Elisha Pilcer v Acquire Bpo Pty Ltd

[2020] FWC 6502

[2020] FWC 6502

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Elisha Pilcer
v
Acquire BPO Pty Ltd
(U2020/4767)

COMMISSIONER LEE MELBOURNE, 22 DECEMBER 2020

Application for an unfair dismissal remedy.

[1] On 14 April 2020, Mr Elisha Pilcer (the Applicant) made an application to the Fair Work Commission (Commission) under s.394 of the Fair Work Act 2009 (Cth) (FW Act) for a remedy, alleging that he had been unfairly dismissed from his employment with Acquire BPO Pty Ltd (the Respondent). The Applicant seeks reinstatement and payment of compensation in the form of lost income, lost opportunity for commissions and lost superannuation.

When can the Commission order a remedy for unfair dismissal?

[2] Section 390 of the FW Act provides that the Commission may order a remedy if:

(a) the Commission is satisfied that the Applicant was protected from unfair dismissal at the time of being dismissed; and

(b) the Applicant has been unfairly dismissed.

[3] Both limbs must be satisfied. I am therefore required to consider whether the Applicant was protected from unfair dismissal at the time of being dismissed and, if I am satisfied that the Applicant was so protected, whether the Applicant has been unfairly dismissed.

When is a person protected from unfair dismissal?

[4] Section 382 of the FW Act provides that a person is protected from unfair dismissal if, at the time of being dismissed:

(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.

When has a person been unfairly dismissed?

[5] Section 385 of the FW Act provides that a person has been unfairly dismissed if the Commission 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.

The Hearing

[6] There being contested facts involved, the Commission is obliged by s.397 of the FW Act to conduct a conference or hold a hearing.

[7] After taking into account the views of the Applicant and the Respondent and whether a hearing would be the most effective and efficient way to resolve the matter, I considered it appropriate to hold a hearing for the matter (s.399 of the FW Act).

Permission to appear

[8] Both the Applicant and the Respondent sought to be represented before the Commission by a lawyer and Counsel respectively. I granted permission to appear pursuant to s 596(2)(a) of the FW Act as I was satisfied the matter was complex and allowing legal representation would allow the matter to be dealt with more efficiently.

Witnesses

[9] The Applicant gave evidence on his own behalf.

[10] The following witnesses gave evidence on behalf of the Respondent:

•  Mr Scott Stavretis, Chief Executive Officer; and

•  Ms Lea Akoka, Chief Executive Officer and Managing Director of Wall Street – HR Systems & Services.

[11] It is convenient at this point to deal with some issues with the evidence. Firstly, the Respondent filed witness statements of Ms Marshall and Mr Bastian. These witnesses were not called to give evidence. Consequently, I have placed no weight on their statements in making my findings. The Applicant’s representative sought that I make a Jones v Dunkel 1 inference that their evidence would not have supported the Respondent’s case. However, it is not clear in what material respect their evidence does not assist the Respondent’s case.2 I decline to make the Jones v Dunkel inference sought by the Applicant.

[12] Further, the Applicant sought to admit with its final written submissions and well after the conclusion of the hearing of evidence, an advertisement that was referred to in the Applicant’s statement. I have determined not to admit that advertisement. The Applicant submitted that there was no substantive prejudice in admitting the document. 3 However, the Respondent objected, making the reasonable point that had it been included in the Court Book during the proceedings, the Respondent would have led evidence on a range of factors, including what the underlying position was and where it was located in order to evidence that it would not have been reasonable to redeploy the Applicant to that position.4 I agree with that proposition, the Respondent will be substantially prejudiced if it is admitted. Further, it would not have been reasonable to re-open the case at that point. The advertisement will not be admitted into evidence.

Submissions

Has the Applicant been dismissed?

[13] A threshold issue to determine is whether the Applicant has been dismissed from their employment.

[14] Section 386(1) of the FW Act provides that the Applicant has been dismissed if:

(a) the Applicant’s employment with the Respondent has been terminated on the Respondent’s initiative; or

(b) the Applicant has resigned from their employment but was forced to do so because of conduct, or a course of conduct, engaged in by the Respondent.

[15] Section 386(2) of the FW Act sets out circumstances where an employee has not been dismissed, none of which are presently relevant. There was no dispute and I find that the Applicant’s employment with the Respondent terminated at the initiative of the Respondent. I am therefore satisfied that the Applicant has been dismissed within the meaning of s.385 of the FW Act.

Initial matters

[16] Under section 396 of the FW Act, the Commission is obliged to decide the following matters before considering the merits of the application:

(a) whether the application was made within the period required in subsection 394(2);

(b) whether the person was protected from unfair dismissal;

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

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

Was the application made within the period required?

[17] Section 394(2) requires an application to be made within 21 days after the dismissal took effect.

[18] It is not disputed and I find that the Applicant was dismissed from his employment on 25 March 2020 and made the application on 14 April 2020. I am therefore satisfied that the application was made within the period required in subsection 394(2).

Was the Applicant protected from unfair dismissal at the time of dismissal?

[19] I have set out above when a person is protected from unfair dismissal.

Minimum employment period

[20] It was not in dispute and I find that the Applicant was an employee, who commenced their employment with the Respondent on 6 May 2019 and was dismissed on 25 March 2020, a period in excess of 6 months.

[21] I am therefore satisfied that, at the time of dismissal, the Applicant was an employee who had completed a period of employment with the Respondent of at least the minimum employment period.

Modern award coverage

[22] It was a matter in dispute as to whether, at the time of dismissal, the Applicant was covered by an award, being the Contract Call Centres Award 2020. For reasons set out later in the decision I have determined the Applicant is not covered by a modern award.

[23] It was not in dispute and I find that, at the time of dismissal, the sum of the Applicant’s annual rate of earnings (being $98,550 inclusive of superannuation) was less than the high income threshold, which, for a dismissal taking effect on or before 30 June 2020, is $148,700.

[24] I am therefore satisfied that, at the time of dismissal, the Applicant was a person protected from unfair dismissal as his earnings were less than the high income threshold.

Was the dismissal consistent with the Small Business Fair Dismissal Code?

[25] Section 388 of the FW Act provides that a person’s dismissal was consistent with the Small Business Fair Dismissal Code if:

(a) immediately before the time of the dismissal or at the time the person was given notice of the dismissal (whichever happened first), the person’s employer was a small business employer; and

(b) the employer complied with the Small Business Fair Dismissal Code in relation to the dismissal.

[26] As mentioned above, I find that the Respondent was not a small business employer within the meaning of s.23 of the FW Act at the relevant time, having in excess of 14 employees (including casual employees employed on a regular and systematic basis).

[27] I am therefore satisfied that the Small Business Fair Dismissal Code does not apply, as the Respondent is not a small business employer within the meaning of the FW Act.

Was the dismissal a case of genuine redundancy?

[28] As set out above, the Respondent terminated the employment of the Applicant on the basis that his job was no longer required and he was redundant. On various grounds, the Applicant contends that the redundancy was not a genuine redundancy.

[29] Under s.389 of the FW Act, a person’s dismissal was a case of genuine redundancy if:

(a) the 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.

[30] I will now consider the submissions and evidence one each of the matters relevant to s.389 below.

Did the employer no longer require the Applicant’s job to be done by anyone because the changes in the operational requirements of the employer’s enterprise?

The Evidence

[31] The Respondent led evidence from two witnesses:

•  Mr Scott Stavretis, Chief Executive Officer of the Respondent and

•  Ms Leah Akoka, Chief Executive Officer and Managing Director of Wall Street - HR Systems & Services (Wall Street), a company engaged by the Respondent to perform human resources and recruitment functions. 5

As to the operational requirements point, the evidence of Mr Stavretis’ was that prior to the Applicant’s termination, the Respondent employed three Business Development Managers (BDM), one of which was the Applicant’s position where he performed work for a company called Shore Solutions.” 6

[32] According to the Respondent:

“Acquire is, indirectly, a substantial shareholder in Shore Solutions. Shore Solutions offers substantially similar services to Acquire, but targets the smaller end of the market. Staff working for Acquire and Shore Solutions in offshore locations often overlap … Shore’s business includes inbound and outbound sales, as well as customer contact centres. Its staff are primarily overseas.” 7

The day-to-day activities of the Applicant, who was employed by Acquire (a substantial shareholder in Shore Solutions), included the performance of services for Shore Solutions. 8 The Applicant’s role included soliciting customers for outsourcing services where the Shore Solutions business would provide those services to the clients.9

[33] In oral evidence, Mr Stavretis gave an account of how the COVID-19 pandemic affected the service offering of Shore Solutions. He stated that:

“In March, as the Philippines COVID-19 cases continued to rise, there was in the industry lots of challenges to make sure that people could be working in a safe environment. On 16 March President Duterte stated that there was going to be what they called a general community quarantine, or, sorry, what the media and everybody else refers to as a lockdown. That was basically telling most industries, including the business process outsourcing industry, which we're a part of, that within 48 hours we could only have a skeleton staff on in the call centre, and that we could only - those staff needed to be located within the centres LGU, which is called a - similar to what we would refer to as a suburb in Australia, so they could walk to work rather than take transport, and that was agreed skeleton force of staff to keep the operations up and running, and everybody else had to work from home or not work at all.

It was during those crazy times where within sort of 48 hours we quickly scrambled around and engaged with our clients, determined what we can do from there, how we could fulfil their contractual obligations. Under the contracts we couldn't, we needed to approach each client, we needed to negotiate a variation to lengthy service agreements, if you like, to allow us to work from home with the conditions and remove obligations on us, and such as providing the premises, et cetera. Some of those clients agreed and some of them didn't agree, and some of them took some time to agree. At that same period of time our clients were also having lots of troubles as well, so they were - we were also getting cancellation requests or downsize requests from our clients or clients obviously just not saying that they wouldn't allow work from home because their businesses were also suffering.

And so over a period of time communication wasn't coming out too clearly from the government, which is a challenge in the industry, and so we were sort of scrambling around to work out how we can get computers to people's homes for those that were allowed to work knowing that very quickly there was going to be transport restrictions where people weren't really allowed to travel between the LGUs and so we were in a survival mode, if you like, trying to work out what we could do to fill any of our client's obligations or, you know, the service that we provide to our clients and our employees, and so a part of that - the no work/no pay, so under the Philippines law due to these tough circumstances or similar if they are unable to work then our employees would go on what's considered a no work/no pay status, so either if they refused or are unable and so us and a lot of the industry at the time had a lot of employees on no work/no pay status.”  10

[34] Consistent with the evidence of Mr Stavretis, there was a dramatic reduction in the revenue of the Respondent. The Respondent’s revenue decreased dramatically in March-April 2020 (April 2020 revenue was 30% less than April 2019), and the Respondent qualified for JobKeeper. 11 There was no real challenge on this evidence. Mr Stavretis was asked about an Australian Financial Review article and queried on the definition of GST Turnover, but his responses to those questions do not alter the clear evidence that there had been a dramatic decrease in the company’s revenue.

[35] As a result of this significant reduction in revenue, Mr Stavretis undertook a review to look for cost savings. His evidence was that the COVID-19 pandemic meant that sales and business development personnel were unable to travel to “pitch” the services of the Respondent or Shore Solutions. Nor could the implementation of the service and training be undertaken. This was a significant part of the role of the Applicant as a Business Development Manager.

[36] Mr Stavretis asked his direct reports for advice on what action to take to deal with the situation. The recommendation was the termination of the Applicant’s position, along with 5 other positions. On 26 March 2020, Mr Stavretis advised his leadership team to halt all recruitment and pay rises within the business.

[37] Subsequently, the Applicant was then terminated on 27 March 2020. The unchallenged evidence of the Mr Stavretis is that, at date of proceedings, only one Business Development Manager remains employed by the Respondent.

The advertisement

[38] It is not in contest that there was an advertisement for a Business Development Manager in the Applicant’s business around the time the Applicant was terminated. The advertisement was on LinkedIn. However, Mr Stravertis’ evidence was that the LinkedIn advertisement was forgotten about despite the hiring freeze and once the Respondent was aware, the ad was removed. Importantly, the evidence of Mr Stavretis was that “no person has filled the position.” 12 I accept that evidence as truthful.

[39] Ms Akoka gave evidence that she only learnt about the advertisement during these proceedings. Her evidence was that:

“We use a job board that we put adverts on and the job boards, the systems are connected to the individual company websites and any other website or any other medium we're interconnected to. So they're preconfigured that way so any job ad that I put on, on the job board, it then goes on the Wall Street website and depending on who the client is, it goes on their website. So it's an automatic process, we don't actually go and post a job somewhere.  The process itself also, even when we terminate a job on the job board, it doesn't necessarily terminate on the other end.” 13

[40] There was also a reference made by the Applicant to other advertisements. 14 The unchallenged evidence on these positions is that they are positions based in the Philippines or Dominican Republic and are not comparable to the Applicant’s position.15 In any case, these advertisements were posted four months after the Applicant’s termination and are not relevant.

[41] In short, it is abundantly clear on the evidence that the COVID-19 pandemic and its impact, particularly in the Philippines, drove the need for operational change in the Respondent. Action taken included hiring and wage freezes and the redundancy of a number of staff including BDM staff. The advertised position for a BDM was missed in the post COVID-19 changes to the business. It was ultimately deleted, and the position was never filled. The one BDM the Respondent has retained is on parental leave and her position has not been filled. 16

[42] The overwhelming evidence is that the Respondent no longer required the job of the Applicant to be done by anyone because of changes in the operational requirements of its enterprise.

Award coverage

[43] The Applicant contended in their written submissions that the Applicant was covered by either the Clerks – Private Sector Award 2020, the Professional Employees Award 2010 or the Contract Call Centres Award 2020.

[44] During the hearing, the Applicant’s representative advised that they abandoned the claimed coverage of the Professional Employees Award 2010 and Clerks – Private Sector Award 2020 but maintained that the Applicant was covered by the Contract Call Centres Award 2020. The Applicant’s abandonment of that position was prudent as it is abundantly clear on the evidence that the Applicant is not covered by either of these Awards.

[45] The Respondent disputes that the Applicant is covered by any award.

[46] Whether or not the Applicant was covered by a modern award is relevant to determining whether there was an obligation to consult with respect to the redundancy under the consultation provisions in the award.

[47] A modern award covers an employee if a modern award is expressed to cover the employee. To determine whether an employee is employed under a classification within a modern award, the Commission must assess the nature of the work and ascertain the principal purpose for which the employee was employed. 17

[48] The Respondent submits that:

“Clause 4.1 of the Call Centre Award provides that the award:

“applies throughout Australia to employers of employees in the contract call centre industry who are covered by the classifications in this award and to those employees”

The Respondent accepts that it falls within the contract call centre industry, as defined in the Call Centre Award.” 18

[49] The question is then, whether the Applicant is an employee who is covered by the classifications in the modern award. The classifications under the Contract Call Centres Award 2020 are set out in Schedule A of the modern award.

[50] The Applicant contends that the Applicant’s duties and role accord well with a classification of either a Principal Customer Contact Specialist, or a Customer Contact Team Leader. 19

[51] The classification definitions in the Contract Call Centres Award 2020 are set out below:

Principal Customer Contact Specialist

(i) Role definition

A Principal Customer Contact Specialist is employed to perform a broad range of skilled applications and provide leadership and guidance to others in the application and planning of the skills. Such an employee will:

•  receive calls;

•  use common call centre telephone and computer technology;

•  enter and retrieve data;

•  work in a team; and

•  manage their own work.

(ii) The employee works with a high degree of autonomy with authority to make decisions in relation to specific customer contact matters and provides leadership as a coach, mentor or senior staff member.

(iii) An employee at this level performs a number of functions within a customer contact operation requiring a diversity of competencies including:

•  providing services to customers involving a high level of product or service knowledge, often autonomously acquired;

•  using multiple technologies such as telephony, internet services and face-to-face contact;

•  taking responsibility for the outcomes of customer contact and rectifying complex situations involving emergencies, substantial complaints and faults, disruptions or disconnection of service or customer dissatisfaction; and

(iv) An employee at this level may provide on the job training instead of customer contact and assist with developing training programs where they are not receiving calls.

Customer Contact Team Leader

(i) Role definition

A Customer Contact Team Leader is employed to perform a broad range of skilled applications including evaluating and analysing current practices, developing new criteria and procedures for performing current practices and providing leadership and guidance to others in the application and planning of the skills. Such an employee will:

•  receive calls;

•  use common call centre telephone and computer technology;

•  enter and retrieve data;

•  work in a team; and

•  manage their own work.

(ii) The employee works with a high degree of autonomy with authority to make decisions in relation to specific customer contact matters and provide leadership in a team leader role.

(iii) This employee performs a number of functions within a customer contact operation requiring a diversity of competencies including:

•  providing services to customers involving a high level of product or service knowledge, often autonomously acquired;

•  using multiple technologies such as telephony, internet services and face-to-face contact; and

•  taking responsibility for the outcomes of customer contact and rectifying complex situations involving emergencies, substantial complaints and faults, disruptions or disconnection of service or customer dissatisfaction.

(iv) Indicative tasks

An employee at this level would normally perform the following indicative tasks:

•  follow work health and safety policy and procedures;

•  communicate in a customer contact centre;

•  work in a customer contact centre environment;

•  respond to inbound customer contact;

•  conduct outbound customer contact;

•  use basic computer technology;

•  use an enterprise information system;

•  provide quality customer service; and

•  provide leadership in a contact centre.

(v) An employee at this level would also normally perform some of the following indicative tasks:

•  lead operations in a contact centre;

•  monitor safety in a contact centre;

•  implement continuous improvement in a contact centre;

•  lead innovation and change in a contact centre;

•  administer customer contact telecommunications technology;

•  implement customer service strategies in a contact centre;

•  information systems in a contact centre;

•  acquire product or service knowledge;

•  gather, collate and record information;

•  analyse information;

•  lead teams in a contact centre;

•  develop teams and individuals in a contact centre; and

•  develop and lead on the job training.

(vi) Qualifications

An employee who holds a Certificate IV in Telecommunications (Customer Contact) or equivalent would be classified at this level when employed to perform the functions in the role definition and taking into account the indicative tasks.

(f) Principal Customer Contact Leader

(i) Role definition

A Principal Customer Contact Leader is employed in the application of a significant range of fundamental principles and complex techniques across a wide and often unpredictable variety of functions in either varied or highly specific functions. Contribution to the development of a broad plan, budget or strategy is involved and accountability and responsibility for self and others in achieving the outcomes is involved.

A Principal Customer Contact Leader would co-ordinate the work of a number of teams within a call centre environment, and would typically have a number of specialists/supervisors reporting to them.

(ii) Indicative tasks

The following tasks are indicative of those performed by an employee at this level:

•  manage personal work priorities and professional development;

•  provide leadership in the workplace;

•  establish effective workplace relationships;

•  facilitate work teams;

•  manage operational plan;

•  manage workplace information systems;

•  manage quality customer service;

•  ensure a safe workplace;

•  promote continuous improvement;

•  facilitate and capitalise on change and innovation; and

•  develop a workplace learning environment.

(iii) Qualifications

An employee who holds a Diploma—Front Line Management or equivalent would be classified at this level when employed to perform the functions in the role definition and taking into account the indicative tasks.

(g) Interpretation

(i) The indicative tasks set out in clause A.2.1 are aligned to the units of competency in the Information Technology and Telecommunications Industry Training Advisory Board’s endorsed customer contact competency standards in the Telecommunications Training Package (ICT2002). The indicative tasks for Principal Customer Contact Leader are aligned to the units of competency in Business Services Training Australia’s endorsed competency standards in the Business Services Training Package (BSB2001).

(ii) In the event of a dispute over the meaning of the indicative tasks the relevant standards will be used to assist interpretation.

[52] These classifications fall within the “Customer Contact Stream” in the Award.

[53] The evidence the Applicant gave as to his role was inconsistent and often self serving when questioned about how the role of a Business Development Manager could fall within the coverage of the Contract Call Centres Award 2020. However, as mentioned earlier, part of the Applicant’s case is that his role was not redundant because the Respondent had advertised on LinkedIn around the time of his termination a position for a Business Development Manager. As set out above I am satisfied that the advertisement was simply overlooked, and the position was never filled. However, relevantly for the consideration of award coverage, the Applicant gave the following evidence during the hearing when asked how his position compared to that in the advertisement.:

“Can I take you through to that document.  Have you compared the position description in that document to your own position description?---Yes, I have. What were your conclusions based on comparing it?---They're pretty much identical.  It's the same role.” 20

[54] The job advertisement includes the following:

“Business Development Representative

We’re an award-winning global outsourcer providing contact centre and back office services on behalf of our global clients. Come work at a place where innovation and teamwork come together to support the most exciting missions in the world!

A SNAPSHOT OF YOUR ROLE

Your day could see you:

•  You will be conducting on-line introductory sales presentations with prospective MSP partners, who expressed interest in our products and services.

•  Goal is to secure net new annual agreements for entry MSP partners.

•  Deliver online presentations to owners of small MSP businesses.

•  Cleary and convincingly communicate the value of our IT Management Platform to secure trial evaluations that lead to annual agreements.

•  Schedule follow-up appointments with our Technical Sales Engineer and ongoing calls to secure agreements.

•  Manage Sales opportunities through pipeline stages.

•  Achieve sales goals for new partner agreements.

A BIT ABOUT YOU

•  2-3 years of experience in a similar role where closing North American prospects to annual agreements.

•  You must be a strong and clear communicator.

•  You must have the sales experience to work through a conversation and be persistent. Need above average objection handling abilities.

•  You have a strong work ethic and a positive attitude with a desire to learn.

•  Full-time position.

Join the A-Team and experience the A-Life!” 21

[55] Despite this clear evidence, the Applicant later claimed in cross examination that his role had changed drastically over time. 22 This answer reflected a tendency of the Applicant to tailor his evidence depending on the context of the questions.

[56] The Applicant was not a credible witness and to the extent there is a conflict on the evidence with other witnesses, I prefer the evidence of these witnesses. Mr Stavretis and Ms Akoka were both forthright and credible witnesses.

[57] During cross-examination, the Applicant was taken to list of duties. With reference to that list, he conceded that:

“(a) he acted in a managerial capacity;

(b) his base salary was $90,000 plus superannuation plus uncapped commissions;

(c) he was required to conduct lead generation and strategic planning;

(d) the strategic planning concerned how to get more sales; and

(e) he alone was accountable for a sale.” 23

[58] On the issue of the Applicant’s role, Mr Stavretis gave evidence of the Respondent’s purpose in hiring the Applicant as a Business Development Manager. He stated:

“As part of the Applicant’s position as a Business Development Manager, he was required to:

(a) generate sales leads;

(b) attend networking events and set up booths;

(c) pitch Shore Solutions’ products and services to current and prospective clients; and

(d) negotiate bespoke and integral commercial contract terms between Shore Solutions and new or existing clients.” 24

[59] This was consistent with Mr Stavretis’ evidence in cross-examination. Mr Stavretis was asked what the Applicant did on a day-to-day basis to which he responded:

“He attempted to solicit customers for outsourcing services where the Shore Solutions business would provide those services to the clients. By doing that he would need to network, he would make outbound telephone calls, he would follow up on leads, he would go to events, he would travel to customers around in Australia, he would tour them to the Philippines, show them the sites, and he would negotiate commercial contracts for those potential customers, hoping to be customers, and then deal with the customer on a commercial aspect.” 25

[60] The evidence as to the nature of the work and the principal purpose for which the employee was employed clearly shows that the Applicant was engaged in soliciting customers to sell outsourced contract call centre solutions. In contrast, the classification structure and definitions in the Contract Call Centres Award under the Customer Contact Stream are focused on the functions within a customer contact operation.

[61] The principal purpose of the Applicant’s position was to find clients prepared to outsource call centre functions to Shore Solutions. He may have from time to time performed some functions within a call centre, but this was not his principal purpose. The principal purpose of his role most certainly does not conform with either the Principal Customer Contact Specialist, or a Customer Contact Team Leader. There is no classification in the Contract Call Centres Award 2020 concerning sales or business development.

[62] It is apparent on the evidence that the Contract Call Centres Award 2020 did not cover the Applicant. It follows there was no consultation obligation arising from the application of a modern award on the Respondent.

Redeployment

[63] The Respondent sets out a useful summary of the legislative framework relevant to this consideration in their final submissions with which I agree. For convenience, it is replicated below:

“Section 389(2) of the FW Act provides that a dismissal will not constitute a 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.

The obligation in respect of redeployment is not at large. It applies only in respect of the enterprise of an “associated entity” of the employer.

“Associated entity” is defined in section 12 of the FW Act as having the meaning given by section 50AAA of the Corporations Act 2001 (Cth) (Corporations Act).

Section 50AAA of the Corporations Act provides as follows:

“Associated entities

(1) One entity (the associate) is an associated entity of another entity (the principal) if subsection (2), (3), (4), (5), (6) or (7) is satisfied.

(2) This subsection is satisfied if the associate and the principal are related bodies corporate.

(3) This subsection is satisfied if the principal controls the associate.

(4) This subsection is satisfied if:

(a) the associate controls the principal; and

(b) the operations, resources or affairs of the principal are material to the associate.

(5) This subsection is satisfied if:

(a) the associate has a qualifying investment (see subsection (8)) in the principal; and

(b) the associate has significant influence over the principal; and

(c) the interest is material to the associate.

(6) This subsection is satisfied if:

(a) the principal has a qualifying investment (see subsection (8)) in the associate; and

(b) the principal has significant influence over the associate; and

(c) the interest is material to the principal.

(7) This subsection is satisfied if:

(a) an entity (the third entity) controls both the principal and the associate; and

(b) the operations, resources or affairs of the principal and the associate are both material to the third entity.

(8) For the purposes of this section, one entity (the first entity) has a qualifying investment in another entity (the second entity) if the first entity:

(a) has an asset that is an investment in the second entity; or

(b) has an asset that is the beneficial interest in an investment in the second entity and has control over that asset.”

An “entity” is defined in section 64A of the Corporations Act. It provides:

“Except in Chapters 2E and 8A, a reference to an entity:

(a) is a reference to a natural person, a body corporate (other than an exempt public authority), a partnership or a trust; and

(b) includes, in the case of a trust, a reference to the trustee of the trust.”

Section 50AA of the Corporations Act sets out what “control” is for the purpose of the Corporations Act. It states:

“Control

(1) For the purposes of this Act, an entity controls a second entity if the first entity has the capacity to determine the outcome of decisions about the second entity's financial and operating policies.

(2) In determining whether the first entity has this capacity:

(a) the practical influence the first entity can exert (rather than the rights it can enforce) is the issue to be considered; and

(b) any practice or pattern of behaviour affecting the second entity's financial or operating policies is to be taken into account (even if it involves a breach of an agreement or a breach of trust).

(3) The first entity does not control the second entity merely because the first entity and a third entity jointly have the capacity to determine the outcome of decisions about the second entity's financial and operating policies.

(4) If the first entity:

(a) has the capacity to influence decisions about the second entity's financial and operating policies; and

(b) is under a legal obligation to exercise that capacity for the benefit of someone other than the first entity's members;

the first entity is taken not to control the second entity.” 26

The entities

[64] The corporate structure with which the Respondent, Acquire BPO Pty Ltd, is associated is helpfully set out in a diagram included in the Respondent’s final submissions as follows: 27

[65] It is accepted by the Respondent that Ostia Holdings and Acquire Client Services are associated entities of the Respondent and they are related bodies corporate.

[66] As to whether any other entity is an associated entity of the Respondent, the Respondent submits that the evidence is insufficient to make a findings that any entity is “controlled” by the Respondent and therefore an associated entity pursuant to s.50AAA(3) of the Corporations Act 2001 (Cth) (Corporations Act).

[67] An entity will be “associated” with the Respondent, pursuant to section 50AAA (4) of the Corporations Act, if that entity:

(a) controls the Respondent; and

(b) the operations, resources or affairs of the Respondent are material to the other entity. 28

[68] The Applicant’s asserts that Larry Kestelman controls the Respondent as he owns 75% of the shares in Ostia Holdings. Other evidence of control by Mr Kestelman asserted by the Applicant include:

•  the Respondent and other entities in which Mr Kestelman has an interest use the same external human resources company, Wall Street, for their human resources needs;

•  the Respondent utilised a hospitality box at basketball games for a team (Melbourne United) which was said by the Applicant’s legal representative to be was “owned” by Mr Kestelman;

•  Wall Street’s website contained testimonials attributed to Mr Kestelman;

•  the Respondent was located in the same building as other Kestelman entities; and

•  Ms Akoka shared with the Respondent’s legal representatives a communication the Applicant’s legal representative sent to a lawyer for a Kestelman company (Elkay Property Group), concerning these proceedings. 29

[69] At the hearing, the Applicant also advanced, for the first time, that IT functions were shared between the Respondent and Kestelman entities in addition to the ability of the companies to transfer phone calls. This contention was unsupported by any evidence other than the claims of the Applicant (and was the subject of an objection) and was never addressed with Mr Stavretis in recall. 30 I am not satisfied on the evidence that there was IT function sharing or transferring of phone calls.

[70] Other contentions advanced for the first time at the hearing were that:

•  the Applicant had seen staff members work across the Respondent and other Kestelman entities; and

•  the Applicant had entertained people at the National Basketball League with Larry Kestelman.” 31

[71] This evidence was vague and not credible, 32 and I have given it little weight in considering the level of managerial integration with the Kestleman entities.

[72] In any case, the Respondent asserts, and I agree, that the matters advanced by the Applicant do not deal with the relevant question under the Corporations Act, which is whether:

•  Mr Kestelman had the capacity to determine the outcome of decisions about the Respondent’s financial and operating policies; and

•  the operations, resources or affairs of the Respondent are material to Mr Kestelman. 33

Nor is there evidence of qualifying investment or third entity control. 34

[73] I agree therefore with the submissions of the Respondent that “the enterprises for the FWC to consider on the redeployment question are those of the Respondent and the two associated entities – Ostia Holdings and Acquire Client Services.” 35

Was there a position to which it was reasonable to redeploy the Applicant in the Respondent or the associate entities?

[74] As to whether it would have been reasonable in the circumstances for the Applicant to be redeployed within the Respondent or in either of the associated entities. I dealt earlier with the situation regarding the Respondent, the clear evidence of a downturn in the business, the redundancies that were effected at the time the Applicant was terminated, the reduction to just one BDM position and the hiring freeze.

[75] This outcome is consistent with a finding that there were no unfilled positions, let alone any that would have been reasonable to redeploy the Applicant to.

[76] The Applicant gave evidence that in his opinion it was the ‘greatest time in the world to sell automation.” 36 The opinion of the Applicant as to what business activities the Respondent should have engaged in is not evidence that supports a finding that it was reasonable to redeploy the Applicant. It is a matter for the Mr Stavretis as to what business strategy he wishes to pursue.

[77] There is no evidence of any unfilled positions in the Respondent’s enterprise at the time of termination. 37 The evidence of Mr Stratevis is that at the time of the Applicant’s termination the Respondent could not deliver on commitments to existing clients because of the lockdown’s effect on the working conditions in Philippines was credible. It follows that the business had no need for employees to sell a service it could not provide.38

[78] Redeployment of the Applicant into the Respondent’s enterprise was not possible nor reasonable.

[79] As to Ostia Holdings and Acquire Client Services, there was no evidence of any position to which it would have been reasonable to redeploy the Applicant.

Other associated entities

[80] For completeness, I note that in the event I am wrong on the legal position of associated entities and that, as submitted by the Applicant, the various companies of which Larry Kestelman is a director are actually associated entities, I agree with the Respondent that, on the evidence, there was not the necessary level of managerial or operational integration for the redeployment of the Applicant to be reasonable.

[81] The decision in Ulan Coal Mines 39is authority for the proposition that the degree of managerial integration between the different entities is likely to be a relevant consideration.

[82] On this point, there is unchallenged evidence given by Mr Stavretis and Ms Akoka refuting any operational or managerial relationship between the Respondent and the companies owned by Mr Kestelman.

[83] Mr Stavretis gave evidence that:

“(a) the Respondent operates independently to Mr Kestelman’s other businesses;

(b) the Respondent does not share any managerial team or employees with any of Mr Kestelman’s other businesses;

(c) he does not have any managerial control or involvement with any of Mr Kestelman’s other businesses;

(d) the Respondent’s management team does not have any control or involvement with any of Mr Kestelman’s other businesses;

(e) none of Mr Kestelman’s other businesses, including members of their respective management teams, have any control or involvement with the Respondent or the Respondent’s subsidiaries;

(f) he is not aware of any instance in which an employee of the Respondent, or an employee of one of the Respondent’s subsidiaries, transferred to one of Mr Kestelman’s other businesses; and

(g) he is not aware of any instance in which an employee of one of Mr Kestelman’s other businesses transferred to the Respondent or to one of the Respondent’s subsidiaries.”

[84] Ms Akoka gave evidence that:

“(a) in providing services to the Kestelman Entities, including the Respondent, she was aware that each Kestelman Entity operates independently and separately to one another in relation to its management of staff and other human resources issues;

(b) in her dealings with the Kestelman Entities, each entity has its own independent management team. She deals with each Kestelman Entity separately to one another.; and

(c) Wall Street is engaged by each Kestelman Entity under a separate services agreement. The services provided by Wall Street to each Kestelman Entity wholly relates to that company. Wall Street does not provide shared services to the Kestelman Entities.” 40

[85] In any case, I am not satisfied on the balance of probabilities that there was a job or a position or other work within these entities to which it would have been reasonable in all the circumstances to redeploy the dismissed employee.

[86] However, even if there were, the clear evidence of the lack of any significant managerial integration weighs against a finding that redeployment would have been reasonable in all the circumstances where there was any such job, position or other work.

Conclusion

[87] For the reasons set out above, I am satisfied that the Applicant’s dismissal was a case of genuine redundancy within the meaning of s.389 of the FW Act because:

•  the Respondent no longer required the Applicant’s job to be performed by anyone because of changes in the operational requirements of the Respondent's enterprise, namely the business downturn caused by the COVID-19 pandemic;

•  the Applicant was not covered by a modern award and therefore the Respondent was not required to comply with any obligation to consult about the redundancy; and

•  it was not reasonable in all the circumstances for the Applicant to be redeployed within the Respondent’s enterprise or the enterprise of an associated entity of the Respondent.

[88] As the dismissal was a case of genuine redundancy, the requirements of s.385(d) of the FW Act are not made out. Therefore, the Applicant has not been unfairly dismissed.

[89] The application for unfair dismissal remedy is dismissed.

COMMISSIONER

Appearances:

N Prawer for the Applicant.
M Foran of Counsel for the Respondent.

Hearing details:

2020.
Melbourne:
August 31;
October 19.

Printed by authority of the Commonwealth Government Printer

<PR725119>

 1 (1959) 101 CLR 298

 2   Transcript at PN1331-PN1332

 3   Ibid at PN1403

 4   Ibid at PN1550

 5   Respondent’s Outline of Submissions dated 14 September 2020, at paragraph 15

 6   Ibid at paragraph 16

 7   Ibid at paragraph 41

 8   Transcript at PN276-PN277

 9   Ibid at PN299

 10   Ibid at PN175-PN176

 11   Respondent’s Outline of Submissions dated 14 September 2020, at paragraph 19

 12   Statement of Scott Stavretis, for the Respondent, dated 7 August 2020 at paragraph 28

 13   Transcript at PN692

 14   Court Book, at page 190 -197

 15   Statement of Scott Stavretis, for the Respondent, dated 7 August 2020 at paragraph 29

 16   Ibid at paragraph 24

 17   Carpenter v Corona Manufacturing Pty Ltd PR925731 (AIRCFB, Williams SDP, Lacy SDP, Tolley C, 17 December 2002) at para. 9, [(2002) 122 IR 387]; cited in McMenemy v Thomas Duryea Consulting Pty Ltd T/A Thomas Duryea Consulting [2012] FWAFB 7184 (Richards SDP, Harrison DP, Cambridge C, 28 August 2012) at para. 11, [(2012) 223 IR 125].

 18   Respondent’s Outline of Submissions dated 14 September 2020, at paragraphs 40-41

 19   Applicant’s Outline of Submissions lodged 1 October 2020, at paragraph 84

 20   Transcript at PN767-768

 21   Court Book, at page 179

 22   Transcript at PN896

 23   Respondent’s Outline of Submissions dated 14 September 2020, at paragraph 56

 24   Ibid at paragraph 53

 25   Transcript at PN299

 26   Respondent’s Outline of Submissions dated 14 September 2020, at paragraphs 63-68

 27   Ibid at paragraph 71

 28   Respondent’s Outline of Submissions dated 14 September 2020, at paragraph 82

 29   Ibid at paragraph 84

 30   Ibid at paragraph 85

 31   Ibid at paragraph 86

 32   Transcript at PN1130

 33   Respondent’s Outline of Submissions dated 14 September 2020, at paragraph 87

 34   Ibid at paragraphs 90-94

 35   Ibid at paragraph 95

 36   Transcript at PN1080

 37   Court Book at pages 315-319

 38   Transcript at PN177

 39   [2010] FWAFB 7578

 40   Respondent’s Outline of Submissions dated 14 September 2020, at paragraph 109-110