Daniel Kerle v Basketball Tek Academy Pty Ltd T/A Basketballtek

[2017] FWC 962

[2017] FWC 962

FAIR WORK COMMISSION

DECISION

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

Daniel Kerle
v
Basketball Tek Academy Pty Ltd T/A Basketballtek
(U2016/12883)

COMMISSIONER SIMPSON BRISBANE, 27 FEBRUARY 2017

Application for relief from unfair dismissal – Initial jurisdictional objection termination was a genuine redundancy – Respondent advised no longer trading – Respondent withdrew objection – Hearing uncontested – Dismissal Unfair – Compensation ordered.

[1] This matter concerns an application under s.394 of the Fair Work Act 2009 (the Act) by Mr Daniel Kerle who alleges that the termination of his employment with Basketball Tek Pty Ltd T/A Basketballtek (Basketballtek.) was unfair.

[2] The application was filed on 25 October 2016. Mr Kerle submitted he commenced employment at Basketballtek on 25 January 2016 as a Basketball coach and administrative officer until his termination on 17 October 2016.

[3] Mr Kerle claims his dismissal was unfair because he was dismissed with immediate effect for no valid reason. The application identified Mr Kerle’s representative as being Mr Jacques Franken of Employee and Executive Protect.

[4] On 4 November 2016 an employer response to the unfair dismissal application was filed. The response identified the Respondent as being Basketball Tek Acamey (sic) Pty Ltd. The originating application identified the Respondent as Basketballtek Pty Ltd. I granted an application to amend the named respondent to properly identify it as Basketball Tek Academy Pty Ltd in accordance with power under section 586(a).

[5] The file indicates conciliation was conducted on 28 November 2016 and the matter did not settle. The response filed identified Basketballtek’s representative as Mr Ian Alcock of HR4U. The response identified Basketballtek as having only 2 employees. A file note of 15 December 2016 indicates Basketballtek did not contest the issue of the minimum employment period having been served given the number of employees of a related entity. The jurisdictional objection that Mr Kerle’s termination was a genuine redundancy per s.389 of the Act was pressed at that time.

[6] Basketballtek claimed in its response Mr Kerle’s employment was terminated as the business could no longer sustain his employment and was under significant financial pressure. There is no dispute Mr Kerle satisfied the minimum employment period required in order to bring the application.

[7] Directions were issued for Basketballtek to file its evidence and submissions by 29 December 2016, Mr Kerle by 3 January 2017 and Basketballtek Reply material by 9 January 2017 with hearing dates from 13 February 2017.

[8] Basketballtek did not file its material as directed. Mr Kerle filed a witness statement and submissions on 3 January 2017 despite Basketballtek not having filed any material. On 3 January Mr Franken filed a Form 54 Notice of ceasing to represent Mr Kerle.

[9] A file note of 4 January 2017 indicates Basketballtek’s representative Mr Alcock advised that the Basketballtek was in the process of ‘going into liquidation’ as it has gone out of business. Mr Alcock advised that he would need to get further information. As at that date the Basketballtek was still registered on ASIC.

[10] On 5 January 2017 correspondence was received from Mr Ian Alcock advising that that Basketballtek had gone out of business, and further that Basketballtek would not be pursuing its objection to the application and would not be filing material in reply. It was said Basketballtek will be put into liquidation in the near future.

[11] Basketballtek did not file material on 9 January 2017. On 16 January 2017 the Unfair Dismissal Team issued amended directions for Basketballtek to file material by 24 January 2017. On the same day a file note indicates Mr Alcock advised that he was no longer acting for Basketballtek, that he was still in contact with the parent company and it was very likely Basketballtek would not be filing submissions by 24 January as directed. A further file note of 19 January 2017 indicates Mr Alcock advised that Basketballtek would not be filing submissions and was unlikely to attend a hearing.

[12] On 20 January 2017 correspondence was received from Mr Alcock advising that Basketballtek had gone out of business, and as such was unable to respond to the matter, fund its defence, or file submissions and it is unlikely Basketballtek respondent will appear at the hearing. On 26 January Mr Alcock filed a Form 54 ceasing to act for Basketballtek.

[13] On 26 January 2017 Mr Kerle sent correspondence to Mr Alcock indicating that Basketballtek was run by the directors of Sportstek Academies and requesting details concerning that matter. Mr Alcock responded to Mr Kerle indicating that there had been a number of attempts to settle the matter which had been rejected by Mr Kerle and that Basketballtek was now in the final stages of being wound up.

[14] I listed the matter for directions on 6 February 2017. Mr Kerle participated by telephone and Basketballtek was not represented. Mr Kerle indicated in the course of the directions that his true employer may be Sportstek Academies Pty Ltd (Sportstek). Mr Kerle undertook to seek to provide contact details for Sportstek and to determine his position as to whether he sought to amend his application. The matter was listed for a further directions hearing on 14 February 2017.

[15] At the directions hearing on 14 February 2017 Mr Kerle appeared by telephone and represented himself. Mr Alcock advised he was appearing as a friend of Mr Kafer, the Chief Executive Officer and Managing Director of Sportstek who also appeared by phone. Mr Kafer advised he was a shareholder in Basketballtek. He indicated that Sportstek was not the employer of Mr Kerle as Basketballtek was a completely separate company with different directors, different shareholding, was run as a separate business and Mr Kerle was paid by that business. Mr Kafer said Mr Kerle was employed by his father who was a director of Basketballtek at the time. Mr Kafer advised he understood Basketballtek would not be filing any further material or appearing at any future hearing.

[16] Given Mr Kerle had not made a decision as to who he maintained was his employer, I directed that Mr Kerle advise the Fair Work Commission (FWC) whether he intended to seek to pursue a new application against Sportstek or pursue the current application against Basketballtek within two days. Mr Kerle advised in writing the following day 15 February 2017 that he intended to continue to pursue the application against Basketballtek. The matter was listed for hearing on 27 February 2017. Mr Kerle’s was the only appearance in the matter.

[17] On the morning of the hearing I directed my Associate to conduct an ASIC search of Basketballtek. The current company extract indicated the company was still in existence and there was no evidence that the company was operating on a basis that would place it beyond the jurisdiction of the FWC to hear and determine the application.

Background

[18] Mr Kerle’s witness statement was admitted into evidence. 1 Mr Kerle’s employment with Basketballtek was as a Basketball Coach and Administrative Officer.2

[19] Mr Kerle said his performance had always been exemplary and he had not been counselled or warned at any stage. 3

[20] On 16 October 2016 Mr Kerle said he noticed that he had not been paid for the previous week. Mr Kerle sent an email to the General Manager of Basketballtek, Ms Sue Williams enquiring about the non-payment of wages. 4

[21] On 17 October 2016 Mr Kerle placed a call to Ms Williams as he had not received a response to his email enquiry. Ms Williams returned his call later that morning informing Mr Kerle that his employment had been terminated with immediate effect. Ms Williams advised Mr Kerle that Mr Kafer, the CEO of Basketballtek’s parent company Sportstek, had asked her to communicate the termination to Mr Kerle. 5

[22] Mr Kerle asked Ms Williams if she could provide him with a termination letter. A letter of termination was provided to Mr Kerle later that day. The termination letter included that Basketballtek could not sustain Mr Kerle’s employment and was under significant financial pressure. The letter also provided that Mr Kerle was entitled to one week’s notice to be paid with Mr Kerle’s accrued entitlements and outstanding remuneration. 6

[23] Mr Kerle sent a further enquiry on 18 October 2016 to Ms Williams requesting an explanation for the non-payment of wages from the week before. 7

[24] Mr Kerle said that on the day he received his termination letter David Crawford, a part-time coach and co-worker working three hours a day as an assistant coach, received an offer from Sue Williams to accept a full time position taking over the duties that Mr Kerle performed.

[25] Whilst the application was not contested the Form F3 filed by Basketballtek indicates it had not intended to argue that the termination was on the basis of Mr Kerle’s capacity or conduct but rather his role was redundant.

Jurisdictional Issue

[26] Whilst Basketballtek did not appear at the hearing and advised it did not intend to press its jurisdictional objection, it is still necessary for the FWC to be satisfied it has jurisdiction. Mr Kerle’s asserted and it was not disputed his employment was pursuant to the Educational Services (Post- Secondary Education) Award 2010 (the Award).

[27] Section 389 of the Act reads 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.”

[28] For a termination to constitute a genuine redundancy each of the discrete requirements in s.389(1)(a), s.389(1)(b) and s.389(2) must be satisfied. The onus falls on Basketballtek to make out its objection.

[29] Clause 8 of the Award reads as follows:

“8.1 Consultation regarding major workplace change

(a) Employer to notify

(i) Where an employer has made a definite decision to introduce major changes in production, program, organisation, structure or technology that are likely to have significant effects on employees, the employer must notify the employees who may be affected by the proposed changes and their representatives, if any.

(ii) Significant effects include termination of employment; major changes in the composition, operation or size of the employer’s workforce or in the skills required; the elimination or diminution of job opportunities, promotion opportunities or job tenure; the alteration of hours of work; the need for retraining or transfer of employees to other work or locations; and the restructuring of jobs. Provided that where this award makes provision for alteration of any of these matters an alteration is deemed not to have significant effect.

(b) Employer to discuss change

(i) The employer must discuss with the employees affected and their representatives, if any, the introduction of the changes referred to in clause 8.1(a), the effects the changes are likely to have on employees and measures to avert or mitigate the adverse effects of such changes on employees and must give prompt consideration to matters raised by the employees and/or their representatives in relation to the changes.

(ii) The discussions must commence as early as practicable after a definite decision has been made by the employer to make the changes referred to in clause 8.1(a).

(iii) For the purposes of such discussion, the employer must provide in writing to the employees concerned and their representatives, if any, all relevant information about the changes including the nature of the changes proposed, the expected effects of the changes on employees and any other matters likely to affect employees provided that no employer is required to disclose confidential information the disclosure of which would be contrary to the employer’s interests.”

[30] On the evidence it is clear Basketballtek did not comply with its obligations to consult and on that basis the termination could not be a genuine redundancy. I am satisfied the FWC has jurisdiction to go on to consider the merits of the application.

Consideration

[31] Mr Kerle gave evidence that there was no valid reason for his dismissal and he would have continued in employment until at least 9 December 2016 which was the end of year for the course students were enrolled in. Mr David Crawford appeared at the hearing and gave evidence in support of Mr Kerle’s application. He confirmed he remained in employment in the full time role until 9 December 2016.

[32] Mr Kerle said he had attended two meetings with Sportstek, the parent company of Basketballtek prior to his termination, on 30 September 2016 and 11 October 2016 which never included any discussion of any changes to Mr Kerle’s position with Basketballtek. 8

[33] The thrust of Mr Kerle and Mr Crawford’s evidence was to the effect that Basketballtek simply decided to terminate Mr Kerle and offer his job to Mr Crawford. Whilst it is always possible this decision may have been based on a decision to restructure the business for the reason alluded to in the termination letter, that being financial pressure, there is no evidence put before the FWC in that regard, and therefore no evidence to support a finding that the termination was fair. I am left only with assertions made prior to the hearing. On that basis I must accept the evidence before me, and I find there was not a valid reason for dismissal.

[34] In relation to each of the other elements of s.387, Mr Kerle was notified of his termination for the first time in the course of a telephone conversation on 17 October 2016 during which he was told he was being terminated with immediate effect.

[35] Mr Kerle was not given the opportunity to respond to any reason for termination related to capacity or conduct. He had no opportunity to request a support person to participate in discussions concerning his dismissal. Basketballtek is not covered by the Small Business Fair Dismissal Code given the requirement of section 23(3) of the Act that associated entities are taken to be one entity. Mr Kerle when asked during his evidence to give the FWC any information he may be aware of concerning either s.387(f) or (g) was unable to provide much that would assist. As stated Basketballtek did not participate in the hearing. It is my understanding that whilst Basketballtek is not a small business for the purposes of the Act it would not be regarded as a large employer and appeared to rely on external advice indicating it did not have in-house human resource management expertise.

[36] There are no other matters I consider relevant. I am satisfied having considered each of the matters required to be considered within s.387 the dismissal was harsh, unjust and reasonable.

Remedy

[37] Mr Kerle did not seek an order for reinstatement. Given it appears Basketballtek no longer trades given correspondence and submissions made on behalf of Basketballtek prior to the hearing, I will give no further consideration to reinstatement.

[38] Section 392 sets out that 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.

[39] The criteria for deciding an appropriate is set out as follows:

“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.”

[40] I adopt the formula set out in Sprigg v Paul’s Licensed Festival Supermarket (1988) 88 IR 21. Mr Kerle submitted that he lost $7,692.32 in wages between 17 October 2016 and 9 December 2016 as the last day of the 2016 cohort which is a figure arrived at by multiplying his weekly wage at the time of termination of $961.54 by eight weeks. On the uncontested evidence of Mr Kerle and Mr Crawford I accept eight weeks as a reasonable period of time to determine Mr Kerle would have remained in employment had he not been terminated on 17 October 2017.

[41] I deduct one week being the amount of notice paid to Mr Kerle on termination reducing the amount to $6,730.78. I make no further deduction for contingencies given the uncontested evidence that Mr Crawford continued in a full time capacity to 9 December 2016 and there is no evidence that Mr Kerle could have remained in his former role to that date.

[42] There is no evidence before me concerning section 392(2)(a) given Basketballtek has not participated in the hearing. I note Basketballtek had provided earlier correspondence to the FWC concerning its financial position however that was not put into evidence. Mr Kerle’s period of service is not lengthy, however there is no evidence to suggest to me that the amount should be further reduced because of the operation of section 392(2)(b). Mr Kerle has given evidence that he has sought to mitigate his loss by making efforts to gain other employment and has also enrolled in further study.

[43] The amount of $6,730.78 does not exceed the compensation cap. I have decided to issue an order that Basketball Tek Academy Pty Ltd pay Mr Daniel Kerle the sum of $6,730.78 gross taxed according to law plus appropriate superannuation contributions. An order will be issued separately with this decision.

COMMISSIONER

Appearances:

Mr Daniel Kerle for the Applicant

Hearing details:

2017

Brisbane

February 27

 1   Exhibit 1, Statement of Daniel Kerle dated 2 January 2017.

 2 Ibid at [2].

 3 Exhibit 1, Statement of Daniel Kerle dated 2 January 2017 at [3].

 4   Exhibit 1, Statement of Daniel Kerle dated 2 January 2017 at [3] and attachment “DK 1”.

 5   Exhibit 1, Statement of Daniel Kerle dated 2 January 2017 at [5] and [6].

 6   Exhibit 1, Statement of Daniel Kerle dated 2 January 2017 at [7] and [8].

 7 Exhibit 1, Statement of Daniel Kerle dated 2 January 2017 at [9].

 8 Exhibit 1, Statement of Daniel Kerle dated 2 January 2017 at [15].

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