Daniel Gray v Marmota Energy Limited

[2016] FWC 4971

[2016] FWC 4971

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Daniel Gray
v
Marmota Energy Limited
(U2016/1594)

SENIOR DEPUTY PRESIDENT O’CALLAGHAN ADELAIDE, 26 JULY 2016

Application for relief from unfair dismissal – genuine redundancy – failure to consult – harsh, unjust unreasonable – compensation.

[1] On 6 April 2016 Mr Gray lodged an unfair dismissal application pursuant to s.396 of the Fair Work Act 2009 (the FW Act) in relation to the termination of his employment with Marmota Energy Limited (Marmota). Mr Gray’s application was the subject of a determinative conference on 20 July 2016. At this conference Mr Gray represented himself and Mr Williams represented Marmota.

[2] Marmota objected to Mr Gray’s unfair dismissal application on a number of initial or jurisdictional grounds. Marmota asserted that Mr Gray was not a person protected from unfair dismissal because his remuneration was above the high income threshold. Secondly, Marmota asserted that the termination of Mr Gray’s employment met the definition of a genuine redundancy such that it could not be unfair. Marmota asserted that it was a small business and that the termination of Mr Gray’s employment met the requirements of the Small Business Fair Dismissal Code (the Code). In the alternative, Marmota asserted that the termination of Mr Gray’s employment was neither harsh, unjust nor unreasonable. The conference on 20 July 2016 provided the parties with an opportunity to provide evidence and make submissions with respect to all of these issues.

[3] The background to the application is that Marmota hold a number of mining tenements and undertake mineral exploration activities. There is no dispute that, at the time of the termination of Mr Gray’s employment, Marmota was a small business for the purposes of the FW Act. Mr Gray was engaged as an Exploration Geologist and, later, a Senior Project Geologist, from November 2007. He was advised of the termination of his employment on 29 February 2016 and that termination took effect on 25 March 2016.

[4] Mr Gray asserts that his employment was covered by the Professional Employees Award 2010 (The Award). He asserts that the termination of his employment was not consistent with the definition of a genuine redundancy set out in s.389 of the FW Act, in that he was dismissed because of his bullying complaint rather than for economic reasons. He asserts that the work he undertook is still being performed by other persons. Further, that the necessary consultation provisions in the Award were not met and that he could have been redeployed to a casual position. Mr Gray asserts that his dismissal was unfair in that it occurred because of his bullying complaint and that it occurred in an unfair manner. Mr Gray seeks the maximum permissible award of compensation on the basis that he anticipated on-going employment with Marmota and has unsuccessfully sought alternative employment.

[5] The initial Marmota position was that Mr Gray was not covered by an award. In the conference, Marmota acknowledged that the Professional Employees Award 2010 covered Mr Gray’s employment. Additionally, Marmota initially argued that Mr Gray was paid in excess of the high income threshold. This position was not pursued.

[6] Whilst it contended that the termination of Mr Gray’s employment was because its Board decided on a restructure to address its financial position, Marmota agreed that it had not met all of the consultation obligations in the Award. Marmota asserted that the termination of Mr Gray’s employment was completely unrelated to the allegations of bullying made by him. Notwithstanding this, Marmota contended that, if the merits of Mr Gray’s application required consideration, the Commission should take into account information discovered after his dismissal which indicated that he had been undertaking work for other companies and engaging in actions which had the potential to damage Marmota’s position.

The evidence

[7] The parties to this matter have provided a very significant quantity of material. I have taken this material into account in reaching my conclusions about this matter. Additionally, I have briefly summarised the witness evidence in the following terms.

[8] Mr Gray’s evidence went to his qualifications and role and the nature of his employment with Marmota. He referred to the contract under which he was initially engaged and to variations to that contract, made in 2015 so as to reduce his work time to 4 days per week with one day each week taken as long service leave. Mr Gray agreed that his employment was partially subsidised through the South Australian Government Geoscientist Assistance Program (referred to as GAP funding) which he successfully pursued and which expired on 31 March 2016.

[9] Mr Gray’s evidence was that he was not given any notice of the possibility that his employment could be terminated but that he understood that Marmota had been undertaking financial cutbacks over the previous 12 months. Mr Gray’s evidence was that in late 2015 Marmota engaged a casual field technician and a casual geologist. Mr Gray asserted that, subsequent to the termination of his employment, those same staff members had been undertaking the same role which he had undertaken during the past 12 months. 1 Mr Gray advised that his skills and experience were consistent with the on-going requirements of Marmota.

[10] In his evidence, Mr Gray referred to his concerns which he had raised with various personnel within Marmota, about the behaviour of the Marmota Chairman, Dr Rose. He regarded Dr Rose’s behaviour toward him as bullying behaviour and specified his concerns as relating to his understanding that Dr Rose had accused him of tampering with sample reports and had sent him emails in capitals which he equated with ‘shouting’ in speech terms. Mr Gray detailed the extent to which he specified his concerns to the Marmota Managing Director shortly before he was dismissed.

[11] Ms Badenhorst worked for Marmota on a casual basis for almost four years until October 2015. Her evidence went to a change in the Marmota focus and direction from May 2015 such that she no longer enjoyed working there. Ms Badenhorst’s evidence went to the difficulties she had in working with Dr Rose and to her working arrangements with Mr Gray.

[12] Mr Williams is the Marmota Managing Director and Company Secretary. His evidence went to the structure of the company and its employees. Mr Williams’ evidence went to confirm the employment arrangements for Mr Gray. Mr Williams gave evidence about discussions at a meeting of the Board of Directors of Marmota on 24 February 2016 which was held following disappointing drilling results and concerns over the impact of those results on Marmota’s financial position. He advised that the Board decided that a more senior geologist working on the basis of around half a day each week, was required and that Mr Gray did not have the skills associated with this changed requirement. Accordingly, Mr Williams advised that the Board decided that Mr Gray’s employment should be terminated. Mr Williams’ evidence was that he subsequently made arrangements with the Board for Mr Gray to remain employed until 25 March 2016, albeit without the requirement for him to work, so that Marmota could call upon him as an employee, if it needed to do so.

[13] Mr Williams’ evidence was that Marmota subsequently contracted with a consultant to provide senior geological advice for approximately half a day per week. Mr Williams advised that Mr Gray was not replaced. Mr Williams gave evidence went to other changes made by Marmota to reduce its costs and to on-going concerns expressed by Marmota shareholders about the company’s financial stability. Mr Williams gave evidence about changes in the composition of the Board in 2015 and his understanding of the relationship between Mr Gray and Dr Rose. His evidence was that he did not consider Mr Gray had been bullied by Dr Rose.

[14] Mr Williams’ evidence also went to his concern about Mr Gray’s actions in deleting material from his Marmota computer after he was advised of the termination of his employment and to his subsequent concerns about various emails, sent by Mr Gray to other geological exploration companies and entities.

[15] Mr Wills is the Senior Geological consultant engaged as a contractor on a part time basis after Mr Gray was dismissed. His evidence went to the nature of the work he undertook and the extent to which this involved approximately half a day per week until June 2016 but then increased to 10 days per month from June 2016 as a result of specific project initiatives.

[16] Dr Rose is the Marmota Board Chairman. His evidence went to the manner of his contact with Mr Gray and the extent to which he did not consider his behaviour to represent bullying. Additionally, Dr Rose detailed the contact which he had with Mr Gray about sample results which he considered required investigation. Dr Rose gave evidence about the Marmota Board deliberations which led to the decision, on 24 February 2016, to make Mr Gray’s position redundant.

Findings

[17] Notwithstanding the various concessions made by Marmota in relation to its initial and jurisdictional objections, I have initially detailed the position I have adopted relative to these matters before considering the merits of the application. 2 In the course of addressing these initial issues, I have set out my conclusions relative to the relevant factual position.

Was Mr Gray a person protected from unfair dismissal?

[18] Section 382 of the FW Act states:

“382 When a person is protected from unfair dismissal

A person is protected from unfair dismissal at a time if, at that time:

(a) the person is an employee who has completed a period of employment with his or her employer of at least the minimum employment period; and

(b) one or more of the following apply:

(i) a modern award covers the person;

(ii) an enterprise agreement applies to the person in relation to the employment;

(iii) the sum of the person’s annual rate of earnings, and such other amounts (if any) worked out in relation to the person in accordance with the regulations, is less than the high income threshold.”

[19] There is no question that Mr Gray had completed the requisite minimum employment period. Mr Gray contends that his employment was covered by the Professional Employees Award 2010. Clause 4 of that Award defines the Award coverage in the following terms:

‘4.1 This award covers employers throughout Australia with respect to their employees performing professional engineering and professional scientific duties who are covered by the classifications in Schedule B—Classification Structure and Definitions of the award and those employees.

4.2 This award covers employers throughout Australia principally engaged in the information technology industry, the quality auditing industry or the telecommunications services industry and their employees who are covered by the classifications in Schedule B.

[4.3 varied by PR992791 from 22Jan10]

4.3 The award does not cover employees who are covered by the following awards:

(a) Airport Employees Award 2010;

(b) Black Coal Mining Industry Award 2010;

(c) Electrical Power Industry Award 2010;

(d) Port Authorities Award 2010;

(e) Rail Industry Award 2010;

(f) State Government Agencies Administration Award 2010; and

(g) Water Industry Award 2010.

4.4 The award does not cover employees of a local government covered by another award.

4.5 The award does not cover an employee excluded from award coverage by the Act.

4.6 The award does not cover employees who are covered by a modern enterprise award, or an enterprise instrument (within the meaning of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth)), or employers in relation to those employees.

[20] Schedule B relevantly states:

“B.1.11 Level 4—Professional

(a) An employee at this level performs professional work involving considerable independence in approach, demanding a considerable degree of originality, ingenuity and judgement, and knowledge of more than one field of, or expertise (for example, acts as their organisation's technical reference authority) in a particular field of professional engineering, professional scientific/information technology field or professional information technology field.

(b) An employee at this level:

(i) initiates or participates in short or long range planning and makes independent decisions on professional engineering or professional scientific/information technology policies and procedures within an overall program;
(ii) gives technical advice to management and operating departments;
(iii) may take detailed technical responsibility for product development and provision of specialised professional engineering or professional scientific/information technology systems, facilities and functions;
(iv) coordinates work programs; and
(v) directs or advises on the use of equipment and materials.

(c) An employee at this level makes responsible decisions not usually subject to technical review, decides courses of action necessary to expedite the successful accomplishment of assigned projects, and may make recommendations involving large sums or long range objectives.

(d) Duties are assigned only in terms of broad objectives, and are reviewed for policy, soundness of approach, accomplishment and general effectiveness.

(e) The employee supervises a group or groups including professionals and other staff, or exercises authority and technical control over a group of professional staff. In both instances, the employee is engaged in complex professional engineering or professional scientific/information technology applications.”

[21] It is apparent from the initial draft of the Professional Employees Award 2010, that the geologist profession was intended to be covered by this Award. Accordingly, I have concluded that Mr Gray’s employment was covered by the Award. Consequently, and notwithstanding that, I consider that his annual rate of earnings did not exceed the high income threshold, therefore it is not necessary that I determine this issue.

The application of the Small Business Fair Dismissal Code

[22] There is no dispute that Marmota was a small business for the purposes of Part 3-2 of the FW Act.

Section 385 of the FW Act

[23] In this circumstance, section 385 provides, in effect, that if the termination of Mr Gray’s employment was consistent with the Small Business Fair Dismissal Code, that termination cannot then be unfair. Section 396 requires that I consider this as an initial issue.

[24] Marmota does not argue that the termination of Mr Gray’s employment related to matters covered by the Code and I do not consider that the Code can be said to have been complied with in these circumstances.

Was the termination of Mr Gray’s employment a case of Genuine Redundancy?

[25] Section 385 states:

“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.”

[26] A genuine redundancy situation is defined in s389 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.”

[27] I have considered Mr Gray’s circumstances in the context of this definition.

[28] At the time of the termination of his employment, Mr Gray was the senior employed geologist for Marmota. He was supported by two other employees. A Ms Wilson was engaged on a casual basis. Secondly, Mr Bevan, who was initially engaged on a casual basis, had been engaged under a weekly employment contract subject to continued GAP funding to support that employment. Mr Gray was working for Marmota for four days a week with the fifth day being taken as long service leave.

[29] I have concluded that Marmota dismissed Mr Gray because of the financial situation it found itself in as at late February 2016. In this respect I have accepted the evidence of its Managing Director, Mr Williams, to the effect that Marmota had, for some time prior to February 2016, been endeavouring to reduce its expenditure as its income options were inherently limited. 3 Mr Williams addressed the termination decision in the following terms:

“16. On 24 February 2016, the Board of Directors of the Respondent met for a scheduled Board meeting at its offices in Glenelg. This meeting was held in the light of the disappointing drilling results at the Widgety prospect at the end of January 2016 … and for the infill calcrete sampling over Westpoint Hill target in early February 2016 … I recall the Board discussed the impact of these negative results on the Respondent’s ability to raise further capital, particularly in the light of its forecast cash balance being less than $300,000 by the end of the current Quarter. The Board discussed a number of cost saving measures in order to preserve cash. As part of that, the Board discussed the staffing structure going forward. It was noted that:

• GAP Funding was in place to 30 June 2016 for Michael Beven, which if not continued beyond then would mean he would revert to being a casual employee;



• GAP Funding was in place to 31 March 2016 for the Applicant;



• Rachael Wilson was employed on a casual basis.

The Board discussed its ongoing requirements and agreed unanimously that:

• given the nature of the employment contracts for Rachael Wilson and Michael Beven, apart from being at much lower rates of pay, they had greater flexibility regarding termination, those contracts could be continued;



• the Respondent need a more senior and experienced geologist in the regions the Respondent was operating in and with a much stronger Exploration Manager skill set and demeanour to provide oversight to Rachael Wilson and Michael Beven and to the Board, especially with respect to gold in the Gawler Craton (by contrast, the Applicant’s expertise primarily lay in uranium which is not an active exploration focus of the Respondent at the moment);



• such role would be on a limited hours basis of around half a day per week;



• the Applicant did not have the skill set, experience or demeanour to fulfil that role;



• in the circumstances the current Senior Project Geologist jobe (sic) was no longer required;





• as a result, the employment of the Applicant should be terminated as soon as possible.” 4

[30] Mr Williams confirmed that no additional employee had been engaged by Marmota subsequent to the termination of Mr Gray’s employment. He stated:

“58. As a result of the reorganisation of the business, some of the functions of the Applicant’s job are undertaken by:

• Michael Beven – these are mainly asset management and maintenance, management of the warehouse, some geological review work both desktop and in the field and some field work.



• Rachael Wilson – these are mainly geologist review of results and historical information, GIS operation and production of cross-sections and maps (although this was not a strength of the Applicant and tended to be done by others), some geological review work both desktop and in the field and some field work, DSD reporting.

• David Williams – management of WPA approvals and reporting, OHS management and reporting, native title claimant negotiations and arrangements for surveys.



• Dr Kevin Willis – oversighting and mentoring of geological staff (although this was not a strength of the Applicant) in addition to providing strategic input on exploration activities (although this was not a strength of the Applicant).” 5

[31] Mr Williams described the arrangement reached with Mr Wills in the following terms:

“21. On 22 March 2016, I reached agreement with Dr Wills for his services to be provided through his service company, KJ Exploration Pty Ltd, as Chief Consulting Geologist effective from 8 March 2016 ….. The services are provided approximately half a day per week with specific projects being negotiated and remunerated on a case by case basis.” 6

[32] That evidence is consistent with that of Mr Wills who confirmed the limited extent of his weekly involvement and stated:

“9. Since March 2016, and unrelated to the Marathon investigation, I have been contracted to undertake part-time consulting work for the Respondent. I have gradually gained a better understanding of the Respondent’s gold and base metal exploration program in the Western Gawler Craton. My role is to help assess exploration prospects and programs and to act as a tutor to the Respondent’s two young geologists who have had relatively little experience in gold and base metal exploration in the area. My conclusions to date are that, prior to my involvement, the Respondent was operating an unbalanced exploration strategy based on too much geophysics and insufficient geological and geochemical understanding – this had led to some wasteful and unnecessary expensive exploration work. An example of this was the work at the Widgety prospect near Mulgathing Homestead, where several gold exploration holes were drilled into a previously drilled area and failed to locate any better mineralisation than the previous holes. Also, a magnetic anomaly target was drilled by several holes despite the presence of exposures of surface rocks which could have been collected and assayed to determine the prospectivity of the target without drilling.” 7

[33] Dr Rose’s evidence confirmed the tenuous financial position of Marmota but, more particularly, addressed the termination of Mr Gray’s employment in the following terms:

“41. Under the circumstances, where the Company’s uranium exploration program had been placed on hold (which was the Applicant’s area of responsibility), with our new gold program in tatters, with our cash position already precarious, and our ability to raise capital from shareholders suddenly impaired, in circumstances where the Applicant’s position had already been reduced to part-time in April 2015, with the Applicant already working off his annual leave, and his position only temporarily been maintained by virtue of the GAP funding that came to an end in March 2016, I could not reasonably see how the Respondent could artificially maintain a position that the Respondent no longer required, for a project that no longer existed, and which the Respondent could simply no longer afford. It was for these reasons that at the Board meeting held on 24 February 2016, the issue of terminating the Applicant’s position and employment was formally proposed – a decision which was unanimously agreed to by all Directors. Such decisions are not made lightly, and the Respondent had done its best to maintain the position for as long as it reasonably could.” 8

[34] I have considered Mr Gray’s position that the termination of his employment occurred because he complained about being bullied. 9 Firstly, I am not satisfied that the evidence substantiates that Mr Gray was, in fact, bullied. In this respect I have noted Mr Gray’s concerns that he believed that Dr Rose had questioned whether or not Mr Gray had tampered with mining test samples. I am not satisfied that Mr Gray has established that the questions that may well have been asked of him, represented bullying behaviour. Furthermore, I am not satisfied that emails, or for that matter, telephone discussions between Dr Rose and Mr Gray have been established as evidencing bullying behaviour.

[35] Notwithstanding this, Mr Gray’s contention is that his dismissal occurred because of his complaint about bullying behaviour. I am not satisfied that this is the case. The evidence before me clearly indicates the matters before the Marmota Board and I am not satisfied that any allegations of bullying behaviour were matters that were considered in the deliberations about the termination of Mr Gray’s employment.

[36] To the extent that Mr Gray argues that concerns about the authenticity of various test results were taken into account in the decision to terminate his employment, I am similarly not satisfied that this has been established as a reason for the termination of his employment.

[37] Simply put, the termination of Mr Gray’s employment occurred because the Marmota Board decided to restructure its operations so as to abolish the Senior Project Geologist position that was held by Mr Gray. Mr Gray contends that this does not meet the requirement in s.389(1)(a) because other employees are undertaking exactly the same role as he had been doing during the past 12 months. 10 In this respect he refers to the tasks being undertaken by Ms Wilson and Mr Bevan. Both those employees were engaged before Mr Gray was made redundant. It is well established11 that reference in s.389(1)(a) to the phrase “no longer required the person’s job to be performed by anyone” extends to circumstances where an employer no longer requires the same number of persons to undertake a set of functions. The Explanatory Memorandum to the Fair Work Bill 2008 explains this position in the following terms:

“1548. The following are possible examples of a change in the operational requirements of an enterprise:

• a machine is now available to do the job performed by the employee;



• the employer‘s business is experiencing a downturn and therefore the employer only needs three people to do a particular task or duty instead of five; or



• the employer is restructuring their business to improve efficiency and the tasks done by a particular employee are distributed between several other employees and therefore the person‘s job no longer exists.”

[38] The evidence before me establishes that Marmota restructured its business so as to allocate the majority of the work previously undertaken by Mr Gray to the two remaining geological employees. Further, that it engaged Mr Wills as a consultant, working for a far shorter period of time each week than had Mr Gray, and that this rearrangement of functions meant that Marmota did not require Mr Gray’s job to be done by anyone.

[39] Mr Gray also contends that the requirements of s.389(1)(a) were not met because Marmota could have pursued other alternatives to making him redundant. It may have been the case that Marmota had other alternatives to making Mr Gray redundant but this does not detract from the reality that the requirements of sub-section 389(1)(a) have been met.

[40] I have adopted a quite different conclusion with respect to s.389(1)(b). Clause 9 of the Award relevantly states:

“9. Consultation

9.1 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 9.1(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 9.1(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.”

[41] The evidence before me does not establish that Marmota management consulted with Mr Gray about the possibility that its financial position could result in his redundancy. Further, Marmota agrees that it did not provide any form of written advice about the proposed significant change to Mr Gray’s work or work situation. As a consequence, I am not satisfied that the requirements of s 389(1)(b) were satisfied in this situation.

[42] In terms of s.389(2) Mr Gray asserts that it would have been reasonable for Marmota to have offered him casual employment as a redeployment option. In this regard I am unable to agree. The evidence before me does not establish that any viable casual employment option existed at the time that the Marmota Board decided to make Mr Gray redundant. Furthermore, an offer of casual employment that lacked any certainty in terms of working hours or arrangements is difficult to reconcile with any form of reasonable redeployment option. I am satisfied that the requirements of this subsection have been met in that it was not reasonable for Marmota to have redeployed Mr Gray.

[43] Consequently, whilst I have concluded that the termination of Mr Gray’s employment was the result of a redundancy situation, I am not satisfied that the strict requirements of s.389 were all met in these circumstances. That conclusion then requires that I consider whether the termination of Mr Gray’s employment was harsh, unjust or unreasonable consistent with s.387 of the FW Act. This section states:

“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.”

Valid Reason (s.387(a))

[44] I have concluded that the termination of Mr Gray’s employment was not related to his capacity or to his conduct. The evidence before me confirms that the reason for the termination of his employment related to the restructuring of the Marmota operation in the light of its deteriorating financial position. That was unrelated to Mr Gray’s conduct or to his capacity. My conclusion in this respect reflects my earlier findings that the termination of Mr Gray’s employment was not related to expressions of concern which he had about bullying behaviour or to any issues associated with an investigation into whether mineral samples had been inappropriately tampered with. As I have indicated that investigation was not specifically targeted at Mr Gray and I do not consider that any adverse conclusions about his work were reached by Marmota.

[45] It has long been established 12 that an employee’s conduct which is identified after the termination of employment may nevertheless constitute a valid reason for the termination of that employment. In this respect I have considered the Marmota submission that, after the termination of Mr Gray’s employment it became aware that he had deleted various materials from its computer system and that, in so doing, it appeared that he had breached its expectation of trust as an employee. I have also considered the extent to which Marmota also asserts that, after the termination of Mr Gray’s employment it became aware of a number of online exchanges which it contends involved Mr Gray making derogatory remarks about Marmota and its Board Chairman. Finally, in this regard, Marmota asserts that it became aware of Mr Gray’s use of his Marmota email account so as to pursue other business activities which particularly benefited another company.

[46] Marmota sought to obtain Orders which would require the production of documents and the attendance at the Commission of an appropriate representative of this other company. That request was not granted prior to the determinative conference and it was not pursued in the course of this conference.

[47] In terms of the matters about which Marmota became aware after the termination of Mr Gray’s employment, I have concluded that Mr Gray’s deletion of various materials from the Marmota computer system had the potential to be regarded as a valid reason for the termination of his employment but I have accepted Mr Gray’s explanation that this was accidental. Had further evidence relative to this issue been provided I may have reached a different conclusion. Secondly, I have not regarded Mr Gray’s posting, under the pseudonym “Mr Dig” of critical observations about Marmota, as a factor which could represent a valid reason for the termination of his employment. Had Mr Gray made that posting as an employee, I may have reached a different conclusion but it seems to me that the posting was made in the context that, at that time, Mr Gray was no longer employed. Thirdly, I am not satisfied that Mr Gray’s use of his Marmota email account for email exchanges with another company has been established such that it could represent a valid reason for the termination of his employment. To the extent that these emails demonstrate that Mr Gray may have been seeking alternative employment, I think that this simply underscores the tenuous financial position of Marmota.

[48] Consequently, I have concluded that there was no valid reason for the termination of Mr Gray’s employment which was related to his capacity or to his conduct. I have adopted the same approach as that which was applied by the majority in UES (Int’l) Pty Ltd v Leevan Harvey. 13 Because the reason for the termination of Mr Gray’s employment was not related to his conduct or to his capacity, I have regarded this factor as a neutral consideration along with whether the termination of Mr Gray’s employment was harsh, unjust or unreasonable.

Notification and the Opportunity to respond (ss.387(b) and (c))

[49] Mr Gray was neither notified of, nor given an opportunity to respond to, any reason for his dismissal which was related to his capacity or to his conduct. As was the case in UES (Int’l), I have similarly regarded this factor as a neutral consideration relative to whether the termination of Mr Gray’s employment was harsh, unjust or unreasonable.

Support person (s.387(d))

[50] Marmota did not unreasonably refuse to give Mr Gray access to a support person to assist in discussions relating to the termination of his employment. However, the process which Marmota followed so as to give effect to that employment termination meant that Mr Gray did not have any form of realistic opportunity to involve anybody else in discussions to that effect. The decision to terminate his employment was simply made by the Marmota Board. This is a factor which is indicative of unfairness.

Size of the Marmota business and access to human resource management expertise (ss.387(f) and (g))

[51] Marmota employed six employees. It was a small employer and I am satisfied that it had neither sophisticated human resource management policies and procedures, nor access to human resource management expertise. This is a factor which mitigates in favour of the termination of Mr Gray’s employment not being regarded as harsh, unjust or unreasonable.

Other matters (s.387(h))

[52] I have concluded that the Marmota decision to terminate Mr Gray’s employment because of its financial position and the difficulties which it was having in terms of its mineral exploration programme was a sound, defensible and well-founded reason for the termination of his employment. I am satisfied that, because of its limited size and its financial position, there were no reasonable redeployment opportunities which could be offered to Mr Gray. Again, consistent with the approach adopted in UES (Int’l), these factors mitigate in favour of the termination of Mr Gray’s employment not being regarded as harsh, unjust or unreasonable.

[53] However, as was the case in UES (Int’l) I have taken into account Marmota’s failure to consult with Mr Gray consistent with the relevant Award provision. That failure extended to both the absence of specific discussions about the possibility of redundancy and the absence of any written advice which detailed the potential impact of the proposed change to the Marmota structure on Mr Gray. Those failings mitigate in favour of a finding of harshness, injustice, or unreasonableness.

Conclusion regarding harsh, unjust or unreasonable

[54] I have concluded that Marmota’s failure to comply with the Award consultation obligations is of such significance that I should regard the termination of Mr Gray’s employment as harsh, unjust or unreasonable, notwithstanding that it occurred for a sound and defensible reason.

Remedy

[55] Section 390 of the FW Act establishes that in these circumstances a remedy may be awarded. The primary remedy is that of reinstatement. Not only does Mr Gray not seek reinstatement, that option is clearly not feasible in these circumstances. Mr Gray’s job no longer exists such that I could consider reinstatement and there is no other comparable position. As a result, I have considered the extent to which an amount of compensation in lieu of reinstatement should be made. Section 392 of the FW Act specifies the factors to which I must have regard in determining an amount of compensation. In applying these factors, I have again adopted the approach set out in UES (Int’l).

Remuneration that would have been received

[56] Had Mr Gray not been notified on 29 February 2016 that he was being dismissed with effect from 25 March 2016, I have concluded that his employment would have been terminated one week later, following the required consultations with him. I do not consider that those consultations would have changed the outcome in this matter. As a result, the remuneration Mr Gray would have received, or would have been likely to receive, would have been one week’s pay at his normal rate plus any additional superannuation obligations. Because the parties have not provided an exact amount I have not expressed this as a dollar amount.

Remuneration earned (s.392(2)(e))

[57] I am satisfied that Mr Gray has not gained other employment since the termination of his employment. I have not reduced the amount being considered pursuant to s.392(2)(c) on this basis.

Income reasonably likely to be earned (s.392(2)(f))

[58] I am not satisfied that any deduction should be made for any income likely to be earned pursuant to this factor.

Other matters (s.392(2)(g))

[59] There are no other matters which I consider should be taken into account in the determination of an amount of compensation.

Viability (s.392(2)(a))

[60] The evidence before me does not establish that an order for one week’s pay plus the corresponding superannuation amount payable to Mr Gray for that week would affect the viability of the Marmota business.

Mitigation efforts (s.392(2)(d))

[61] There is conflicting evidence before me relative to the employment opportunities which are open to Mr Gray. Having considered that evidence, I am not satisfied that Mr Gray’s efforts to mitigate his losses give rise to the need to review the amount I am contemplating.

Misconduct (s.392(3))

[62] Mr Gray’s employment was not terminated as a consequence of any misconduct. Accordingly, I have not reduced the compensation amount on this basis.

Conclusion

[63] I have concluded that Mr Gray should be paid one week’s pay at the weekly rate applicable at the time of the termination of his employment, as compensation for the termination of his employment. Superannuation obligations will apply to this amount. In the event that the parties are unable to agree on this amount within 14 days, I will determine the exact amount involved. An Order (PR583239) to this effect will be issued.

Appearances:

D Gray on his own behalf.

D Williams for the respondent.

Hearing (Determinative Conference) details:

2016.

Adelaide:

July 20.

 1   Exhibit A2, para 24

 2 see s.396 of the FW Act

 3   Exhibit M5, paras 22 - 55

 4   Exhibit M5, para 16

 5   Exhibit M5, para 58

 6   Exhibit M5, para 21

 7   Exhibit M4, para 9

 8   Exhibit M9, para 41

 9   Exhibit G5, para 32

 10   Exhibit G4, para 24

 11   see Ulan Coal Mines Pty Ltd v Howarth [2010] 196 IR 32 (17) and Dibb v Commissioner of Taxation [2004] 136 FCR 388 (404-405)

 12   see Australian Meat Holdings Pty Ltd v McLauchlan (1998) 84 IR 1 and Livingstones Australia v ICF (Australia) Pty Ltd T/A IC Frith & Associates [2014] FWCFB 1276

 13   [2012] FWAFB 5241, 14 August 2012

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<Price code C, PR583238>