Caitlin Drinkwater v The Trustee for the Joel and Bec Scott Family Trust and the Trustee for the Mark and Natalie Ramsay Family Trust T/A Frankies at Forde
[2020] FWC 4769
•6 OCTOBER 2020
| [2020] FWC 4769 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Caitlin Drinkwater
v
The Trustee for the Joel and Bec Scott Family Trust and the Trustee for the Mark and Natalie Ramsay Family Trust T/A Frankies at Forde
(U2020/6194)
DEPUTY PRESIDENT DEAN | SYDNEY, 6 OCTOBER 2020 |
Application for an unfair dismissal remedy – Small Business Fair Dismissal Code – whether genuine redundancy – dismissal not unfair.
[1] On 5 May 2020 Ms Caitlin Drinkwater made an application pursuant to s.394 of the Fair Work Act 2009 for an unfair dismissal remedy with respect to the termination of her employment by The Trustee for the Joel and Bec Scott Family Trust and the Trustee for the Mark and Natalie Ramsay Family Trust T/A Frankies at Forde (Frankies). Frankies is a café located in Forde, ACT.
[2] Frankies objects to the application and contends that Ms Drinkwater’s dismissal was consistent with the Small Business Dismissal Code (the Code) and a genuine redundancy.
[3] The application was heard by video on 11 August 2020. At the hearing Ms Drinkwater was represented by her father, Mr Bradley Drinkwater and Frankies was represented by its owner, Mr Mark Ramsay. Oral evidence was given by Ms Drinkwater and her mother, Mrs Catherine Drinkwater, and by Mr Ramsay.
[4] For the reasons set out below, I find that the dismissal of Ms Drinkwater was not unfair, and accordingly her application is dismissed.
Background
[5] Ms Drinkwater is a 16 year old full time student. She commenced employment with Frankies in December 2017 as a dishhand and later worked as a waitress.
[6] Due to the impact on the business caused by COVID-19, Ms Drinkwater was stood down from 24 March 2020. Notwithstanding the stand down, she worked on 28 March and 3 April.
[7] On 15 April 2020 Ms Drinkwater and a fellow employee, Ms Widdeson, met with Mr Ramsay to enquire about being nominated for the Jobkeeper payment. Mr Ramsay expressed his belief at the meeting that they were not eligible for the payment because of their age.
[8] Two meetings, held on 17 and 22 April 2020, subsequently occurred between Ms Drinkwater, her parents and Mr Ramsay. Discussions at the meetings centred on Ms Drinkwater’s potential dismissal and issues pertaining to the Jobkeeper Scheme and Ms Drinkwater’s eligibility for the JobKeeper payment.
[9] There is no dispute that Mr Ramsay indicated at the meetings that he could not afford to pay the JobKeeper payments at the time since the employer will not be reimbursed until May 2020.
[10] Ms Drinkwater was advised of her dismissal at the meeting on 22 April 2020.
Evidence and Submissions
Ms Drinkwater
[11] Ms Drinkwater claims that her dismissal was not a genuine redundancy and that she was unfairly dismissed.
[12] She gave evidence that at the meeting on 15 April 2020 Mr Ramsay said to her that he could not pay the Jobkeeper payments upfront and would have to terminate all causal employees.
[13] Ms Drinkwater said that she became aware that Ms Widdeson and her parents also met with Mr Ramsay about the JobKeeper scheme and she was given the option to “rescind her claim for JobKeeper payment” rather than be dismissed.
[14] She said that despite Frankie’s business being affected by COVID-19, she continued to work shifts at Mr Ramsay’s request until she started to enquire about receiving JobKeeper payments. It was also after she raised this issue that she was advised on 16 April that she was not required to work the rostered shift the following day.
[15] Ms Drinkwater said that at the meeting on 22 April 2020, Mr Ramsay stated that he resented the implications made by her that he was not looking after his staff by not approaching his bank for the purpose of taking out a loan to cover the upfront Jobkeeper payments. Mr Ramsay also said to her that ‘there is no way you can work here after all this has happened’.
[16] In cross examination Ms Drinkwater was asked if she was told at these meetings that her dismissal would be for financial reasons and said:
“Mr Ramsay told me that because of the downturn that Frankies was facing during the pandemic and because of issues paying the JobKeeper payment up front that he wouldn't be able to afford to pay all of his eligible employees up front, so he said that because of that I would have to get terminated. However, because to our knowledge I was the only one who was terminated over this and because everybody had the option to rescind their claim to the JobKeeper payment and hence they wouldn't provide any financial strain on Frankies they didn't get fired, and because I would have rescinded my claim given that opportunity that everyone else had is why I believe that I was fired not for financial reasons, even though that is what Mr Ramsay said.” 1
[17] Ms Drinkwater claimed that she was treated differently from other casual employees and believed that she was the only employee who was not given the option to rescind the claim for JobKeeper payment rather than being terminated.
[18] The evidence of Mrs Drinkwater supported the evidence given by her daughter as to the matters discussed at the two meetings.
[19] It was submitted on behalf of Ms Drinkwater that her dismissal was not a genuine redundancy but because she exercised her workplace right in enquiring about her entitlement to JobKeeper payments. Mr Ramsay’s decision to dismiss her was because she challenged his assertions that she was not entitled to the JobKeeper payments. It was submitted that Ms Drinkwater could have remained stood down which would not have resulted in any financial cost to Frankies and by refusing to do so it proved that the termination was ‘due to spite’ rather than a genuine redundancy.
Frankies
[20] Mr Ramsay argued that Ms Drinkwater’s dismissal was a case of genuine redundancy.
[21] Mr Ramsay gave evidence that Frankies’ business was impacted by the COVID-19 pandemic which caused a substantial downturn. Mr Ramsay produced financial records showing an over 40% decrease of turnover in April and May 2020 from the same period in 2019.
[22] Mr Ramsay gave evidence that due to the severe business downturn, Ms Drinkwater’s casual employment was no longer required and that the dismissal was consistent with the Code. Mr Ramsay confirmed that apart from Ms Drinkwater, two other employees were also dismissed. 2
[23] Mr Ramsay believed he had followed the requirements of the Code, and Ms Drinkwater’s position (along with the other two employees) were not required by the business.
Consideration
[24] Section 385 of the Act, set out below, defines what is an unfair dismissal.
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.”
Small Business Fair Dismissal Code
[25] The Code is set out below:
Summary Dismissal
It is fair for an employer to dismiss an employee without notice or warning when the employer believes on reasonable grounds that the employee’s conduct is sufficiently serious to justify immediate dismissal. Serious misconduct includes theft, fraud, violence and serious breaches of occupational health and safety procedures. For a dismissal to be deemed fair it is sufficient, though not essential, that an allegation of theft, fraud or violence be reported to the police. Of course, the employer must have reasonable grounds for making the report.
Other Dismissal
In other cases, the small business employer must give the employee a reason why he or she is at risk of being dismissed. The reason must be a valid reason based on the employee’s conduct or capacity to do the job.
The employee must be warned verbally or preferably in writing, that he or she risks being dismissed if there is no improvement. The small business employer must provide the employee with an opportunity to respond to the warning and give the employee a reasonable chance to rectify the problem, having regard to the employee’s response. Rectifying the problem might involve the employer providing additional training and ensuring the employee knows the employer’s job expectations.
Procedural Matters
In discussions with an employee in circumstances where dismissal is possible, the employee can have another person present to assist. However, the other person cannot be a lawyer acting in a professional capacity.
A small business employer will be required to provide evidence of compliance with the Code if the employee makes a claim for unfair dismissal to Fair Work Australia, including evidence that a warning has been given (except in cases of summary dismissal). Evidence may include a completed checklist, copies of written warning(s), a statement of termination or signed witness statements.”
[26] There is no dispute that Frankies is a small business employer.
[27] The Code deals with summary dismissal on the ground of serious misconduct and other dismissal on the basis of the employee’s conduct or capacity to do the job. The Commission has previously found that the Code does not deal with termination on the ground of redundancy. 3
[28] In the present case, Frankies claims that Ms Drinkwater’s dismissal was a case of genuine redundancy and did not relate to her conduct or capacity to do the job.
[29] Accordingly, I am satisfied and find that the Code does not apply to the dismissal and cannot form a basis for the jurisdictional objection.
[30] I now turn to consider whether the dismissal was a genuine redundancy.
Genuine redundancy
[31] The term ‘genuine redundancy’ is defined in s.389 of the Act:
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.
[32] There is no reason to doubt that Frankies was adversely impacted by the COVID-19 pandemic. I accept the evidence of Mr Ramsay that the business had experienced a substantial downturn. On that basis, I am satisfied that the requirement under s.389(1)(a) is met.
[33] In its F3 Employer’s Response, Frankies stated that Ms Drinkwater’s employment was covered by the Restaurant Industry Award 2020 (the Award). Clause 32 of the Award provides:
32. Consultation about major workplace change
32.1 If an employer makes a definite decision to make major changes in production, program, organisation, structure or technology that are likely to have significant effects on employees, the employer must:
(a) give notice of the changes to all employees who may be affected by them and their representatives (if any); and
(b) discuss with affected employees and their representatives (if any):
(i) the introduction of the changes; and
(ii) their likely effect on employees; and
(iii) measures to avoid or reduce the adverse effects of the changes on employees; and
(c) commence discussions as soon as practicable after a definite decision has been made.
32.2 For the purposes of the discussion under clause 32.1(b), the employer must give in writing to the affected employees and their representatives (if any) all relevant information about the changes including:
(a) their nature; and
(b) their expected effect on employees; and
(c) any other matters likely to affect employees.
32.3 Clause 32.2 does not require an employer to disclose any confidential information if its disclosure would be contrary to the employer’s interests.
32.4 The employer must promptly consider any matters raised by the employees or their representatives about the changes in the course of the discussion under clause 32.1(b).
32.5 In clause 32 significant effects, on employees, includes any of the following:
(a) termination of employment; or
(b) major changes in the composition, operation or size of the employer’s workforce or in the skills required; or
(c) loss of, or reduction in, job or promotion opportunities; or
(d) loss of, or reduction in, job tenure; or
(e) alteration of hours of work; or
(f) the need for employees to be retrained or transferred to other work or locations; or
(g) job restructuring.
32.6 Where this award makes provision for alteration of any of the matters defined at clause 32.5, such alteration is taken not to have significant effect.
[34] The evidence is clear that there were two meetings in which discussions were held between the parties as to the possible dismissal of Ms Drinkwater for financial reasons related to COVID-19 and its effect on the business. However, there is no evidence that Mr Ramsay provided the information required by clause 32.2 in writing to Ms Drinkwater.
[35] Accordingly, Frankies has not met the consultation requirements of the Award. It follows that I am not satisfied that the redundancy was a genuine redundancy as defined in s.389 of the Act, and I must therefore consider whether the dismissal was unfair.
Was the dismissal unfair?
[36] I am satisfied that Ms Drinkwater was dismissed, that Small Business Fair Dismissal Code does not apply and that her dismissal was not a case of genuine redundancy. Her dismissal will be unfair if it was harsh, unjust or unreasonable.
[37] Section 387 of the Act provides that, in considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the Commission 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.
[38] The ambit of the conduct which may fall within the phrase ‘harsh, unjust or unreasonable’ was explained in Byrne v Australian Airlines Ltd4as follows:
‘... It may be that the termination is harsh but not unjust or unreasonable, unjust but not harsh or unreasonable, or unreasonable but not harsh or unjust. In many cases the concepts will overlap. Thus, the one termination of employment may be unjust because the employee was not guilty of the misconduct on which the employer acted, may be unreasonable because it was decided upon inferences which could not reasonably have been drawn from the material before the employer, and may be harsh in its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct in respect of which the employer acted.’
[39] I am required to consider each of these criteria, to the extent they are relevant to the factual circumstances before me.5
Valid reason - s.387(a)
[40] In order to be a valid reason, the reason for the dismissal should be “sound, defensible or well founded”6 and should not be “capricious, fanciful, spiteful or prejudiced.”7 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.8
[41] Having considered all of the evidence, I am satisfied that there was a valid reason for Ms Drinkwater’s dismissal. That is, Frankies suffered a significant downturn in business as a result of COVID-19.
[42] I am also satisfied that Ms Drinkwater was not dismissed because she exercised a workplace right as she contended.
[43] There was clearly a dispute as to whether Ms Drinkwater was eligible for JobKeeper, given her age and that she was not financially independent. Mr Ramsay provided a copy of a JobKeeper information sheet dated 25 April 2020, issued by the Australian Government, which included the following as to eligibility:
“You will not be eligible for the JobKeeper Payment if you were under 16 at 1 March 2020 or are a full-time student, 17 years old and younger, and you are not financially independent.”
[44] Conversely, Ms Drinkwater provided a copy of a document produced by the Australian Tax Office, dated 7 May 2020, stating that “… if you were 16 or 17 you can also qualify for fortnights before 11 May 2020, and continue to qualify after that if you are independent or not undertaking full time study”.
[45] While it is unnecessary for me to decide whether or not Ms Drinkwater was eligible for the JobKeeper payments, it is abundantly clear that the information available at that time surrounding the eligibility for 16 year olds was inconsistent and confusing, and this contributed significantly to the dispute between the parties.
[46] I accept the evidence of Mr Ramsay that there were two casual employees in addition to Ms Drinkwater who were dismissed around the same time as Ms Drinkwater and were not replaced. Accordingly, I accept she was not ‘singled out’.
[47] I do consider that Ms Drinkwater may well have been chosen as one of the three who were dismissed given the friction that arose between the parties as a result of the dispute about her eligibility for the JobKeeper payment. In particular, it seems clear that Mr Ramsay found her comments around his unwillingness to take out a bank loan to pay staff to be offensive.
[48] In this regard, Mr Drinkwater in his closing submissions said the following:
“When we first had the meeting, Caitlin pushed and asked, ‘Why aren't you seeking financial institution assistance for putting people on JobKeeper?’ This was based on what the Prime Minister and the Treasurer had pushed very widely on the news, and Mr Ramsay had said, ‘That's not how we do business.’ As we've mentioned in the statements, Mr Ramsay took this as affront and said, ‘I don't have to do any of this. I don't see why I have to. I'm doing all I can for my employees.’"
Caitlin quite rightly pointed out and said, ‘Well, you're not even trying to approach a bank or anything like that, so what’ - you know, ‘are you really doing all that you could?’ Was this out of line? I don't know, but Mr Ramsay has obviously taken it to heart.
Now, the point is, there might have been personality conflicts, but to come down and say that she's being dismissed for purely economic reasons is just simply not the case, and to say at the end of it, and I quote, he had lost respect for her and her family, that's not an economic reason for dismissing anyone. Whilst he might have had a dispute with myself and my wife, still that's no reason to take it out on a 16-year-old girl”. 9
[49] It is understandable, in my view, that Mr Ramsay may have been offended by Ms Drinkwater’s comments regarding his decision not to take out a bank loan to pay staff, and the implication that he was not properly taking care of his staff. In my view, Ms Drinkwater’s expectations in this regard were completely unreasonable in the circumstances of a global pandemic and the widespread shut down of many businesses.
[50] In summary, I accept there was a valid reason for Ms Drinkwater’s dismissal relating to the significant downturn in business resulting from COVID-19, and that she was one of three who were dismissed for that reason.
Notification of the valid reason and opportunity to respond - s.387(b) and (c)
[51] Notification of a valid reason for termination must be given to an employee protected from unfair dismissal before the decision is made,10 in explicit terms11 and in plain and clear terms.12 In Crozier v Palazzo Corporation Pty Ltd13 a Full Bench of the Australian Industrial Relations Commission dealing with similar provision of the Workplace Relations Act 1996 stated the following:
“[73] As a matter of logic procedural fairness would require that an employee be notified of a valid reason for their termination before any decision is taken to terminate their employment in order to provide them with an opportunity to respond to the reason identified. Section 170(3)(b) and (c) would have very little (if any) practical effect if it was sufficient to notify employees and give them an opportunity to respond after a decision had been taken to terminate their employment. Much like shutting the stable door after the horse has bolted.”14
[52] An employee protected from unfair dismissal must also be provided with an opportunity to respond to any reason for dismissal relating to the conduct or capacity of the person. Such requirement will be satisfied where the employee is aware of the precise nature of the employer’s concern about his or her conduct or performance and has a full opportunity to respond to this concern.15 This criterion is to be applied in a common sense way to ensure the employee is treated fairly and should not be burdened with formality.16
[53] Given the discussions that took place between the parties in the two meetings outlined earlier, I am satisfied that Ms Drinkwater was advised of the reason for her dismissal before it took effect and she was given an opportunity to respond to it.
Unreasonable refusal by the employer to allow a support person - s.387(d)
[54] Ms Drinkwater was accompanied by her parents in the two meetings held with Mr Ramsay.
Warnings regarding unsatisfactory performance - s.387(e)
[55] There is no suggestion that Ms Drinkwater was dismissed for unsatisfactory performance and so this criterion is not relevant.
Impact of the size of the Respondent on procedures followed (s.387(f)), and the absence of dedicated human resources management specialist/expertise on procedures followed (s.387(g))
[56] Frankies is a small café, and I consider that its size and the absence of dedicated human resource expertise may have impacted on the procedures followed by it in effecting the dismissal.
Other relevant matters - s.387(h)
[57] Section 387(h) of the Act provides the Commission with a broad scope to consider any other matters it considers relevant.
[58] I do not consider there are other matters that require consideration under this subsection.
Conclusion
[59] Having considered each of the matters specified in s.387 of the Act and for the reasons set out above, I am satisfied that the dismissal of Ms Drinkwater was for a valid reason, and was not otherwise harsh, unjust or unreasonable.
[60] Accordingly, her application for an unfair dismissal remedy is dismissed. An order to that effect will issue with this decision.
DEPUTY PRESIDENT
Appearances:
B Drinkwater for Caitlin Drinkwater.
M Ramsay for The Trustee for the Joel and Bec Scott Family Trust and the Trustee for the Mark and Natalie Ramsay Family Trust T/A Frankies at Forde.
Hearing details:
2020.
Sydney (By video):
August 11.
Printed by authority of the Commonwealth Government Printer
<PR722550>
1 Transcript PN144.
2 Transcript PN112.
3 See Iannello v Motor Solutions Australia Pty Ltd[2010] FWA 3125.
4 (1995) 185 CLR 410 at 465 per McHugh and Gummow JJ.
5 Sayer v Melsteel Pty Ltd[2011] FWAFB 7498, [14]; Smith v Moore Paragon Australia Ltd PR915674 (AIRCFB, Ross VP, Lacy SDP, Simmonds C, 21 March 2002), [69].
6 Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371, 373.
7 Ibid.
8 Walton v Mermaid Dry Cleaners Pty Ltd (1996) 142 ALR 681, 685.
9 Transcript PN204-206.
10 Chubb Security Australia Pty Ltd v Thomas Print S2679 at [41].
11 Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137, 151.
12 Previsic v Australian Quarantine Inspection Services Print Q3730.
13 (2000) 98 IR 137.
14 Ibid at 151.
15 Gibson v Bosmac Pty Ltd (1995) 60 IR 1, 7.
16 RMIT v Asher (2010) 194 IR 1, 14-15.
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