Desanka Nestorovska v Ngarluma & Yindjibarndi Foundation Limited (Administrators Appointed) T/A NYFL
[2018] FWC 4302
•16 AUGUST 2018
| [2018] FWC 4302 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Desanka Nestorovska
v
Ngarluma & Yindjibarndi Foundation Limited (Administrators Appointed) T/A NYFL
(U2018/2945)
DEPUTY PRESIDENT BINET | PERTH, 16 AUGUST 2018 |
Application for an unfair dismissal remedy.
[1] On 21 March 2018, Mrs Desanka Nestorovska (Mrs Nestorovska) filed an application (Application) pursuant to section 394 of the Fair Work Act 2009 (Cth) (FW Act) with the Fair Work Commission (FWC) alleging she was unfairly dismissed from her position as a cleaner by Ngarluma & Yindjibarndi Foundation Limited (Administrators Appointed) trading as NYFL (Foundation).
[2] The Foundation was founded in 2000 to facilitate an arrangement between the North West Shelf Joint Venturers (JV) and the Ngarluma and Yindjibarndi people which amongst other things provides for a semi-annual payment to be made to the Foundation by the JV in order to support the Ngarluma and Yindjibarndi people. 1
Interlocutory matters
[3] On 29 March 2018, Cor Cordis Chartered Accountants (Cor Cordis), informed the FWC that as at 12 March 2018, the Foundation had been placed into voluntary administration and Mr Jeremy Nipps and Mr Cliff Rocke of Cor Cordis appointed Administrators of the Foundation (Administrators). The Administrators objected to the Application proceeding on the basis that section 440D of the Corporations Act 2001 (Cth) operated to stay the continuation of the proceedings (First Jurisdictional Objection).
[4] On 9 April 2018, a Notice of Listing was issued for a conference before Deputy President Binet on 20 April 2018.
[5] On 20 April 2018, the Administrators informed Chambers that the Administrators did not propose to attend the conference listed for the same day. The Administrators were advised that if no representatives from Cor Cordis attended the conference, the matter would instead be listed for a hearing of the First Jurisdictional Objection. The Administrators confirmed that no representatives from Cor Cordis would be in attendance at the conference.
[6] The Application was subsequently listed for a hearing before Deputy President Binet (Jurisdictional Hearing). Directions were issued on 14 May 2018 for the further conduct of the matter (Jurisdictional Directions).
[7] On 21 May 2018, Chambers were advised that the Administrators no longer pressed the First Jurisdictional Objection. The Jurisdictional Hearing date and the Jurisdictional Directions were vacated and new directions issued for the further conduct of the matter in preparation for a Hearing on Monday 25 June 2018 for the determination of the merits of the Application.
[8] On 29 May 2018, at the request of the Administrators, a conference was held in order for the parties to explore a conciliated resolution of the Application.
[9] On 30 May 2018, Chambers were informed that the Administrators wished to press a different jurisdictional objection, namely that Mrs Nestorovska’s dismissal was a genuine redundancy for the purposes of section 389 of the FW Act (Second Jurisdictional Objection).
[10] Given the regional location of the parties, the FWC’s obligation to determine matters expeditiously, and that the determination of the Second Jurisdictional Objection would require consideration of evidence in common with the determination of the merits of the Application, the Application was listed for a Determinative Conference to determine both the Second Jurisdictional Objection and the merits of the Application. The Determinative Conference was scheduled to be held on 19 July 2018 in Karratha (Determinative Conference).
[11] On 28 June 2018, the Administrators sought permission to be represented at the Determinative Conference.
[12] Section 596 of the FW Act provides as follows:
“596 Representation by lawyers and paid agents
(1) Except as provided by subsection (3) or the procedural rules, a person may be represented in a matter before the FWC (including by making an application or submission to the FWC on behalf of the person) by a lawyer or paid agent only with the permission of the FWC.
(2) The FWC may grant permission for a person to be represented by a lawyer or paid agent in a matter before the FWC only if:
(a) it would enable the matter to be dealt with more efficiently, taking into account the complexity of the matter; or
(b) it would be unfair not to allow the person to be represented because the person is unable to represent himself, herself or itself effectively; or
(c) it would be unfair not to allow the person to be represented taking into account fairness between the person and other persons in the same matter.”
[13] Taking into account the submissions of the Administrators, and in the absence of any objection from Mrs Nestorovska opposing representation, leave to be represented by HopgoodGanim Lawyers was granted to the Administrators pursuant to section 596(2)(a) of the FW Act.
[14] At the Determinative Conference, Mrs Nestorovska and her son, Mr Michael Nestoroski (Mr Nestoroski) gave evidence in support of her Application. Mrs Nestorovska was assisted by a Macedonian translator and by her son. Ms Lorrae Tostevin, Commercial Manager of the Foundation (Ms Tostevin) gave evidence on behalf of the Administrators. Mr Mark Hyde of HopgoodGanim Lawyers appeared with leave on behalf of the Administrators.
Background
[15] Mrs Nestorovska commenced full time employment with the Foundation as a cleaner on 9 December 2016 pursuant to a contract of employment dated 9 December 2016. The contract of employment provided that the location of the work Mrs Nestorovska was engaged to perform was Rio Tinto’s Dampier Salt site (Dampier Salt). 2
[16] The Foundation trades in its own capacity and is also the trustee of two trading trusts that delivers services and engages in business activities for the benefit of approximately 1,800 members of the Ngarluma and Yindjibarndi communities. 3 The Foundation inter alia also owns 100% of the shareholdings of NYFL Nursery Pty Ltd trading as NYFL Catering and NYFL Facility Management (Nursery).4
[17] As Commercial Manager of the Foundation, Ms Tostevin was responsible for the rostering and management of the staff engaged by the Foundation to perform various cleaning, facilities management and hospitality services provided by the Foundation. Since about January 2018, Ms Tostevin has also been responsible for the rostering and the management of staff at the Nursery which provides catering, cleaning and gardening services. 5
[18] For the duration of her employment with the Foundation, Mrs Nestorovska performed work at Dampier Salt. 6
[19] It is unclear whether the Foundation or the Nursery were contracted to provide the cleaning services at Dampier Salt and for whose benefit Mrs Nestorovska performed her work. In her witness statement, Ms Tostevin stated that Mrs Nestorovska performed the cleaning services at Dampier Salt on behalf of the Nursery and did not perform work for the benefit of the Foundation. However, in the same witness statement, Ms Tostevin revealed that she was unaware of the precise nature of the contractual arrangement but that she understood that the Foundation and/or the Nursery were contracted to provide cleaning services at Dampier Salt.
[20] On 18 July 2017, Mrs Nestorovska was granted unpaid leave for the period from 17 August 2017 until 27 February 2018 to enable her to travel to Macedonia. The letter confirming the approval of her unpaid leave confirmed that the Foundation would hold Mrs Nestorovska’s position as a cleaner at Dampier Salt open for her to return to after her period of leave was completed. 7 During Mrs Nestorovska’s absence, her work was performed by employees of the Nursery and continues to be done so since Mrs Nestorovska’s dismissal.8
[21] Mrs Nestorovska was directed to undergo a medical before she returned to work following her period of unpaid leave. A medical was scheduled for her on 27 February 2018, however Mrs Nestorovska requested that the medical be rescheduled because she was suffering jet lag. On 28 February 2018, Mrs Nestorovska indicated that she was ready and willing to undertake the medical and return to work. Ms Tostevin arranged for a medical to be conducted on 7 March 2018. Mrs Nestorovska attended the appointment and accordingly underwent a medical. 9
[22] On the afternoon of 9 March 2018 the CEO of the Foundation Mr Bruce Jorgensen (Mr Jorgensen) informed Ms Tostevin that a Board meeting would be held the following day to discuss the future of the Foundation. On 11 March 2018, Mr Jorgensen informed Ms Tostevin that at the meeting, the Board had passed a resolution that the Foundation be placed into voluntary administration effective from 12 March 2018 due to insolvency concerns. Ms Tostevin was informed on 12 March 2018 that the Administrators had been appointed. 10
[23] On 12 and 13 March 2018 Ms Tostevin participated in discussions between Mr Jorgensen, the Foundation’s accountants and the Administrators regarding the following: cost saving initiatives to reduce the operating costs of the Foundation, current and future staffing levels of the Foundation and its subsidiaries, and budget constraints on Foundation expenditure. 11
[24] During discussions on 13 March 2018 between Ms Tostevin, Mr Jorgensen, the Foundation’s accountants and the Administrators, it was determined that the Foundation would be restructured to reduce costs and five full-time positions within the Foundation, including the only two cleaning positions, would be made redundant. 12
[25] At this juncture, Mrs Nestorovska had not yet recommenced work following her period of approved unpaid leave. On 14 March 2018, Ms Tostevin telephoned Mrs Nestorovska and informed her that the Foundation had been placed into voluntary administration. Ms Tostevin arranged to meet Mrs Nestorovska the following day at Mrs Nestorovska’s home to explain how the restructure would impact Mrs Nestorovska. During the telephone call, Ms Tostevin informed Mrs Nestorovska that Mrs Nestorovska could have a support person with her during their meeting. 13
[26] On 15 March 2018, Ms Tostevin attended at Mrs Nestorovska’s home. Ms Tostevin says that she explained to Mrs Nestorovska that the Foundation had been put into Administration, a review of the Foundation’s operations had been conducted by the Administrators, and that Mrs Nestorovska’s position had been made redundant. Ms Tostevin says that she explained to Mrs Nestorovska that other employees of the Foundation had also been made redundant and that subsidiaries of the Foundation were also in administration or at risk of being placed in administration. 14
[27] During their meeting, Ms Tostevin gave Mrs Nestorovska a letter confirming that Mrs Nestorovska’s employment had been terminated with immediate effect. 15
[28] Mr Nestoroski and his spouse were present during the discussions between Ms Tostevin and Mrs Nestorovska. 16
[29] In her witness statement, Mrs Nestorovska says that during the meeting she asked Ms Tostevin who would be performing the cleaning work at Dampier Salt. Mrs Nestorovska says that Ms Tostevin told her that cleaners employed on a casual basis would be performing the work. According to Mrs Nestorovska she told Ms Tostevin that she would be prepared to do the work as a casual employee and Ms Tostevin replied that she would sort it out and get back to Mrs Nestorovska with two days. Mrs Nestorovska says that she never heard back from Ms Tostevin. 17 Mr Nestoroski confirmed his mother’s recollection of this conversation. Ms Tostevin says that she did not offer Mrs Nestorovska casual work and cannot recall offering to check if casual work was available.18
Is Mrs Nestorovska protected from unfair dismissal?
[30] Mrs Nestorovska maintains that she was unfairly dismissed and seeks an Order that she be compensated. 19
[31] An order for compensation may only be issued if Mrs Nestorovska was protected from unfair dismissal at the time of her dismissal.
“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.”
[32] There is no dispute, and I am satisfied, that Mrs Nestorovska completed the minimum employment period, and that an enterprise agreement applied to her employment. 20 Consequently, I am satisfied Mrs Nestorovska was protected from unfair dismissal.
Was Mrs Nestorovska’s dismissal unfair?
[33] Section 385 of the FW Act sets out the circumstances in which a dismissal will be considered unfair:
“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.”
[34] It is not contested that Mrs Nestorovska was dismissed, and it is not asserted that the Small Business Fair Dismissal Code applied to Mrs Nestorovska’s dismissal. 21
Was Mrs Nestorovska’s dismissal a genuine redundancy?
[35] The Administrators submit that the Application should be dismissed because the dismissal was a case of genuine redundancy. Section 389 of the FW Act defines the meaning of genuine redundancy for the purposes of the FW Act:
“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.”
Was Mrs Nestorovska’s job no longer required to be performed?
[36] In order to establish that Mrs Nestorovska’s dismissal was a genuine redundancy, the Foundation must demonstrate that it no longer required Mrs Nestorovska’s job to be performed by anyone because of changes in the operational requirements of the Foundation. 22
[37] According to her employment contract, and the letter confirming the approval of her period of leave without pay, Mrs Nestorovska was engaged by the Foundation to perform cleaning work at Dampier Salt.
[38] Mrs Nestorovska’s payslips indicated that she was paid by the Nursery to perform the cleaning work at Dampier Salt. 23 In her witness statement Mrs Tostevin stated that Mrs Nestorovska performed the cleaning services at Dampier Salt on behalf of the Nursery and did not perform any work for the benefit of the Foundation. At the Determinative Conference, Mr Nestoroski raised the possibility that his mother was in fact employed by the Nursery rather than the Foundation. Mrs Nestorovska decided not to press this point and both parties agreed that the Foundation was Mrs Nestorovska’s employer.24 In the absence of a submission to the contrary and any determinative evidence that Mrs Nestorovska was in fact employed by the Nursery rather than the Foundation, I have proceeded on the basis that she was employed by the Foundation.
[39] The cleaning work performed by Mrs Nestorovska at Dampier Salt is still being performed. Since the time that Mrs Nestorovska commenced her unpaid leave, the work has been performed by cleaners who are employed by the Nursery. 25
[40] Ms Tostevin indicated that was she unsure whether it was the Foundation and/or the Nursery which was contracted by Rio Tinto to provide the cleaning services at Dampier Salt. The Administrators assert that it is the Nursery and not the Foundation that is contracted to perform the cleaning services at Dampier Salt; however no documentary evidence was tendered to support this assertion. 26
[41] According to the termination letter Mrs Nestorovska received from Ms Tostevin, Mrs Nestorovska was dismissed because the Foundation was “… unable to continue to pay its employees.” 27 However it appears that the decision to make Mrs Nestorovska’s position redundant was based on the Administrator’s view that the Nursery rather than the Foundation was contractually responsible for the performance of the cleaning work at Dampier Salt and that the Foundation had no other cleaning contracts which Mrs Nestorovska could be deployed to perform.28
[42] If the Foundation was not contractually responsible for the cleaning at Dampier Salt, then it could be said that Mrs Nestorovska’s position was no longer required by the Foundation to be performed due to changes in the Foundation’s operational requirements. The relevant organisational change being a decision that the Foundation cease providing employees to perform the work at Dampier Salt, based on advice from the Administrators that the legal entity responsible for performing the work was the Nursery rather than the Foundation.
[43] Alternatively, if the Foundation was the entity contractually responsible for the cleaning at Dampier Salt, then it could be said that Mrs Nestorovska’s position was no longer required due to changes in the operational requirements of the Foundation, being that the Foundation had been trading insolvent for several years and could not afford to pay her.
[44] In either circumstances I am satisfied that the Foundation no longer required Mrs Nestorovska’s job to be performed by anyone because of changes in the operational requirements of the Foundation’s enterprise.
Did the Foundation comply with any consultation obligations?
[45] In order to establish that Mrs Nestorovska’s dismissal was a genuine redundancy, the Foundation must demonstrate that it complied with any obligation in any award or enterprise agreement which applied to Mrs Nestorovska’s employment to consult with her about her redundancy. Consultation should be meaningful and should be engaged in before an irreversible decision to terminate has been made. 29 If an employer was obliged to consult and fails to do so, there cannot be a genuine redundancy.30
[46] At the time of her dismissal, Mrs Nestorovska was covered by the Compass Group (ESS Remote – Western Australian) Enterprise Agreement 2012 (EA). 31
[47] The consultation provisions in the EA appear at clause 8 which provides that:
“8. CONSULTATION REGARDING MAJOR WORKPLACE CHANGE
8.1 This clause applies if:
(1) the Company has made a definite decision to introduce a major change to production, program, organisation, structure, or technology in relation to its business; and
(2) the change is likely to have a significant effect on employees (as that term is defined below) of the Company.
8.2 The Company must notify the relevant employees of the decision to introduce the major change.
8.3 The relevant employees may appoint a representative for the purposes of the procedures in this clause and the Company must recognise the representative.
8.4 As soon as practicable after making its decision, the Company must consult with the relevant employees about the introduction of the change, the effect the change is likely to have on them and measures the Company is taking to avert or mitigate the adverse effect of the change on those employees. The Company must give prompt and genuine consideration to matters raised by the relevant employees.
8.5 If a clause of the Agreement provides for the change, the requirements of this clause do not apply.
8.6 In this clause, a major change is likely to have a significant effect on employees if it results in:
(a) the termination of the employment of employees; or
(b) major change to the composition, operation or size of the Company’s workforce or to the skills required of the employees; or
(c) the elimination or diminution of job opportunities (including opportunities for promotion or tenure; or
(d) the alteration of hours of work; or
(e) the need to retrain the employees; or
(f) the need to relocate the employees to another workplace; or
(g) the restructuring of jobs.
8.7 In this clause, relevant employees means the employees who may be affected by the major change.
8.8 Nothing in this clause requires the Company to discuss with or disclose to employees confidential or commercially sensitive information.”
[48] There is no assertion by either party that another clause of the EA provides for the change in question.
[49] The consultation obligations contained in clause 8.1 of the EA are triggered in the event of ‘major change’. The Respondent submits that a decision to make five employees redundant does not constitute ‘major change’ for the purposes of clause 8.1 and therefore the consultation obligations contained in clause 8 of the EA were not triggered. 32
[50] This submission misconstrues clause 8 of the EA. Clause 8 is triggered when an employer has made a major change to production, program, organisation, structure or technology in relation to its enterprise. The number of redundancies caused by that change is a consequence of the change and not the change itself.
[51] In this case, the Foundation has undisputedly undergone major change to production, program, structure and organisation. The Foundation has been placed in voluntary administration, thereby removing responsibility for operating the enterprise from the Board and placing that responsibility on the Administrators. The Administrators have declared the Foundation insolvent and consequently imposed cost restraints, restructured trading activities and reorganised the business. As a consequence of this change, five of the 28 positions were removed from the organisational structure. 33
[52] I am therefore satisfied that the Administrators were required to comply with the consultation provisions contained in clause 8 of the EA when effecting Mrs Nestorovska’s redundancy.
[53] The Foundation submitted in the alternative that the discussions Ms Tostevin held with Mrs Nestorovska in relation to her dismissal satisfied the consultation obligations contained in clause 8 of the EA. 34
[54] Clause 8 imposes an obligation on the Foundation not only to give notice of change, but to consult with the purpose of trying to take steps to avoid the retrenchment of employees. Clause 8.4 imposes an obligation on the Foundation to give consideration to the matters raised by employees about a major change. Clause 8 clearly contemplates consultation about a decision that would introduce major change occurring before a decision is made to terminate an employee’s employment.
[55] It was Ms Tostevin’s evidence that the decision to terminate Ms Nestorovska’s employment occurred on 13 March 2018. 35 The meeting between Ms Tostevin and Mrs Nestorovska to discuss Mrs Nestorovska’s retrenchment occurred on 15 March 2018.36 Therefore, the decision to dismiss Mrs Nestorovska was made before the ‘consultation’ relied on by the Administrators as compliance with clause 8 of the EA, had occurred.
[56] Clause 8 imposes an obligation to engage in consultation, not to simply give notice. The obligation to consult, imposed by clause 8 of the EA, differs significantly from the obligation to give notice. Unlike the obligation to give notice, the obligation to consult does not simply entail advising an employee of what is to happen. Consultation requires that the employee concerned is provided with a bona fide opportunity to influence the decision-maker. 37
[57] Notwithstanding the evidence of Mrs Nestorovska and Mr Nestoroski, 38 Ms Tostevin says that she did not discuss alternatives to retrenchment with Mrs Nestorovska. Ms Tostevin says that she did not do so because Ms Tostevin had formed the view that no alternatives to dismissing Mrs Nestorovska existed.
[58] Ms Tostevin appears to have formed this view for two reasons. Firstly, because she had been instructed by the Administrators that Mrs Nestorovska could not be offered employment with the Nursery to perform the cleaning duties she had been engaged to perform by the Foundation, because the Administrators had not been appointed as Administrators of the Nursery and therefore could not direct the Nursery to engage Mrs Nestorovska. 39 Secondly, Ms Tostevin says that she did not consider offering Mrs Nestorovska employment with the Nursery performing the cleaning work at Dampier Salt that Mrs Nestorovska previously performed because Mrs Nestorovska had been employed on a full-time, permanent basis and the cleaners engaged by the Nursery during Mrs Nestorovska’s absence on unpaid leave were engaged to perform the work on a casual basis.40
[59] On her own evidence Ms Tostevin did not therefore explore with Mrs Nestorovska measures to avert or mitigate the adverse effect of the decision to make Mrs Nestorovska’s position redundant.
[60] For the reasons set out below, in relation to whether redeployment was reasonable, measures to avert or mitigate the adverse effect of the decision to make Mrs Nestorovska’s position with the Foundation redundant might have included offering Mrs Nestorovska casual employment with the Nursery performing the cleaning duties that she had been engaged to perform by the Foundation.
[61] The discussions that Ms Tostevin held with Mrs Nestorovska are more accurately characterised as notification rather than consultation. It appears that no genuine opportunity was provided to Mrs Nestorovska to have consideration given to steps that might have mitigated, or averted altogether, the adverse impact of the redundancy on her.
[62] In light of the above, I am not satisfied that the Foundation complied with the requirement in the EA to consult with Mrs Nestorovska about the redundancy prior to dismissing her. I therefore find that Mrs Nestorovska’s dismissal was not a case of genuine redundancy within the meaning of section 389 of the FW Act.
[63] Having found that the Foundation failed to comply with the requirement in the EA to consult with Mrs Nestorovska and that therefore her dismissal was not a genuine redundancy it is not strictly necessary for me to consider whether redeployment was reasonable in all the circumstances. I have done so below because I am satisfied that it is a relevant matter for the purposes of section s.387(h) of the FW Act. 41
Was redeployment reasonable in all the circumstances?
[64] In order to establish that Mrs Nestorovska’s dismissal was a genuine redundancy, the Foundation must demonstrate that it would have been not been reasonable in all the circumstances for Mrs Nestorovska to be redeployed within the Foundation or an enterprise of an associated entity of the Foundation.
[65] The Respondent submits that redeployment was not appropriate in the circumstances because it says that no job existed within the Foundation to which Mrs Nestorovska could be redeployed and the Administrators could not redeploy Mrs Nestorovska to an associated entity of the Foundation. 42
[66] The Foundation concedes that the Nursery is an associated entity of the Foundation for the purposes of section 389 of the FW Act. 43
[67] As outline above, during Mrs Nestorovska’s absence on approved unpaid leave and since her dismissal, the cleaning work Mrs Nestorovska performed at Dampier Salt has been performed by cleaners employed by the Nursery on a casual basis. 44
[68] At the Determinative Conference, Ms Tostevin revealed that since January 2018 (including at the time at which Mrs Nestorovska’s position with the Foundation was made redundant) her responsibilities included the hiring and rostering of cleaners engaged by the Nursery to perform the cleaning work at Dampier Salt. 45
[69] Ms Tostevin also revealed that the cleaners performing cleaning work at Dampier Salt were genuine casual employees who did not work on a regular or systematic basis but instead were offered shifts on an ad-hoc basis. 46
[70] According to Ms Tostevin, since Mrs Nestorovska’s dismissal, the Nursery has advertised for additional casual employees to perform cleaning roles. 47
[71] It appears that Mrs Nestorovska was not considered for, or offered, casual employment by Ms Tostevin performing the cleaning work at Dampier Salt when Mrs Nestorovska’s position with the Foundation was made redundant because the Administrators instructed Ms Tostevin that Mrs Nestorovska could not be redeployed to this role. 48
[72] It appears that the Administrators reached this conclusion on three grounds. Firstly, they appear to have formed the view that the Foundation’s obligation to redeploy was limited to circumstances where the Foundation could direct that redeployment occur and as the Administrators had not been appointed as Administrators of the Nursery they could not direct the Nursery to engage Mrs Nestorovska. 49 Secondly, the Administrators appear to have formed the view that to offer Mrs Nestorovska casual cleaning shifts at Dampier Salt would require the dismissal of cleaners currently performing those duties.50 Thirdly, as the cleaning positions at the Nursery were casual, part-time positions they were unsuitable for the purposes of redeploying Mrs Nestorovska, because she had been employed by the Foundation in a permanent, full-time capacity.51
[73] Based on Ms Tostevin’s evidence it would appear that the casual employees who were performing the cleaning work at Dampier Salt previously performed by Mrs Nestorovska had no reasonable expectation of ongoing work and/or of any particular shifts and that the Nursery was not legally bound to continue to offer any of those individuals work and/or particular shifts at Dampier Salt. Furthermore according to Ms Tostevin, the Nursery has been actively recruiting additional cleaners.
[74] It is true that the Administrators had no power to direct Ms Tostevin to offer Mrs Nestorovska work on a casual basis performing cleaning duties. However, there was no reason why they could not ask Ms Tostevin in her capacity as the employee of the Nursery responsible for the hiring, rostering and management of clearing staff employed by the Nursery to consider Ms Nestorovska for this work.
[75] In her witness statement, Mrs Nestorovska says that during the meeting held at her home on 15 March 2018 she indicated to Ms Tostevin that she would accept redeployment to a casual cleaning position with the Nursery. Mr Nestoroski corroborated his mother’s evidence. Ms Tostevin says she cannot recall the conversation. Mr Mark Hyde, appearing for the Foundation, chose not to question Mrs Nestorovska or Mr Nestoroski about any of the evidence contained in their witness statements including their evidence with respect to the conversation Mrs Nestorovska says she had with Ms Tostevin about casual employment. I prefer the evidence of Mrs Nestorovska and Mr Nestoroski that Mrs Nestorovska did offer to accept redeployment to a casual cleaning role. 52
[76] Mrs Nestorovska had performed the cleaning work at Dampier Salt for an extended period of time. There was no evidence of any concerns with respect to her performance of these duties. Given her experience in the role and the length of her employment with the related entity it would appear that she would be at least as suitable, if not more suitable, a candidate for upcoming shifts of casual cleaning duties at Dampier Salt, as any other of the casual cleaners engaged by the Nursery to perform those duties. I am therefore satisfied that on the balance of probabilities, that in the circumstances, it would have been reasonable for Mrs Nestorovska to be redeployed within the enterprise of the Nursery as a cleaner employed on a casual basis.
Was Mrs Nestorovska’s dismissal harsh, unjust or unreasonable?
[77] Having been satisfied of each of subsections 385(a), (c) and (d) of the FW Act, it is necessary to determine whether Ms Nestorovska’s dismissal was harsh, unjust or unreasonable. The criteria to be taken into account when assessing whether her dismissal was harsh, unjust or unreasonable are set out at section 387 of the FW Act:
“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.”
[78] The ambit of the conduct which may fall within the phrase ‘harsh, unjust or unreasonable’ was explained in Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 465 by McHugh and Gummow JJ as follows:
“.... It may be that the termination is harsh but not unjust or unreasonable, unjust but not harsh or unreasonable, or unreasonable but not harsh or unjust. In many cases the concepts will overlap. Thus, the one termination of employment may be unjust because the employee was not guilty of the misconduct on which the employer acted, may be unreasonable because it was decided upon inferences which could not reasonably have been drawn from the material before the employer, and may be harsh in its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct in respect of which the employer acted.”
[79] To determine whether Mrs Nestorovska’s dismissal was, in the circumstances, harsh, unjust or unreasonable, it is necessary to consider each of the criteria set out in section 387 of the FW Act to the extent that they are relevant to the circumstances of this matter: Annetts v Ansett Australia Ltd (2000) IR 98 at [15]
Did the Foundation have a valid reason for dismissing Mrs Nestorovska? (s.387(a))
[80] An employer must have a valid reason for the dismissal of an employee protected from unfair dismissal, although it need not be the reason given to the employee at the time of the dismissal.53 The reasons should be ‘sound, defensible and well founded’54 and should not be ‘capricious, fanciful, spiteful or prejudiced.’55 The reason must be valid in the context of the employee’s capacity or conduct. The requirement to be reasonable must be applied in a practical common sense way to ensure that the employer and employee are each treated fairly.56
[81] Mrs Nestorovska was dismissed because the Foundation no longer required any cleaners not for any reason associated with her capacity to perform her work or her conduct in performing her work. I have therefore regarded the question of whether there was a valid reason for her dismissal as a neutral factor. 57
Was Mrs Nestorovska given an opportunity to respond? (s.387(c))
[82] An employee protected from unfair dismissal must be provided with an opportunity to respond to any reason for dismissal relating to the conduct or capacity of the person. This criterion is to be applied in a common sense way to ensure the employee is treated fairly and should not be burdened with formality.58
[83] According to Ms Tostevin, the decision to dismiss Mrs Nestorovska was made on 13 March 2018. Ms Tostevin telephoned Mrs Nestorovska the following day and informed her that the Foundation had been placed in voluntary administration. Ms Tostevin arranged to meet Mrs Nestorovska the next day at Mrs Nestorovska’s home to explain how the restructure would impact Mrs Nestorovska. On 15 March 2018, Ms Tostevin attended at Mrs Nestorovska’s home and told Mrs Nestorovska that her position had been made redundant. During this meeting Ms Tostevin gave Mrs Nestorovska a letter confirming that Mrs Nestorovska’s employment had been terminated with immediate effect. 59
[84] There is no evidence before me that Mrs Nestorovska was given an opportunity to respond to the reasons given to her for her dismissal before the decision to dismiss her was made. I have taken this into account as a relevant matter for the purposes of section 387(h) of the FW Act.
[85] The reason given to Mrs Nestorovska for her dismissal did not relate to her capacity or conduct so, even if she had been provided with an opportunity to respond, it would not have related to her capacity or conduct 60 and therefore could not have satisfied section 387(c) of the FW Act. I have therefore regarded this factor as neutral.61
Was Mrs Nestorovska unreasonably refused a support person? (s.387(d))
[86] Where an employee protected from unfair dismissal has requested a support person be present to assist in discussions relating to the dismissal, the employer should not unreasonably refuse that person being present. There is no positive obligation on an employer to offer an employee the opportunity to have a support person.62
[87] Mrs Nestorovska was offered the opportunity to have a support person present during her meeting with Ms Tostevin on 15 March 2018. Mrs Nestorovska took advantage of this offer and both her son and her daughter-in-law were present during the meeting.
[88] I therefore find the Administrators did not unreasonably refuse to allow Mrs Nestorovska to have a support person present at discussions relating to the dismissal.
Was Mrs Nestorovska given warnings regarding her unsatisfactory performance? (s.387(e))
[89] Where an employee protected from unfair dismissal is dismissed for the reason of unsatisfactory performance, the employer should warn the employee about the unsatisfactory performance before the dismissal. Unsatisfactory performance is more likely to relate to an employee’s capacity than their conduct.63
[90] The Administrators dismissed Mrs Nestorovska on the grounds that her position was redundant. The Administrators did not rely on Mrs Nestorovska’s work performance as ground or reason for her dismissal. This factor is therefore neutral.
What is the impact of the size of the respondent on procedures followed and the presence or absence of dedicated human resources management specialist/expertise on the procedures followed? (s.387(f) and s.387(g))
[91] The Foundation is small company of 28 employees 64 without dedicated human resource management expertise. However, it appears that the Foundation was not without some considerable cash flow, benefitting from a semi-annual injection of more than $700,000 from the JV.65
[92] The Administrators say that they do not employ specialists with human resource specialist expertise. The Administrations submit that engaging external expertise was not justified in the circumstances; however in retrospect the engagement of external expertise at an earlier point might have spared the cost of two conferences and a hearing in a regional location. 66
[93] I am satisfied that the size of the Foundation and the absence of dedicated human resource management expertise impacted on the process followed to effect Mrs Nestorovska’s dismissal.
Are there any other relevant matters? (s.387(h))
[94] Section 387(h) provides the Commission with a broad scope to consider any other matters it considers relevant.
[95] The Administrators submit that Mrs Nestorovska has suffered no hardship as a result of her dismissal because she had been on an extended period of unpaid leave at the time of her dismissal, had delayed her return to paid duties by approximately one month due to not attending a medical at the earliest opportunity and had not returned to paid duties at the Foundation entered voluntary administration.
[96] In relation to these submissions I note that the leave in question was authorised by the Foundation and was unpaid. Arguably this benefited the Foundation as the Foundation was spared Mrs Nestorovska’s wage costs during this period as the contract was performed by employees of the Nursery, presumably at the Nursery’s cost. I also note that Mrs Nestorovska was scheduled to return to work on 27 February 2018 and indicated on 21 February 2018 that she would be ready and willing to recommence work on 27 February 2018. The Foundation made it a precondition of her return to work that she attend a medical, although the Foundation did arrange for that medical to occur until 27 February 2018. Mrs Nestorovska says that she was unfit to attend the medical on that date. There is no evidence that this assertion was false or that Mrs Nestorovska did not have sufficient accrued sick leave to be lawfully absent from the medical. On 28 February 2018 Mrs Nestorovska informed Ms Tostevin that she was fit to undergo a medical. A medical was not booked until 8 March 2018. The delay in Mrs Nestorovska’s return to work beyond any lawful authorised absence lay with the Foundation and not Mrs Nestorovska.
[97] It is unclear whether Mrs Nestorovska was paid for the period between 29 February 2018 and her dismissal on 15 March 2018. If not, she may have a claim for unpaid wages.
[98] I have taken into account Mrs Nestorovska’s age and the fact that she lives in a regional area as factors which limit her opportunities for securing alternative employment.
[99] I have also taken into account the failure by the Administrators to fully explore the opportunities for redeployment of Mrs Nestorovska and to genuinely consult with Mrs Nestorovska regarding mitigating the impact of organisational change upon her. 67
Conclusion
[100] Having considered each of the matters specified in section 387 I am satisfied that the failure by the Administrators to fully explore the opportunities for redeployment and to genuinely consult with Mrs Nestorovska caused the dismissal of Mrs Nestorovska to be unreasonable. Given her age and her residential location in a regional area of Western Australia I am satisfied that her dismissal was harsh. Accordingly, I find Mrs Nestorovska’s dismissal was unfair.
Remedy
[101] Mrs Nestorovska seeks an Order that she be compensated.
[102] Section 390 of the FW Act sets out the circumstances in which an order for reinstatement or compensation may be made:
“390 When the FWC may order remedy for unfair dismissal
(1) Subject to subsection (3), the FWC may order a person’s reinstatement, or the payment of compensation to a person, if:
(a) the FWC is satisfied that the person was protected from unfair dismissal (see Division 2) at the time of being dismissed; and
(b) the person has been unfairly dismissed (see Division 3).
(2) The FWC may make the order only if the person has made an application under section 394.
(3) The FWC must not order the payment of compensation to the person unless:
(a) the FWC is satisfied that reinstatement of the person is inappropriate; and
(b) the FWC considers an order for payment of compensation is appropriate in all the circumstances of the case.
Note: Division 5 deals with procedural matters such as applications for remedies.”
[103] I am satisfied Mrs Nestorovska was protected from unfair dismissal pursuant to section 382 of the FW Act and that she was dismissed unfairly.
Is an Order for reinstatement appropriate?
[104] Reinstatement is the FW Act’s primary remedy for unfair dismissal and must be ordered if sought unless the FWC is satisfied on proper grounds that reinstatement is not appropriate. In DP World Sydney Limited v Lambley[2013] FWCFB 9230 at [138], the Full Bench of the FWC said:
“The language of s.390 makes the position pellucidly clear. The Commission “must” order reinstatement unless reinstatement of the person is inappropriate.”
[105] Mrs Nestorovska does not seek reinstatement on the grounds that her relationship with the Foundation and its associated entities has now broken down as a consequence of the litigation and because she has obtained alternative employment with one of her sons. 68 In light of these submissions and my findings that Mrs Nestorovska’s position with the Foundation was redundant and she could not be redeployed elsewhere in the Foundation I am satisfied that reinstatement is not appropriate.
Is an Order for compensation appropriate?
[106] Section 390(3)(b) provides an order for compensation can only be made if such an Order is appropriate in all the circumstances.
[107] Mrs Nestorovska seeks an Order that she be compensated in lieu of being reinstated.
[108] If the Foundation had consulted with Mrs Nestorovska in accordance with the EA and properly explored the opportunities for redeployment as a casual cleaner with the Nursery I am satisfied that at that time of her dismissal Mrs Nestorovska would have accepted employment on a casual basis with the Nursery. However given that reinstatement is not appropriate I am satisfied that an order for compensation is appropriate in all the circumstances of this case.
[109] Section 392 of the FW Act sets out the circumstances that must be taken into consideration when determining an amount of compensation, the effect of any findings of misconduct on that compensation amount and the upper limit of compensation that may be ordered:
“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.”
[110] Neither party adequately dealt with the issue of remedy in their written or oral submissions. Directions will therefore be issued for the filing of materials addressing this issue and providing the opportunity for the parties to make oral submissions with respect to the quantum of any compensation order arising from this decision.
Conclusion
[111] I am satisfied that Mrs Nestorovska was protected from unfair dismissal, that the dismissal was unfair, and that a remedy of compensation is appropriate.
[112] Directions will be issued to the parties requiring the filing of materials in order for me to determine the quantum of compensation to be awarded to Mrs Nestorovska.
DEPUTY PRESIDENT
Appearances:
D Nestorovska, Applicant.
M Hyde for the Respondent.
Hearing details:
2018.
Karratha.
July 19.
Printed by authority of the Commonwealth Government Printer
<PR609191>
1 Exhibit R5.
2 Exhibit R3 at Annexure LS1; Exhibit A1 at [2]; Exhibit R6 at [1].
3 Exhibit R3 at [4].
4 Exhibit R5.
5 Exhibit R3 at [5]–[6].
6 Exhibit R3 at [10]; Exhibit R6.
7 Exhibit R3 at Attachment LS-2.
8 Exhibit R3 at [15]; Exhibit A1 at [3]; Exhibit R6.
9 Exhibit R3 at [18]–[23]; Exhibit R6 at [10]–[15].
10 Exhibit R3 at [24]–[26].
11 Ibid at [27].
12 Exhibit R3 at [31]; Exhibit R6 at [17].
13 Exhibit R3 at [32]–[33]; Exhibit R6 at [18].
14 Exhibit R3 at [34]; Exhibit A1 at [8]; Exhibit R6 at [20].
15 Exhibit R3 at [35]; Exhibit R6 at [21].
16 Exhibit R6 at [19].
17 Exhibit A1 at [9].
18 Transcript at PN241 and PN330.
19 Ibid at PN58–59.
20 Ibid at PN44.
21 Ibid at PN40-41.
22 Kieselbach v Amity Group Pty Ltd (Unreported, AIRC, Hamilton DP, 9 October 2006) PR973864.
23 Exhibit A4.
24 Transcript at PN211–PN212.
25 Exhibit R6 at [6].
26 Exhibit R2 at [9].
27 Exhibit R3 at Attachment LS-5.
28 Exhibit R2 at [8]–[9].
29 Construction, Forestry, Mining and Energy Union v Newcastle Wallsend Coal Company (1998) 88 IR 202.
30 UES (Int’l) Pty Ltd v Harvey (2012) 215 IR 263.
31 Transcript PN44–PN45.
32 Exhibit R1 at [21].
33 Exhibit R3 at [28].
34 Exhibit R1 at [22].
35 Exhibit R3 at [31].
36 Ibid at [34].
37 Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v QR Limited [2010] FCA 591 at [40]–[45].
38 Mrs Nestorovska’s and Mr Nestoroski’s evidence that Mrs Nestorovska and Ms Tostevin discussed the possibility of Mrs Nestorovska being engaged on a casual basis to perform the cleaning work at Dampier Salt when Ms Tostevin visited Mrs Nestorovska at her home on 15 March 2018.
39 Transcript at PN252.
40 Ibid at PN241.
41 UES (Int’l) Pty Ltd v Harvey (2012) 215 IR 263 at [27].
42 Exhibit R1 at [23]–[25].
43 Exhibit R3 at [5].
44 Late in her evidence Ms Tostevin revealed that one of the cleaners employed by the Nursery is employed on a full time basis: Transcript at PN263.
45 Transcript at PN242, PN248 and PN251.
46 Ibid at PN223 and PN275.
47 Ibid at PN330.
48 Ibid at PN252 and PN281–318.
49 Exhibit R2 at [9].
50 Transcript at PN330.
51 Ibid at PN241.
52 Ibid at PN70–PN71, PN80–PN81.
53 Shepherd v Felt & Textiles of Australia Ltd (1931) 45 CLR 359 at 373 and 377-378.
54 Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371 at 373.
55 Ibid.
56 Ibid.
57 UES (Int’l) v Leevan Harvey[2012] FWAFB 5241 at [26].
58 RMIT v Asher (2010) 194 IR 1 at 14–15.
59 Exhibit R3 at [35] and Exhibit R6 at [21].
60 Exhibit R2 at [10].
61 UES (Int’l) Pty Ltd v Harvey (2012) 215 IR 263 at [43].
62 Explanatory Memorandum, Fair Work Bill 2008 (Cth) at [1542].
63 Annetta v Ansett Australia Ltd (2000) 98 IR 233 at 237.
64 As at 12 March 2018. See Exhibit R2 at [11].
65 Exhibit R5 at page 11.
66 Exhibit R2 at [11].
67 UES (Int’l) Pty Ltd v Harvey (2012) 215 IR 263 at [26]–[27].
68 Transcript at PN344.
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