Brock McDonald v Chelsea Flooring PtyLtd T/A Chelsea Flooring

[2017] FWC 4671

[2017] FWC 4671

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Brock McDonald
v
Chelsea Flooring PtyLtd T/A Chelsea Flooring
(U2017/6472)

DEPUTY PRESIDENT BEAUMONT PERTH, 13 OCTOBER 2017

Application for an unfair dismissal remedy – small business employer – jurisdictional objection – genuine redundancy – application dismissed.

[1] On 16 June 2017 Mr Brock McDonald (the Applicant) made an application to the Fair Work Commission (the Commission) pursuant to s.394 of the Fair Work Act 2009 (Cth) (the Act) for a remedy in respect of his dismissal (the Application).

[2] Chelsea Flooring Pty Ltd T/A Chelsea Flooring (the Respondent) employed the Applicant, a Sales Representative, from 16 July 2007 until he was dismissed on 26 May 2017. There was a period when the Applicant ran the Respondent’s business while the owner was overseas. However, preceding the Applicant’s dismissal and at the time of his dismissal he was a Sales Representative.

[3] The Respondent has objected to the Application on the basis that:

● the dismissal was a case of genuine redundancy; and

● the Respondent is a small business, and the dismissal was consistent with the Small Business Fair Dismissal Code.

[4] The Applicant submits that the dismissal arose because of a breakdown in the relationship between the Applicant and the Respondent. It follows, according to the Applicant, that the dismissal was not a case of genuine redundancy.

Legal representation

The Respondent

[5] Mr Talbot of Counsel represented the Respondent. He submitted that representation would assist the Commission to bring focus and efficiency to the proceedings. The Commission, it said, would be required to determine a jurisdictional issue which involved a complex and often misinterpreted area of law.

[6] Counsel said that the Director of the Respondent would be required to give evidence in the hearing and this could create difficulties with the provision of evidence. It followed that the matter would be more efficiently dealt with by a representative who was not acting as a witness.

[7] The Director of the Respondent was said to have no experience in advocacy or preparation of cases before the Commission. A point that was considered by the Commission in Woodward v Greyhound Australia Pty Ltd 1 (Woodward). Further, in relation to s.596(2) of the Act, the fact that the Applicant may not be represented by a lawyer or paid agent should not automatically result in a finding of unfairness.

The Applicant

[8] The Applicant submitted that there had been attempts to resolve the matter to no avail and expressed scepticism that Sparke Helmore Lawyers represented the Respondent.

[9] The Applicant said that he was unable to afford legal representation as he was facing extreme financial hardship and Sparke Helmore Lawyers may prejudice the situation of the Applicant by the burden of unnecessary formality.

Consideration

[10] Without making any findings on the material submitted by the Applicant and the Respondent on the substantive matter it appeared, on a reading of the file, the matter would likely involve consideration of the definition of genuine redundancy and the exclusion under s.389(2) of the Act.

[11] These are complex and technical legal provisions on which the parties are likely to have opposing views. Issues in respect to the onus of proof and the question of operational requirements, consultation and redeployment will likely arise. The Respondent is a business of approximately 6-7 employees and does not employ any human resources or industrial relations experts.

[12] The Director of the Respondent is a witness in the matter. However, I formed the view that the Director being a witness cannot, on its own, be a satisfactory reason to grant permission. 2

[13] Cross-examination of the witnesses would likely be necessary and it appeared from a preliminary review of the file that there may be personal animosities between the Applicant and the Director of the Respondent business, which could potentially impact on the determination of this matter. I considered that these personal animosities were best reduced by the involvement of an external legal resource which would enable the matter to be dealt with more efficiently. 3

[14] While the Respondent submitted that it had no experience in advocacy or preparation of cases before the Commission and that this was considered by the Commission in Woodward, I was unpersuaded that the case of Woodward was analogous to these proceedings and was therefore of little or no assistance.

[15] The Respondent submitted that while the Applicant had elected not to seek representation that should not preclude the Respondent being granted permission to be legally represented. It was submitted that the fact that the Applicant may not be represented by a lawyer or paid agent should not automatically result in a finding of unfairness.

[16] While granting permission to for the Respondent to be represented may give rise to concerns of fairness, Counsel for the Respondent has a duty to the Commission. 4

[17] Viewed in its totality, the resolution of this dispute by arbitration is not without complexity of a kind that travels beyond factual disputes and simple undisputed application of well settled principles. I determined that permission for representation by a lawyer in these proceedings should be granted to the Respondent section 596(2)(a) of the Act having been met.

Support person

[18] The Applicant submitted that that he was disadvantaged because his support person could not represent him at the hearing.

[19] On the first day of the hearing it was communicated that the Applicant was accompanied by his support person, Ms Melanie Merrett (Ms Merrett). The role of a support person was explained to both the Applicant and Ms Merrett. During the first day of the hearing the Applicant’s support person provided constant guidance to the Applicant with regard to submissions to make, questions to ask, and evidence to put before the Commission. There were notable pauses throughout the day as both Ms Merrett and the Applicant considered the questions they wanted to ask.

[20] The hearing was set down for one day but ran over time. Before the conclusion of the first day both parties were asked about their availability regarding a further day. Both parties agreed to reconvene the following morning at 9:00am on Wednesday, 13 September 2017.

[21] On the night of Tuesday, 12 September 2017, my Chambers received an email at 10:22pm concerning Ms Merrett’s lack of availability to attend on Wednesday, 13 September 2017.

[22] When the hearing commenced on the second day the parties were invited to make submissions concerning the Applicant’s request for the hearing to be vacated and the second day to be set down at an alternative time due to Ms Merrett’s absence.

[23] The Applicant submitted that Ms Merrett was unavailable as she was working on a contract basis. Having just returned from a two week holiday, being sick post-holiday, and in light of the Applicant’s financial situation, the Applicant and Ms Merrett could not afford to lose Ms Merrett’s pay.

[24] Counsel for the Applicant objected to the date of Thursday, 14 September 2017, being vacated and the matter being relisted. Counsel submitted that Ms Merrett had been in the room on Tuesday, 12 September 2017, when the day was listed and unless there was a strong explanation as to why she would not have known that she was meant to be working on the Wednesday, when the date and time was agreed by the Applicant, it would not be appropriate for the matter to be postponed.

[25] The Applicant was asked when Ms Merrett became aware of the work opportunity. He stated ‘To work? Well, she’s on – she’s in the closing stages of the contractual work’. 5 While time was provided for the Applicant to extend on his submission, he did not. No reasonable explanation was provided to justify vacating the listing for Wednesday, 13 September 2017.

[26] Having considered what was required for the second day of the hearing namely for the Applicant to provide his evidence, and on that point he had come prepared with a witness statement and annexures, that he would be cross-examined and then an opportunity would arise for re-examination, I formed the view that Ms Merrett would provide minimal assistance to him in any event.

[27] Further, having consulted with the parties it was determined that while closing submissions would be made at the hearing, both parties could provide written submissions allowing the Applicant to obtain assistance from Ms Merrett if he so wished. There were no objections to this proposal.

Background

[28] The Respondent operates a flooring business. At the time of the Applicant’s dismissal it employed six people including the Applicant, Mr Ken McPherson, Bookkeeper (Mr McPherson), an Office Assistant, two tradespeople and Mr Shane Barrett, Director/Owner of the Respondent (Mr Barrett).

[29] Both parties accepted that the Respondent was a small business employer as that term is understood in s.23 the Act. There was no evidence to suggest that there were associated entities of the Respondent.

[30] According to the Respondent, the Applicant was covered by the Commercial Sales Award 2010 (the Award). The Applicant did not object to this point.

[31] At the time of his dismissal the Applicant received remuneration of $2,135.25 (gross) per week, use of a motor vehicle and payment of mobile phone expenses.

[32] Mr Barrett and the Applicant had been friends for approximately 20 years and had a working relationship for nearly 10 years.

[33] For a period of the Applicant’s employment he ran the Respondent business while Mr Barrett was overseas. Mr Barrett returned on occasions during this period and personnel were engaged to assist with sales from time to time. From the evidence it would seem that the discussion or one of several discussions, regarding the Applicant running the Respondent business, occurred at the Inglewood Hotel.

[34] Mr Barrett gave evidence that due to the Applicant assuming the additional responsibility of running the business he increased the Applicant’s remuneration. The Applicant disputes that the remuneration increase occurred at this time.

[35] For a period of 8 months in or around 2013-2014, Mr Barrett said that the Respondent business engaged a business coach. It was identified that a turnover of $280,000 per month was required to keep the business above water and $300,000 per month was required to make the business profitable. The Applicant confirms he was in attendance for the most part at these meetings but would not accept that sales targets had been set, or if they had, they were subject to change at the whim of the Mr Barrett.

[36] By January 2015, the Respondent business faced a downturn and Mr Barrett returned from overseas to assume management. The Applicant resumed the position of Sales Representative with no change in his remuneration.

[37] Mr Barrett said that in the later part of 2016 and in early 2017 he held discussions with Mr McPherson and the Applicant informing them if sales targets were not achieved they could not run. These discussions were purported to have occurred every week during the period of 2017. The Applicant disputes this was the case and further gives evidence that he did not know about the Respondent business’ downturn or particular sales targets.

[38] There were concerns about the performance of the Applicant, which Mr Barrett says he addressed in a meeting on 11 January 2017.

[39] The Applicant held the view that on 11 January 2017 there was a disagreement between him and Mr Barrett. The Applicant left the disagreement to take some time out and returned to work that same day with the belief that he and Mr Barrett would reconcile as they had done previously. The Applicant disputes that performance concerns were raised with him.

[40] On 12 January 2017, the Respondent offered the Applicant a new employment contract (Contract). Under the Contract the Applicant’s remuneration remained unchanged albeit there was a clause that provided for access to commission. The Applicant gave evidence that he considered the contract was detrimental and it was given to him as punishment for the disagreement. The evidence of Mr Barrett was that he was trying to formalise the business processes. The Applicant refused to sign the Contract and the terms and conditions of the Applicant’s employment remained unchanged.

[41] On 16 January 2017, Mr McPherson sent an email to the Applicant titled ‘Working Relations’. 6 Mr Barrett was copied to the email. The email set out a sales target of $150,000 a month and outlined concerns about the Applicant’s conduct. In addition, it listed the Applicant’s ‘thoughts’. The email concludes ‘this year is set to be our best yet, but we need to get past problems off our back. Than [sic] move forward as a team’.

[42] After some questioning, the evidence of the Applicant was that it was not clarified whether the target of $150,000 was his sales target. 7 He provided further evidence that the target referred to in the email titled ‘Working Relations’ had not been agreed upon.8

[43] Mr Barrett expressed that over several months in 2017 he had emphasised to the Applicant the poor financial position of the business and the importance of meeting sales targets. Mr Barrett further provided that while the business target was set at $300,000 per month he had set a business goal of $400,000 per month to catch up on sales and get the business into surplus.

[44] When the Applicant was questioned about Mr Barrett setting sales targets in cross examination he was evasive stating ‘Well, like I said before, he would increase things off a whim off his own bat, as [sic] he’s seen fit’. 9

[45] By email dated 24 January 2017, the Applicant replied to Mr McPherson’s email dated 16 January 2017. 10 The Applicant apologised for the disagreement he had with Mr Barrett on 11 January 2017 and confirmed that he did not accept the Contract. The Applicant further noted that subsequent to his discussion with Mr McPherson he believed he would receive a reply from Mr Barrett and that they would meet in a café to discuss how all could move forward together in a fair and agreeable manner.

[46] On 15 May 2017, Mr Barrett says that he met with the Applicant to discuss the financial predicament of the Respondent business. At the meeting Mr Barrett says he discussed with the Applicant that he just wanted him to do his job so he could keep him but advised that he could not continue to pay the salary with the sales that were being made. The Applicant denies that any such discussion took place on 15 May 2017.

[47] The Applicant disputes that Mr Barrett informed him of the business down turn before the meeting on 15 May 2017 or at the meeting.

[48] On 20 May 2017, Mr McPherson emailed the Applicant about a meeting scheduled for 22 May 2017 in which there would be discussions of a business restructure. 11 Attached to the email was a letter titled ‘Potential Redundancy’.12 Mr Barrett sent a text to the Applicant similarly outlining a request to formally meet to discuss the Applicant’s position.

[49] The Applicant replied to Mr Barrett’s text message noting that he had a medical issue and would be seeing a specialist on either 22 May 2017 or 23 May 2017. 13 Mr Barrett offered to meet the Applicant at his house on the weekend of 20 May 2017 to enable the Applicant’s support person to be present. The Applicant declined this offer. Mr Barrett sent a text ‘I need to do things Monday it’s making feel sick as it is, The meeting sorry I can come to your place after if she would like to talk to me’. 14

[50] Mr Barrett emailed the Applicant on 22 May 2017 and via letter dated 22 May 2017 instructed him to attend a final consultation meeting set for 24 May 2017. 15 It was noted that Employsure would be present at the meeting to support/facilitate and to ensure procedural fairness. The Applicant was informed he could bring a support person to the meeting.

[51] On the way to meeting on 24 May 2017, the Applicant received a text message from Mr Barrett changing the location of the meeting to a coffee shop. 16 It was noted that the meeting would be between the two of them.17 In response to Mr Barrett’s text message the Applicant sent an emoticon of thumbs up.18 Mr Barrett gave evidence that he wanted the meeting to be a personal thing with just him and the Applicant as it had been in the past. The Applicant asserted that he was denied having a support person present and thought it unusual to have such a meeting in a coffee shop.

[52] Mr Barrett’s account of the meeting on 24 May 2017 differs from that of the Applicant. Mr Barrett said he discussed with the Applicant his inability to maintain the Applicant in the position he was in due to the business downturn. He explored with the Applicant the potential of creating a new sales position that would attract a retainer of $40,000 and commission of 5-8% on sales in excess of $150,000. 19 The Applicant would retain the company vehicle and the Respondent business would continue to pay mobile phone bills.20

[53] At the meeting the Applicant was given the opportunity to come back to Mr Barrett with something he was happy with by 26 May 2017. 21 Mr Barrett voiced that the Applicant said he would obtain advice on the proposal and broached that an independent contractor arrangement may assist him financially. For the remainder of the week the two continued to work together.

[54] The Applicant’s account of the meeting on 24 May 2017 was that he was informed his position was no longer available and he was receiving a redundancy. According to the Applicant there was really no indication why the redundancy was occurring. The Applicant acknowledged that in the last 4-5 months since the dismissal had occurred he had processed a lot of information so the actual discussion of what was said he could not recall. 22

[55] When questioned on whether he had broached with Mr Barrett an independent contractor arrangement around the time of 24 May 2017 the Applicant stated ‘I can’t recall’ 23 and qualified that comment with ‘There were lots of discussions over the years about…’.24 The Applicant says there was a discussion about an independent contractor arrangement at some time, or times, during his employment with Mr Barrett but it was not in May 2017 or April 2017.

[56] Mr Barrett did not receive a proposal from the Applicant by 26 May 2017. The Applicant received a letter dated 22 May 2017 from Mr Barrett informing him that his position was redundant effective 26 May 2017 and entitlements were outlined which included 4 weeks payment in lieu of notice. 25

[57] There appears to be some confusion concerning the notice period. While the letter of 26 May 2017 set out payment would be made in lieu of notice Mr Barrett gave evidence that he understood that the notice period would be worked. The Applicant confirmed that he attended work on 29 May and 30 May 2017, but the purpose of such attendance was to meet with Mr Barrett only and not to perform work. When asked what else he did on 30 May 2017 he could not recall. 26 After a disagreement with Mr Barrett on 30 May 2017 the Applicant left the Respondent business and was unresponsive to all calls and emails.

[58] Mr McPherson sent a further letter to the Applicant dated 4 June 2016. 27 The letter reconfirmed the redundancy on 26 May 2017, requested the return of the Respondent’s motor vehicle and mobile phone and set out revised entitlements. It had become apparent to the Respondent that the Applicant would not work out his notice period.

[59] By email dated 7 June 2017 a further letter was sent to Mr Barrett confirming the redundancy on 26 May 2017 and providing ‘you were required to work out your notice period of four weeks. However, you ceased working on 30 May 2017. As such, we will deduct from your final pay an amount equivalent to the unworked notice’. 28

[60] Since the Applicant’s dismissal, Mr Barrett says he has primarily assumed the responsibilities and duties of the Sales Representative position with Mr McPherson assisting at times with sales on the shop floor. No Sales Representatives had been employed or otherwise engaged since Mr Barrett’s dismissal.

Protection from Unfair Dismissal

[61] Section 394(1) of the Act provides that a person who has been dismissed may apply to the Commission for an order under Division 4 of Part 3-2 of the Act granting a remedy for unfair dismissal.

[62] An order for reinstatement or compensation may only be issued where the Commission is satisfied the applicant was protected from unfair dismissal at the time of the dismissal.

[63] A dismissal is unfair if the Commission is satisfied, on the evidence before it, that all of the circumstances set out at s.385 of the Act existed. Section 385 provides the following:

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.

[64] Section 396 of the Act provides that, before considering the merits of an application for unfair dismissal remedy order, the Commission must determine some other initial matters. Section 396 is as follows:

396 Initial matters to be considered before merits

The FWC must decide the following matters relation to an application for an order under Division 4 before considering the merits of the application:

(a) whether the application was made within the period required in subsection 394(2);

(b) whether the person was protected from unfair dismissal;

(c) whether the dismissal was consistent with the Small Business

Fair Dismissal Code;

(d) whether the dismissal was a case of genuine redundancy.

[65] The effect of s. 396 of the Act is that if a dismissal was a case of genuine redundancy, the Commission does not need to consider whether it is satisfied the dismissal was harsh, unjust or unreasonable.

[66] A person has not been unfairly dismissed where the dismissal is consistent with the Small Business Fair Dismissal Code (Code). The Code is only relevant if the employer is a small business. 29 I am satisfied the Respondent is.

[67] However, the Code does not apply to dismissals in circumstances of redundancy. 30

[68] It is not in dispute that the Applicant made his application for an unfair dismissal remedy within the period required in s.394(2) of the Act and that the Applicant is a person protected from unfair dismissal.

Genuine redundancy

[69] The Respondent bears the evidential burden concerning its objections. It submits the Commission should dismiss the Application because the dismissal was by way of genuine redundancy. The term ‘genuine redundancy’ is defined in s.389 of the Act in the following terms:

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.

[70] Section 385(d) of the Act provides that if I am satisfied that the dismissal was a genuine redundancy then it cannot be an unfair dismissal.

No longer requires the person’s job to be performed

[71] To be satisfied the dismissal was a case of genuine redundancy, the Commission must be satisfied the role of Sales Representative was no longer required to be performed by anyone because of operational changes to the Respondent. 31

[72] The Act does not define the term ‘operational requirements’. It is a broad term that permits consideration of many matters including the state of the market in which the business operates and the application of good management to the business. 32

[73] Some examples of changes in operational requirements include a downturn in trade that reduces the number of employees required and the employer restructuring the business to improve efficiency, including the redistribution of tasks done by a particular person between several other employees, thus resulting in the person’s job no longer existing. 33

[74] An employee may still be genuinely made redundant when there are aspects of the employee duties still being performed by other employees. 34 In Kekeris v A. Hartrodt Australia Pty Ltd T/A A. Hartrodt 35, Senior Deputy President Hamberger found:

When one looks at the specific duties performed by the applicant prior to her termination they have much in common with those of the two positions in the new structure. The test is not however whether the duties survive. Paragraph 1548 of the Explanatory Memorandum makes clear that it can still be a ‘genuine redundancy’ where the duties of the previous job persist but are redistributed to other positions. The test is whether the job performed by the applicant still exists.  36

[75] It should be noted it is the ‘job’ that is no longer required to be performed, rather than the ‘duties’. 37

[76] The onus is on the employer to prove that, on the balance of probabilities, the redundancy was due to changes in operational requirements. 38 

Consultation

[77] The Explanatory Memorandum to the Fair Work Bill 2008 (Cth)states the following in respect of consultation in s.389 of the Act:

1550. Paragraph 389(1)(b) provides that it will not be a case of genuine redundancy if an employer does not comply with any relevant obligation in a modern award or enterprise agreement to consult about the redundancy. This does not impose an absolute obligation on an employer to consult about the redundancy but requires the employer to fulfil obligations under an award or agreement if the dismissal is to be considered a genuine redundancy.

[78] If an employer is obliged to consult and fails to do so there cannot be a genuine redundancy. 39

[79] Consultations should be meaningful and should be engaged in before an irreversible decision to terminate has been made. 40

[80] Consultation is not perfunctory advice on what is about to happen, consultation is providing the individual, or other relevant persons, with a bona fide opportunity to influence the decision maker. 41

[81] The Award provides:

8.1 Consultation regarding major workplace change

(a) Employer to notify

(i) Where an employer has made a definite decision to introduce major changes in production, program, organisation, structure or technology that are likely to have significant effects on employees, the employer must notify the employees who may be affected by the proposed changes and their representatives, if any.

(ii) Significant effects include termination of employment; major changes in the composition, operation or size of the employer’s workforce or in the skills required; the elimination or diminution of job opportunities, promotion opportunities or job tenure; the alteration of hours of work; the need for retraining or transfer of employees to other work or locations; and the restructuring of jobs. Provided that where this award makes provision for alteration of any of these matters an alteration is deemed not to have significant effect.

(b) Employer to discuss change

(i) The employer must discuss with the employees affected and their representatives, if any, the introduction of the changes referred to in clause 8.1(a), the effects the changes are likely to have on employees and measures to avert or mitigate the adverse effects of such changes on employees and must give prompt consideration to matters raised by the employees and/or their representatives in relation to the changes.

(ii) The discussions must commence as early as practicable after a definite decision has been made by the employer to make the changes referred to in clause 8.1(a).

(iii) For the purposes of such discussion, the employer must provide in writing to the employees concerned and their representatives, if any, all relevant information about the changes including the nature of the changes proposed, the expected effects of the changes on employees and any other matters likely to affect employees provided that no employer is required to disclose confidential information the disclosure of which would be contrary to the employer’s interests.

Redeployment

[82] A dismissal is not a case of genuine redundancy if it would have been reasonable in all circumstances for the person to be redeployed within the employer’s enterprise, or within the enterprise of an associated entity of the employer.

[83] The consideration of the reasonableness of redeployment involves an examination of the actions taken by the employer to redeploy the employee and the actions of the employee, their conduct and approach to the redeployment.

[84] The Explanatory Memorandum to the Fair Work Bill at paragraph 1552 provides:

1552. There may be many reasons why it would not be reasonable for a person to be redeployed. For instance, the employer could be a small business employer where there is no opportunity for redeployment or there may be no positions available for which the employee has suitable qualifications or experience.

1553. Whether a dismissal is a genuine redundancy does not go to the process for selecting individual employees for redundancy. However, if the reason a person is selected for redundancy is one of the prohibited reasons covered by the general protections in Part 3-1 then the person will be able to bring an action under that Part in relation to the dismissal.

[85] The decision in Ulan Coal Mines Limited v Honeysett and others 42 dealt extensively with the redeployment obligations set out in s.389(2) of the Act. I have considered the decision of the Full Bench in that matter and in Technical and Further Education Commission TA TAFE NSW v Pykett 43.

Consideration

Sales representative position no longer required

[86] The oral evidence of Mr Barrett was clear regarding the financial pressure the business had been facing and that restructuring of the business was required. Those financial pressures were not new and had been present for the period of FY17. From January 2017 the situation was becoming somewhat dire and Mr Barrett acknowledged that he thought that the business may not survive.

[87] In or around 2014 the Business Coach had informed Mr Barrett that sales of $280,000 per month were required to keep the business turning over and $300,000 per month was required for the Respondent business to be profitable. Mr Barrett gave evidence that he had set a target of $400,000 per month.

[88] Mr Barrett provided evidence that the Applicant was required to bring in $150,000 per month in sales and that target had been clearly communicated verbally and via email. The target was required to keep the Respondent business financially viable and to retain the Applicant in his position.

[89] The Applicant disputes that the $150,000 was an agreed target and that he was required to achieve it. Mr Barrett clearly had authority to set targets and the Applicant’s agreement concerning those targets was not required. Exhibit BM-2 stated ‘Sales targets being met 150k per month needs to be met on an annualized basis’. I am unpersuaded that the Applicant did not know what was required of him concerning the meeting of such targets.

[90] For the period of January 2017 through to April 2017 the Applicant did not meet the sales target and neither did the Respondent business (see Exhibit SB-3). The Applicant was of the view that this information adduced at hearing could have been fabricated and questioned whether it was genuine.

[91] During January 2017 to April 2017, Mr Barrett said he informed Mr McPherson and the Applicant weekly, if not daily, of the importance of achieving the sales targets. Mr Barrett said that he advised the Applicant that he could not continue to pay the salary he was on with the sales the Applicant was making. Mr Barrett gave evidence that he just wanted the Applicant to do his job so he could keep him.

[92] Mr Barrett provided two profit and loss statements prepared by his Bookkeeper. In the hearing Mr Barrett conceded that he had not checked the accuracy of the 15 May 2015 to 15 May 2016 document. On checking the document he admitted it was inaccurate. As such Exhibit R-7a document titled ‘Profit & Loss Chelsea Flooring Pty Ltd 1 July 2015 to 30 June 2016’ was tendered as a correct statement of the relevant period. In addition, Exhibit SB-6 ‘Profit & Loss Chelsea Flooring Pty Ltd 1 July 2016 to 30 June 2017’ was admitted into evidence.

[93] Attention was drawn by the Applicant to the veracity of the profit and loss statements given in Mr Barrett’s evidence he had said he had not checked them before filing and they had been prepared by his Bookkeeper. Further, the Applicant questioned whether it could be accepted that they were actually the profit and loss statements of the Respondent business.

[94] It is important that Mr Barrett’s evidence constitute more than unadorned assertions. I accept the sworn evidence of Mr Barrett concerning the financial pressures of the Respondent business and that that Exhibit SB-3, Exhibit SB-6 and Exhibit R-7 are authentic. In all the circumstances I am persuaded that while unsophisticated documents Exhibit SB-3, Exhibit SB-6 and Exhibit R-7 functionally show the business sales of the Respondent business and the Applicant’s contribution to those sales, and the profit and loss status of the Respondent business for the stated periods.

[95] The down turn in trade, particularly that of the sales achieved by the Applicant had reduced the number of Sales Representative required. I accept the evidence of Mr Barrett who provided a cogent account that on making the Applicant’s position redundant, he predominately assumed the duties and responsibilities and was assisted by Mr Mcpherson who would attend some sales on the shop floor.

[96] It is very clear from the evidence that the redundancy of the Sales Representative role was part of a considered review of the Respondent’s business and an attempt to position the Respondent business to continue. The Applicant did not accept the Respondent business was under financial pressure. The gist of the Applicant’s submission was that the relationship between him and Mr Barrett had soured to the extent that Mr Barrett no longer wanted him there. However, the evidence and material before the Commission would suggest otherwise. I am satisfied that the redundancy was not manufactured as a ruse or device done for the purpose of trying to get rid of the Applicant.

[97] I am satisfied that the Respondent has proven on the balance of probabilities that the redundancy was due to operational requirements.

Consultation

[98] Mr Barrett said that he met with the Applicant on 15 May 2017 to discuss with the Applicant that his position was at risk. The Applicant disputes this. From the evidence it is unclear whether a meeting took place on this date but it is accepted that a letter was emailed to the Applicant on 20 May 2017 titled ‘Potential Redundancy’. 44

[99] The letter set out that a meeting would take place on 22 May 2017 at 10.30am. The Applicant informed Mr Barrett that he may be unable to meet on 22 May 2017 due to medical reasons and asked that the date be rescheduled to enable his partner and support person to be present.

[100] There were a series of text messages during the course of 20 May 2017:

11:27

Hi Brock tried to call, would like to have a formal meeting regarding your position on Monday at 10:30am, I sent you a e/mail too Cheers

14:08
Yeah I’ll be there unless I have to go back to the hospital….

Also if I’m going to have you and Ken there I would like my own representative in Mel so I would prefer to reschedule a time that she can be there as well. Now depending on which day specialist available. After what the dr’s told me last night sorting out my ear problem is my priority at the moment.”

No problem I will drop in to you on Monday then to talk, hope you get some sleep

If i can’t get into see specialist on Monday I’ll be at work otherwise will def be Tuesday to see them.

Either way if you are in pain you better off not being at work,, speak Monday morning.

15:52

I need to do thins Monday it’s making feel sick as it is, The meeting sorry I can come to your place after if she would like to talk to me

17:17

Would you like me to come to your…

[101] On 22 May 2017 the Applicant received an email from Mr Barrett with a letter attached titled ‘Invitation to final redundancy meeting’. The meeting was scheduled for 9.00am at the offices of the Respondent business on 24 May 2017.

[102] On Wednesday, 24 May 2017 at 8.47am the Applicant received from Mr Barrett the following text:

Morning meet me at the same coffee shop, would rather talk just you and me 9am.

[103] The Applicant replied to the 24 May 2017 text with an emoticon text thumbs up.

[104] I accept the evidence of the Applicant that he was informed in the meeting that his position had become redundant. The Applicant’s recollection of remainder of the meeting is at best vague. Where there is a difference in the accounts of that of the Applicant and Mr Barrett concerning the meeting, the evidence of Mr Barrett is preferred.

[105] Mr Barrett said that he had moved the meeting to the café as he just wanted it to be between him and the Applicant. It had been submitted by Counsel of the Respondent that past meetings involving employment matters between Mr Barrett and the Applicant had occurred in more informal settings such as the pub.

[106] It is accepted that there was a twenty year relationship between the Applicant and Mr Barrett. Therefore, Mr Barrett’s account that it was an emotional and personal thing for him appears credible. It likewise provides adequate explanation concerning why Mr Barrett decided to move the meeting to the coffee shop and only have him and the Applicant present.

[107] At the meeting on 24 May 2017, Mr Barrett gave evidence that he explained to the Applicant that he couldn’t continue to pay the Applicant on his current remuneration and was making the position redundant. He discussed with the Applicant creating a new position with a significantly different salary structure and noted that he was happy to work something out.

[108] According to Mr Barrett there was no other position in which to place the Applicant and the creation of a new position was a last ditch effort to find a way to keep the Applicant in the business. Mr Barrett asked the Applicant to consider the proposal and come back to him by 26 May 2017. Mr Barrett had formed the view that the Applicant and he were going to work it out with the Applicant accepting the proposal.

[109] The Applicant did not respond to the proposal and made no other proposals by 26 May 2017. On receiving no response from the Applicant, on 26 May 2017 the Respondent sent the Applicant an email attaching a letter titled ‘Confirmation of Redundancy’ in which it is stated that the redundancy was effective 26 May 2017.

[110] I am satisfied on the evidence that Mr Barrett commenced discussions as early as practicable after making a definite decision about the redundancy of the Sales Representative position. Understandably, a delay occurred regarding the timing of the first meeting on 22 May 2017 due to the ill health of the Applicant.

[111] Having reviewed the text messages, correspondence and discussion between the Applicant and Mr Barrett, I am of the view that the meeting between the Applicant and Mr Barrett on 24 May 2017 was consensual.

[112] The consultation engaged in was meaningful and occurred before the Applicant’s dismissal on 26 May 2017. The Applicant was notified of the change, its effect and a measure to avert the adverse effects on 24 May 2017. Further, Mr Barrett actively sought the view of the Applicant on how the adverse effect could be mitigated. There was a bona fide opportunity for the Applicant to influence Mr Barrett and voice an alternative proposal to that suggested by Mr Barrett.

[113] There was no evidence before me that the opportunity the Respondent gave to the Applicant to provide any further information between 24 May 2017 and 26 May 2017 was disingenuous, or that alternative proposals that may have been put forward by the Applicant would be dismissed or discounted automatically.

[114] In light of contextual circumstances I am satisfied that the consultation was compliant with clause 8 of the Award notwithstanding there were two days between notification of the redundancy and the dismissal. 45

Redeployment

[115] It was clear on the evidence that there were no positions in which to redeploy the Applicant and the creation of the new commission based sales representative position was an attempt by Mr Barrett to retain the Applicant in the business. I accept that Mr Barrett and Mr McPherson have, since the Applicant’s dismissal, assumed the duties and responsibilities of the sales representative position.

[116] Section 389(2) of the Act sets out that it will not be a case of genuine redundancy if it would have been reasonable in all the circumstances for the person to be redeployed within the employer’s enterprise, or within the enterprise of an associated entity of the employer. I am satisfied on the evidence that at the time of dismissal it would not have been reasonable in all the circumstances for the Applicant to be redeployed within the Respondent business or that of an associated entity.

Credibility of witness

[117] There was confusion caused because of errors regarding dates on letters and reference in the letters to meetings not held 46. I consider there is a plausible explanation for such errors. As a small business the Respondent had engaged the services of an external provider to provide guidance and support concerning the process. The Respondent business had relied upon the documentation provided by the external provider without amending the documentation to reflect changed circumstances.

[118] While I am unimpressed by the Respondent business’ lack of attentiveness to the dates and meeting references in the letters of 20 May 2017 and 22 May 2017, I am not satisfied that these errors impact the credibility of Mr Barrett’s evidence. I remain of the view that the evidence of Mr Barrett represents a truthful and accurate version of events and prefer it over that provided by the Applicant concerning reasons for the redundancy, the consultation that took place and whether redeployment would have been reasonable in all the circumstances.

Notice period

[119] However, the Applicant understandably has some consternation that the notice period was not paid in lieu.

[120] The Respondent is of the view that the Applicant was instructed to work out the notice period despite the letter of 22 May 2017 (which was provided on 26 May 2017 to the Applicant) advising that the notice would be paid in lieu. The Respondent draws upon the Applicant’s attendance at work on 29 May and 30 May 2017 to show that the Applicant had started to work out the notice period until such point as there was a disagreement.

[121] The Respondent has purported to having provided two conflicting instructions regarding the notice period. One instruction in writing that provides notice will be paid in lieu and one purported to have been provided verbally that requires the Applicant to work out the notice period. A subsequent letter was sent to the Applicant on 4 June 2017. The letter of 4 June 2016 was silent regarding payment in lieu of notice or that given the Applicant purportedly had opted not to work the notice period, payment would not be made in this respect.

[122] A letter sent to the Applicant via email dated 7 June 2017 provides that because the Applicant ceased working on 30 May 2017 a deduction would be made from his final pay in an amount equivalent to the unworked notice.

[123] The Applicant’s evidence about the meeting on 24 May 2017 was unclear with regard to what was discussed except that his position was redundant and he would be receiving a redundancy. The Applicant acknowledged that since the dismissal he had processed a lot of information so the actual discussion of what was said he could not recall. 47

[124] Conveying what can be considered ‘bad’ news in a dismissal meeting may result in heightened emotions for both employer and employee. It is probably more the case for the employee who is the recipient of the ‘bad’ news. It is therefore unsurprising that an employee may depart a dismissal meeting and recall little of the content with the exception that they have lost their job. This may go some way to providing a plausible explanation concerning the Applicant’s vague recollection of what was discussed in the meeting on 24 May 2017.

[125] It is incumbent on the employer to ensure written communication provided to the employee concerning the dismissal, employee entitlements and obligations is provided in a timely manner, and is accurate and consistent with any verbal instruction.

[126] I consider Applicant’s explanation that he had presented to work to attempt to meet with Mr Barrett believable. It may also have been the case that Mr Barrett provided a verbal instruction to work out the notice period.

[127] I have not found that the Applicant was dismissed without notice of termination being provided. However, it remains the case that at the time of hearing the Respondent had not paid the Applicant in lieu of notice, save two days, given it considered the notice period was not worked in circumstances where it considered the Applicant obliged to do so. Neither of the parties have contended that there had been serious misconduct and I am satisfied the evidence does not in itself indicate that the dismissal was by way of a summary dismissal.

[128] I have found that the dismissal of the Applicant was by way of genuine redundancy and therefore the application for relief from unfair dismissal is dismissed. An order dismissing the application will be issued concurrently. Given my finding it is unnecessary to consider whether the dismissal was consistent with the Code.

DEPUTY PRESIDENT

Appearances:

B. McDonald on his own behalf.

A. Talbert of Sparke Helmore Lawyers for the Respondent.

Hearing details:

2017.

Perth:

September 12, 13.

Final written submissions:

Applicant, 18 September 2017.

Respondent, 18 September 2017.

 1   [2015] FWC 2105.

 2   Jeanette McKinnon v Sue Blakey T/A Eventide Homes [2013] FWC 4751 [25].

 3   Kimiko Schneider v Republic Theatres Darwin Pty Ltd T/A CMAX Cinema [2017] FWC 610 [10].

 4   Allen v Fluor Construction Services Pty Ltd(2014) 240 IR 254 [48].

 5   Transcript PN14.

 6   Exhibit A1 – BM3.

 7   Transcript PN166.

 8   Transcript PN148.

 9   Transcript PN160.

 10   Exhibit A1 – BM3.

 11   Exhibit R4.

 12   Ibid.

 13   Exhibit SBTC-1.

 14   Ibid..

 15   Exhibit A1 – PRL-2.

 16   Exhibit SBTC-1.

 17   Ibid.

 18   Ibid.

 19   Exhibit R2 para 14.

 20   Ibid.

 21   Exhibit R2 para 15.

 22   Transcript PN251.

 23   Transcript PN226 and PN227.

 24   Transcript PN228.

 25   Exhibit A1 – RL-1.

 26   Transcript PN285-294.

 27   Exhibit A1 – RL-2.

 28   Exhibit A1 – RL-3.

 29 Section 23 Fair Work Act 2009 (Cth).

 30   Kristina Iannello v Motor Solutions Australia Pty[2010] FWA 3125 para [13]; Josef Nalevansky v Thought Equity Motion Inc[2010] FWA 3707 [11] –[16]; Mr Raymond Schroder v Identity One[2012] FWA 9490 [4].

 31 Section 389(1)(a) Fair Work Act 2009 (Cth).

 32   Nettlefold v Kym Smoker Pty Ltd (1996) 69 IR 370, 373.

 33   Explanatory Memorandum, Fair Work Bill 2008 (Cth) [1548].

 34   Dibb v Commissioner of Taxation (2004) 136 FCR 388, 404-405.

 35   Kekeris v A. Hartrodt Australia Pty Ltd T/A A.Hartrodt[2010] FWA 674.

 36   Ibid., [27]

 37   Ulan Coal Mines Ltd v Howarth, (2010) 196 IR 32, [17].

 38   Keiselbach v Amity Group Pty Ltd (unreported, AIRC, Hamilton DP, 9 October 2006) PR973864, [34].

 39   See also UES (Int’l) Pty Ltd v Harvey (2012) 215 IR 263.

 40   Construction, Forestry, Mining and Energy Union v Newcastle Wallsend Coal Company (1998) 88 IR 202.

 41   Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Vodaphone Network Pty Ltd PR911257 [25].

 42 (2010) 196 IR 32.

 43 (2014) 240 IR 130.

 44   Exhibit R4.

 45   Ventyx Pty Ltd v Mr Paul Murray[2014] FWCFB 2143 [58] – [62].

 46   Exhibit R-4 and Exhibit R5.

 47   Transcript PN251.

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