Dinh Trong Dang v The Vietnamese Community in Australia NSW Chapter Incorporated

[2022] FWC 3341

[2022] FWC 3341

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.394—Unfair dismissal

Dinh Trong Dang
v

The Vietnamese Community in Australia NSW Chapter Incorporated

(U2022/7821)

COMMISSIONER MCKINNON SYDNEY, 22 DECEMBER 2022

Application for an unfair dismissal remedy

1. The Vietnamese Community in Australia NSW Chapter Incorporated (VCA NSW) is an independent representative body of Vietnamese Australian refugees and permanent residents in NSW. It is comprised of a Management Committee (Committee), and Advisory and Supervisory Council (AS Council), association members and individual members. The Committee is the representative body for VCA NSW, whose role is to manage the activities and staff of VCA NSW. The AS Council represents the association members and supervises the Committee.

1. Mr Dinh Trong Dang was employed by VCA NSW as a Problem Gambling Counsellor from 21 August 2000 until 11 July 2022, when he was dismissed due to a “lack of funding and financial resources”. Mr Dang applied in time for an unfair dismissal remedy from the Commission. VCA NSW is a small business employer. It objects to the application on the basis that the dismissal was a case of genuine redundancy.

1. I have decided that the dismissal was not a case of genuine redundancy and that Mr Dang was unfairly dismissed. These are my reasons.

Protection from unfair dismissal

1. A person is protected from unfair dismissal if, at the time of dismissal, they have completed at least the minimum employment period and they are covered by a modern award, and/or an enterprise agreement applies to them, and/or their annual rate of earnings is less than the high income threshold.[1]

1. Mr Dang was employed by VCA NSW for significantly more than 12 months. He has completed at least the minimum employment period as an employee of VCA NSW. There is no dispute that Mr Dang was dismissed from his employment by VCA NSW.

1. At the time of dismissal, Mr Dang’s annual rate of earnings was below the high income threshold of $158,500. In any event, Mr Dang was covered by the Social, Community, Home Care and Disability Services Industry Award 2010 (the Award). Mr Dang is protected from unfair dismissal.

1. Under section 385 of the Act, a person has been unfairly dismissed if the Commission is satisfied that they have been dismissed; that the dismissal was harsh, unjust or unreasonable; that the dismissal was not consistent with the Small Business Fair Dismissal Code and that it was not a case of genuine redundancy.[2]

1. The employment of Mr Dang was terminated for reasons of redundancy. The dismissal was not consistent with the Small Business Fair Dismissal Code because the Code does not apply to dismissals due to redundancy. The question is whether the dismissal was a case of genuine redundancy.

1. If the dismissal was not a case of genuine redundancy, the second question is whether the dismissal was harsh, unjust or unreasonable (and so unfair).

Relevant background

1. Under the VCA NSW Constitution, the term of a member of the VCA NSW Committee is 2 years. The Committee President is only allowed 2 consecutive terms. Clause 15.2 of the Constitution provides that if the whole Committee cannot carry out their duties, the AS Council is required to temporarily take over the responsibility of managing the Vietnamese Community and organise an election within 4 weeks, or if the transition occurs within 3 months of the expiry of elected terms, until the term expires and a new Committee has been elected. If the AS Council temporarily takes over management tasks of the community, the President of the AS Council temporarily acts as President of the Committee (clause 17.2).

1. On 7 November 2021, at VCA NSW’s annual general meeting, all members of the Committee resigned, including its President, Mr Paul Huy Nguyen. I reject the evidence of Mr Nguyen that he did not resign at this meeting.

1. On 21 December 2021, the Welfare Centre Coordinator, Ms Thi Van Hanh Nguyen, wrote to the AS Council advising that VCA NSW’s funding agreements with the Department of Customer Services was due to expire on 31 December 2021, at which time the Problem Gambling Counsellor employment contracts of herself and Mr Dang would also end. Ms Nguyen notified the AS Council of outstanding contractual obligations to acquit the expiring funding agreement, as well as the Welfare Centre’s projects that needed to continue in 2022-2023, projects handed over by the “Ex-President” Mr Nguyen and leave accruals for staff to 1 December 2021. The letter asked for guidance and decisions on future plans, including whether staff could continue to use the offices and office facilities, how to deal with issues in relation to projects handed over, and a proposal to apply for VCA NSW to become a registered provider of aged care services.

1. On 31 December 2021, the funding agreement referred to above expired and VCA NSW’s role in providing problem gambling counselling services ceased. Ms Nguyen asked Mr Dang to work as a project worker for Cancer Screening and Cancer Control programs, and to provide case work services and assist Ms Nguyen in writing submissions and organising information sessions and other activities. Mr Dang agreed and continued working for VCA NSW.

1. After 23 March 2022, Mr Dang did not receive any payment of wages, despite continuing to work and submit his timesheets on the due date as usual. He asked Ms Nguyen about it. Ms Nguyen said she would contact the AS Council and let him know.

1. On 11 April 2022, Mr Dang attended a meeting with Ms Kim Huong Thi Nguyen (Ms Huong), the Vice President of the AS Council and two other AS members as well as Ms Nguyen. Ms Nguyen advised the AS Council members that staff had not been paid for the past fortnight. Ms Huong advised that VCA NSW’s bank accounts had been frozen.

1. On 14 June 2022, Mr Dang received an email from Mr Nguyen asking to meet to discuss “future work plan and arrangements” and stating that the Committee had not received any reports from staff in respect of work in progress or ongoing projects.

1. On 17 June 2022, Mr Dang was sent a copy of an email from Ms Huong:

“I refer to your email and confirm that the Management Committee of the VCA/NSW resigned at the Annual General Meeting on 7 November 2021 and that the Advisory Council has been the acting Management Committee of VCA/NSW from that day.

Mr Paul Huy has no authority in managing the VCA from 7 November 2021. Any attempt to assume power by Paul Huy Nguyen will be treated as an illegal Act.

Kind Regards,

Kim Huong Thi Nguyen
Vice President of Advisory Council”

1. Mr Dang did not respond to the information request from Mr Nguyen. He understood that this was Ms Nguyen’s responsibility in her role as Welfare Centre Coordinator.

1. On 23 June 2022, Mr Dang and Ms Nguyen met with Mr Nguyen and Ms Kate Hoang, who said they were acting as President and Vice President of VCA NSW at that time. They asked for performance reports and timesheets and payroll summaries for the period since 24 March 2022. Ms Nguyen appears to have taken minutes of the meeting. VCA NSW deny that they are an accurate record of what occurred. I accept the minutes of the meeting as an accurate summary of the discussion from Ms Nguyen’s perspective and reject the evidence of Mr Nguyen to the effect that he told Mr Dang and Ms Nguyen in that meeting that “if we can’t find sufficient funding immediately, we won’t be able to keep you on”.

1. On 28 June 2022, Mr Dang received an email from Mr Nguyen saying:

“This is to confirm that the above meeting was held and i like to confirm the following:

-     The welfare staff did not report to the EC any work activities nor work schedules, timesheets since November 2021.

-     We requested the office to send the detail of past performance reports (for the last 6 months) including any new grants/work in progress of existing grant … etc

-     We requested all timesheets and payroll summary for each fortnight for the same period with view to sort out all outstanding wages commitment.

To date, we have not received any response from you.”

1. On 30 June 2022, Mr Nguyen wrong to Mr Dang and Ms Nguyen as follows:

“I write to advise you that the Management Committee and Advisory council held a meeting on 29/6 to discuss the above matter and matters relating to our earlier meeting on 23/6 with Welfare office.

We noted the following:

-     To date there were reports sent by the office to MC.

-     Income grants from the last 6 months was approximately $6,000

-     Wages for all staff has been paid and or accrued amount to $3,850 PER WEEK and continues (approximately $100,100 in wages & super for the last 6 months) plus all leave accruals entitlements.

-     There were no prospect of any income or grants from any sources in the foreseeable future,

-     Our office overheads continue to incur at around $800 a month.

Having due regard to the above mentioned facts, we are of the view that the current situation is financially unsustainable and if this continues would lead to a dire financial consequences of VCA NSW.

In light of the above we ask that if you would have any responses to the above concerned problems.

Paul Huy Nguyen”

1. On 1 July 2022, Mr Cong Binh Tran, the bookkeeper for VCA NSW, sent payroll summaries from 24 March 2022 to 29 June 2022 to Mr Nguyen to show wages outstanding for staff.

1. On the morning of Monday, 4 July 2022, Mr Dang received a phone call from Ms Nguyen saying that she could not go into the office in Cabramatta because someone had reset the number lock and changed the key lock. When Mr Dang arrived, he saw Ms Nguyen, Ms Huong and two locksmiths. After the two locks were reset, they went into the office and Mr Dang checked his computer. He noticed that his screen had been changed and another user login had been used.

1. On 6 July 2022, Mr Dang received an email from Mr Nguyen asking all staff and volunteers to vacate the Cabramatta office immediately and work from home until further notice.

1. On 8 July 2022, Mr Dang had lunch with Ms Nguyen and three others. He asked Ms Nguyen if he could take the office printer home to use for scanning documents while working from home. Ms Nguyen had doubts that the printer still worked. Upon further inquiries, it was discovered that the printer still worked, but a new ink cartridge would be required.

1. At about 3.00pm Mr Dang moved his car to the car park close to the office. Mr Dang and others tried to put it into the boot of his car but it would not fit. They decided to put it back into the office and return the following week with a bigger car.

1. At approximately 5.00pm, Mr Dang and his colleagues were leaving the office. They saw a small group of people with mobile phones in their hands taking photos and videos of them. This included Mr Tat Phuong Nguyen, a member of the AS Council, and his wife, who followed the staff for about 10 minutes.

1. On 11 July 2022, Mr Dang received a letter of termination on the grounds of redundancy under the signature of Mr Nguyen, VCA NSW President.

Was the dismissal a case of genuine redundancy?

Did VCA NSW no longer require Mr Dang’s job to be performed because of changes in its operational requirements?

1. I am satisfied that at the time of dismissal, Mr Dang’s job was no longer required by VCA NSW to be performed by anyone. VCA NSW is a not-for-profit community organisation that relies on government funding for the vast majority of its activities and projects. From 31 December 2021, funding associated with his longstanding role of Problem Gambling Counsellor ceased. This represented a major change in the operational requirements of VCA NSW as it meant the cessation of problem gambling services that it had delivered in the community for many years. From that time on, Mr Dang continued to perform work at the direction of Ms Nguyen on other projects, although this was not a sustainable long‑term solution.

1. The unsustainable financial position of VCA NSW was set out clearly in the email from Mr Nguyen to Mr Dang and Ms Nguyen on 30 June 2022. While income grants for the past 6 months were approximately $6,000, the wages bill for staff over that period was accruing at $3,850 per week, plus leave accruals and superannuation (approximately $100,100 in the same 6‑month period) and the cost of maintaining the office was around $800 per month. In relation to this email, it is necessary to observe that I do not read it as falsely asserting that staff had been paid their wages for all of this period. The words used by Mr Nguyen are “paid and or accrued”, referring to wage liabilities in the 6‑month period from 1 January 2022 to 30 June 2022. Employees of VCA NSW were paid for approximately half of that period. For the remaining half, their unpaid entitlements continued to accrue.

1. While there is no direct evidence of when the decision was made by VCA NSW to terminate the employment of Mr Dang due to redundancy, I find that this occurred after 7 July 2022, when Ms Nguyen asked the AS Council to confirm the employment status of staff, and before 11 July 2022, when the decision to terminate his employment was communicated to Mr Dang.

Failure to consult under the Award

1. The dismissal will not be a genuine redundancy for the purposes of the Act unless VCA NSW has complied with its redundancy-related consultation obligations under the Award.[3]

1. Clause 8 of the Award applies if an employer makes a definite decision to make major changes in production, program, organisation, structure or technology that are likely to have significant effects on employees. Clause 8 applied to the cessation of problem gambling services upon completion of the funding grant on 31 December 2021. This is because it was likely to mean the end of employment or at the very least, reduced working hours, for at least two of its four employees.

1. Under clause 8, as soon as practicable after the decision to cease providing the service was made, VCA NSW was required to:

(a) give notice of the changes it had decided to make to all employees who may be affected by them and any of their representatives; and
(b) discuss with them the introduction of the changes, their likely effect on employees; and measures to avoid or reduce the adverse effects of proposed changes.

1. What makes this case slightly unusual is that the decision to cease providing problem gambling services was made by acquiescence rather than expressly. That is, VCA NSW had a Performance and Funding Agreement with the NSW Department of Customer Service to provide the service. The Agreement expired on 31 December 2021. It was a notorious fact to VCA NSW that funding for the service would end on this day. The matter was also brought to the attention of the AS Council (then acting in the dual role of the Committee) on 21 December 2021 by Ms Nguyen. There is no evidence of attempts by VCA NSW to secure alternative funding to continue to provide the service. It was simply assumed that provision of the service would cease.

1. Ms Nguyen’s efforts to seek guidance on the likely consequences for staff when the funding agreement came to an end were met with silence. I accept that it is likely that this was because VCA NSW was embroiled in an internal dispute between members of the AS Council and Committee. The inattention to staff matters in the meantime resulted in a failure of VCA NSW to give notice of the cessation of the services to its staff (except through Ms Nguyen). There was no discussion about the introduction of the change or its likely effect on employees. There was no discussion about measures to avoid or reduce the adverse effects of the proposed changes. Attempts to seek clarification and/or approval on proposed reductions in working hours to meet the new circumstances of VCA NSW were unsuccessful.

1. I find that VCA NSW did not comply with its obligations to consult about the changes that ultimately led to the redundancy of Mr Dang under clause 8 of the Award.

Reasonable redeployment

1. A dismissal is not a case of genuine redundancy if it would have been reasonable in all the circumstances for the person to be redeployed within the employer’s enterprise or that of one of its associated entities.

1. There is no evidence that it would have been reasonable to redeploy Mr Dang within VCA NSW to another position. There is no evidence that there was any such vacant position. There is also no evidence of any associated entities of VCA NSW. I am not satisfied that it would have been reasonable in all the circumstances to redeploy Mr Dang.

Was the dismissal harsh, unjust or unreasonable?

1. Whether a dismissal was harsh, unjust or unreasonable depends on an assessment of all the relevant facts and circumstances, including those set out in section 387 of the Act. Those are considered in turn.

Was there a valid reason for the dismissal related to capacity or conduct, and was it notified to Mr Dang?

1. I find that there was a valid reason for the dismissal of Mr Dang on the basis that VCA NSW no longer required his role to be performed by anyone, for the reasons given above. The reason was foreshadowed, but not expressly notified to Mr Dang in communications from Mr Nguyen on 14 June 2022, 23 June 2022 and 30 June 2022. The reason was only notified to Mr Dang when the decision to terminate his employment on redundancy grounds was communicated on 11 July 2022.

Was there an opportunity to respond to any capacity or conduct related reason?

1. The reasons for dismissal did not relate to the capacity or conduct of Mr Dang. This is not a relevant matter in the circumstances.

Was there any unreasonable refusal to allow a support person to be present to assist at any discussions relating to dismissal?

1. There was no unreasonable refusal to allow Mr Dang to have a support person assist in discussions about the dismissal. This is not a relevant consideration.

Was Mr Dang warned about relevant unsatisfactory performance?

1. Mr Dang’s dismissal was not related to unsatisfactory performance. This is not a relevant consideration.

Degree to which the size of the employer’s business and any absence of dedicated human resources management specialists or expertise in the business would be likely to impact on procedures followed in effecting the dismissal

1. VCA NSW is a small business employer. There is no evidence that it had relevant human resources or other specialist expertise to assist with the process of making an employee redundant. Volunteer members of the Committee and AS Council do not appear to have been overly familiar with the Award or its application to the circumstances that it faced. These matters contributed to deficiencies in the process adopted to make Mr Dang’s position redundant.

Other relevant matters

1. Mr Dang has not been paid any wages since the last week of March 2022 and nor was he paid his entitlements on termination, including notice of termination under the National Employment Standards. It is not for the Commission to determine underpayment claims, but the matter remains relevant because of the uncertainty it created in relation to Mr Dang’s role from at least 31 December 2021.

1. The Committee and the AS Council knew in April 2022 that the bank accounts of VCA NSW had been frozen due to a legal dispute. They must have known that one consequence of this was that employees would no longer be paid wages. Likely, they also considered the need to address the question of their ongoing employment in the near future. And yet they took no positive steps to consult with employees about the changed funding position and how it proposed to continue to service the Vietnamese community, or how employees might be affected by the separate legal case, or how VCA NSW proposed to ensure it met its obligations in relation to employment entitlements.

1. Mr Dang was left in this position of uncertainty – working but not being paid - for more than three months before the decision to terminate his employment was finally made and communicated. In my view, this was manifestly unreasonable.

1. A related question is whether VCA NSW was aware that its staff were still working after 31 December 2021. I do not accept that staff failures to follow the correct payroll process left members of the Committee and/or AS Council in the dark about what they were doing, if anything. As they had done for many years, staff continued to work and to follow the usual process of submitting timesheets to Ms Nguyen for sign off in her capacity as Welfare Centre Coordinator. Once signed off, Ms Nguyen sent the timesheets to Mr Tran, the bookkeeper. Based on these signed timesheets, Mr Tran prepared payroll summaries and activities and arranged for payment of staff with approval of the Committee Treasurer, Mr Minh Trien Nguyen. Of course, Mr Tran was unable to complete the payroll process without approval from the Committee. This was where the process failed, and responsibility sits with VCA NSW alone.

1. As to Mr Nguyen’s authority to act in relation to the termination of Mr Dang’s employment, the precise machinations of VCA NSW in relation to its office-bearers over the period from late November 2021 to 11 July 2022 are not in evidence. Mr Nguyen resigned as President on 7 November 2021, likely because his 2‑year term on the Committee had expired. A dispute seems to have arisen between members of the Committee and members of the AS Council, causing a change in the office bearers over the period. It seems likely that after his resignation, Mr Nguyen was asked to step up to the role again, if not permanently, then in an acting capacity. Whatever his status was under the VCA NSW Constitution, it appears that he had the endorsement of the President of the AS Council through Mr Huynh. I find that Mr Nguyen had at least apparent authority to act as he did in relation to the employment of Mr Dang.

1. There is one final matter of relevance. There have been factual disputes in the evidence as between Mr Dang and Mr Nguyen – specifically in relation to whether Mr Nguyen resigned, and in relation to communications from the staff to Mr Nguyen after 31 December 2021. In each case, I have preferred the evidence of Mr Dang, whose evidence was sincere and consistent, to that of Mr Nguyen, whose evidence was more difficult to follow at times.

Conclusion on the merits

1. I find that Mr Dang was unfairly dismissed. While there was a valid reason for dismissal, in the circumstances the dismissal was unjust because it involved conduct that was contrary to law, and unreasonable because of the failure to engage in any meaningful communication with Mr Dang about what was likely to happen with his employment for more than three months. It was also harsh to Mr Dang, who is 68 years old and had worked diligently for VCA NSW and for the benefit of the Vietnamese community in Australia, for almost 22 years.

Compensation

1. Reinstatement is not an appropriate remedy in this case because of the financial position of VCA NSW, which now appears to be reliant on volunteers to undertake the limited project work for which it is funded.

1. Compensation is the appropriate remedy for Mr Dang.

1. Section 392(2) of the Act deals with how compensation is to be assessed in connection with an unfair dismissal. The established methodology is elaborated on in Bowden v Ottrey Homes Cobram and District Retirement Villages Inc (Bowden).[4] I respectfully adopt and apply the approach set out in that decision.

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

1. While VCA NSW has limited access to ongoing project funding, I am not satisfied that an order for compensation will materially affect its viability. No reduction in the amount of compensation is made for this reason.

Remuneration Mr Dang would have received, or would have been likely to receive, if he had not been dismissed (s.392(2)(c))

1. It is likely that Mr Dang would only have remained in employment with VCA NSW for approximately four weeks had an appropriate process to give effect to the dismissal been adopted.

1. Mr Dang’s weekly earnings on 23 March 2022 when his wages ceased being paid were $2,835.28 gross per fortnight (56 hours at $50.63 per hour). I find that Mr Dang would have earned $5,670.56 gross in the 4-week period had he not been dismissed, although it is unlikely that he would have received payment of this amount given the failure of VCA NSW to pay wages after March 2022.

Remuneration earned (s.392(2)(e)) and income reasonably likely to be earned (s.392(2)(f))

1. Mr Dang was not paid an amount in lieu of notice of termination and there is no evidence that he has earned any other income in the period since dismissal.

1. No adjustment of the compensation amount is required on this basis.

Length of service (s.392(2)(b))

1. Mr Dang had almost 22 years’ service with VCA NSW. This is not an insignificant period of service. The compensation amount will be increased by 1 week on this account, or $1,417.64. This brings the total compensation amount to $7,088.20 gross.

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

1. It is understandable in the circumstances that Mr Dang has not made active efforts to mitigate his losses since the dismissal. He had already endured a number of months working without pay. Mr Dang is 68 years old and has medical conditions for which he has been seeking treatment. His long experience is in community work and gambling counselling and he has not yet seen work of this kind advertised. No adjustment of the compensation amount will be made in relation to mitigation.

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

1. No adjustment of the amount of compensation is made for contingencies because of the period of time that has elapsed since the dismissal, and the limited prospects of any change in the circumstances of Mr Dang between the date of hearing and decision.

Misconduct (s.392(3))

1. There is no evidence that misconduct was a contributing factor to the dismissal. No reduction in the amount of compensation is appropriate under section 392 of the Act.

Shock, Distress (s.392(4))

1. The amount of compensation does not include a component for shock, humiliation or distress.

Compensation cap (s.392(5)&(6))

1. The amount of $7,088.20 gross is less than the compensation cap of 26 weeks’ pay and no further adjustment of the amount is necessary.

Instalments (s.393)

1. An application was made by VCA NSW to pay any compensation awarded by instalments. I consider this appropriate and will order that the compensation amount be paid in three equal fortnightly instalments.

Conclusion on remedy

1. In my view, the compensation figure arrived at in this case does not yield an amount that is clearly excessive or clearly inadequate.

1. For the reasons set out above, I am satisfied that a remedy of compensation in the sum of $7,088.20 gross in favour of Mr Dang is appropriate in the circumstances of this case. I will issue an order [PR749122] to that effect.

COMMISSIONER

Appearances:

L Meagher of Counsel for the applicant.
A Kaylinger of Counsel for the respondent.

Hearing details:

2022.
Sydney (by video):
December 15.

[1] Fair Work Act 2009 (Cth), s.382.

[2] Fair Work Act 2009 (Cth), s.385.

[3] Fair Work Act 2009 (Cth), s.389(1)(b).

[4] [2013] FWCFB 431.

Printed by authority of the Commonwealth Government Printer

<PR749119>