Cameron Hardy v SME Commercial Finance Pty Ltd

[2020] FWC 4060

[2020] FWC 4060

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Cameron Hardy
v
SME Commercial Finance Pty Ltd
(U2020/5127)

COMMISSIONER BISSETT MELBOURNE, 4 AUGUST 2020

Application for an unfair dismissal remedy – jurisdictional objection - genuine redundancy – jurisdictional objection upheld - application under s.394 dismissed.

[1] Mr Cameron Hardy (Applicant) has made an application to the Fair Work Commission seeking relief from unfair dismissal. The Applicant was employed by SME Commercial Finance Pty Ltd (Respondent) as a mortgage broker. His employment was covered by the Banking, Finance and Insurance Award 2020 1.

[2] The Applicant’s employment was terminated by way of redundancy on 2 April 2020. The Applicant claims that his dismissal was unfair. The Respondent submits that the dismissal was a case of genuine redundancy.

[3] The application was heard by video link on 30 April 2020. It was conducted by way of determinative conference by agreement with the parties.

[4] Section 396 of the Fair Work Act 2009 (FW Act) sets out the matters that must be considered prior to the merits of an application. It states that:

396 Initial matters to be considered before merits

The FWC must decide the following matters relating 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.

[5] The Respondent claims that the dismissal was a genuine redundancy.

[6] The Respondent is also a small business such that it may be necessary for me to determine if the Small Business Fair Dismissal Code applies.

[7] I will deal with the genuine redundancy question first. Only if I find the dismissal was not a genuine redundancy will I need to consider if the Small Business Fair Dismissal Code applies.

GENUINE REDUNDANCY

[8] Section 389 of the FW Act sets out those grounds of which a dismissal may be a genuine redundancy for the purposes of Part 3-2 of the FW Act. Section 389 of the FW Act states 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.

[9] I will consider each of these matters as is relevant in this case.

Evidence and submissions

[10] Mr Neil McKay is the Chief Executive Officer of the Respondent. He gave evidence that, in the initial stages of the COVID-19 pandemic the management team of the Respondent met to consider its financial position. He said they considered the Respondent’s cash position, debt repayments and future income. On 26 March 2020, having gathered the relevant financial information, the Respondent determined that it could not afford to carry the staff it had and decided that it would be required to lose one position.

[11] Pending a decision and, in light of the situation, the Respondent determined to stand down the Applicant. Mr McKay said he tried to contact the Applicant by phone but could not reach him so he advised the Applicant of his stand down by email on 27 March 2020. Mr McKay said that the Applicant was paid fortnightly, a week in arrears and a week in advance, and had just been paid so that the stand down that came into effect on 27 March 2020 was with pay. On the stand down the Applicant’s access to certain credit systems was removed, apparently as required by the relevant regulator.

[12] Over the following week Mr McKay said he had several conversations with the Applicant, some by phone and some via text message. He said that the Applicant did ask by text if he could be made redundant but he no longer had that text message.

[13] Mr McKay said there were discussions internally of alternative roles for the Applicant but none could be identified.

[14] Mr McKay said the Respondent had advertised a position of Credit Analyst – Sales Support Officer on 2 June 2020 but this was well after the redundancy of the Applicant and that, in any event, it had determined not to fill the position because of the financial situation of the Respondent. The vacancy was caused by the departure of a Credit Analyst on short notice.

[15] The Applicant submits that, on 26 March 2020 he received an email advising that he had been stood down. The Applicant has a compromised immune system and was working from home at the time. He said that he contacted Mr McKay and questioned why he had been stood down. He said he told Mr McKay that the Respondent could not stand him down just because there was a down turn in business.

[16] The Applicant said that he was not offered any alternative work to the stand down.

[17] The Applicant stated that, in his discussions with Mr McKay he concluded that the Respondent was not going to move from its position, so he asked if there was any chance of a redundancy. The Applicant agreed that he had a number of conversations about keeping his job but said they went nowhere.

[18] The Applicant does not agree that the operational needs of the business have changed and said that he did not consider that the business could operate on reduced staffing.

[19] The Applicant said that the position of Credit Analyst was advertised by the Respondent the day following the unsuccessful conciliation of his application in the Commission.

[20] The Applicant also said that he did not believe he had been paid the correct notice period on his dismissal. He said that he had been stood down with pay on 27 March 2020 and that he had been paid until 2 April 2020. He was dismissed on 2 April 2020 and says he should have received two weeks’ pay in lieu of notice. Instead, he said that he was only paid one weeks’ pay. The Respondent said the Applicant had been paid for the week he had been stood down and this offset one weeks’ pay in lieu of notice.

[21] Mr Michael Evans is the Accountant (by contract) for the Respondent. He filed a statement in which he provided an income report for the Respondent demonstrating the decline in revenue from January 2020 to April 2020. He said that this information was provided to management of the Respondent to enable them to make decisions in relation to the business.

[22] The Applicant had no comment on the financial information provided by Mr Evans although he said he believed the Respondent had traded while insolvent – a matter Mr McKay vehemently denied.

[23] I would observe that there does appear to be an anomaly in the payment in lieu of notice made to the Applicant if, as Mr McKay said, the Applicant had been stood down with pay. If that is the case, the Applicant would appear only to have been paid 1 weeks’ pay in lieu of notice. This is not a matter for the Commission to determine but something the Respondent should clarify with the Applicant.

Operational requirements of the business (s.389(1)(a))

[24] I am satisfied that there was a drying up of the “pipeline of transactions” for the Respondent and that this was caused (at least in part) by the effect of COVID-19. This affected the operational requirements of the business such that it no longer required the same number of employees as before. In these circumstances the Respondent determined that it should make an employee redundant.

[25] It is noteworthy that the Respondent has also determined not to fill the vacant Credit Analyst position because of “the uncertainty of the ongoing COVID-19 situation and the impact of that on new business”. I accept that this function is now performed by Mr McKay.

[26] I would observe that the Applicant’s comments with respect to the status of the Respondent when trading were made without any evidence and I give them no credence.

[27] I am therefore satisfied that the Respondent no longer required the Applicant’s job to be performed by anyone because of changes in the operational requirements of the business. That the Applicant does not think the business can be effective with the reduced staff levels is not a matter I need to consider. It is up to the Respondent to determine what staffing it considers is necessary for its business. All I need to determine is if the Applicant’s job is no longer required and that is due to changed operational requirements. The requirements of s.389(1)(a) of the FW Act have therefore been met.

Consultation obligations (s.389(1)(b))

[28] Both parties agree that the Applicant’s role is covered by the Banking, Finance and Insurance Award 2020.

[29] Whilst the finalisation of the decision to dismiss the Applicant commenced as a discussion on stand down, the Applicant accepts that the issue of his future employment was discussed the week prior to his dismissal. As he said, he engaged in “every conversation” about saving his job with no satisfactory outcome.

[30] Whilst the discussions over the week prior to the dismissal of the Applicant were not called “consultation” as might often be expected in such a circumstance, I am satisfied that the content of the discussions with the Applicant was in relation to the decision to reduce staff at the Respondent and his future with the business.

[31] It is well established that the method of selection of the person to be made redundant is not a matter for the Commission to consider in determining if the redundancy was genuine. The Explanatory Memorandum to the Fair Work Bill clearly states that “Whether a dismissal is a genuine redundancy does not go to the process for selecting individual employees for redundancy.” 2 To the extent the conversation with the Applicant went to this matter or that it is put as a relevant consideration to me, it is not matter I should take into account.

[32] I am satisfied that there was appropriate discussion with the Applicant prior to the finalisation of the decision to dismiss him.

[33] I am therefore satisfied that the requirements of s.389(1)(b) have been met.

Was redeployment reasonable?

[34] The position the Applicant says he could have been redeployed into was not advertised until some 9 weeks after he was dismissed. In any event, the Respondent determined not to fill the position.

[35] Whilst it may have been reasonable for the Applicant to be redeployed into a nominated position, that the position of Credit Analyst was not advertised as vacant at the time of his dismissal means that it was not available for him to be redeployed into at that time. That it has not been filled supports a conclusion that it was not available for redeployment even if that could have occurred weeks after the redundancy.

[36] Mr McKay said that, in any event, even if the position was available the Applicant did not have the skills necessary to do the job. For the reasons given I do not need to determine this question.

[37] The Applicant identified no other positions he could have been redeployed into. I am therefore satisfied that it was not reasonable in all of the circumstances to redeploy the Applicant within the Respondent’s business.

Conclusion

[38] For all of these reasons I am satisfied that the dismissal of the Applicant was a genuine redundancy.

[39] Section 385 of the FW Act details when a person has been unfairly dismissed. It states that:

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.

[40] In circumstances where the dismissal was a genuine redundancy Mr Hardy cannot have been unfairly dismissed. His application must therefore be dismissed. An order 3 to this effect will be issued at the same time as this decision.

COMMISSIONER

Appearances:

C. Hardy on his own behalf.

N. McKay for SME Finance Group Pty Ltd.

Hearing details:

2020.
Melbourne by video:
July 30.

Printed by authority of the Commonwealth Government Printer

<PR721504>

 1   MA000019.

 2   Paragraph 1553.

 3   PR721528.