Cardy, Tamica v Local Trades Specialists Group Pty Ltd
[2018] FWC 2034
•30 APRIL 2018
| [2018] FWC 2034 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Cardy, Tamica
v
Local Trades Specialists Group Pty Ltd
(U2017/13413)
DEPUTY PRESIDENT BEAUMONT | PERTH, 30 APRIL 2018 |
Application for an unfair dismissal remedy – small business employer – jurisdictional objection – genuine redundancy.
[1] On 17 December 2017, Ms Tamica Cardy (Ms Cardy) made an application to the Fair Work Commission (the Commission) for a remedy in respect of her dismissal from Local Trades Specialists Group Pty Ltd T/A Local Trades (Local Trades) (the Application).
[2] Local Trades had informed Ms Cardy that the financial position of the business had necessitated making her position redundant and her employment would end on 5 December 2017. It filed an Employer Response, Statement of Evidence and Outline of Argument in the proceedings but did not attend the hearing.
[3] The Employer Response was filed 71 days outside of the directions that had been issued on 19 December 2017. The Employer Response, Statement of Evidence, Outline of Argument and any material that Local Trades wanted to rely upon was provided to Chambers on 8 March 2018, 2 days outside of the directions that had been issued on 24 January 2018 and only after Chambers prompted the Respondent to file such material.
[4] Following an unsuccessful conciliation of the matter on Wednesday 14 March 2018, four days before the hearing, the Respondent requested an adjournment. Having been provided with short notice concerning the request for an adjournment, and having not been provided with a reasonable justification to warrant the granting of the same, the Commission proceeded to hear the matter.
[5] It is noted that the Respondent was phoned multiple times and contacted by e-mail on 15 and 16 March 2018 to elicit reasons why the adjournment should be granted at such short notice. My Chambers left numerous voicemails and outlined that the Deputy President was not satisfied with the level of response provided in the adjournment request, and if a plausible explanation was not forthcoming the hearing would proceed. In the correspondence from Chambers the Respondent was reminded that it had been aware of the hearing date for some six weeks and was reminded of the hearing date in a subsequent Notice of Listing some 15 days earlier. No response from the Respondent was received.
[6] The Employer Response outlined that Local Trades objected to the Application on the basis that it was a small business employer and the dismissal was consistent with the Small Business Fair Dismissal Code (Code). In contrast, Ms Cardy advanced an argument that the redundancy of her position was not genuine because she was replaced by a person who assumed the duties and responsibilities of her position and had been newly introduced to the business.
[7] In the circumstance of this matter the Small Business Fair Dismissal Code objection was not made out by the Respondent and the dismissal of the Applicant was not by way of genuine redundancy. The Parties are directed to file any written submission regarding Division 4 of the Fair Work Act 2009 (Cth) (the Act) within seven days from the date of this decision, the relevant sections of which are provided. The matter will then be listed for a telephone hearing regarding remedy.
Background
[8] Ms Cardy commenced work on a full-time basis with Local Trades on 24 October 2016 as Account Manager and Customer Support (support role). According to the Employer Response it was said that Local Trades had four employees.
[9] Ms Cardy worked from home and was responsible for overseeing the publication of various brochures that advertised tradespersons and services. As the intermediary to connect customers with tradespersons, she was awarded commission when customers were retained through the renewal of contracts with Local Trades or where tradespersons issued monetary vouchers of $500 per month.
[10] Ms Cardy’s hourly base rate was $30.3644 1 and she received 2% commission on all customer contract renewals2.
[11] On 20 November 2017, Mr Altintas, Local Business Success Partner, informed Ms Cardy by email that he wanted to have a meeting with her at his house at 1100hrs on 21 November 2017 3. The email dated 20 November 2017 time stamped 1:40pm set out:
Hi Tamica
Can you meet me at my place tomorrow at 11am or sometime after 3pm?
Thanks
Kind Regards
Tuna Altintas
Local Business Success Partner 4
[12] Having asked what was the purpose of the meeting, Ms Cardy was informed:
Hi Tamica
It is regarding to the company’s position & the position of support role.
I will pencil in 11am tomorrow.
See you then.
Thanks
Tuna 5
[13] Ms Cardy said that she met with Mr Altintas on 21 November 2017 at his home and at that meeting was advised that her position was being made redundant and an email would be sent stating her final day of employment 6. In his Statement of Evidence that was signed and filed with the Commission on 8 March 2017, Mr Altintas confirmed that he notified Ms Cardy of her dismissal on 21 November 2017 and that it took effect on 5 December 2017.
[14] Ms Cardy’s evidence was that she was not advised of any options regarding redeployment into other roles within the business, or a reduction in hours in her current role to be able to retain her employment 7.
[15] Mr Altintas emailed Ms Cardy on 23 November 2017 informing her that her final day of employment would be 5 December 2017 8:
Hi Tamica
As discussed this Tuesday (21st), the full time support role has been made redundant due to financial & operational struggles of the company.
Your final day at work will be Tuesday the 5th December 2017.
I will get Sue to calculate the payable amount for you and send it through.
Be in touch.
Kind Regards,
Tuna Altintas
Local Business Success Partner 9
[16] Mr Altintas’ Statement of Evidence stated that:
The company was in a financial struggle and she was made aware of it as being the reason for her dismissal.
The company didn’t employ anyone else to take her position.
[17] Ms Cardy said that on 5 December 2017, she received an email from the email address ‘Accounts Local Trades’ that was addressed to ‘Lise’ 10. The email had been sent to the ‘Support’ email address, an email address that was her ‘work email address’11. The email read:
Hi Lise
Here’s a few to start with – will go through and find any others that might need attention
Please give me a call if you want to discuss any of these before ringing them.
Tuna – are the same TV ads continuing?? Shouldn’t Finesse plastering come out of the TV ads?
…. 12
[18] The email dated 5 December 2017 from Accounts Local Trades then proceeded to outline various commercial arrangements for advertising, vouchers, leads and payment arrangements 13.
[19] Later in the day on 5 December 2017, Ms Cardy said that Mr Altintas instructed her to send out an email to clients advising of her departure and the commencement of Lise 14. Ms Cardy confirmed that she complied with the instruction and subsequently an email was sent to a list of clients the content of which was polite in tone.
[20] Ms Cardy gave evidence that throughout her employment with Local Trades there were no performance or misconduct issues raised. The material filed with the Commission by Local Trades similarly makes no mention of performance or misconduct issues.
[21] Local Trades filed with the Commission a document titled ‘Profit and Loss Local Trades Specialist Group Pty Ltd For the 6 months ended 31 December 2017 Cash Basis’ (Profit and Loss Document). This document set out that net loss for Local Trades was $57,225.
Submissions of the Applicant
[22] Ms Cardy says she was informed that her position was made redundant due to the financial and operational circumstances of the company. Consequently, Mr Altintas advised her that her position was unable to be sustained; no one would assume her role and Mr Altintas and Ms Jessica Comber (another staff member of Local Trades) (Ms Comber) would be sharing the responsibility of her role. Ms Cardy said her case was one of an unfair dismissal because Mr Altintas and Ms Comber would be sharing the responsibilities of her role.
[23] Further, to this she contended that she was replaced by a new staff member who was to commence on 6 December 2017 and would be employed for the roles and responsibilities of the support role she had once occupied.
Submissions of the Respondent
[24] In the Employer Response, the short point submitted by Local Trades was that the Commission should dismiss the Application because the dismissal was consistent with the Small Business Fair Dismissal Code.
[25] It then expanded upon its objection by stating that Ms Cardy was dismissed due to a business downturn and financial difficulties. It acknowledged that the position of Ms Cardy was filled by someone else but qualified it by the following comment:
… The employee argues that her role was filled by someone else, however, she needs to realise that the person is not an employee. The new person is a contractor of the cost of the new person is nowhere near the cost of employing a full-time position 15.
[26] The Respondent advanced that the new person in the support role was a contractor and that the cost of the contractor was nowhere near the cost of employing a full-time person. The reason cited for the dismissal was ‘downturn in the business of financial difficulty’.
Matters in dispute
[27] Ms Cardy has contended that her dismissal was not by way of genuine redundancy and that she was simply replaced by another employee.
[28] Contrary to Ms Cardy’s submission, it would appear that Local Trades considers that the dismissal was not unfair on the basis that it complied with the Code.
[29] In the Employer Response, Local Trades marked that it was a small business and the dismissal was consistent with the Code. However, when outlining why it objected on the ground of compliance with the Code it stated in the Employer Response:
The employee was dismissed due to a business downturn and financial difficulties.
…
Our business is losing money and struggling to keep up with its creditors. So the decision of dismissal was a genuine case of trying to survive in the business.
[30] Local Trades did not mark on the Employer Response that the dismissal was a case of genuine redundancy. However, having reviewed all content of the Employer Response and the other materials submitted, including the email dated 23 November 2017 from Mr Altintas to Ms Cardy 16, it is evident that the Respondent, who was self-represented, considered it dismissed Ms Cardy by way of a redundancy.
[31] For this reason and having observed that genuine redundancy is not broached in the Code, I have decided to first consider the initial matter of ss.385(d) and ss.396(d).
Protection from Unfair Dismissal
[32] 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.
[33] 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.
[34] Section 396 of the Act provides that before considering the merits of an application for an 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.
[35] 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.
[36] It is not in dispute that Ms Cardy made her application for an unfair dismissal remedy within the period required in ss.394(2) of the Act and that she is a person protected from unfair dismissal.
[37] The Respondent bears the evidential burden concerning its objections.
Genuine redundancy
[38] 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.
[39] 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. There are various factors to consider when arriving at a decision on whether the redundancy is a genuine redundancy. They are subsequently traversed.
No longer requires the person’s job to be performed
[40] To be satisfied the dismissal was a case of genuine redundancy, the Commission must be satisfied the support role was no longer required to be performed by anyone because of operational changes to the Respondent 17.
[41] 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 18.
[42] 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 19.
[43] An employee may still be genuinely made redundant when there are aspects of the employee duties still being performed by other employees 20. In Kekeris v A. Hartrodt Australia Pty Ltd T/A A. Hartrodt 21, 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. 22
[44] It should be noted it is the ‘job’ that is no longer required to be performed, rather than the ‘duties’ 23. The onus rests with the employer to prove that, on the balance of probabilities, the redundancy was due to changes in operational requirements24.
Consultation
[45] 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.
[46] If an employer is obliged to consult and fails to do so it is said that there cannot be a genuine redundancy 25. Consultations should be meaningful and should be engaged in before an irreversible decision to terminate has been made26.
[47] 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 27.
[48] I consider that the Clerks - Private Sector Award 2010 (Award)covers Ms Cardy and it relevantly 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
[49] 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.
[50] 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.
[51] 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.
[52] The decision in Ulan Coal Mines Limited v Honeysett and others 28 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 Pykett29.
Consideration
[53] Members of the Commission are bound to act ‘judicially’ in the sense that they are obliged to respect and apply traditional notions of procedural fairness and impartiality 30. Although the Commission is to proceed without unnecessary technicality and as informally as the circumstances of the case permit31.
[54] Ms Cardy, from the filing of her Application to the date of hearing complied with the directions of the Commission, and presented to hearing prepared to advance her case.
[55] Mr Altintas was cautioned that in the absence of providing reasons for his request for an adjournment at such late stage in the proceedings, an adjournment would not be granted and the matter would proceed to hearing. Regrettably, Mr Altintas was not forthcoming with a satisfactory reason for the late adjournment request and the hearing proceeded.
[56] As a consequence of Mr Altintas’ absence at hearing the Respondent’s material before the Commission is both untested and unsworn. It is therefore the case that the weight to be attributed to untested and unsworn assertions over sworn evidence is less. Mr Altintas was unavailable for cross-examination and his absence in turn meant there was the absence of a contradictor at hearing. I have duly considered these matters when arriving at my findings.
Support role no longer required
[57] There are two related aspects to consider; namely, did Local Trades no longer require the applicant’s job to be performed by anyone and if so, was this because of changes in the operational requirements of Local Trade’s enterprise.
[58] The evidence of Ms Cardy was that Local Trades continued to require the performance of the support role. She advanced that her job was still required.
[59] While Ms Cardy’s evidence was compelling her submission concerning her duties being dispersed to remaining staff members and that therefore rendering her dismissal unfair, was misplaced. It is accepted that a redundancy refers to the job no longer being required, not the duties and responsibilities. An employee may still be genuinely made redundant when there are aspects of the employee duties still being performed by other existing employees, within the business.
[60] In the Employer Response, Mr Altintas clearly outlined that that the new person was a contractor who cost less than employing someone in a full-time position, that Local Trades was on the verge of closing down due to its financial position and that it could not afford to employ Ms Cardy back as a full time employee due to the financial position of the company.
[61] Local Trades contended that it changed the basis upon which the support role work was to be performed such that it no longer needed to have a directly employed support person. Rather, it would rely upon a contractor thereby reducing labour expenses associated with maintaining a full-time position.
[62] Ms Cardy gave evidence that ‘Lise’ had been employed into her role. Mr Altintas filed material that set out the contrary, a contractor had been engaged. I am mindful that the material of Mr Altintas is unsworn and that Ms Cardy has provided no evidence to support her contention that the new staff member ‘Lise’ was an employee. Mr Altintas has similarly filed no material to show that the staff member was a contractor.
[63] Arriving at a finding is not without difficulty given the evidential issues. The reference to having the job no longer performed by anyone must mean by anyone employed by the business. Outsourcing of a function to an independent contracting organisation can in particular circumstances displace an existing employee or employees and give rise to a circumstance of redundancy.
[64] However, the evidential onus rests with Local Trades regarding its objection to the Application. I am not satisfied that Local Trades changed its operational requirements to outsource the support role work in circumstances where before me is only the unsworn material of Mr Altintas that he engaged a contractor. The financial predicament of the business is based on the unsworn assertions of Mr Altintas and a Profit and Loss Document which has been neither explained nor robustly tested.
[65] Ms Cardy asserted that the redundancy was a sham. While I am unable to conclude that this was the case I am nevertheless unable to discern whether the new staff member was a contractor or an employee. Further my understanding of the services that the new staff member was to provide is limited to one email sent on 5 December 2017 32. This email does not illuminate the scope of the services or the basis of the new staff member’s engagement.
[66] It follows that based on the evidence before me, I do not accept that Local Trades no longer required Ms Cardy’s job to be performed by anyone because of the changes in operational requirements of Local Trades.
Consultation
[67] Having found that ss.389(1)(a) of the Act has not been satisfied, I acknowledge that there is perhaps limited value in traversing ss.389(1)(b). However, I observe that based on the evidence of Ms Cardy and the material filed by Local Trades, I am not satisfied that there was consultation as that term is understood under the relevant Part.
[68] From the written evidence it appears there was a perfunctory notification to Ms Cardy that her position was redundant and her employment would end.
[69] At hearing Ms Cardy acknowledged that Mr Altintas gave her the option of commencing as a contractor in February 2018 when informing her of the redundancy of her position and final end date. The proposed contractor position attracted no money unless a sale was made. It was to involve cold calling and appointment setting.
[70] Ms Cardy said that she discussed briefly with Mr Altintas the money side of things regarding the proposed contractor role but it involved quite a reduction in pay and was not a full-time position. Further, because of the time lapse between the conclusion of the support role and the commencement of the contractor position Ms Cardy said that there was no job security. It would be the case that she would be unemployed for a period of at least 1-2 months assuming that the contractor role eventuated. Ms Cardy said that the discussion regarding the contractor role ended quickly.
[71] It is apparent from Ms Cardy’s evidence that when notified of the redundancy the corollary of that, namely dismissal, had already been determined. I am satisfied that there was no discussion regarding her current position with the exception of the redundancy of it and the end date of her employment. While reference was made to a contractor position commencing in February 2018, I am not persuaded based on the evidence before me that such dialogue constituted consultation.
Redeployment
[72] According to the Employer Response Local Trades was said to have had 4 employees. Redeployment does not appear to have been reasonable in all the circumstances although I acknowledge that in the absence of sworn evidence it is difficult to ascertain.
[73] Ms Cardy’s evidence was that there was discussion concerning a contractor position staring in February 2018. However, I am not persuaded that the discussion of the proposed contractor position satisfies the notion of redeployment as that term is understood under Part 3-2. It is the case in any event that a finding is unnecessary given that ss.389(1) has not been satisfied.
Compliance with the Small Business Fair Dismissal Code
[74] A person has not been unfairly dismissed where the dismissal is consistent with the Code. The Code is only relevant if the employer is a small business 33. And, while the Employer Response sets out that Local Trades had four employees at the relevant time it is the case that the Code does not apply to dismissals in circumstances of redundancy34. This is self-evident from the Code’s content which refers specifically to summary dismissal and ‘other dismissal’, which refers only to the employee’s conduct or capacity to the job.
[75] Given the absence of grounds concerning Ms Cardy’s conduct or capacity to do the job, the objection premised on compliance with the Code falls away and my attention turns to s. 387 of the Act.
Whether the dismissal was harsh, unjust or unreasonable
[76] It is the case that the dismissal of Ms Cardy was not by way of genuine redundancy as that term is understood under the Act and that the objection premised on compliance with the Code is not made out. In light of this whether Ms Cardy’s dismissal was unfair will turn on whether it is found to be harsh, unjust or unreasonable.
[77] The Act relevantly provides in this respect the following:
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.
[78] It is clear that s.387 of the Act contemplates that an overall assessment as to the nature of the dismissal must be made by the Commission. In so doing, the Act sets out a number of considerations that must, where relevant, be weighed up in totality.
[79] It is convenient therefore to use the various provisions of s.387, with reference to the relevant circumstances, to outline my consideration of the matter.
Subsection 387(a) - valid reason for the dismissal related to capacity or conduct (including its effect on the safety and welfare of other employees)
[80] When determining if a dismissal was unfair the Commission must take into account whether there was a valid reason for dismissal relating to the employee’s capacity or conduct 35. It is not the case that there must be a valid reason, the legislation simply requires me to take into account whether there was a valid reason for the dismissal related to capacity and conduct.
[81] ‘Valid’ in this context is generally considered to be whether there was a sound, defensible or well-founded reason for the dismissal. The provisions must be applied in a practical, common sense way to ensure that the employer and employee are treated fairly 36.
[82] Where the reason for termination of employment relates to an employee’s capacity or conduct, it is not the Commission’s function to stand in the shoes of the employer and determine whether or not the decision made by the employer was a decision that would be made by the Commission. It is for the Commission to assess whether the employer had a valid reason connected with the employee’s capacity or conduct 37.
[83] It is well understood that ss.387(a) is not limited to simply the capacity or conduct of an employee. Selvachandran v Peteron Plastics Pty Ltd 38(Selvachandran) establishes the applicable formulation of the test for a valid reason. Although the case was decided under a different legislative scheme, whereby the existence of a valid reason was a statutory requirement, the Commission has subsequently applied it to the current legislative formulation in which the existence of a valid reason is one, albeit important, consideration in determining whether a dismissal is harsh, unjust or unreasonable39.
[84] To constitute a valid reason the reason must be valid in the context of the employee’s capacity or conduct or based upon the operational requirements of the employer’s business 40. The section requires the employer’s reason to be valid, and thereby focuses upon the employer and the basis of her or his decision, rather than upon its consequences for the employee. What has to be examined is the validity of the reason, and its connection with the employee’s capacity or conduct or its basis in operational requirements of the employer41.
[85] As observed the dismissal of Ms Cardy appeared to be completely unrelated to her capacity or conduct. The reason given for her dismissal according to Ms Cardy and in the materials of the Local Trades was that Local Trades had made her position redundant due to the financial and operational struggles of the company. It therefore appears that this was a redundancy undertaken in the context of a business in financial difficulty and as such would arguably otherwise be a sound and well founded decision.
[86] However, I am not satisfied that Local Trades changed its operational requirements to outsource the support role work. Before me is unsworn material of Mr Altintas that he engaged a contractor, that the business was under financial stress and there is a Profit and Loss Document was filed, which has not been tested.
[87] I am simply unable to discern whether the new staff member was a contractor or an employee. Further my understanding of the work that the new staff member was to undertake is limited to one email sent on 5 December 2017 42, which fails to illuminate the extent of the services provided, and the submission concerning the operational reasons are merely untested assertions.
[88] In Parmalat Food Products Pty Ltd v Wililo 43 the Full Bench held that the existence of a valid reason is a very important consideration in any unfair dismissal case, the absence of which will almost invariably render the termination unfair.
[89] Having considered the case before and I am not persuaded that there was a valid reason for Ms Cardy’s dismissal in the circumstances of this case.
Subsection 387(b) and (c) – notification of the valid reason and an opportunity to respond
[90] The Commission must take into account whether notification of a valid reason for termination has been given to an employee protected from unfair dismissal before the decision is made 44, and in explicit45, plain and clear terms. It is accepted that this is to be applied in a common sense way to ensure the employee is treated fairly and should not be burdened with formality46.
[91] The evidence shows that while Ms Cardy was notified of the decision to make her position redundant and to dismiss her by way of redundancy 47, the decision to dismiss had been made before Ms Cardy was provided with an opportunity to respond.
Subsection 387(d) – any unreasonable refusal by the respondent to allow a support person
[92] When considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the Commission must take into account any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal.
[93] In the circumstances of this case this would appear to be a neutral factor. Ms Cardy was seemingly unaware that her meeting with Mr Altintas on 21 November 2017 would culminate in her dismissal. However, in his email to Ms Cardy dated 20 November 2017, Mr Altintas explained that the meeting on 23 November 2017 was regarding the company’s position and the position of the support role. It was arguably open for Ms Cardy to request a support person but no such request was forthcoming.
Subsection 387(e) – if the dismissal is related to unsatisfactory performance
[94] This does not arise here for reasons outlined above.
Subsection 387(f)-(g) Impact of the size of the respondent on procedures followed and absence of dedicated human resources management specialist/expertise on procedures followed
[95] When considering whether a dismissal was harsh, unjust or unreasonable, the Commission must take into account the degree to which: (a) the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal; and (b) 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.
[96] The material submitted by Local Trades indicates they are an unsophisticated employer and appear to have a limited number of staff. It is apparent they are absent internal expertise regarding human resource management. I have duly considered this factor in reaching my conclusion.
Other relevant matters – ss.387(h)
[97] Exhibit A7, the final payslip of Ms Cardy, shows that she was paid for 53.20 ordinary hours and her accrued untaken annual leave. However, it is not clear from the payslip that a redundancy payment was forthcoming. Given Ms Cardy’s length of service and observing that Local Trades asserted that it had made the support role redundancy, one would have anticipated a redundancy payment of 4 weeks.
Conclusion on nature of dismissal
[98] There was no valid reason for Ms Cardy’s dismissal accompanied by a failure to afford Ms Cardy procedural fairness as understood by reference to ss.387(b) and (c) of the Act. While I appreciate that Local Trades was a business lacking human resource expertise, I consider that in all the circumstances such the procedural deficits, including the failure to make a redundancy payment, gave rise to unfairness in the particular circumstances of this case. The dismissal was therefore unfair within the meaning of the Act.
[99] Division 4 of the Act sets out the remedies for unfair dismissal. The parties are provided with seven days from the date of this decision to file any written submissions regarding Division 4 of the Act. The parties are provided with relevant sections of the Act for their assistance. The matter will then be listed for a telephone hearing.
DEPUTY PRESIDENT
Appearances:
Miss T Cardy, representing herself as the Applicant.
Hearing details:
2018
March 19
Perth.
1 Exhibit A9.
2 Exhibit A1 Witness Statement of Tamica Cardy
3 Exhibit A5.
4 Ibid.
5 Ibid.
6 Exhibit A1 Witness Statement of Tamica Cardy.
7 Ibid.
8 Exhibit A6.
9 Ibid.
10 Exhibit A1 Witness Statement of Tamica Cardy.
11 Ibid.
12 Exhibit A10.
13 Ibid.
14 Exhibit A11.
15 Employer Response dated 7 March 2018.
16 Exhibit A6.
17 Section 389(1)(a) Fair Work Act 2009 (Cth).
18 Nettlefold v Kym Smoker Pty Ltd (1996) 69 IR 370, 373.
19 Explanatory Memorandum, Fair Work Bill 2008 (Cth) [1548].
20 Dibb v Commissioner of Taxation (2004) 136 FCR 388, 404-405.
21 Kekeris v A. Hartrodt Australia Pty Ltd T/A A.Hartrodt[2010] FWA 674.
22 Ibid [27].
23 Ulan Coal Mines Ltd v Howarth, (2010) 196 IR 32 [17].
24 Keiselbach v Amity Group Pty Ltd (unreported, AIRC, Hamilton DP, 9 October 2006) PR973864 [34].
25 See also UES (Int’l) Pty Ltd v Harvey (2012) 215 IR 263.
26 Construction, Forestry, Mining and Energy Union v Newcastle Wallsend Coal Company (1998) 88 IR 202.
27 Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Vodaphone Network Pty Ltd PR911257 [25].
28 (2010) 196 IR 32.
29 (2014) 240 IR 130.
30 John Holland Pty Ltd T/A John Holland Aviation Services Pty Ltd v Mr Ronaldo Salazar [2014] FWCFB 7813 [20] citing Coal and Allied Mining Services Pty Ltd v Lawler & others (2011) 192 FCR 78 at [25].
31 John Holland Pty Ltd T/A John Holland Aviation Services Pty Ltd v Mr Ronaldo Salazar [2014] FWCFB 7813 [20].
32 Exhibit A6.
33 Section 23 of the Act.
34 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].
35 ss.387(a) of the Act.
36 Ibid as cited in Potter v WorkCover Corporation (2004) 133 IR 458 and endorsed by the Full Bench in Industrial Automation Group Pty Ltd T/A Industrial Automation (2010) 202 IR 17 [36].
37 Walton v Mermaid Dry Cleaners Pty Ltd (1996) 142 ALR 681, 685.
38 (1995) 62 IR 371.
39 Lion Dairy and Drinks Milk Ltd v Norman[2016] FWCFB 4218
40 Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371.
41 Qantas Airways Ltd v Cornwall (1988) 84 FCR 483.
42 Exhibit A10.
43 (2011) 207 IR 243 [24].
44 Trimatic Management Services Pty Ltd v Daniel Bowley[2013] FWCFB 5160; Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137 151.
45 Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137 at 151; Previsic v Australian Quarantine Inspection Services Print Q3730.
46 Royal Melbourne Institute of Technology v Asher (2010) 194 IR 1 14-15.
47 Exhibit A6.
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