[2019] FWC 239

The attached document replaces the document previously issued with the above code on 13 February 2019.

Number sequencing amended at paragraph [60].

Associate to Commissioner Wilson

Dated 13 February 2019

[2019] FWC 239

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Claire Bourdon
v
AR-Rahmaan Investments Pty Ltd T/A The Cheesecake Shop
(U2018/9233)

COMMISSIONER WILSON

MELBOURNE, 13 FEBRUARY 2019

Application for an unfair dismissal remedy.

[1] This decision concerns the merits of Ms Clare Bourdon’s dismissal by AR-Rahmaan Investments Pty Ltd T/A The Cheesecake Shop (The Cheesecake Shop) from the store it operates in Ballarat, under s.394 of the Fair Work Act 2009 (the Act), which was lodged with the Commission on 7 September 2018.

[2] Section 396 of the Fair Work Act 2009 (the Act) requires the determination of four initial matters before consideration of the merits of the application. Two of the matters require determination in this decision; namely, the matter of whether or not the dismissal was a genuine redundancy within the meaning of the Act, and the matter of whether the decision was consistent with the Small Business Dismissal Code.

[3] Neither party put forward that the two remaining initial matters required such consideration. As a result, I find that Ms Bourdon’s application was lodged with the Fair Work Commission within the 21 day period for making such applications and that at the time she was dismissed she was a person protected from unfair dismissal.

[4] Prior to the commencement of proceedings I sought the views of the parties regarding the form which the proceedings should take (s.399) and indicated to them that I considered appropriate for the matter to proceed by way of a Determinative Conference rather than through a more formal hearing process. Neither party objected to my suggestion.

[5] Evidence was led by Ms Bourdon on her own behalf and by Ismail Khan, Managing Director, Yashmin Khan, Store Manager and Zubayr Khan, Assistant Manager for The Cheesecake Shop.

[6] For the reasons set out below, I have found that Ms Bourdon’s termination of employment was not a case of genuine redundancy within the meaning of the Act and that her dismissal was not consistent with the Small Business Dismissal Code. After further consideration, I have found that her dismissal was otherwise unfair, taking in to account the criteria within s.387 of the Act, and that an amount of compensation is to be awarded to Ms Bourdon as the appropriate remedy.

BACKGROUND

[7] Ms Bourdon was employed by The Cheesecake Shop, Ballarat, between 26 November 2016 and 6 September 2018 as a full-time baker, however worked for the previous owners of The Cheesecake Shop for the 12 years preceding that. 1

[8] It is uncontested that at the time of Ms Bourdon’s dismissal that The Cheesecake Shop employed 10 people and is therefore a “small business employer” within the meaning of the Act. 2 At the time of her dismissal, the business employed three full time employees including Ms Bourdon, Ms Yashmin Khan and Christine Hill who decorates cakes, as well as employing seven casual employees who generally undertook front of house duties such as serving customers at the counter.3

[9] Ismail Khan, Managing Director and Owner of The Cheesecake Shop put forward that at or around three months prior to Mr Bourdon’s dismissal that he had had discussions with Ms Bourdon about either working part time three days per week so that he could employ an additional baker two days per week or five days per week which would mean additional duties would likely be added to her responsibilities, neither of which she was amenable to. 4 Then about a month later, two months prior to Ms Bourdon’s dismissal while Ms Bourdon was on intermittent leave and Ms Khan was performing her duties that he undertook consideration of whether Ms Khan could permanently absorb Ms Bourdon’s baking duties and Ms Bourdon’s entire position could be made redundant.5 This consideration was not brought to Ms Bourdon at that time.6 Mr Khan confirms that consultation regarding the redundancy over an extended period of time with Ms Bourdon did not take place.7

[10] On 5 September 2018 Mr Khan puts forth that he approached Ms Bourdon and after taking her to the back office advised that he was considering making her position redundant and asked her “what do you feel about it” 8 advising Ms Bourdon that "I'm sorry that this is the course of action that I would like to take, but I'll let you know tomorrow" being 6 September 2018.

[11] Later that same day after not hearing anything from Ms Bourdon in response to this conversation, when Ms Bourdon returned to The Cheesecake Shop Mr Khan puts forth that he advised Ms Bourdon that he was making her position redundant as Ms Khan would be undertaking her duties in the future as a result of the a restructure of the business. Mr Khan’s evidence is that he sought clarification from the Applicant as to whether she had any questions to which she replied along the line “okay Chief, it’s your call, you are the boss”. 9

[12] Mr Khan puts forth that he prepared Ms Bourdon’s termination letter that night and left it with Ms Khan to distribute while he returned to Brisbane. Mr Khan submits that Ms Khan was then directed to provide the letter to Ms Bourdon and should Ms Bourdon wish to discuss the possibility of her continuing on a part time basis with The Cheesecake Shop to undertake those discussions. 10

[13] Ms Khan supports Mr Khan’s recollection of events and puts forth that once she was given the ‘go ahead’ from Mr Khan she gave Ms Bourdon the letter on 6 September 2018 at around 6:00 PM and said to Ms Bourdon “Look, unfortunately dad has asked me to hand this over to you. This is the redundancy letter. I will try and see what I can do" - obviously try and talk to him to see where we're standing because everything had happened so quickly.” 11

[14] Ms Khan submits that from 6 September 2018 that Ms Bourdon’s baking responsibilities at The Cheesecake Shop had been undertaken by herself, her son Mr Zubayr Khan and a decorator who works three days per week. 12

[15] Mr Zubayr Khan, put forth that while he overheard discussions between Ms Bourdon and Mr Khan relating to Ms Bourdon’s medical certificates that he was not physically present during their discussions relating to redundancy. 13

[16] Mr Zubayr Khan also submits that he believes Mr Bourdon was given the option of working part time about two to three months prior to her dismissal, however the strength of this evidence is questionable given he was not privy to the discussions back of house between Mr Khan and Ms Bourdon, all that he overheard was Ms Bourdon state to Ms Khan “you’re better off getting someone else to do the baking because it would be cheaper.” 14

[17] The Applicant recalls these events differently putting forth that the conversation between herself and Ms Khan on 5 September 2018 was initially directed towards Mr Khan’s request for Ms Bourdon to provide medical certificates for her absences. After questioning the legality of the request Ms Bourdon recalls that:

“At that point Ismail became enraged. He turned to his grandson Zubayr Khan who was sitting at the office area and with a short angry tone snapped to him something in Indian language which I couldn't understand. He then immediately turned back to me and snapped "Claire can I speak with you out the back". I agreed. I followed him out the back where it was just him and myself and he said simply "Claire, I'm going to make you redundant". 15

[18] Mr Zubayr Khan’s evidence supports this characterisation of the discussions, although he did not hear what had been said in the back-room. 16

[19] Ms Bourdon submits that while she agreed with the dismissal in the moment for reason of shock that she was of the belief that Mr Khan would calm down and reinstate her. The following day on 6 September 2018 she returned to The Cheesecake Shop at approximately 6:55 PM where she was presented with a letter of termination for reason of redundancy by Ms Khan. 17 Her evidence is that at no time was she asked by either Mr or Ms Khan if she had any questions about the redundancy.18

[20] Ms Bourdon denies that Mr Khan ever discussed the possibility of her position becoming redundant before the events which occurred on 5 September 2018 19 and submits that the reason for her dismissal was because she had taken time of work for personal reasons stating:

“Obviously given the fact that I had just had the two sick days off, speaking with Ishmail (sic) on the Wednesday night when he came into the shop, his demeanour and the way that he spoke to me about that, then obviously that just led straight into the discussion about being made redundant and there being no speak of any redundancy, any restructure in the business. After Ishy spoke with me in regards to that matter in that moment, there was - Christine Hill was working that night and I came out the back and I told her what had just happened, what the conversation was, and she was absolutely shocked and said, "Oh, well, you know, surely he's just angry and that. It'll blow over". You know, in times there's been several times leading up to obviously that night where I'd had discussions with Ismail about my pay, taking time off. Like, it was always very difficult. It was always – like, he always wanted me to work more for no extra money. It was just an ongoing battle, and I refused to, you know, agree to his terms which I think were unfair and I think ultimately that contributed to my demise, the fact that I wouldn't deviate from working fairly in terms of, you know, being paid correctly and having a fair go at work.

While I was at that business, like, I worked as hard as I could possibly work for him, and I was – I don't like to sit here and prop myself up but, like, I didn't – I gave it my all when I worked for him from when I got there till 7 o'clock I left no stone unturned and so my only thing was that I thought I should be paid fairly in that regards, so, yes, I was - that was the only thing we clashed in I guess, in the sense that I refused to, you know, work for unfair pay conditions and whatnot. So it's a combination of all these things, obviously I feel, that led to my termination in that business, and I feel – I strongly believe if, you know, if I had have agreed to work for unfair terms I would still be working in that business today. So I think I fell on my own sword a little bit in that regard, but I did seek advice, and I spoke regularly with their other full-time employee, Rhonda Urban, about Ismail always asking these things of me, and I said to, you know, Rhonda at the time, or many times that, you know, that's one thing I do, I'm just refusing to, you know, work for unfair terms and that. I feel as though I don't deserve that and no one does, so, yes, obviously a combination of lots of things I think led to that day ultimately, and just the fact that, like, I wasn't asked – if I was asked if – to speak with him further about it to maybe take on some part-time work I would've agreed with it. Like, I've got a mortgage. I've got bills to pay, like, I need an income, so if that was the only option that I had I would've been discussing with - sitting down and talking to him about it further obviously if we could work something out, absolutely. 20

[21] Ms Bourdon concedes that while conversations had occurred previously between herself and Mr Khan about moving to three days per week, she does not recall being given the option to work five days per week and none of these conversations occurred against the backdrop of a potential redundancy. 21 Moreover, Ms Bourdon notes that these conversations occurred over the telephone with Ms Khan not in person, leaving her perplexed as to how Mr Z Khan could have overheard these conversations.22 Ms Bourdon also submits that this discussion was coupled with discussions around her being paid overtime for the additional hours she was being asked to work, which is why she replied “you’re better off getting someone else to do the baking because it would be cheaper.”

LEGISLATION – INITIAL MATTERS

[22] The legislative provision relevant to whether Ms Bourdon’s termination of employment was a genuine redundancy are set out in s.389 of the Act, which is 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.”

[23] Relevantly, the provisions dealing with whether Ms Bourdon’s employment was consistent with the Small Business Dismissal Code as provided for by s.388 is in the following terms:

“388 The Small Business Fair Dismissal Code

(1) The Minister may, by legislative instrument, declare a Small Business Fair Dismissal Code.

(2) A person’s dismissal was consistent with the Small Business Fair Dismissal Code if:

(a) immediately before the time of the dismissal or at the time the person was given notice of the dismissal (whichever happened first), the person’s employer was a small business employer; and

(b) the employer complied with the Small Business Fair Dismissal Code in relation to the dismissal.”

[24] The Code itself is in these terms:

“Small Business Fair Dismissal Code

Commencement

The Small Business Fair Dismissal Code comes into operation on 1 July 2009.

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.”

CONSIDERATION – INITIAL MATTERS

Consistency with Small Business Fair Dismissal Code

[25] As stated previously it is not in contest that at the time of Ms Bourdon’s dismissal that The Cheesecake Shop employed only 10 people.

[26] A review of the evidence in this matter shows that matters of the Small Business Dismissal Code are not relevant to her employment. There is nothing before the Commission that would support a finding that Ms Bourdon had been dismissed without notice or warning because The Cheesecake Shop believed on reasonable grounds that her conduct was sufficiently serious to justify immediate dismissal, or that she was dismissed as a result of concerns regarding her performance or her conduct at work. Instead, it is consistent with the evidence that The Cheesecake Shop’s reason for her dismissal were that they no longer required the position to be undertaken full time by any other person. These reasons were communicated to Ms Bourdon on 5 September 2018 with a termination letter later being provided on 6 September 2018.

[27] As a result, the finding must be made that Ms Bourdon’s “dismissal was inconsistent with the Small Business Fair Dismissal Code”. 23

Whether Genuine Redundancy

[28] As set out above, the meaning of genuine redundancy is set out within s.389 of the Act. Three relevant tests are set out within the section; firstly a person’s employer must no longer require their job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise; secondly the employer must have complied with any obligation in a modern award or enterprise agreement to consult about the redundancy; and thirdly it is the case that a matter is not a genuine redundancy if it would have been reasonable in all the circumstances for the person to be redeployed either within the employer’s enterprise or that of an associated entity.

[29] The evidence supports findings in respect of the first and third of these elements.

[30] In relation to the first element, it is demonstrably the case that The Cheesecake Shop no longer required Ms Bourdon’s job to be performed by a full time employee as her duties and responsibilities had been absorbed into the positions of Ms Yashmin Khan and Mr Zubayr Khan positions and at times, the position of Ms Hill.

[31] In relation to the third element relating to the potential for redeployment, the evidence allows a finding that while it may have been unreasonable for Ms Bourdon to have been redeployed on a full time basis as a baker it appears that she could have been redeployed as a part time baker. While it is possible that Ms Bourdon may then have been able to supplement this reduction in hours by undertaking some front of house duties it is unclear the extent of the effect this would have had on her income, presumably a reduction in income. Given there is no evidence that The Cheesecake Shop has any other positions available within the organisation it is plausible that either working part time as a baker or part time as a baker and part time as a front of house employee would result in a reduction in income which would make such positions ‘unreasonable’ when considering redeployment.

[32] In relation to the second of the elements, going to the question of compliance with the consultation provisions of an applicable modern award or enterprise agreement, Ms Bourdon’s employment was subject to the General Retail Industry Award 2010 (the Award). 24

[33] The Award provides the following in relation to consultation:

“8. Consultation about major workplace change

8.1 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

8.2 For the purposes of the discussion under clause 8.1(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

8.3 Clause 8.2 does not require an employer to disclose any confidential information if its disclosure would be contrary to the employer’s interests.

8.4 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 8.1(b).

8.5 In clause 8:

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

(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.

8.6 Where this award makes provision for alteration of any of the matters defined at clause 8.5, such alteration is taken not to have significant effect.

8A. Consultation about changes to rosters or hours of work

8A.1 Clause 8A applies if an employer proposes to change the regular roster or ordinary hours of work of an employee, other than an employee whose working hours are irregular, sporadic or unpredictable.

8A.2 The employer must consult with any employees affected by the proposed change and their representatives (if any).

8A.3 For the purpose of the consultation, the employer must:

(a) provide to the employees and representatives mentioned in clause 8A.2 information about the proposed change (for example, information about the nature of the change and when it is to begin); and

(b) invite the employees to give their views about the impact of the proposed change on them (including any impact on their family or caring responsibilities) and also invite their representative (if any) to give their views about that impact.

8A.4 The employer must consider any views given under clause 8A.3(b).

8A.5 Clause 8A is to be read in conjunction with any other provisions of this award concerning the scheduling of work or the giving of notice.”

[34] Mr Ismail Khan’s evidence is that he consulted with Ms Bourdon in the back room, putting to her his intentions and then asking for her consideration and response;

“THE COMMISSIONER: Did you, Mr Khan, then have the discussion with Ms Bourdon and tell her that she was to be made redundant?

MR I KHAN: Well, that was the day - on Wednesday when I came in. Obviously I wanted to discuss on Monday, but Claire was sick.

THE COMMISSIONER: Right.

MR I KHAN: I was wanting to talk to her on Monday so that gives her enough time to think on these lines. I'm not saying that the position has become redundant, but this is what I'm planning to do. It didn't eventuate because she got sick. That's fine, she was sick for two days and then she came back on the Tuesday - she came back on Wednesday, so Wednesday I went in and told her - while I was talking of something else, then I told her that I'm thinking of making this position redundant and this will be the course of action I would like to take, but not that day; "What do you feel about it?" you know, I told her.

I had to take her to the back office because other staff are working in the bakery, in the premises, so - she was all right. I told her, "I'm sorry that this is the course of action that I would like to take, but I'll let you know tomorrow."” 25

[35] Ms Bourdon’s evidence is that she was simply told her position was to be made redundant and that no consultation was involved.

[36] Both Ms Bourdon and Mr Zubayr Khan agree there was an initial conversation between Ms Bourdon and Mr Ismail Khan in which Ms Bourdon was questioned about her prior absence, after which the conversation moved into the back-room of the business. 26 The evidence is that the matter of Ms Bourdon’s potential redundancy was only discussed in the back-room, and that later in the evening, after the discussion, Mr Ismail Khan left a draft termination letter with Ms Yashmin Khan.

[37] Mr Khan seeks the Commission accept that after telling Ms Bourdon about his anticipated decision he asked her “what do you feel about it” 27 and saying “I'm sorry that this is the course of action that I would like to take, but I'll let you know tomorrow”, Ms Bourdon more or less acquiesced to the situation, saying to him something like “okay Chief, it’s your call, you are the boss”.28

[38] Ms Bourdon’s evidence on the subject indicates a far less calm situation, although she does agree she may have agreed with Mr Ismail Khan;

“He turned to his grandson Zubayr Khan who was sitting at the office area and with a short angry tone snapped to him something in Indian language which I couldn't understand. He then immediately turned back to me and snapped "Claire can I speak with you out the back". I agreed. I followed him out the back where it was just him and myself and he said simply "Claire, I'm going to make you redundant". At that point I was shocked and overwhelmed. I felt backed into a corner and wasn't comfortable in this position of it just being him and I in regards to such a serious complex matter. All of these matters combined I decided to just agree with him at that point and seeing I could tell he was angry and it was in the heat of the moment I thought once he calmed down we would clear all matters up the following day and everything would be ok. He stormed out and left the shop. I walked back through the shop and met with a fellow work colleague who was working that evening, Christine Hill. I told her what just happened. She was shocked and said surly he will not follow through with that. He has just said that in the heat of the moment, that would be ridiculous the business would be in trouble without you. We then finished off the day as per normal.” 29

[39] Consideration of the evidence in total, including that given by Mr Zubayr Khan suggests that the construct advanced by Mr Ismail Khan is less plausible than that of Ms Bourdon. Mr Zubayr Khan concurs with Ms Bourdon that there was a conversation about a medical certificate and that he and his grandfather spoke in Indian about the need for a certificate, after which “he asked Claire to go to the back because he wanted to talk to her separately”. 30 Such indicates the conversation in the rear was less than procedural, communicating a redundancy decision and asking for views prior to implementation, since it was likely less than a friendly conversation.

[40] Ms Bordoun characterises the conversation as angry and less than calm. If it had been procedural and calm, there appears no reason for it not to have been conducted in the presence of Mr Zubayr Khan. Mr Ismail Khan was prepared to discuss the need for Ms Bourdon to provide a medical certificate in front of his grandson, so why not her potential redundancy? Further, on the subject of whether the backroom discussion on 5 September 2018 stands for a consultation with Ms Bourdon, I note that Ms Khan both expected to be able to get Mr Ismail Khan to “change his mind”, 31 as well as having given the termination letter to Ms Bourdon without having asked for her response when, on 6 September 2018;

“I took her in and I basically said, "Look, unfortunately dad has asked me to hand this over to you. This is the redundancy letter. I will try and see what I can do"”. 32

[41] There would be no need to see what one could do or seek a change of mind if the conversation in the evening of 5 September 2018 was genuinely consultative and left on the basis that Ms Bourdon would consider her views and relay them to her employer the next day. Instead, trying to see what one could do or speculating about a change of mind are considerations that one may have towards a decision that has already been firmly and unambiguously made.

[42] As a result of the foregoing, I am satisfied that the termination of Ms Bourdon by The Cheesecake was not a genuine redundancy and was not consistent with the Small Business Dismissal Code.

[43] As a result of the foregoing findings it is necessary to consider whether Ms Bourdon’s dismissal was otherwise an unfair dismissal after consideration of the criteria within s.387 of the Act.

CONSIDERATION – WHETHER UNFAIR DISMISSAL

[44] The legislative provisions which are relevant to this matter are set out in s.387 of the Fair Work Act 2009 (the Act), which is as follows:

“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.”

[45] The Full Bench has summarised the approach that should be taken by the Commission to the criteria within s.387 in the following way: 33

“[28]The following propositions concerning consideration as to whether there is a valid reason for dismissal for the purpose of s.387 are well established:

• a valid reason is one which is sound, defensible and well-founded, and not capricious, fanciful, spiteful or prejudiced; 34

a reason would be valid because the conduct occurred and justified termination; conversely the reason might not be valid because the conduct did not occur or it did occur but did not justify termination (because, for example, it involved a trivial misdemeanour); 35

• it is not necessary to demonstrate “serious misconduct” or misconduct sufficiently serious to justify summary dismissal in order to establish a valid reason for dismissal; 36

the existence of a valid reason to dismiss is not assessed by reference to a legal right to dismiss 37 (so that, for example, where summary dismissal has occurred, it is not necessary to determine whether the right of summary dismissal was legally available); and

the criterion for a valid reason is not whether serious misconduct as defined in reg.1.07 has occurred, since reg.1.07 has no application to s.387(a) (although a finding that misconduct of the type described might well ground a conclusion that there is a valid reason for dismissal based on the employee’s conduct). 38” (original references)

[46] I will deal with each of the criteria within s.387 in turn.

(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)

[47] Determination of a valid reason involves an examination of whether the reason given is “sound, defensible or well founded”, within the overall context of the employment relationship;

“At the same time 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. Further, in considering whether a reason is valid, it must be remembered that the requirement applies in the practical sphere of the relationship between an employer and an employee where each has rights and privileges and duties and obligations conferred and imposed on them. The provisions must ‘‘be applied in a practical, commonsense way to ensure that’’ the employer and employee are each treated fairly, see what was said by Wilcox CJ in Gibson v Bosmac Pty Ltd (1995) 60 IR 1, when considering the construction and application of s 170DC.” 39

[48] In the circumstances, I am satisfied that there was a valid reason for Ms Bourdon’s dismissal. That reason related to her redundancy from the business. The evidence supports a finding that the work previously been done by Ms Bourdon was absorbed into the duties of others, in the manner as set out above.

(b) whether the person was notified of that reason

[49] The letter of termination provided to Ms Bourdon on 6 September 2018 comprehensively sets out the reasons for the termination of her employment as follows:

“Dear Claire,

Termination of your employment by reason of redundancy

The purpose of this letter if to confirm the outcome of a recent review by AR-RAHMAAN INVESTMENTS PTY LTD (the employer) of its operational requirements, and what this means for you.

As a result of structural changes and consolidation of job positions, the position of baker is no longer required. Regrettably this this means your employment will terminate. This decision is not a reflection on your performance.

Your employment will end close of day 6/09/18. Based on your length of service, your notice period if 2 weeks. In lieu of receiving that notice, you will be paid your normal salary for the aforementioned 2 weeks.

You will also be paid your accrued entitlements and any outstanding pay up to and including your last day of employment. This includes the balance of any time off instead of overtime paid accrued but not yet taken (paid at overtime rate applicable when overtime was worked), and superannuation.

If you have been paid annual leave in advance, any amount of annual leave still owing will be deducted from your final pay.

You may seek information about minimum terms and conditions of employment from the Fair Work Ombudsman. If you wish to contact them you can call 13 13 94 of visit their website at

We thank you for your valuable contribution during your employment with us. Please contact me if you wish to obtain a reference in the future.

Yours sincerely,

Ismail Khan

Managing Director”

(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person

[50] For the Commission to have regard to whether an employee has been given an opportunity to respond to the reason for dismissal there needs to be a finding that there is a valid reason for dismissal. 40

[51] Ms Bourdon was not dismissed for any reason related to her capacity or conduct but was instead made redundant because her position was to be absorbed into the duties of others. As a result no further consideration of this criterion is required.

(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

[52] Ms Bourdon was not aware there would be a conversation with her on 5 September 2018 about the future of her employment and she did not request to have a support person present to assist in those discussions.

(e) if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal

[53] Consideration of this criterion is unnecessary since Ms Bourdon’s dismissal did not relate to any questions of unsatisfactory performance.

(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

[54] The Cheesecake Shop at Ballarat is a small business and that size likely impacted upon the way in which the business decided to make Ms Bourdon redundant. The evidence of Mr Ismail Khan refers to having taken some advice about Ms Bourdon’s dismissal and the letter of termination reads as if it has been professionally prepared. Nonetheless, it is likely that the enterprise suffered in the delivery of its decision to terminate Ms Bourdon and especially in relation to its obligations under the Award to consult with her about the it’s decision to make her redundant.

(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;

[55] Similarly, I am satisfied that the absence of dedicated Human Resource Manager and specialists or expertise in the enterprise likely impacted on the procedures followed by The Cheesecake Shop in effecting Ms Bourdon’s dismissal.

(h) any other matters that the FWC considers relevant

[56] Section 387(c) of the Act refers to the opportunity for a person being considered for dismissal to respond to the reasons held by the employer for their dismissal, albeit in the context of a termination relating to their capacity or conduct. The section does not explicitly refer to the opportunity to respond where the valid reason relates to matters of redundancy, however the obligations set out both within the s.396 initial matters as well as the obligation to consult in the Award lead to the proposition that the person being considered for redundancy should have the opportunity to respond to that proposal. In the circumstances I consider this to be a relevant matter to be taken into account as to whether the overall dismissal was unfair within the meaning of s387.

[57] Since I have not accepted Mr Khan’s evidence about his contention that Ms Bourdon was invited to provide a response to him on the subject, and because I have accepted that indeed she was not provided with such an opportunity, I am of the view that the absence of this real opportunity means the overall dismissal was unjust and unreasonable and thereby an unfair dismissal.

[58] In the circumstances it was both unjust and unreasonable that Ms Bourdon was not given such an opportunity to consider the proposal made by Mr Khan to provide alternatives to him for his consideration. Instead what was put to her was essentially a final decision made peremptorily. When Ms Khan provided Ms Bourdon with the termination letter it was merely provided to her rather than being provided after an enquiry about whether Ms Bourdon had anything in the way of response.

[59] As a result of the foregoing consideration of s387, I find that Ms Bourdon’s dismissal was an unfair dismissal.

REMEDY

[60] The sections of the Act dealing with remedy once a finding of unfair dismissal has been made are as follows:

“390 When the FWC may order remedy for unfair dismissal

(1) Subject to subsection (3), the FWC may order a person’s reinstatement, or the payment of compensation to a person, if:

(a) the FWC is satisfied that the person was protected from unfair dismissal (see Division 2) at the time of being dismissed; and

(b) the person has been unfairly dismissed (see Division 3).

(2) The FWC may make the order only if the person has made an application under section 394.

(3) The FWC must not order the payment of compensation to the person unless:

(a) the FWC is satisfied that reinstatement of the person is inappropriate; and

(b) the FWC considers an order for payment of compensation is appropriate in all the circumstances of the case.

Note: Division 5 deals with procedural matters such as applications for remedies.

391 Remedy—reinstatement etc.

Reinstatement

(1) An order for a person’s reinstatement must be an order that the person’s employer at the time of the dismissal reinstate the person

by:

(a) reappointing the person to the position in which the person was employed immediately before the dismissal; or

(b) appointing the person to another position on terms and conditions no less favourable than those on which the person was employed immediately before the dismissal.

(1A) If:

(a) the position in which the person was employed immediately before the dismissal is no longer a position with the person’s employer at the time of the dismissal; and

(b) that position, or an equivalent position, is a position with an associated entity of the employer;

the order under subsection (1) may be an order to the associated entity to:

(d) appoint the person to another position on terms and conditions no less favourable than those on which the person was employed immediately before the dismissal.

Order to maintain continuity

(2) If the FWC makes an order under subsection (1) and considers it appropriate to do so, the FWC may also make any order that the FWC considers appropriate to maintain the following:

(a) the continuity of the person’s employment;

(b) the period of the person’s continuous service with the employer, or (if subsection

(1A) applies) the associated entity.

Order to restore lost pay

(3) If the FWC makes an order under subsection (1) and considers it appropriate to do so, the FWC may also make any order that the FWC considers appropriate to cause the employer to pay to the person an amount for the remuneration lost, or likely to have been lost, by the person because of the dismissal.

(4) In determining an amount for the purposes of an order under subsection (3), the FWC must take into account:

(a) the amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for reinstatement; and

(b) the amount of any remuneration reasonably likely to be so earned by the person during the period between the making of the order for reinstatement and the actual reinstatement.

392 Remedy—compensation

Compensation

(1) An order for the payment of compensation to a person must be an order that the person’s employer at the time of the dismissal pay compensation to the person in lieu of reinstatement.

Criteria for deciding amounts

(2) In determining an amount for the purposes of an order under subsection (1), the FWC must take into account all the circumstances of the case including:

(a) the effect of the order on the viability of the employer’s enterprise; and

(b) the length of the person’s service with the employer; and

(c) the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed; and

(d) the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal; and

(e) the amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for compensation; and

(f) the amount of any income reasonably likely to be so earned by the person during the period between the making of the order for compensation and the actual compensation; and

(g) any other matter that the FWC considers relevant.

Misconduct reduces amount

(3) If the FWC is satisfied that misconduct of a person contributed to the employer’s decision to dismiss the person, the FWC must reduce the amount it would otherwise order under subsection (1) by an appropriate amount on account of the misconduct.

Shock, distress etc. disregarded.

(4) The amount ordered by the FWC to be paid to a person under subsection (1) must not include a component by way of compensation for shock, distress or humiliation, or other analogous hurt, caused to the person by the manner of the person’s dismissal.

Compensation cap

(5) The amount ordered by the FWC to be paid to a person under subsection (1) must not exceed the lesser of:

(a) the amount worked out under subsection (6); and

(b) half the amount of the high income threshold immediately before the dismissal.

(6) The amount is the total of the following amounts:

(a) the total amount of remuneration:

(i) received by the person; or

(ii) to which the person was entitled;

(whichever is higher) for any period of employment with the employer during the 26 weeks immediately before the dismissal; and

(b) if the employee was on leave without pay or without full pay while so employed during any part of that period—the amount of remuneration taken to have been received by the employee for the period of leave in accordance with the regulations.”

[61] Pursuant to subsection 390(3) of the Act an order for the payment of compensation to a person must not be made unless the Fair Work Commission “is satisfied that reinstatement of a person is inappropriate” and also that the Commission “considers an order for payment of compensation is appropriate in all the circumstances of the case.”

[62] Ms Bourdon does not seek reinstatement to The Cheesecake Shop and in any event there is not presently a position for her to be reinstated to, given that her duties have been absorbed into the work of others. As a result my finding is that it is not appropriate for Ms Bourdon to be reinstated to her former employment with The Cheesecake Shop, but that it is appropriate for an order of compensation to be made.

[63] In assessing the amount of the order for compensation, I now turn to each of the criteria within s test of 392(2);

(a) the effect of the order on the viability of the employer’s enterprise

[64] Other than submitting to the Commission that The Cheesecake Shop at Ballarat is “a small family business”, 41 Mr Khan does not put forward that an order for compensation would affect the viability of his business.

[65] There is otherwise no evidence before the Commission that such an order would deleterious the effect and viability of his business.

(b) the length of the person’s service with the employer

[66] Mr Khan commenced operating the business from around November 2016, however Ms Bourdon had worked in the business since about 2004. 42 During that time she undertook training as a baker and became fully qualified as a tradesperson.43

[67] In the context of a small business that is obviously a significant amount of time to be employed and is something to be taken into account in assessing compensation.

(c) the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed

[68] In matters in which compensation is a consideration, the Commission ordinarily makes an assessment of remuneration the employee lost through dismissal, which in turn requires a finding in relation to “anticipated period of employment”. The Full Bench of the Australian Industrial Relations Commission has observed the following in relation to these matters:

“[33] The first step in this process - the assessment of remuneration lost - is a necessary element in determining an amount to be ordered in lieu of reinstatement. Such an assessment is often difficult, but it must be done. As the Full Bench observed in Sprigg:

". . . we acknowledge that there is a speculative element involved in all such assessments. We believe it is a necessary step by virtue of the requirement of s.170CH(7)(c). We accept that assessment of relative likelihoods is integral to most assessments of compensation or damages in courts of law."

[34] Lost remuneration is usually calculated by estimating how long the employee would have remained in the relevant employment but for the termination of their employment. We refer to this period as the "anticipated period of employment". This amount is then reduced by deducting monies earned since termination. Only monies earned during the period from termination until the end of the "anticipated period of employment" are deducted. An example may assist to illustrate the approach to be taken.” 44 (endnotes omitted)

[69] The critical issue in this matter is the extent to which proper consultation about impending redundancy may either have led to an outcome different to redundancy or alternatively may have delayed implementation of the decision.

[70] The letter of termination makes clear that Ms Bourdon’s last day of employment was 6 September 2018, the same date of the letter and that she was paid two weeks pay in lieu of notice.

[71] It is likely in the circumstances before the Commission that had there been a proper consultation with Ms Bourdon both that she was unlikely to consider a part-time arrangement because it likely would not suit her circumstances as well as that the overall conversation might only have taken a few days to resolve and perhaps at most a week.

[72] Bearing in mind that Ms Bourdon is a long serving employee, as well as that being a small business there is no an obligation under the National Employment Standard or elsewhere for The Cheesecake Shop to make a redundancy payment to Ms Bourdon, 45 the range of the anticipated period of employment may have been between a few days and a week. The lower end of the period is derived by considering that Ms Bourdon might have been allowed the weekend to consider her position and communicate her response to her employer, and the upper end of the period may have been no more than a week from Thursday, 6 September 2018.

[73] As a result, I set the anticipated period of employment at one week.

(d) the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal

[74] Since leaving The Cheesecake Shop Ms Bourdon has chosen to work in an entirely different field gaining some casual employment with an archaeological firm. At the time of the hearing she had worked about 10 days in total. Her evidence though is that such employment is not ongoing.

[75] Ms Bourdon’s evidence is also that she has made about five job applications after leaving The Cheesecake Shop, with none of them being in retail or hospitality.

[76] In the circumstances Ms Bourdon’s efforts to mitigate her loss through dismissal have not been great, but given her overall length of service, I do not discount the compensation because of her mitigation efforts.

(e) the amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for compensation

[77] The precise amounts of remuneration earned by Ms Bourdon after leaving The Cheesecake Shop are not before me, however I accept that the amounts have been modest overall and far lower than the loss that was incurred by Ms Bourdon having been dismissed. In the circumstances of her lengthy period of overall employment for the Respondent and its predecessor, I reduce the amount of post-employment remuneration to be assessed to zero.

(f) the amount of any income reasonably likely to be so earned by the person during the period between the making of the order for compensation and the actual compensation

[78] Similarly there is no evidence before the Commission about the income that would be earned by Ms Bourdon between the date of making the order and the actual compensation. In the scheme of the evidence before me I accept that such payments were likely to be incidental.

(g) any other matter that the FWC considers relevant.

[79] I am not aware of any other considerations which might be relevant to the order of compensation, and have considered all of the circumstances of the case in determining an appropriate remedy.

CONCLUSION AND ORDERS

[80] After consideration of the foregoing issues, I find that the Applicant was dismissed and that it was unfair within the meaning of the Act.

[81] I find that reinstatement is not an appropriate remedy in this case.

[82] I find that compensation is appropriate.

[83] The approach by the Fair Work Commission in these matters, and which I follow here, is to estimate the remuneration the employee would have received if they had not been dismissed (usually calculated by estimating how long the employee would have remained in the relevant employment but for the termination of their employment); deduct any remuneration earned by the employee since their dismissal until the end of the anticipated period of employment (in this case reduced by me to zero); consider whether there should be a deduction of an amount for contingencies, 46 noting that it may not be appropriate to deduct contingencies if all of the projected period of continued employment has passed;47 consider the impact of taxation and adjust the figure accordingly; and assess the figure against the compensation cap set by s.392(5).48

[84] In relation to the matter of contingencies, I find there are none that ought to be taken into account in this matter. I also find it not appropriate to make a deduction for monies earned since termination, given the highly casual nature of the earnings and that the amount of compensation to be ordered is likely significantly lower than the loss incurred by Ms Bourdon, having been dismissed, as well as taking into account the significant length of her service with the current and past owner of The Cheesecake Shop, Ballarat.

[85] The Commission’s order for compensation will be for a payment of one week compensation, and as set out above, the order for payment will be on the basis of her weekly wage weekly of $1000, with an additional amount of 9.5% superannuation. The compensation to be ordered will be subject to taxation according to law. No deductions will be made either for misconduct, monies earned since termination or contingencies. My calculation of the amount payable is set out in the following table:

1. Estimate the amount the employee would have received or would have been likely to receive if the employment had not been terminated,	1 week projected lost income at the rate of $1000 per week 49	$1000
9.5% Employer superannuation contribution on above	$95
Deduction for misconduct 50	$0
2. Deduct monies earned since termination,	$0
3. Deductions for contingencies,	$0
TOTAL	$1095
4. Calculate any impact of taxation,
5. Apply the legislative cap.”

[86] The total amount of $1095 does not exceed the compensation cap applying at the time of dismissal.

[87] In accordance with this decision, $1000, less taxation, is to be paid directly to Ms Bourdon, and $95 is to be paid to her superannuation account. The order will require the payments to be made within 14 days of the date of this decision.

COMMISSIONER

Appearances:

Ms C. Bourdon on her own behalf.

Mr I. Khan and Ms Y Khan, on behalf of the Respondent.

Hearing details:

2018.

Ballarat;

18 December.

Printed by authority of the Commonwealth Government Printer

1 Transcript, PN 237-246.

2 See FW Act, s.23.

3 Transcript, PN 190.

4 Ibid, PN 283-297.

5 Ibid, PN 67-77.

6 Ibid, PN 303-308.

7 Ibid, PN 363.

8 Ibid, PN 83.

9 Ibid, PN 94.

10 Ibid, PN 113-124.

11 Ibid, PN 114.

12 Ibid, PN 167-178.

13 Ibid, PN 431-464

14 Ibid, PN 442.

15 Exhibit A3, Witness Statement of Claire Bourdon, pg.4.

16 Transcript, PN 436-438.

17 Exhibit A3, pg. 4.

18 Transcript, PN 149-150.

19 Ibid.

20 Ibid, PN 235-236.

21 Ibid, PN 470-472.

22 Ibid, PN 473.

23 FW Act, s.396(c).

24 MA000004.

25 Transcript, PN 80 – 84.

26 Ibid, PN 435 – 438.

27 Ibid, PN 83.

28 Ibid, PN 94.

29 Exhibit A3, p.4.

30 Transcript, PN 436.

31 Ibid, PN 116.

32 Ibid, PN 114.

33 Titan Plant Hire Pty Ltd v Shaun Van Malsen[2016] FWCFB 5520.

34 Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371 at 373.

35 Edwards v Giudice [1999] FCA 1836; (1999) 94 FCR 561 at [6]-[7].

36 Sharp v BCS Infrastructure Support Pty Limited[2015] FWCFB 1033 at [32]; Annetta v Ansett Australia (2000) 98 IR 233 at [9]-[10].

37 Sharp v BCS Infrastructure Support Pty Limited[2015] FWCFB 1033 at [32]; He v Lewin [2004] FCAFC 161; (2004) 137 FCR 266 at [15].

38 Sharp v BCS Infrastructure Support Pty Limited[2015] FWCFB 1033 at [33]-[34]; O'Connell v Wesfarmers Kleenheat Gas Pty Ltd [2015] FWCFB 8205 at [22]-[23].

39 Selvachandran v Peteron Plastics (1995) 62 IR 371, pg.373.

40 Chubb Security Australia Pty Ltd v Thomas (unreported, AIRCFB, McIntyre VP, Marsh SDP, Larkin C, 2 February 2000) Print S2679 [41].

41 Transcript, PN 357.

42 Ibid, PN 256 – 259.

43 Ibid, PN 240 – 254.

44 Ellawala v Australian Postal Corporation, AIRCFB (2000), Print S5109, at [33] and [34].

45 FW Act, s.121(1)(b).

46 See Slifka v J W Sanders Pty Ltd, (1995) 67 IR 316.

47 Bowden v Ottrey Homes Ibid, at [54].

48 See Sprigg v Paul’s Licensed Festival Supermarket (1998) 88 IR 21, 32, and Ellawala v Australian Postal Corporation (unreported, AIRCFB, Ross VP, Williams SDP, Gay C, 17 April 2000) Print S5109 [33].

Claire Bourdon v AR-Rahmaan Investments Pty Ltd T/A the Cheesecake Shop

[2019] FWC 239

13 FEBRUARY 2019

DECISION

BACKGROUND

LEGISLATION – INITIAL MATTERS

CONSIDERATION – INITIAL MATTERS

CONSIDERATION – WHETHER UNFAIR DISMISSAL

REMEDY

CONCLUSION AND ORDERS