continue, some changes would need to be made.
Following the First Meeting, the Respondent continued to lose clients and business and as a result, on 21 February 2023, Mr Hopfner called a second meeting (the Second Meeting). Miss Francis attended the Second Meeting along with Mr Gador and Mr Cook.
During the Second Meeting, Mr Hopfner informed Miss Francis, Mr Gador and Mr Cook of the loss of clients and stated if the Respondent was to continue to lose income and clients, changes would need to be made, including likely redundancies. Miss Francis walked out of the Second Meeting as she advised she did not want to hear comments made regarding the business losing clients and the impact Mr and Ms O’Brien had on this loss of clients and business.
Following the Second Meeting, the Respondent continued to lose clients and business and as a result, on 1 March 2023, Mr Hopfner called a third meeting (the Third Meeting).
Miss Francis attended the Third Meeting with Mr Gador and Mr Cook.
During the Third Meeting, Mr Hopfner again informed Miss Francis, Mr Gador and Mr Cook that client and business losses were continuing and asked them to speak up if they heard of anything to do with the loss of clients. Mr Hopfner again advised that if this continued, steps would need to be taken as a result of the downturn in work.
In the week prior to Miss Francis’ redundancy, Mr Hopfner requested she prepare a spreadsheet regarding the loss of fees and clients the Respondent has suffered since 1 July 2022. Following the review of this list and as a result of the continued loss of clients and business, a decision was made to make Miss Francis’ position redundant.
Since making Miss Francis’ position redundant, Mr Gador and Mr Cook have picked up the majority of the administrative and reception duties Miss Fracis previously undertook. Ms Samantha Campbell, Mr Hopfner’s Executive Assistant, employed by an associated entity has taken over the balance of Miss Francis’ duties.
Mr Hopfner declared that Miss Francis did not have the experience, training or qualifications to perform the work being performed by Mr Gador or Mr Cook.
Mr Hopfner explained that both Mr Gador and Mr Cook had the experience, training and qualifications to continue in their current positions while assuming the responsibilities of Miss Francis’ former role.
The Respondent has not hired anyone to replace Miss Francis.
At the time of Miss Francis’ redundancy, the Respondent did not have the capacity to redeploy her in another position.
Mr Hopfner confirmed that the Respondent does not employ a human resources management specialist or expert.
Evidence given during the determinative conference
Mr Hopfner stated that Ms O’Brien gave notice of her resignation in November 2022. The Respondent’s work has been reducing since December 2022.
Ms O’Brien is now working as a bookkeeper as a competitor of the Respondent. Mr Hopfner discovered that from December 2022, Miss Francis was meeting with Ms O’Brien on Tuesday afternoons. He stated that it rang alarm bells for him, and he had to deal with it.
Mr Hopfner stated that he usually pays wages on a Thursday. On Wednesday, 1 March 2023, he looked at the Respondent’s bank account and couldn’t pay the full wages. He had earlier been given a temporary overdraft of $10,000.
On Friday, 3 March 2023, Mr Hopfner’s wife was having surgery for a mastectomy. Mr Hopfner needed to assist his wife. He asked his son to carry out the dismissal of Miss Francis’ employment. He stated that it just happened to be in the car park.
Mr Hopfner stated that when he had addressed Miss Francis about meeting with Ms O’Brien, and the damage that it could cause the Respondent, Miss Francis responded, “I can meet with anybody I like. I’m not a child!” He considered she was aggressive, and she knew the Respondent was losing clients.
Miss Francis put to him in cross-examination that he had said to her in respect to her association with Ms O’Brien, “Well, you need to make better choices in friends.” Mr Hopfner denied he said that to her.
Mr Hopfner noted that he is 72 years old and is now working full-time at the Respondent’s business on Bribie Island. He considers that he is meant to have retired and is now having to continue to work.
Mr Hopfner noted that he made a gratuity payment of $250 to Miss Francis in January 2023 from his own account, tax-free.
In cross-examination, Mr Hopfner responded to Miss Francis’ question as to why she had been advertised only 48 hours prior to the dismissal as ‘key personnel’ in advertising material. Mr Hopfner stated that the advertising material had been pre-paid and he held no animosity towards Miss Francis.
As to how long Miss Francis would have continued employment, Mr Hopfner stated that the Respondent did not have the finances to continue to employ her. He stated that had Miss Francis suggested cutting back to two or three days per week during the consultation period, he would have said no to such a proposition. He noted that Mr Cook is a member of his family and can provide flexibility to the Respondent.
Evidence of Mr Grelito Simval Gador
Mr Gador is employed as an Accountant of the Respondent. He works part-time from 9:00am to 2:00pm on Mondays to Wednesdays. He commenced working with the Respondent on 25 January 2023. At the time he started employment, Miss Francis and Mr Cook were employed by the business.
Mr Gador was first made aware of the financial difficulties of the Respondent a few days into his employment. He noted that it was losing clients. Miss Francis provided him with a list of clients to work through and advised that a few clients on the list had already left.
A few weeks after Mr Gador commenced work, Mr Hopfner called a meeting. He cannot recall the date of this meeting. Mr Gador attended the meeting, together with Mr Hopfner, Miss Francis and Mr Cook. Mr Hopfner provided them with a general update on matters and advised that clients were still leaving the business. Mr Hopfner stated that if the Respondent continued to lose clients, it would need to look at ways to manage costs.
Mr Hopfner stated that the former business owners, Mr O’Brien and Ms O’Brien had been contributing towards the loss of clients. Miss Francis stated she did not want to hear those things and got up and left the meeting.
After Miss Francis left the meeting, Mr Hopfner advised that if the Respondent continued to lose clients, changes would be made. One of the changes was Mr Gador would be employed on a part-time basis compared to the previous accountant who Mr Gador replaced, who was employed full-time, as a cost saving measure. There were also discussions about redundancies, although nothing specific was mentioned about which role or roles might be made redundant.
A few weeks after the meeting, Mr Gador was informed that Miss Francis was no longer employed by the Respondent.
Since Miss Francis’ dismissal, Mr Gador and Mr Cook have picked up her duties. This includes undertaking reception and administrative work. Mr Gador said his workload has increased since Miss Francis’ departure. He confirmed that Miss Francis has not been replaced.
Evidence given during the determinative conference
Mr Gador stated that at one point he spoke with Miss Francis and said that he did not know the O’Briens. He expressed sympathy with Miss Francis when she said Mr Hopfner had mentioned her friendship with Ms O’Brien. Mr Gador said he could not recall Mr Hopfner having stated that Miss Francis should more wisely choose her friends in front of him.
Mr Hopfner informed him on 6 March 2023 that Miss Francis was no longer part of the practice. Mr Hopfner had stated that there was an ‘incident’ and there had been an accumulation of events.
Evidence of Ms Samantha Campbell
Ms Campbell is an Executive Assistant to Mr Hopfner, employed by JHT Holdings Ltd, an associated entity of the Respondent.
On 2 March 2023, Ms Campbell received various emails from Miss Francis regarding feeling unsafe in the office. Ms Campbell told her to go home for the day. A copy of this email correspondence is extracted below, in chronological order:
Time From Sent Message 9:45am Miss Francis Mr Hopfner Hi Rudi,
Can you please confirm that I have approval to forward all required information for the above including all related entities?
They have also asked if [redacted]’S Bookkeeper [redacted] can come and pick up the company binder for [redacted]?Thankyou
10:50am Miss Francis Ms Campbell Hi Sam,
I know Rudi is sick, but I need a urgent reply to this one, I can see that he has read the email I sent! Has he said anything to you?
Thankyou
10:51am Ms Campbell Miss Francis Hi Ashleigh
Rudi is handling all of the Ethical Letters. If he hasn’t give you approval to release anything as yet then it will have to wait unfortunately.
Regards,
10:53am Miss Francis Ms Campbell Im sorry Sam, you guys must see what situation this is putting me in…
I have already had one break down this morning and have got both the front and back door locked as I am petrified to be here. I would also like to switch the phone off for today, I am in tears and whole body shaking with that much stress and anxiety.Kind Regards,
11:04am Ms Campbell Miss Francis Hi Ashleigh
I have just spoken to Rudi, he has spoken to [redacted] already this morning and has told him he will have his information this afternoon so you don’t need to worry about this one.
Please go home for the rest of the day. Put a sign up on the door stating the office is temporarily closed.
Regards,
11:09am Miss Francis Ms Campbell [redacted] is also asking about his company binder for [redacted] and as his new account mentioned yesterday he would like to get his Bookkeeper to pick it up. As that didn’t happen yesterday, he has asked for her to pick it up today.
Im not going home, I have invoices to catch up on. I have turned my phone to offline.
Kind Regards
11:10am Ms Campbell Miss Francis Hi Ashleigh
For health and safety purposes, you have advised in writing that you feel unsafe so we need you to go home for the day please.
Regards,
11:40am Miss Francis Ms Campbell I have just seen this, I will go home.
Kind Regards,
11:41am Miss Francis Ms Campbell Sorry Sam, Am I coming in tomorrow? Will anyone be here with me?
Kind Regards,
11:52am Ms Campbell Miss Francis Hi Ashleigh
I am just waiting to hear from Caelen to see if he will be in the office tomorrow as Rudi won’t be in.
Regards,
11:53am Miss Francis Ms Campbell Ok, thankyou
Kind Regards
11:58am Ms Campbell Miss Francis Hi Ashleigh
Caelen will be in the office tomorrow with you.
Hope you feel better. This will all be sorted out soon.
Tomorrow, if you know the number calling is one of the people with an Ethical letter than let it go to Voicemail. Any emails that come through forward them to me, I will handle them.
If anyone comes in, call me and I will put Rudi on the phone as I will be with him tomorrow.
Regards,
Aside from the email trail, Ms Campbell confirmed she did not speak with Miss Francis on 2 March 2023.
Ms Campbell received a call from Miss Francis at 8:31am on 3 March 2023. The call was from a number without displaying the number. During the phone conversation, the following exchange occurred:
· Miss Francis asked, words to the effect of, “Do you know what Rudi has just done?”
· Ms Campbell replied that she did.
· Miss Francis advised that she had a doctors appointment that morning to lodge a Workers’ Compensation claim for stress due to Rudi’s narcissistic behaviour over the last few weeks / months and that she would also be claiming for unfair dismissal.
· Miss Francis further informed Ms Campbell that she was going to report Mr Hopfner to the CPA, IPA and TPB as he was practising when he had lost his licence.
· Ms Campbell told Miss Francis that if she had any issues, she needed to put them in writing.
· Miss Francis continued to speak and was getting louder and louder.
· As a result, Ms Campbell terminated the phone call.
On 9 March 2023, Ms Campbell said she was at the Respondent’s premises alone when Miss Francis arrived and proceeded to walk to the premises.
Prior to Miss Francis arriving, Miss Francis called the Respondent from a private number asking who was at the office. Ms Campbell was concerned about a confrontation arising between Miss Francis and herself, and as a result, locked the door so Miss Francis was unable to enter the premise.
Miss Francis proceeded to bang on the door loudly and started yelling out.
Ms Campbell said she opened the door and asked how she could assist Miss Francis. Miss Francis stated that she had left a pink rock on her desk and asked to collect it. Ms Campbell collected the rock and went back to the door to hand it to her. Miss Francis then stated she was going to take legal action against Mr Hopfner.
Ms Campbell replied that she was unable to discuss these matters with her and that she should seek legal advice. Ms Campbell then closed and locked the door.
Miss Francis continued to stand at the door, yelling, and remained at the premises for some time.
Ms Campbell said she was concerned for her safety, so she contacted the police and made a report. The police arrived 20 to 30 minutes later, however Miss Francis had already left the premises.
Ms Campbell provided a detailed report to the police, and they recommended she contact the police again if Miss Francis returned. Following this encounter, Ms Campbell said she was very shaken and was concerned that Miss Francis was going to return to the premises.
Ms Campbell has not had any contact with Miss Francis following this interaction.
Evidence given during the determinative conference
Ms Campbell confirmed that Mr Hopfner had obtained an overdraft. It needed to be repaid within 30 days and that occurred.
Respondent’s Submissions
Whilst the Respondent acknowledged that Miss Francis was dismissed on 3 March 2023, the Respondent submitted the dismissal was not an unfair dismissal as it was the case of genuine redundancy.
The Respondent had acquired the business assets from an unrelated third party on 30 June 2021, and has since suffered a substantial loss of ongoing client revenue. These events led the Respondent to immediately review the financial viability of its current operations, and to make operational changes to the business.
Upon the Respondent reviewing its operational costs and subsequent downturn in revenue, an immediate restructure of the Respondent was resolved, and Miss Francis was subsequently made redundant on 3 March 2023.
The Respondent noted the consultation clause within the Award. The Respondent submitted it consulted with Miss Francis on at least four occasions namely on 13 December 2022, 21 February 2023, 1 March 2023 and 3 March 2023. Miss Francis walked out of the meeting the Respondent called on 21 February 2023.
The Respondent submitted that at no time during the consultation or the redundancy discussion did Miss Francis request to have a support person present. The Respondent does not have a dedicated human resources specialist or consultant.
The Respondent submitted that in accordance with clause 42 of the Award and s.121(1)(b) of the Act, the Respondent did not have an obligation to pay Miss Francis any redundancy pay. This submission was made prior to any consideration was given as to whether the Respondent, was, in fact, a small business, which it is now known that it is not.
The Respondent referred to the decision of Lindsay v Department of Finance Deregulation[1] where the Commission held that employer in that matter notified its employees of the proposed redundancies and although the meeting with the applicant in that matter was brief due to the hostility she showed towards the employer, meetings with other employees involved an extended discussion about the proposed redundancies. In that matter, Williams C held that the consultation with the applicant was truncated as a result of her attitude and actions, rather than any refusal of the Respondent to consult. Ultimately, Williams C in that matter held the consultation obligations in the modern award were satisfied.
EVIDENCE OF MISS FRANCIS
Miss Francis was employed as a Reception/Administration Assistant with the Respondent on a part-time basis from 5 July 2021 to 6 July 2022. From 7 July 2022, up until her dismissal on 3 March 2023, she was a full-time employee.
As a full-time employee she completed 38 hours a week on Mondays to Fridays from 8:30am to 5:00pm, except on Tuesdays where she finished at 3:00pm. Her annual salary was $52,142.48.
She confirmed that the reason given to her for the dismissal was “business restructure due to loss of client base”. Miss Francis confirmed she did not ask to have a support person with her at any discussions relating to her dismissal.
Miss Francis noted that on 16 February 2023, Ms Campbell sent the following email to her, attaching a letter that had been sent by the Respondent’s legal representative, Kanther Law to Ms O’Brien in February 2023, by then a former employee of the Respondent. Miss Francis was quite disturbed that this email and the letter to Ms O’Brien had been sent to her. She simply informed Ms Campbell that she had signed the relevant post-employment commitments in her contract when commencing. The email sent by Ms Campbell to Miss Fracis is extracted below:
“Good afternoon Ashleigh
Due to recent events Rudi has asked me to forward this letter to you so you are aware of your obligations should you ever leave OBT (Entegra (Aust) B I Pty Ltd) as an employee. It is for information purposes only, there is no intent behind it, as it may not be clear what obligations are. This is being sent to all staff members to ensure everyone is aware of their obligations to the business should you ever cease employment with us for any reason.
Regards,
Samantha Campbell
Executive Assistant”
Leading up to Thursday, 2 March 2023, a significant number of clients were leaving the firm due to a lack of work being done. When those clients communicated their intention to move their business, Mr Hopfner would not respond in a timely manner with supply of documents and information required by the client’s new accountants and bookkeepers together with the original documents the clients owned.
As the clients had taxation obligations, Miss Francis noted that a lot of the clients and the former client’s newly appointed accounts were calling and emailing, requesting the client information to be passed on. The clients and newly appointed accountants were aware of the risk of penalties from the Australian Taxation Office.
Ethical Letters are a form of communication from a newly appointed accountant to a client’s former accountant, advising the former accountant that the client had appointed a new accountant. Miss Francis repeatedly informed Mr Hopfner of each Ethical Letter received, to which he said that he would respond to them. Miss Francis said that she constantly received phone calls and emails from clients seeking to move their clientele.
On 23 February 2023, Miss Francis received an email response from Mr Hopfner which stipulated, in part, as follows:
“Stop sending me reminders about ethical letters. I have told you that I am dealing with them. All that you are required to do is forward any correspondence about ethical letters to me and I will deal with them according to professional association by-laws as I am obligated to do”.
Miss Francis was confused, as Mr Hopfner had told her to stop sending reminders, but she was also told to forward any correspondence on. Miss Francis responded, asking for clarification on Mr Hopfner’s statement about by-laws, and where she can find the published by-laws so she could explain to clients when they call or email. No response was received.
Miss Fracis made inquiries with CPA Australia and was told that a publication does not exist. An Ethical Letter is considered a courtesy from one accountant to another.
Between 23 February 2023 and 2 March 2023, Miss Francis continued to receive email and phone requests for documentation to be forwarded onto new accountants.
By 9:45am on 2 March 2023, Miss Francis had received three client visits, phone calls and emails for documents. She stated that she was afraid of what might happen if the “wrong” person came into the office to collect documents as she has been told not to hand anything over. Miss Francis was in the office by herself. She had an anxiety attack and was fearfully in tears.
By 10:53am, Miss Francis let Ms Campbell know how concerned she was. Miss Francis was of the opinion that having been informed Mr Hopfner was ill, he was ‘avoiding’ the office as he didn’t want to face disappointed clients. Miss Francis let Ms Campbell know of her anxiety attack. Miss Francis informed Ms Campbell that she had locked the front and back doors and asked for the phones to be switched off. Miss Francis explained that individual people’s phone can be switched off and calls would be diverted to other phones, such as Mr Hopfner and Ms Campbell.
Miss Francis received a reply from Ms Campbell, saying “please go home for the rest of the day. Put a sign on the door stating the office is temporarily closed”. Miss Francis responded to Ms Campbell that she doesn’t need to go home and she had invoices to do, but had turned her phone to offline. Ms Campbell replied, insisting that Miss Francis goes home for “health and safety reasons”.
Miss Francis said she responded as to whether or not she was to come to work the following day, and Ms Campbell responded yes, she would not be alone as Mr Cook will also be in the office. Miss Fracis said she has been advised not to contact Ms Campbell directly, but this was by reply email to herself.
On 3 March 2023, Miss Francis arrived in the carpark at 8:24am for her start time at 8:30am. Mr Hopfner’s son, Matthew, was in the carpark. He is on the payroll with an associated entity and performs ad-hoc IT work from the Respondent’s premises. Miss Francis would usually let Matthew into the office.
Whilst at the back door, Matthew handed to Miss Francis an envelope containing the termination letter.
Having read the letter, Miss Francis collected her things and returned the keys. She returned to her car and called Mr Hopfner to ask what was happening. Mr Hopfner did not answer.
Miss Francis called Ms Campbell to see what was happening. This call lasted 1 minute and 19 seconds. Miss Francis described Ms Campbell’s tone to be quite abrupt. Ms Campbell told her that she didn’t need to talk to Miss Francis. Ms Campbell hung up on Miss Francis.
Miss Francis believed she was terminated due to voicing her opinion that she didn’t feel safe due to being in an unsafe work environment arising from the ‘chosen conduct of Mr Hopfner and his business choices’.
Miss Francis obtained other employment nine weeks post-dismissal. The new employment is casual work for 21 hours per week. She made great attempts to mitigate her loss, having applied for 31 jobs. She has limitations as to where she can work due to having a child with ASD Level 2 and needing to be relatively close by.
Miss Francis is of the view that the relationship with the Respondent has broken down.
Miss Francis explained in detail her visit to the Respondent premises on 9 March 2023. She noted that she was due to receive her termination payment on this day. She had not received it and was trying to find out when she could expect payment.
Miss Francis emailed at 8:32am, asking when she could expect to receive her pay. Ms Campbell responded at 8:39am to advise that there is a period of seven days permitted to make a termination payment. At 9:33am, Miss Francis called the office to speak with Ms Campbell.
As Miss Francis was out of the house and had left a sentimental crystal (described as a pink rock), she drove to the office and arrived in the car park at 9:34am.
Miss Francis decided to record sound on her mobile phone as she left her car and walked to the front door at 9:40am. She noted the door was being locked. It took Miss Francis approximately 30 seconds to walk to the front door.
Around 10 seconds later, Ms Campbell responded to Miss Francis knocking on the door. Miss Francis requested her pink stone be retrieved from her desk. She also asked, “what was the problem”, to which Ms Campbell said she could not talk to her. Miss Francis then referred to Mr Hopfner as a “narcissistic slime ball”. The door was shut, and locked while Miss Francis’ pink stone was being retrieved.
Once the door was open again, Miss Francis was handed her item. She advised Ms Campbell that the information Mr Hopfner was providing clients was incorrect and that she had advised the ‘required boards’. At this time, the door was being closed and locked while Miss Francis was letting her know that she was contacting the Commission and WorkCover regarding verbal and emotional abuse.
Miss Francis noted the conversation was only one minute long.
Miss Francis remained in the car park and called Caxton Legal Service, a telephone number she had been given by the Commission. She was seeking to learn her rights to termination payment.
A friend then arrived, and they held a conversation for around one minute. Miss Francis soon left. Her friend noted that the police did arrive after she had left. Miss Francis was not contacted by the police.
Evidence given during the determinative conference
Miss Francis denied that after Ms O’Brien left the employment of the Respondent she would meet up with her on Tuesday afternoons. Miss Francis noted that when she finished work on Tuesday afternoons, that being her short day, she would take her son to his ASD appointments. She has only met with Ms O’Brien since being dismissed.
Is respect of consultation, if the Respondent had consulted with her about her position being made redundant, she would have suggested working reduced hours, for example two days per week. She stated that she was never provided with this opportunity.
Miss Francis noted that she had made a doctor’s appointment prior to being dismissed on account of the stress she was experiencing. She later made a workers’ compensation claim which was rejected. She noted that she only had around one day of paid sick leave available to her, so if she had not been dismissed, she would likely have been on unpaid leave until she was well enough to return to work.
Consideration
I turn now to a consideration of the criteria set out in s.389 of the Act. For Miss Francis’ dismissal to be a case of genuine redundancy, the Respondent must meet each of the criteria set out in s.389 of the Act.
s.389(1)(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
The test to be considered where there has been a reorganisation or redistribution of duties is whether the employee has any duties left to discharge.[2]
Where there is no longer any function or duty to be performed by an employee, his or her position becomes redundant even where aspects of that employee’s duties are still being performed by other employees.[3]
The decision in Kekeris v A. Hartrodt Australia Pty Ltd T/A a.hartrodt[4] considered this point and established the test is whether the previous job has survived the restructure or downsizing, rather than a question as to whether the duties have survived in some form. The Full Bench in Ulan Coal Mines Limited v Howarth and others[5] considered and applied the decision of Ryan J in Jones v Department of Energy and Minerals,[6] and said:
“[17] It is noted that the reference in the statutory expression is to a person’s ‘job’ no longer being required to be performed. As Ryan J observed in Jones v Department of Energy and Minerals (1995) 60 IR 304 a job involves ‘a collection of functions, duties and responsibilities entrusted, as part of the scheme of the employees’ organisation, to a particular employee’ (at p. 308). His Honour in that case considered a set of circumstances where an employer might rearrange the organisational structure by breaking up the collection of functions, duties and responsibilities attached to a single position and distributing them among the holders of other positions, including newly-created positions. In these circumstances, it was said that:
‘What is critical for the purpose of identifying a redundancy is whether the holder of the former position has, after the re-organisation, any duties left to discharge. If there is no longer any function or duty to be performed by that person, his or her position becomes redundant… (at p.308)’
This does not mean that if any aspect of the employee’s duties is still to be performed by somebody, he or she cannot be redundant (see Dibb v Commissioner of Taxation(2004) FCR 388 at 404-405). The examples given in the Explanatory Memorandum illustrate circumstances where tasks and duties of a particular employee continue to be performed by other employees but nevertheless the ‘job’ of that employee no longer exists.”
I am satisfied that, albeit Mr Hopfner made a hasty decision to make Miss Francis’ role redundant, as of 3 March 2023, the Respondent did not require the role to be performed by anyone because of changes in the operational requirements of the Respondent’s enterprise. The evidence is clear that the duties are absorbed into the functions of Mr Gador, Mr Cook and Ms Campbell.
s.389(1)(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
The obligation on an employer to consult about redundancy only arises when a modern award or enterprise agreement applies to an employee and that modern award or enterprise agreement contains requirements to consult about redundancy.
It is not disputed that Miss Francis was employed under the Award.
Whether the cessation of an employee from a small group of employees constitutes significant effects on employees for the purposes of clause 38 of the Award, including major change, and therefore an obligation to consult in accordance with the provisions of the Award, must be determined.
In Port Kembla Coal Terminal Ltd v CFMEU (Port Kembla),[7] Jessup J observed that “the forced redundancy of three employees out of a workforce of about 98 did not of itself constitute a major change within the meaning of cl 7.1.”[8] However, as White J noted in Port Kembla, a simple comparison between the number of employees to be dismissed and the number of employees in the workforce overall is not conclusive of whether there are major changes.[9] Much depends upon the circumstances of a case.
Paragraph 1548 of the Fair Work Bill 2008 (Cth) Explanatory Memorandum to the Act sets out as follows:
“The following are possible examples of a change in the operational requirements of an enterprise: a machine is now available to do the job performed by the employee; the employer’s business is experiencing a downturn and therefore the employer only needs three people to do a particular task instead of five; or the employer is restructuring their business to improve efficiency and the tasks done by a particular employee are distributed between several other employees and therefore the person’s job no longer exists.”
The Respondent made a definite decision to make a major change to the business, eliminating the role of Reception/Administration Assistant. The Respondent’s decision had a significant effect on employees, including by the elimination of a position.
It follows that the Respondent was required to comply with the consultation obligations in clause 38 of the Award. Having reached this conclusion, I turn to consider whether the Respondent complied with its consultation obligations within the Award.
I am aware that throughout early 2023, Mr Hopfner was flagging the difficulties the Respondent was facing on account of clients leaving the business. He foreshadowed that there might need to be some changes.
Mr Hopfner’s evidence is that he did not decide to make Miss Francis’ role redundant until early March 2023. A definite decision was not made until then. Upon Mr Hopfner making a definite decision to make changes, the Respondent was obligated to discuss those changes and their likely impact.
The relevant clause within the Award requires the matters to be put in writing to allow discussions to occur about the likely impact of a decision to make a role redundant. It is an express term. None of this occurred. Accordingly, I am not satisfied that the cession of Miss Francis’ employment was a case of genuine redundancy within the meaning of s.389(2) of the Act.
In light of the conclusion reached, it is unnecessary to consider s.389(2), being whether it would have been reasonable in all the circumstances for Miss Francis to have been redeployed within the Respondent, or an associated entity. However, for completeness, and in case I am incorrect about the consultation obligations above, I have determined the issue below.
s.389(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.
Whether redeployment of an employee is considered reasonable will depend on the circumstances that exist at the time of the dismissal.[10]
In Hallam v Sodexo Remotes Site Australia Pty Ltd,[11] a Full Bench of the Commission stated the following:
“…Subsection 389(2) states that 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. Subsection 389(2) places no obligation on an employer to redeploy, or to do everything possible to achieve a redeployment outcome. The exception is applied at the time of dismissal. It operates so that a dismissal that would otherwise be a case of genuine redundancy under subsection 389(1) will not be so if it would have been reasonable in all the circumstances for the person to be redeployed within the employer’s enterprise, or with an enterprise of an associated entity of the employer.”
As the Full Bench observed in TAFE NSW v Pykett,[12] to show that it would have been reasonable for the Respondent to redeploy Miss Francis, it is not necessary to identify a particular job or position in which Miss Francis could have been redeployed. However, the Commission must be satisfied on the balance of probabilities, and based on the evidence, that there was a “job or a position or other work” to which it would have been reasonable to redeploy Miss Francis.
The material before the Commission demonstrates that there were no suitable roles in which Miss Francis could be redeployed. Miss Francis’s personal circumstances dictate that she must work close by to her family. While it is clear that the Respondent did not contemplate any redeployment into associated entities as it did not consider at the time that it needed to, on examination, there weren’t any suitable roles to which to redeploy her into.
Conclusion on the issue of genuine redundancy
The jurisdictional objection that the dismissal was a case of genuine redundancy requires two affirmative elements and one negatory element which must be satisfied, so as to establish whether a dismissal was or was not a case of genuine redundancy.
For all the reasons set out above, I am not satisfied that Miss Francis’ dismissal was a case of genuine redundancy because:
· While the Respondent no longer required Miss Francis’ job to be performed by anyone because of changes in the operational requirements of its enterprise; and
· It would not have been reasonable in all the circumstances for Miss Francis to be redeployed within the Respondent’s enterprise or the enterprise of an associated entity; and
· the Respondent did not comply with its obligation in the Award that applied to the employment to consult about the redundancy.
The Respondent’s jurisdictional objection is dismissed.
Was the dismissal harsh, unjust or unreasonable?
A dismissal may be unfair, when examining if it is ‘harsh, unjust or unreasonable’ by having regard to the following reasoning of McHugh and Gummow JJ in Byrne v Australian Airlines Ltd:[13]
“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.”
I am duty-bound to consider each of the criteria set out in s.387 of the Act in determining this matter.[14]
s.387(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)
When considering whether there is a valid reason for termination, the decision of North J in Selvachandran v Peterson Plastics Pty Ltd (1995) 62 IR 371 at 373 provides guidance as to what the Commission must consider:
“In its context in s.170DE(1), the adjective “valid” should be given the meaning of sound, defensible or well founded. A reason which is capricious, fanciful, spiteful or prejudiced could never be a valid reason for the purposes of s.170DE(1). At the same time the reasons must be valid in the context of the employee’s capacity or conduct or based upon the operational requirements of the employer’s business. Further, in considering whether a reason is valid, it must be remembered that the requirement applies in the practical sphere of the relationship between an employer and an employee where each has rights and privileges and duties and obligations conferred and imposed on them. The provisions must “be applied in a practical, common-sense way to ensure that the employer and employee are treated fairly.”
However, the Commission will not stand in the shoes of the employer and determine what the Commission would do if it was in the position of the employer.[15]
I am satisfied that the Respondent no longer required Miss Francis’ job to be performed by anyone because of changes in the operational requirements of the enterprise. The reason for Miss Francis’ dismissal was not related to her capacity or conduct.[16] As such, this is a neutral factor with respect to whether Miss Francis’ dismissal was harsh, unjust or unreasonable.
Rather disturbingly, however, Mr Hopfner’s evidence given during the determinative conference somewhat suggested that he was irritated with Miss Francis’ relationship with Ms O’Brien, and he considered that she was meeting with Ms O’Brien soon after Ms O’Brien’s departure from the Respondent.
There is also reference in Mr Gador’s evidence to there having been an ‘incident’ as one of the reasons for Miss Francis’ cessation of employment.
If Mr Hopfner did, indeed dismiss Miss Francis for continuing to have a relationship with Ms O’Brien, or for supposedly meeting with Ms O’Brien on Tuesday afternoons (which I don’t accept she did), none of these reasons would constitute a valid reason for the dismissal.
s.387(b) - Whether the person was notified of that reason
Taking the Respondent’s reason for the dismissal on face value, and as Miss Francis’ termination of employment did not relate to capacity or conduct, this is a neutral factor. I note, however, Miss Francis was notified of the reasons for the dismissal in the termination letter dated 3 March 2023.
s.387(c) - Whether there was an opportunity to respond to any reason related to the capacity or conduct of the person
This criterion deals with procedural fairness in respect of a reason for dismissal related to an employee’s capacity or conduct. Again, taking the Respondent’s reason for the dismissal on face value and that Miss Francis’ employment ended by way of redundancy, this is a neutral factor.
s.387(d) - Any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to the dismissal
Where an employee protected from unfair dismissal has requested a support person be present to assist in discussions relating to the dismissal, an employer should not unreasonably refuse that person being present.
There is no positive obligation on an employer to offer an employee the opportunity to have a support person. The Explanatory Memorandum, Fair Work Bill 2008 (Cth) at [1542] states the following:
“This factor will only be a relevant consideration when an employee asks to have a support person present in a discussion relating to dismissal and the employer unreasonably refuses. It does not impose a positive obligation on employers to offer an employee the opportunity to have a support person present when they are considering dismissing them.”
In the circumstances, I find that the Respondent did not unreasonably refuse to allow Miss Francis to have a support person present when she was informed of the dismissal. However, I note that Miss Francis was not on notice of the meeting’s purpose such that she was not afforded the opportunity to request a support person. This matter is appropriately considered under s.387(h).
s.387(e) - Was there a warning of unsatisfactory work performance before dismissal
Miss Francis’ dismissal did not relate to unsatisfactory performance. This is a neutral factor.
s.387(f) - Whether the respondent’s size impacted on the procedures followed and s.387(g) - Whether the absence of a dedicated human resource management specialist impacted on the procedures followed
The Respondent is within a group of small entities, which when consolidated, employs less than 20 employees. The Respondent and its associated entities did not have any internal human resource management expertise. I consider that the size of the business and its lack of internal expertise impacted on the procedures followed.
s.387(h) – Other matters
I am satisfied that the Respondent had a valid reason to dismiss Miss Francis having regard to its operational requirements. While Mr Hopfner’s decision to dismiss Miss Francis was hasty, the Respondent was facing a cash-flow problem and was haemorrhaging clients. Mr Hopfner decided that he could do without an onsite receptionist. He determined that other employees, including Ms Campbell employed within an associated entity, could absorb Miss Francis’ administrative duties.
Regrettably, and for a professional services owner with decades of experience, Mr Hopfner failed to have regard to the Respondent’s obligation to consult with Miss Francis relevant to the Respondent’s definite decision to introduce major change to the business. The Respondent did not appreciate that it had an obligation under the Award to consult in the extensive manner required by the Award, particularly in writing.
It would have been appropriate for the Respondent to conduct a meeting with Miss Francis, explain the scenario and inform her in writing that it was considering ending her employment. It is at that time the Respondent could have held discussions relevant to how it was going about its decision making and how it considered it could do without Miss Francis.
It would have been an opportune time for Miss Francis to propose an alternative to being made redundant. While Mr Hopfner gave evidence in June 2023 that he would have said no to any part-time suggestion made by Miss Francis, we’ll never know whether the employment could have been salvaged in some form, on account of the Respondent’s failure to consult with Miss Francis at the time.
The manner in which the termination was effected, in the car park or by the back door of the premises by Mr Hopfner’s son, Matthew, was undignified. Despite all that was going on in Mr Hopfner’s life that day, with his wife having surgery, he should have provided appropriate instructions to his son to ensure that Miss Francis was dismissed in an appropriate manner, which would be, at a bare minimum, within the office.
I have had regard for Miss Francis’ length of service of less than two years and note that it is not a long period of time.
The fact that the dismissal was conducted in breach of the consultation provisions of the Award weighs heavily for a finding that the dismissal was harsh, unjust or unreasonable.
Conclusion
The jurisdictional objection that the dismissal was a case of genuine redundancy requires two affirmative elements and one negatory element which must be satisfied so as to establish whether a dismissal was or was not a case of genuine redundancy.
I have determined that the second affirmative element was not satisfied in this case. Specifically, the Respondent has not complied with an obligation in the Award that applied to Miss Francis’ employment to consult about her redundancy. Therefore, the dismissal did not satisfy the meaning of genuine redundancy as contained within s.389(1)(b) of the Act.
Consequently, the jurisdictional objection has been determined and rejected, and consideration has turned to the substantive merits of the application. Having appropriate regard for the various factors contained within s.387 of the Act, I determine that Miss Francis’ dismissal was unjust. The primary reason for this is the failure to consult with Miss Francis regarding a proposed dismissal as required by the terms of the Award.
Having satisfied myself that the dismissal was unjust, pursuant to s.385(b) of the Act, I find that Miss Francis was unfairly dismissed.
Remedy
Section 390 of the Act reads as follows:
“390 When the FWC may order remedy for unfair dismissal
(1) Subject to subsection (3), the FWC may order a person’s reinstatement, or the payment of compensation to a person, if:
(a) the FWC is satisfied that the person was protected from unfair dismissal (see Division 2) at the time of being dismissed; and
(b) the person has been unfairly dismissed (see Division 3).
(2) The FWC may make the order only if the person has made an application under section 394.
(3) The FWC must not order the payment of compensation to the person unless:
(a) the FWC is satisfied that reinstatement of the person is inappropriate; and
(b) the FWC considers an order for payment of compensation is appropriate in all the circumstances of the case.
Note: Division 5 deals with procedural matters such as applications for remedies.”
Miss Francis is a person protected from unfair dismissal for the Act’s purposes and is a person who has been unfairly dismissed. Accordingly, I am empowered to exercise discretion as to whether she can be reinstated.
I am satisfied that it is inappropriate to order reinstatement due to the size of the business and its associated entities and the work available to the small number of employees still employed. Further, I am satisfied that the relationship between the parties has broken down.
I now turn to consideration of compensation.
Compensation
Section 392 of the Act provides:
“392 Remedy—compensation
Compensation
(1) An order for the payment of compensation to a person must be an order that the person’s employer at the time of the dismissal pay compensation to the person in lieu of reinstatement.
Criteria for deciding amounts
(2) In determining an amount for the purposes of an order under subsection (1), the FWC must take into account all the circumstances of the case including:
(a) the effect of the order on the viability of the employer’s enterprise; and
(b) the length of the person’s service with the employer; and
(c)the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed; and
(d)the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal; and
(e)the amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for compensation; and
(f)the amount of any income reasonably likely to be so earned by the person during the period between the making of the order for compensation and the actual compensation; and
(g) any other matter that the FWC considers relevant.
Misconduct reduces amount
(3) If the FWC is satisfied that misconduct of a person contributed to the employer’s decision to dismiss the person, the FWC must reduce the amount it would otherwise order under subsection (1) by an appropriate amount on account of the misconduct.
Shock, distress etc. disregarded
(4) The amount ordered by the FWC to be paid to a person under subsection (1) must not include a component by way of compensation for shock, distress or humiliation, or other analogous hurt, caused to the person by the manner of the person’s dismissal.
Compensation cap
(5) The amount ordered by the FWC to be paid to a person under subsection (1) must not exceed the lesser of:
(a) the amount worked out under subsection (6); and
(b)half the amount of the high income threshold immediately before the dismissal.
(6) The amount is the total of the following amounts:
(a) the total amount of remuneration:
(i) received by the person; or
(ii) to which the person was entitled;
(whichever is higher) for any period of employment with the employer during the 26 weeks immediately before the dismissal; and
(b)if the employee was on leave without pay or without full pay while so employed during any part of that period—the amount of remuneration taken to have been received by the employee for the period of leave in accordance with the regulations.”
Authorities
The approach to the calculation of compensation is set out in a decision of a Full Bench of the Australian Industrial Relations Commission in Sprigg v Paul’s Licensed Festival Supermarket.[17] That approach, with some refinement, has subsequently been endorsed and adopted by Full Benches of the Commission in Bowden v Ottrey Homes Cobram and District Retirement Villages inc T/A Ottrey;[18] Jetstar Airways Pty Ltd v Neeteson-Lemkes[19] and McCulloch v Calvary Health Care (McCulloch).[20]
I have had regard to the above authorities, and I have considered the submission of each party.
The effect of the order on the viability of the respondent
No submissions were made relevant to this issue. There is no evidence to suggest that an award of compensation would affect the viability of the Respondent’s enterprise.
The length of Miss Francis’ service
Miss Francis had less than two years’ service. This is not a long period of time.
The remuneration that Miss Francis would have received, or would have been likely to receive, if she had not been dismissed
If the Respondent had consulted with Miss Francis, on the balance of probabilities, and despite Miss Francis potentially suggesting part-time work instead of being made redundant the Respondent would likely have affirmed its decision to make her redundant.
In all of the circumstances, I consider that it would have been appropriate to consult with Miss Francis over a period of one week. I have determined that one week would have been the appropriate amount of time to consult with Miss Francis given her length of time with the Respondent and to allow a reasonable amount of time for the Respondent to consider any alternative suggestions she might have had.
The efforts of Miss Francis (if any) to mitigate the loss suffered because of the dismissal
Miss Francis made significant efforts to find alternative employment, particularly having regard for her location and family circumstances.
The amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for compensation
Miss Francis secured alternative employment approximately nine weeks following the dismissal.
The amount of any income reasonably likely to be so earned by Mr Balchin during the period between the making of the order for compensation and the actual compensation
This factor is not relevant in the circumstances of this matter.
Other relevant matters
On account of the Respondent being ignorant to the fact that it is not a small business when its associated entities are included, and seemingly relying on this error in failing to pay to Miss Francis termination payments, the Respondent is obliged to pay to Miss Francis four weeks’ severance pursuant to s.119 of the Act.
Ordinarily an employee being made redundant in such a fashion would be entitled to tax-free concessions and the amount would be paid by the employer tax-free.
It is noted the Respondent paid to Miss Francis one week’s payment as a ‘gratuity’.
Misconduct reduces amount
Section 392(3) of the Act requires that if the Commission is satisfied that the misconduct of a person contributed to the employer’s decision to dismiss the person then the Commission must reduce the amount it would otherwise order by an appropriate amount on account of the misconduct.
The section requires that consideration be given by the Commission, amongst other things, as to whether a person’s misconduct contributed to the decision to dismiss an employee even if the Commission has found that there was no valid reason for the person’s dismissal. However, if there was no valid reason for the dismissal that may be relevant to the Commission’s decision as to the appropriate amount by which the amount of compensation should be reduced.[21]
I do not find that Miss Francis engaged in any misconduct that would reduce the amount to be awarded to her.
Shock, distress etc. disregarded
I confirm that any amount ordered does not include a component by way of compensation for shock, distress or humiliation, or other analogous hurt caused to Miss Francis by the manner of the dismissal.
Compensation Cap
I must reduce the amount of compensation to be ordered if it exceeds the lesser of the total amount of remuneration received by the applicant, or to which the applicant was entitled, for any period of employment with the employer during the 26 weeks immediately before the dismissal, or the high income threshold immediately prior to the dismissal.
The high income threshold immediately prior to the dismissal was $162,000, and the amount for 26 weeks was $81,000. The amount of compensation the Commission will order does not exceed the compensation cap.
Payment by instalments
I have had regard to this issue and note that there has been a substantial period of time between the decision being reserved and the decision being issued. I do not consider that an order of $4,116.27 being paid within 14 days of the date of this decision will stretch the Respondent on account of the time the Respondent has had to put aside any potential liability in respect of this application.
Order of compensation
I have determined that the Respondent ought to have consulted with Miss Francis for a period of one week in respect of the proposed redundancy. At an hourly rate of $26.3880, this is an amount of $1,002.74. Miss Francis would have been employed at this time, and accordingly it is appropriate to order superannuation to be paid on this amount.
Further, Miss Francis ought to have been paid four weeks’ severance, being an amount of $4,010.98. It is necessary to deduct one week on account of one week having been paid to her by the Respondent as a gratuity. This amount is reduced to $3,008.24. Regrettably, it is unlikely that Miss Francis will become entitled to beneficial tax concessions on account of the Commission making an order of compensation as opposed to the Respondent having paid the amount to Miss Francis as a payment on account of bona fide redundancy (a taxation term). It is disappointing that an accounting firm failed to meet its obligations to its employee, and the employee is likely to miss out on a lawful tax concession. The Respondent is welcome to liaise with the ATO to inquire as to the relevant taxation to be deducted (if any) in respect of paragraph [193](c) below.
Miss Francis has appropriately been paid her two weeks’ notice period by the Respondent.
The Respondent is to pay to Miss Francis the following amounts within 14 days:
(a)$1,002.74 taxed as required by law;
(b)10.5% superannuation (as it then was in the 2022/2023 financial year) on the amount in [193](a) being an amount of $105.29 into Miss Francis’ superannuation account; and
(c)$3,008.24 taxed as required by law.
An Order [PR766402] giving effect to this decision will be published.
COMMISSIONER
Appearances:
A Francis on her own behalf.
C Kanther of Kanther Law, with permission, with R Hopfner of the Respondent.
Hearing details:
Brisbane.
Video by Microsoft Teams.
2023.
15 June.
[1] [2011] FWA 4078.
[2] Jones v Department of Energy and Minerals [1995] IRCA 292 (16 June 1995), [(1995) 60 IR 304 at p.308 (Ryan J)]; cited with approval in Ulan Coal Mines Limited v Howarth and others [2010] FWAFB 3488 (Boulton J, Drake SDP, McKenna C, 10 May 2010) at para. 17, [(2010) 196 IR 32].
[3] Ibid.
[4] [2010] FWA 674.
[5] [2010] FWAFB 3488
[6] (1995) 60 IR 304.
[7] [2016] FCAFC 99
[8] Ibid at [186]. See also Australian Nursing and Midwifery Federation v Bupa Aged Care Australia Pty Ltd [2017] FCA 1246at [22]-[31]
[9] Ibid at [499].
[10] Ulan Coal Mines Limited v Honeysett (2010) 199 IR 363 at [28].
[11] [2017] FWCFB 6847 at [20].
[12] [2014] FWCFB 714, (2014) 240 IR 130 at [36].
[13] (1995) 185 CLR 410, [465].
[14] Sayer v Melsteel[2011] FWAFB 7498 at [20].
[15] Walton v Mermaid Dry Cleaners Pty Ltd(1996) 142 ALR 681, 685.
[16] UES (Int’L) Pty Ltd v Harvey[2012] FWAFB 5241 at [42].
[17] (1998) 88 IR 21.
[18] [2013] FWCFB 431.
[19] [2014] FWCFB 8683.
[20] [2015] FWCFB 2267.
[21] Crawford v BHP Coal Pty Ltd [2017] FWC 154, [345] – [346]; Read v Gordon Square Child Care Centre Inc. [2013] FWCFB 762, [83]..
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