Daniel Hall v The Whole Box ‘n Dice Pty Ltd

[2018] FWC 3521

[2018] FWC 3521 [Note: An appeal pursuant to s.604 (C2018/3777) was lodged against this decision - refer to Full Bench decision dated 28 September 2018 [[2018] FWCFB 6086] for result of appeal.]

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394 - Application for unfair dismissal remedy

Daniel Hall
v
The Whole Box ‘n Dice Pty Ltd
(U2017/13508)

COMMISSIONER CAMBRIDGE SYDNEY, 20 JUNE 2018

Application for unfair dismissal remedy - jurisdictional objections - ss. 385, 389 and 396 of the Fair Work Act 2009 - whether dismissal complied with Small Business Fair Dismissal Code - whether dismissal was a case of genuine redundancy - Small Business Fair Dismissal Code not relevant in redundancy circumstances - genuine redundancy not established - jurisdictional objections rejected - harsh and unreasonable dismissal - compensation Ordered.

[1] This matter involves an application for unfair dismissal remedy made pursuant to section 394 of the Fair Work Act 2009 (the Act). The application was made by Daniel Peter Hall (the applicant). The respondent employer is The Whole Box ‘n Dice Pty Ltd ABN: 34 060 308 830 (the employer).

[2] The application was lodged at Sydney on 19 December 2017. The application indicated that the date that the applicant’s dismissal took effect was 15 December 2017. Consequently, the application was made within the 21 day time limit prescribed by subsection 394 (2) of the Act.

[3] The matter was not resolved at conciliation. The employer raised jurisdictional objections to the application on the basis that the dismissal was alleged to be a case of genuine redundancy, and that the dismissal was consistent with the Small Business Fair Dismissal Code (the Code). The matter has proceeded to arbitration before the Fair Work Commission (the Commission) in a Hearing conducted in Sydney on 18 April 2018. The Hearing dealt with evidence and submissions which encompassed both the jurisdictional objections and also the substantive issues of the alleged unfair dismissal.

[4] At the Hearing the applicant represented himself, and he provided evidence as the only witness in support of the unfair dismissal claim and against the jurisdictional objections raised by the employer. Ms J M Richards, the owner and Director of the employer’s business, appeared for the employer at the Hearing. Ms Richards was the only witness who provided evidence on behalf of the employer.

[5] The application was the subject of jurisdictional challenges made by the employer upon the assertion that the applicant’s dismissal was a case of genuine redundancy and/or that the dismissal of the applicant was consistent with the Code. The question of whether a modern award covered the applicant also arose in connection with the genuine redundancy issue. Consequently, in this instance, s. 396 of the Act has required that the Commission must decide whether the dismissal was a case of genuine redundancy and/or whether it was consistent with the Code before any consideration could be made of the merits of the application.

Background

[6] The employer is a small business employer which at the time of the dismissal of the applicant employed less than 15 persons. The employer conducts a business that was described as “below the line” marketing operation. The “below the line” marketing business involves the design, manufacture and procurement of promotional merchandise which is provided to clients as part of a marketing program designed to increase customer sales for the client.

[7] The applicant was employed for a period of about two years and ten months. The applicant was engaged in a position described as Business Development Manager, and he worked from the employer’s premises located in the Sydney suburb of Alexandria. The work of the applicant broadly involved the sale of promotional programs and associated merchandise to clients of the employer. The sales role of the applicant included the retention of existing clients, and the engagement of new clients/sales. The sales orientation of the work of the applicant was reflected in his remuneration structure which included a base salary plus commissions paid upon the sales levels that he attained. The applicant was also paid a car allowance which reflected that his work involved a significant amount of travel to visit clients and potential clients.

[8] The applicant was engaged by way of a letter of offer together with a documented “Code of Conduct.” The work of the applicant was not covered by an enterprise agreement. A significant contest arose as to whether the work of the applicant was covered by a modern award, namely the Commercial Sales Award 2010 (MA000083).

[9] The applicant’s work performance and conduct was not the subject of any recorded complaint. In July 2017, the applicant approached Ms Richards and he sought a pay rise. Following some discussion about alteration to the applicant’s commission structure, the applicant and Ms Richards agreed to certain amendments to his remuneration and these matters were documented in October 2017. The agreed changes to remuneration involved an altered commission structure and a pay rise in base salary that was to commence on 25 January 2018.

[10] However, before the applicant could enjoy the benefits of the anticipated pay rise, he was dismissed from his employment when, on 15 December 2017, Ms Richards advised him that she had made a decision to make his position redundant. Ms Richards had reviewed the deteriorating financial position of the business operation of the employer and she decided that the work of the applicant could be redistributed between another employee and herself.

[11] On 15 December 2017, the applicant was called into a meeting with Ms Richards and advised of the decision to terminate his employment on the basis that his position had been made redundant effective immediately. The applicant was provided with a letter dated 15 December 2017, which advised of his dismissal, and he was subsequently paid a period of three weeks wages in lieu of notice together with his outstanding leave entitlements.

[12] Following his dismissal, the applicant had unsuccessfully sought alternative employment and he had made numerous job applications in the pursuit of further employment.

The Employer’s Case on Jurisdictional Objections and Merits

[13] Ms Richards,who appeared for the employer, made oral submissions in support of written material which had been filed on behalf of the employer. In summary, Ms Richards submitted that the dismissal of the applicant was a case of genuine redundancy as required by subsection 385 (d) of the Act. Further, Ms Richards submitted that the dismissal of the applicant was also consistent with the Small Business Fair Dismissal Code.

[14] Ms Richards made submissions that referred to s. 389 of the Act which provided a definition for the meaning of genuine redundancy.Ms Richards said that she believed that she had done the right thing by the applicant. Ms Richards submitted that the applicant had been dismissed for financial reasons involving a marked decrease in the turnover of the business. Ms Richards said that the employer no longer required the job of the applicant to be performed by anybody else. Ms Richards said that the work that had previously been performed by the applicant was now undertaken by herself and another employee, Mr Lambert.

[15] Ms Richards also submitted that the applicant was not covered by an enterprise agreement or modern award, and therefore there was no requirement for the employer to consult with the applicant about the redundancy. Ms Richards said that the applicant had been employed under a contract of employment document and he was paid considerably above the modern award rates of pay.

[16] Ms Richards further asserted that the applicant had been made aware that the business was suffering financially and that casual employees had been dismissed, contractors had their hours cut back, she herself had removed herself from the payroll, and she was left with little other option but to redistribute the work of the applicant to herself and Mr Lambert.

[17] Ms Richards also submitted that the employer was a small business employer with now only four full-time employees. The submissions made by Ms Richards also indicated that the employer had obtained advice before making the applicant’s position redundant and she believed that they had paid all due entitlements to the applicant. Ms Richards submitted that the dismissal of the applicant was consistent with the Small Business Fair Dismissal Code.

[18] The submissions made by the employer also included financial information which was said to demonstrate the recent deterioration in the operating position of the business. Further, it was submitted that if compensation was Ordered in respect to the applicant’s unfair dismissal claim, such compensation would create undue stress on the business and the viability of the business moving forward.

[19] In summary, Ms Richards submitted that the requirements of s. 389 of the Act had been met, and therefore the applicant’s dismissal was a case of genuine redundancy. Further, Ms Richards submitted that the dismissal of the applicant was consistent with the Small Business Fair Dismissal Code. Therefore, Ms Richards submitted that the applicant had not been unfairly dismissed.

The Applicant’s Case against the Jurisdictional Objections and on Merits

[20] The applicant submitted that his dismissal did not involve a case of genuine redundancy. The applicant provided extensive documentary material which included a combination of assertions of fact and submissions.

[21] The applicant submitted that the work that he performed involved selling products and/or services to new and existing clients, and despite his job title, this was work which was covered by the Commercial Sales Award 2010 (the Award). Consequently, the applicant submitted that the employer was required to comply with the consultation obligations as set out in clause 8 of the Award.

[22] The applicant submitted that there had been no consultation with him prior to Ms Richards advising him on 15 December 2017, that his position was immediately made redundant. Consequently, according to the submissions made by the applicant, his dismissal was not a case of genuine redundancy because the employer had not complied with its obligations as established by clause 8 of the Award.

[23] In further submissions, the applicant rejected the suggestion that his dismissal had been consistent with the Small Business Fair Dismissal Code. The applicant submitted that the employer had not produced documentary material which verified compliance with the Small Business Fair Dismissal Code and that the provision of such material was necessary to establish compliance. The applicant also made submissions which challenged the identification of the number of employees of the employer. However, this challenge did not suggest that at the time of his dismissal the employer had more than 15 employees.

[24] The applicant said that his dismissal was not a case of genuine redundancy, it was not consistent with the Small Business Fair Dismissal Code and that his termination of employment was harsh, unreasonable and unjust. The submissions made by the applicant did acknowledge that the role that he had performed was redundant and was not being required to be performed anymore, in any form. However, the applicant submitted that his dismissal was not for valid reason because getting rid of the only salesperson for financial reasons was a total contradiction.

[25] The applicant also made submissions regarding any potential remedy for his alleged unfair dismissal. The applicant submitted that the employment relationship had soured and that he did not trust the owner anymore. Consequently, the applicant sought compensation as remedy for his alleged unfair dismissal and he made submissions about the amount that should be provided to him. The applicant submitted that he should be provided with redundancy pay, amounts in respect of underpayment of wages, outstanding commissions, and further compensation for loss of earnings since his unfair dismissal.

[26] In summary,the applicant submitted that the Commission should dismiss the jurisdictional objections raised by the employer. Further, the applicant submitted that his dismissal was unfair and he should be provided with the financial compensation that he had sought.

Consideration

[27] This Decision has firstly involved the determination of jurisdictional objections which have been raised by the employer.

[28] Relevantly s. 396 of the Act requires that the Commission must decide a number of specified matters before considering the merits of any application made under s. 394. In this instance the jurisdictional objections arise from the provisions of subsections 396 (c) and (d) of the Act. The particular provisions of s. 396 of the Act are:

“396 Initial matters to be considered before merits

The FWC must decide the following matters relating to an application for an order under Division 4 before considering the merits of the application:

(a) ...

(c) whether the dismissal was consistent with the Small Business Fair Dismissal Code;

(d) whether the dismissal was a case of genuine redundancy.”

The Small Business Fair Dismissal Code

[29] The Small Business Fair Dismissal Code (the Code) reads as follows:

“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.”

[30] As can be seen from the text of the Code, it endeavours to codify particular dismissal circumstances involving an employee’s conduct or capacity to perform the job for which they are engaged. The Code is silent in respect to circumstances involving a dismissal which was made because of the employer’s financial circumstances and which was not connected with the employee’s conduct, capacity, or performance of their work.

[31] In this instance, there was no suggestion that the dismissal of the applicant was connected with any unsatisfactory conduct, capacity or performance of his work. The dismissal of the applicant was made entirely because of the financial circumstances of the business operation of the employer, and the identification of a redistribution of the work that the applicant performed.

[32] Consequently, although the respondent employer is a small business employer as defined in the Act, the Code has no particular relevant operation in regards to the circumstances of the dismissal of the applicant. However, in a general sense, the procedural requirements that can be identified in various parts of the text of the Code, reflect a broad requirement to provide employees with a process that ensures that any dismissal includes reasonable consultation, and an opportunity for discussion prior to finalisation and implementation of the dismissal.

The Genuine Redundancy Question

[33] It would seem that a person cannot be unfairly dismissed if the dismissal was a case of genuine redundancy. This appears to be the clear corollary of subsection 385 (d) of the Act:

“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

…

(d) the dismissal was not a case of genuine redundancy.”

[34] Section 389 of the Act provides for a meaning of genuine redundancy:

“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.”

[35] An examination of the provisions of s. 389 of the Act identifies three specific elements which, if satisfied in combination, determine whether or not a dismissal was a case of genuine redundancy. Subsection 389 (1) contains two affirmative elements, both of which must be established, in order to allow for a finding that a dismissal was a case of genuine redundancy, and subsection 389 (2) contains one negatory element which, if established, renders the dismissal not to be a case of genuine redundancy.

[36] For convenience I have abbreviated the three elements identified within s. 389. The first affirmative element which is extracted from subsection 389 (1) (a) has been described as “job lost due to operational requirements”, the second affirmative element extracted from subsection 389 (1) (b) has been called “consultation obligations”, and the third negatory element found in subsection 389 (2) is abbreviated as “reasonable redeployment”.

[37] Consequently, the consideration of the question of whether the dismissal of the applicant was a case of genuine redundancy has involved examination of the three separate elements contained in s. 389 of the Act, such that, each of these three separate elements must, in combination, be satisfied in order to make any finding of genuine redundancy. This means that the two affirmative elements contained in subsection (1) must be established, and the negatory element found in subsection (2) must not be present in order to make a finding that a particular dismissal was a case of genuine redundancy.

Job Lost Due To Operational Requirements

[38] In this instance, the evidence has established that the position that the applicant occupied as Business Development Manager was no longer required. The employer identified that the work that the applicant performed in the position of Business Development Manager could be redistributed to Ms Richards herself in combination with another employee, Mr Lambert. Although there may have been some initial confusion on the part of the applicant, he accepted that the position that he had occupied (i.e. his job), was no longer required by the employer, even though the work that he had previously performed was still required to be undertaken.

[39] In this instance, the evidence has clearly established that the work that had been performed by the applicant in the position of Business Development Manager has been redistributed or reassigned amongst other employees. The redistribution or reassignment of work amongst retained employees does not alter the fact that a job as opposed to the work of an individual was no longer required. In this case, the job of a Business Development Manager was no longer required by the employer.

[40] Consequently, the first element of s. 389 of the Act has been established, that is, the employer no longer required the job of the applicant as Business Development Manager to be performed by anyone because of changes in the operational requirements of the employer's enterprise.

Consultation Obligations

[41] The second element contained in s. 389 of the Act requires a positive finding that the employer had complied with any modern award or enterprise agreement obligations to consult about the redundancy.

[42] The applicant submitted that a modern award namely, the Commercial Sales Award 2010 (MA000083) (the Award) applied to his employment. The employer asserted that the Award did not apply to the applicant as he was engaged under a written contract of employment and paid considerably in excess of the rates prescribed by the Award.

[43] The question of whether the Award applied to the employment of the applicant was a matter of significant contest during the Hearing, and it is an issue that has become central to the determination of the unfair dismissal claim made by the applicant.

[44] In simple terms, if the Award did not apply to the employment of the applicant then there was no obligation on the employer to consult with him once Ms Richards had made the decision to make his position redundant. Alternatively, if the Award applied to the employment of the applicant it was clear from the evidence that the consultation requirements of clause 8 of the Award had not been complied with because there was simply no discussion with the applicant before he was advised of the decision of Ms Richards to restructure his position, and terminate his employment immediately on 15 December 2017.

[45] The coverage of the Award is relevantly stipulated in clause 4.1 of the Award which reads as follows:

“4. Coverage

[Varied by PR994436]

4.1 This occupational award covers employers throughout Australia with respect to Commercial Travellers, Merchandisers and Advertising Sales Representatives and those employees unless any other modern award contains classifications that apply to such persons, in which case the other modern award prevails.”

[46] The Award contains definitions at clause 3.1 for inter alia, the occupations of Commercial Travellers, Merchandisers and Advertising Sales Representatives as mentioned in clause 4.1. The relevant definitions found in clause 3.1 read as follows:

“Advertising Sales Representative means a person employed, substantially away from the employer’s place of business, in soliciting orders, obtaining sales leads or appointments or otherwise promoting sales for, or selling advertising space or time of any kind

Commercial Traveller means a person employed, substantially away from the employer’s place of business, for the purpose of soliciting orders for, or selling articles, goods, wares or merchandise or material for wholesale sale, for resale, or for use in or in connection with the production and/or preparation and/or distribution of commodities for sale by the customer

Merchandiser means a person who is employed away from, or substantially away from, the employer’s place of business in promoting the employer’s products, re-ordering stock and preparing display units and gondola ends, and who in conjunction with these principal functions may solicit orders as a minor feature of the employee’s work”

[47] In addition, the question of whether the Award applied to the applicant, as opposed to whether it may have covered his employment must be determined having regard for s. 47 of the Act which reads as follows:

“47 When a modern award applies to an employer, employee, organisation or outworker entity

When a modern award applies to an employee, employer, organisation or outworker entity

(1) A modern award applies to an employee, employer, organisation or outworker entity if:

(a) the modern award covers the employee, employer, organisation or outworker entity; and

(b) the modern award is in operation; and

(c) no other provision of this Act provides, or has the effect, that the modern award does not apply to the employee, employer, organisation or outworker entity.

Note 1: Section 57 provides that a modern award does not apply to an employee (or to an employer, or an employee organisation, in relation to the employee) in relation to particular employment at a time when an enterprise agreement applies to the employee in relation to that employment.

Note 2: In a modern award, coverage of an outworker entity must be expressed to relate only to outworker terms: see subsection 143(4).

Modern awards do not apply to high income employees

(2) However, a modern award does not apply to an employee (or to an employer, or an employee organisation, in relation to the employee) at a time when the employee is a high income employee.

Modern awards apply to employees in relation to particular employment

(3) A reference in this Act to a modern award applying to an employee is a reference to the award applying to the employee in relation to particular employment.”

[48] The applicant was not a high income employee, and therefore the question of whether the Award applied to him has involved a determination of whether the work that he performed was properly comprehended by the coverage of the Award as stipulated in clause 4.1 of the Award.

[49] The work performed by the applicant was undeniably sales orientated, and he estimated that on average, the time during which he performed work at the employer’s place of business and the time spent away from that place of business, was about a 50:50 ratio. On balance, and following careful consideration, having regard for the specific definitions for the relevant occupational classifications contained in clause 3.1 of the Award, I have formed the view that the work of the applicant was essentially a combination of work comprehended by the definitions of Advertising Sales Representative and Commercial Traveller.

[50] Therefore the employment of the applicant was covered by the Award, and pursuant to s. 47 of the Act, the Award applied to the applicant. The evidence established that the employer did not comply with the consultation obligations of clause 8 of the Award.

[51] Consequently, I find that the relevant consultation obligations have not been met and this particular element of s. 389 (1) (b) of the Act has not been satisfied. Therefore the dismissal of the applicant was not a case of genuine redundancy.

Reasonable Redeployment

[52] As the second element of s. 389 has not been met it is unnecessary for the Commission to examine the third element which is the reasonable redeployment issue contained in subsection 389 (2).

[53] The jurisdictional objections raised by the employer have not been upheld. The dismissal of the applicant was not consistent with the Small Business Fair Dismissal Code, although the Code was largely irrelevant in this instance. Further, the dismissal of the applicant was not a case of genuine redundancy. Consequently, the matter has required a substantive determination of its merits.

The Merits

[54] The unfair dismissal provisions of the Act include section 385 which stipulates that the Commission must be satisfied that four cumulative elements are met in order to establish an unfair dismissal. These elements are:

(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.

[55] In this case, the Commission has determined jurisdictional objections arising under subsections 385 (c) and (d) of the Act. Consequently, the matter has turned to a determination of that element contained in subsection 385 (b) of the Act, specifically whether the dismissal of the applicant was harsh, unjust or unreasonable. Section 387 of the Act contains criteria that the Commission must take into account in any determination of whether a dismissal is harsh, unjust or unreasonable. These criteria are:

(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.

387 (a) - Valid Reason for the Dismissal Related to Capacity or Conduct

[56] In this case the applicant was dismissed because of the deteriorating financial position of the business operation of the employer. In these circumstances, the employer determined that the position of the applicant would be made redundant, and the work that he performed was redistributed to other employees.

[57] The reason for the dismissal of the applicant was therefore not related to his capacity or conduct.

387 (b) - Notification of Reason for Dismissal

[58] The applicant was provided with notification of the reason for dismissal. The written notification of the reasons for his dismissal was provided at the time that he was dismissed, 15 December 2017.

387 (c) - Opportunity to Respond to any Reason Related to Capacity or Conduct

[59] As the applicant was not dismissed for any reason related to his capacity or conduct this factor is not a relevant consideration.

387 (d) - Unreasonable Refusal to Allow a Support Person to Assist

[60] There was no opportunity for the applicant to engage in any discussions relating to his dismissal. Therefore the process adopted by the employer had the practical effect of representing an unreasonable refusal to allow the applicant to have a support person present.

387 (e) - Warning about Unsatisfactory Performance

[61] This factor has no relevance in this instance.

387 (f) - Size of Enterprise likely to Impact on Procedures

[62] The employer is a small business employer with only about five full-time employees at the time of the dismissal of the applicant. Despite the small size of the employer’s enterprise it was regrettable that the dismissal of the applicant occurred in a very abrupt manner.

387 (g) - Absence of Management Specialists or Expertise likely to Impact on Procedures

[63] The employer, as a small business did not have access to dedicated “HR specialists”.

387 (h) - Other Relevant Matters

[64] The dismissal of the applicant occurred in a very unfortunate manner which failed to provide for any discussion or consultation about the decision to make the applicant’s position redundant. The applicant was understandably aggrieved and surprised by the news of his dismissal, particularly as he was anticipating a future wage increase in January.

[65] The dismissal of the applicant was conducted in breach of the consultation provisions of the Award. I recognise that in a small business context, the employer might understandably not recognise that the Award would apply to the applicant. However, a procedure which provided for some discussion and consultation about any possible mitigation of the effects of the decision to make the position of the applicant redundant should have occurred as a matter of fundamental fairness.

Conclusion

[66] This Decision has firstly required determination to be made in respect of jurisdictional objections raised by the employer. The jurisdictional objections have been advanced on the basis that, firstly, the dismissal of the applicant was consistent with the Small Business Fair Dismissal Code, and secondly, the dismissal was a case of genuine redundancy. These jurisdictional objections have arisen by virtue of the potential operation of ss. 385 (c) and (d) of the Act.

[67] The first jurisdictional objection has been rejected primarily on the basis that the particular circumstances of the dismissal in this instance do not provide for any relevant operation of the Small Business Fair Dismissal Code. The dismissal of the applicant was not connected with any conduct, capacity or performance issues but instead arose from a financial imperative.

[68] The determination of the second jurisdictional objection has focused upon the meaning of genuine redundancy as contained in s. 389 of the Act. Section 389 of the Act contains two affirmative elements and one negatory element which must be satisfied so as to establish whether a dismissal was or was not a case of genuine redundancy.

[69] Upon analysis, I have determined that the second affirmative element was not satisfied in this case. Specifically, the employer had not complied with an obligation in a modern award that applied to the employment of the applicant to consult about his redundancy. Therefore, the dismissal of the applicant did not satisfy the meaning of genuine redundancy as contained in subsection 389 (1) (b) of the Act.

[70] Consequently, the jurisdictional objections raised by the employer have been rejected, and consideration has turned to the substantive merits of the application. Having appropriate regard for the various factors contained in s. 387 of the Act, the Commission has determined that the dismissal of the applicant was harsh and unreasonable.

[71] In view of the findings made as to the jurisdictional objections and the substantive merits of the application, the dismissal of the applicant was unfair. The applicant is a person protected from unfair dismissal. The applicant is entitled to be provided with remedy for his unfair dismissal.

Remedy

[72] The applicant has not sought reinstatement as a remedy for his unfair dismissal. In the circumstances, particularly as there has been an identified loss of trust and confidence in the employment relationship, reinstatement would not be an appropriate remedy.

[73] I have decided that compensation would be an appropriate remedy for the applicant’s unfair dismissal, and I turn to the factors which involve the quantification of any amount of compensation.

[74] Section 392 of the Act prescribes certain matters that deal with compensation as a remedy for unfair dismissal. I have approached the question of compensation having regard for the guidelines that have been established in the Full Bench Decisions of; Sprigg v Paul’s Licensed Festival Supermarket 1 and, Smith and Ors v Moore Paragon Australia Ltd 2 and, more recently, the cases of McCulloch v Calvary Health Care Adelaide3 and Balaclava Pastoral Co Pty Ltd v Nurcombe4.

[75] Firstly, I confirm that an Order for payment of compensation to the applicant will be made against the employer in lieu of reinstatement of the applicant.

[76] Secondly, in determining the amount of compensation that I Order, I have taken into account all of the circumstances of the matter including the factors set out in paragraphs (a) to (g) of subsection 392 (2) of the Act.

[77] There was uncontested evidence provided which established that an Order of compensation would impact on the viability of the employer’s enterprise. This evidence has been the most significant factor in reducing the amount of compensation to be provided.

[78] The applicant had been employed for a period of approximately two years and ten months. The applicant would have been likely to have received remuneration of approximately $1,732 per week, inclusive of car allowance and agreed salary increase, if he had not been dismissed.

[79] There was evidence to suggest that the employment of the applicant would not have continued for a significant period of time because of the deteriorating financial position of the employer.

[80] For the purposes of calculation of remuneration that the applicant would have received or would have been likely to receive if he had not been dismissed, I have notionally considered that the employment of the applicant would have continued for at least a further 10 weeks. Therefore the total remuneration that would have been received in the notional period of 10 weeks following dismissal amounted to a figure of $17,320.

[81] Following the dismissal, the applicant has sought alternative employment. The applicant had not secured any alternative employment as at the time of the Hearing, 18 April 2018. For the purposes of calculation of compensation, the total amount of remuneration received in alternative employment has been considered to be zero.

[82] Thirdly, in this instance there was no established misconduct of the applicant which contributed to the employer's decision to dismiss.

[83] Fourthly, I confirm that any amount Ordered does not include a component by way of compensation for shock, distress or humiliation, or other analogous hurt caused to the applicant by the manner of the dismissal.

[84] Fifthly, the amount Ordered does not exceed the compensation cap as prescribed by s. 392 (5) of the Act.

[85] Consequently, for the reasons outlined above I have determined that the amount of compensation to be provided to the applicant should be calculated by subtracting from the amount determined as remuneration that the applicant would have received or would have been likely to have received if he had not been dismissed, an amount equivalent to six weeks in recognition of the impact that payment of the full amount would have on the viability of the employer’s enterprise. Therefore, that calculation is: $17,320 minus $10,392.

[86] The result is an amount of compensation of $6,928.00. Accordingly, separate Orders [PR608165] providing for remedy in these terms will be issued.

COMMISSIONER

Appearances:

Mr D Hall appeared unrepresented.

Ms J Richards appeared for the employer.

Hearing details:

2018.

Sydney:

April, 18.

Printed by authority of the Commonwealth Government Printer

<PR608161>

 1 Sprigg v Paul’s Licensed Festival Supermarket, (Munro J, Duncan DP and Jones C), (1998) 88IR 21.

 2   Smith and Ors v Moore Paragon Australia Ltd, (Lawler VP, Kaufman SDP and Mansfield C), (2004) PR942856.

 3   John McCulloch v Calvary Health Care Adelaide, (Ross P, Hatcher VP and Gostencnik DP), [2015] FWCFB 873.

 4   Balaclava Pastoral Co Pty Ltd t/a Australian Hotel Cowra v Darren Nurcombe, (Hatcher VP, Gostencnik DP and Cribb C) [2017] FWCFB 429.