Dean Benson v Munns Parks and Gardens Pty Ltd

[2016] FWC 5066

[2016] FWC 5066

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Dean Benson
v
Munns Parks and Gardens Pty Ltd
(U2016/6690)

DEPUTY PRESIDENT GOOLEY MELBOURNE, 27 JULY 2016

Application for relief from unfair dismissal.

[1] Mr Dean Benson was employed by Munns Parks and Gardens Pty Ltd from 9 July 2015 until 18 April 2016. Mr Benson alleges he was unfairly dismissed. Munns objected to Mr Benson’s application on the basis that it was a small business and Mr Benson had not served the minimum employment period and that this was a genuine redundancy.

[2] At the hearing I granted Mr Benson permission to be represented by a lawyer as I accepted the submission that he would not be able to represent himself effectively and it would be unfair not to permit him to be represented. Mr Munns, the Director of Munns, who represented Munns at the hearing, did not oppose permission being granted.

Minimum Employment Period

[3] Munns filed material in support of its objection that it was a small business and Mr Benson had not served the minimum employment period. This included a list of those employed at the time of Mr Benson’s dismissal and payroll records. Those records disclosed that at the time of Mr Benson’s dismissal, Munns employed 17 full time or part time employees. I caused a letter to be sent to Munns prior to the hearing advising that on the material filed it did not appear that Munns was a small business. I asked Munns to advise if they pressed the objection. At the hearing Mr Munns advised that he had now received advice and accepted that as it had 15 or more employees at the time of Mr Benson’s dismissal and Mr Benson was employed for more than 6 months he was protected from unfair dismissal.

Procedure

[4] After determining the issue of whether Mr Benson had met the minimum employment period and upon the advice of both parties that they understood that the hearing would deal with both that issue and the further objection raised by Munns I determined to proceed to hear and determine the further objection. With the agreement of the parties this was done by way of a determinative conference.

Genuine Redundancy

[5] To sustain this objection Munns is required to establish that:

1. It no longer required Mr Benson’s job to be performed by anyone because of changes in the operational requirements of the enterprise;

2. It complied with its obligations under the Award to consult about redundancy;

3. It was not reasonable in all the circumstances to redeploy Mr Benson.

[6] Mr Munns gave evidence of the downturn in his business and the financial difficulties faced by the business. It was his evidence that he did not have enough work for a workshop foreman which was the title given to Mr Benson’s position.

[7] It was his uncontested evidence that he had tendered for a lot of work without success. It was his evidence that Munns had lost two or three major contracts since last spring and the company had struggled since. It was his evidence that there was no need for a workshop position due to a lack of work. He said that Munns had sold equipment associated with the tree side of the business. It was his evidence that they currently have 14 staff and by the end of the week that will be reduced to 12.

[8] Mr Munns gave evidence that he had significant payroll tax and GST payments to make.

[9] Mr Benson gave evidence that Munns had bought significant stock and equipment a few weeks prior to his dismissal. Mr Munns accepted that he had considered buying hay baling equipment to diversity his business but his financial position meant that the purchase did not go ahead. He agreed that he bought another piece of equipment because he formed the view that it would enable the business to do work more quickly.

[10] Mr Benson gave evidence that Munns had employed two new employees after his dismissal and that one of them performs his duties in the workshop. Mr Munns accepted that he employed two new workers. However he denied that one of the persons was doing Mr Munns’ work. It was his evidence that Mr Munns’ work was either not being done or done by a third party. He accepted that one of the new workers was doing some of the duties previously done by Mr Benson but he was not doing this work full time. Further he was not able to do some of the skilled work performed by Mr Benson as he was not qualified. While it was put that Mr Benson was fully occupied whilst at work, Mr Munns said that much of that work was simply not being done now.

[11] Mr Munns said his decision to terminate Mr Benson was financial as his rate of pay was higher than the other workers and he did not need a full time workshop foreman.

[12] Mr Munns produced the 2015-16 profit and loss statement to support his evidence of the dire financial position of the company.

[13] It was not disputed that Munns had lost contracts. It was further not disputed that the company faced financial difficulties. It is not for the Commission to decide how Munns should run its business. If it makes a decision to reduce the amount of maintenance it will do on its equipment that is a decision it is entitled to make.

[14] I am satisfied on the evidence before the Commission that there had been a change in the operational requirements of the business such that it did not need a full time workshop foreman.

[15] Mr Munns accepted that there was no consultation with Mr Benson prior to his dismissal. Mr Munns was not aware that Mr Benson’s employment was covered by an award.

[16] Mr Benson submitted that his work was regulated by the Gardening and Landscaping Services Award 2010. The Award covers employers in the gardening and landscaping service industries provided the employees are within the classification structure. Mr Benson’s primary duties were maintenance of equipment and machinery. I am satisfied that Award applies to Mr Benson. The Award contains the standard consultation clause. I am satisfied, given Mr Munns’ concession, that Munns did not comply with its obligations to consult with Mr Benson prior to dismissing him.

[17] Mr Benson gave evidence that 2-3 weeks prior to his dismissal a long term casual was offered a full time position. Mr Benson did not put to Mr Munns that when this occurred he had made the decision to make his position redundant and I do not have regard to this. It was Mr Benson’s position that was redundant and he was the only person occupying that position. It would not have made any difference to Mr Benson’s position if the long term casual had been retained in their pre-existing position or been offered a permanent position.

[18] Mr Munns employed two new employees at the time he made Mr Benson redundant. He did not consider Mr Munns for either of these positions nor did he consider whether he could have redeployed Mr Munns to positions in the field. Mr Munns said he did not because of the significant difference in the wage paid to these workers compared to Mr Benson. At the hearing Mr Munns gave evidence that he did not think Mr Benson would be a good fit.

[19] While Mr Munns was not very clear about when these two new employees were employed, he did not challenge Mr Benson’s evidence that they were employed immediately following his dismissal. Mr Benson gave evidence that he would have accepted a lower paid position rather than being unemployed. I accept that evidence even though it is given with the benefit of hindsight. At the time Mr Benson would not have realised how difficult it would be for him to gain other employment. However I accept that he may have accepted a lower paid position until such time as he was able to obtain other employment. It was not disputed that Mr Benson performed duties other than his maintenance duties and Mr Munns had no issue with how Mr Benson performed those duties. I am therefore satisfied that there were other positions to which Mr Benson could have reasonably been redeployed albeit at a lower rate of pay.

[20] While I am satisfied that Munns has satisfied point (1) above, I am not satisfied it has met the other criteria therefore I conclude that this was not a genuine redundancy and therefore Munns’ objection must be dismissed.

Was the termination of employment harsh, unjust or unreasonable?

[21] In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, Fair Work Australia must take into account the following:

s387(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);

[22] In accordance with the principles set out in UES (Int’l) Pty Ltd v Leevan Harvey 1 because the reason for Mr Benson’s dismissal did not relate to his capacity or conduct there was no valid reason for the dismissal. Accordingly this is a neutral consideration.2

s387(b) whether Mr Benson was notified of that reason and s387(c) whether Mr Benson was given an opportunity to respond to any reason related to the capacity or conduct of the person;

[23] Mr Benson was not given an opportunity to respond. However given this criteria relates to an opportunity to respond to the valid reason, these are neutral considerations. 3

s387(d) any unreasonable refusal by the employer to allow Mr Benson to have a support person present to assist at any discussions relating to dismissal;

[24] Munns did not unreasonably refuse to allow Mr Benson to have a support person. This is a neutral consideration.

s387(e) if the dismissal related to unsatisfactory performance by the person—whether Mr Benson had been warned about that unsatisfactory performance before the dismissal;

[25] Mr Benson was not dismissed due to unsatisfactory performance. This criterion is a neutral consideration.

s387(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 s387(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;

[26] While not a small business, Munns has no dedicated human resources specialist or managers. There was a general manager. Mr Benson however deserved better treatment than he received. Small business owners must be aware of their obligations under the awards and laws that regulate the employment of their employees. Their size does not absolve them of that responsibility. At the hearing Mr Munns accepted that the dismissal should have been handled differently.

s387(h) any other matters that the Fair Work Commission considers relevant.

[27] While I have accepted that Munns was in financial difficulty and that Mr Munns was under significant financial pressure, his failure to consult with Mr Benson meant that Mr Benson had no opportunity to discuss remaining in his employment albeit in a different and lower paid position.

[28] Mr Benson was not a long serving employee and he had previously resigned his employment with Munns to take up another position. He however gave evidence that when he accepted a return to full time employment in July 2015 he was verbally informed by the general manager that his job was secure for the next two years.

Conclusion

[29] I am satisfied that the dismissal of Mr Benson was unreasonable. In this case the failure to consult with Mr Benson meant there was no real opportunity to consider alternatives. Even had Mr Munns been concerned that Mr Benson might not have been a good fit he had done the work before and it was not said that there were any issues with the performance of his work. He should have been given preference for employment over prospective employees.

Remedy

[30] Mr Munns is not seeking reinstatement of his employment. He is seeking the maximum compensation available under the Fair Work Act 2009.

[31] In assessing any amount in lieu of reinstatement, the Fair Work Commission is required to have regard to the following:

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

[32] I am satisfied that an order for compensation would have an impact on the viability of the employer’s enterprise. Mr Munns’ gave uncontested evidence about the dire financial position of the business. I am satisfied that this warrants a reduction in the amount of compensation ordered.

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

[33] Mr Benson has only had a short period of service with Munns. That he had previously worked for them and resigned and come back is not a relevant consideration. His length of service does not require any adjustment to the amount of compensation.

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

[34] Had Munns complied with its obligations under the Award, it would have consulted with Mr Benson. While I am satisfied that it would not have made a difference to the decision to no longer have a full time workshop foreman, it would have made a difference to the outcome because Mr Munns would have accepted a lower paid position to enable him to remain in employment.

[35] There is no evidence before me that those new employees who were employed at the time Mr Benson was dismissed are not still in employment. However if Mr Benson had remained in employment he would have earned between $20-$27 per hour and not the $37.50 per hour that he was earning as the workshop foreman because the only alternative jobs on offer were at a lower rate of pay.

[36] I am satisfied that Mr Benson would have remained in employment for a further six months. Assuming he was employed at $27 per hour he would have earned $26,676.

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

[37] Mr Benson said he had applied for hundreds of jobs and was registered with an employment agency and was required to attend once a fortnight and provide evidence that he had applied for at least 20 jobs per fortnight. He was applying for a variety of positions and had not been successful in obtaining employment. I am satisfied that Mr Benson has made a reasonable effort to mitigate his loss and therefore there is no need to make any adjustment to the amount of compensation ordered to be paid.

(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;

[38] Mr Benson has not had any income from employment or other work.

(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;

[39] Given his lack of success in finding employment he is not reasonably likely to earn any monies during this period.

(g) any other matter that the Fair Work Commission considers relevant.

[40] Mr Benson is 50 years old with two children.

Conclusion

[41] I am satisfied that Mr Benson’s loss is $26,676. From this I will deduct 20% due to the impact of such an order on the business and I will deduct an amount of 30% for the possibility that in six months Mr Benson may have been made redundant because Munns decided to wind up the business or further reduce the number of employees or he would have left the business as he obtained a higher paid position.

[42] I therefore order Munns pay Mr Benson $13,338 taxed according to law plus $1267.11 to his superannuation fund within 30 days of the making of the order.

DEPUTY PRESIDENT

Appearances:

K. Ravi for the Applicant.

C. Munns for the Respondent.

Hearing details:

2016.

Melbourne:

25 July.

 1   [2012] FWAFB 5241

 2   Ibid at [42]

 3   Ibid at [43]

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