Gomes v OE & DR Pope Pty Ltd

[2014] FWC 8342

[2014] FWC 8342

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Susana Gomes
v
OE & DR Pope Pty Ltd T/A Pope Packaging
(U2014/6388)

COMMISSIONER HAMPTON ADELAIDE, 22 DECEMBER 2014

Application for relief from unfair dismissal - redundancy - not genuine redundancy under the Act due to non-compliance with consultation obligation - whether dismissal harsh, unjust or unreasonable - whether redundancy valid reason under the Act or to be taken into account under other considerations - genuine reason for redundancy - real consequences of failure to consult - available mitigation alternatives - dismissal unfair - reinstatement appropriate remedy given circumstances - redundancy payments to be returned - continuity and partial lost pay orders appropriate - orders made.

1. Introduction and Case Outline

[1] Ms Susana Gomes has made an application to the Commission seeking a remedy for an alleged unfair dismissal. The application has been made under s.394 of the Fair Work Act 2009. Ms Gomes’ employer was OE & DR Pope Pty Ltd T/A Pope Packaging (Pope Packaging).

[2] Pope Packaging is a manufacturer and supplier of paper, plastic and textile packaging and has plants at both Wingfield and Woodville in South Australia.

[3] Ms Gomes commenced employment with Pope Packaging on 17 August 2006 in a casual position and became a full-time quality controller in February 2007. Ms Gomes was continuously employed by Pope Packaging until the date of her dismissal and had worked at both the Wingfield and Woodville plants. At the time of her dismissal, Ms Gomes was a full-time machine operator at the Woodville plant.

[4] Ms Gomes was dismissed on the stated grounds of redundancy on 4 April 2014. Ms Gomes contends that the dismissal was not a case of genuine redundancy due to reasons including the employer’s failure to consult with her or her union as required under the Act. This, she contends, was a “breach” of the relevant modern award. Ms Gomes also contends that Pope Packaging failed to make any genuine attempts to redeploy her.

[5] Ms Gomes further contends that there was no valid reason for the termination and that it was unfair within the meaning of the Act. Amongst other reasons, Ms Gomes contends that dismissal has imposed great hardship on her due to her personal circumstances including limited English language skills. Furthermore, in the context of a long term loyal employee with a good employment record, the dismissal was harsh and unreasonable.

[6] Ms Gomes seeks reinstatement to a position no less favourable than her former role, with continuity of service and payment of lost wages (after taking into account the redundancy payments already received, which she has offered to repay if appropriate orders are made).

[7] In the first instance, Pope Packaging raised a jurisdictional objection on the basis that the dismissal was a genuine redundancy within the meaning of s.389 of the Act. That is, the dismissal was said to be for genuine operational reasons and occurred in the context of a decision to, in effect, reduce dedicated sewing lines and machine operations due to trading conditions and a downturn in business. Further, the employer initially contended that the consultation requirements of the relevant industrial instrument had been met and that all reasonable options of redeployment had been explored.

[8] However, the employer subsequently conceded the jurisdictional objection of genuine redundancy on the basis of a failure to consult within the meaning of s.389(1)(b) of the Act. Pope Packaging continues to contend that the applicant was made redundant and that the termination was not harsh, unjust or unreasonable in all of the circumstances. That is, the termination was a bona fide redundancy and this was a sound reason for the termination. Further, the deficiencies in consultation did not have an impact on the fairness of the dismissal as there were no reasonable redeployment options and a considerable redundancy payment was made to the benefit of Ms Gomes.

[9] In the circumstances, as part of applying the statutory criteria, I need to consider and resolve the following related issues:

● Was Ms Gomes’ dismissal made on the basis of the redundancy of her position?
● Did the failure to consult with the applicant and/or the AMWU lead to the dismissal being harsh, unjust or unreasonable?
● Were there available positions into which Ms Gomes could have been redeployed as a result of meaningful consultation?
● Is a dismissal, that occurs on the basis of redundancy but which does not fall within the meaning of a genuine redundancy set out in s.389 of the Act, unfair by virtue of that circumstance?

[10] Given the evident factual conflicts, I was obliged 1 to conduct a hearing or conference in order to make the necessary findings leading to the determination of the matter. Having consulted the parties I determined that a hearing was appropriate.

[11] The applicant was represented by Mr Hardie, the AMWU’s Legal Officer and Pope Packaging was represented, with permission, by Mr Kidman. 2

2. The evidence before the Commission

[12] Ms Gomes provided a witness statement and gave evidence in the matter. In addition, she also relied upon evidence from the following:

● Craig Larner - Regional Secretary (Print Division) of “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) - South Australian Branch;
● Michael Gomes - Machine Operator and Union delegate (husband of the applicant);
● David Rohrlach - Storeperson and Union delegate at the Woodville plant;
● Sareth Soy - Machine operator and Union delegate at the Wingfield plant; and
● Denny Kemp - Print Operator at the Wingfield plant.

[13] Pope Packaging relied upon the evidence of the following management employees:

● Viren Shroff - Production Manager at the Woodville plant;
● Matthew Sullivan - General Manager; and
● Graham Doak - Production Manager at the Wingfield plant.

[14] I have found that each of the witnesses were generally reliable and gave evidence to the best of their recollection. Some of the evidence could be described as opinion evidence and although relevant in this jurisdiction, it is evidence about the facts that I have given most weight to. Where there is conflict in the evidence, I have preferred the evidence of those with the more direct knowledge.

[15] In terms of evidence about the use of casual labour hire within the business after the applicant’s dismissal and related staffing matters, this is directly relevant to the question of any remedy. It is also relevant to the issues associated with the redeployment options and the consequences of a failure to consult, but only to the extent that the evidence casts light upon the circumstances present at the time of the dismissal.

[16] I would also note that the evidence of some of the applicant’s and employer’s witnesses on this issue was speculative to a degree, and tended to overstate and understate respectively, the degree to which work was reasonable available that could be performed by Ms Gomes.

3. The circumstances of Ms Gomes’ employment and the facts surrounding her dismissal

[17] It is appropriate to deal with some of the factual disputes and broader context before dealing with the substantive statutory considerations. I have resolved the various factual conflicts having regard to my observations above and the probability and consistency of the evidence.

[18] Ms Gomes employment was subject to the Graphic Arts Printing and Publishing Award 2010 (the modern award).

[19] Clause 9 of the modern award provides as follows:

“9. Consultation

9.1 Consultation regarding major workplace change

(a) Employer to notify

(i) Where an employer has made a definite decision to introduce major changes in production, program, organisation, structure or technology that are likely to have significant effects on employees, the employer must notify the employees who may be affected by the proposed changes and their representatives, if any.
(ii) Significant effects include termination of employment; major changes in the composition, operation or size of the employer’s workforce or in the skills required; the elimination or diminution of job opportunities, promotion opportunities or job tenure; the alteration of hours of work; the need for retraining or transfer of employees to other work or locations; and the restructuring of jobs. Provided that where this award makes provision for alteration of any of these matters an alteration is deemed not to have significant effect.

(b) Employer to discuss change

(i) The employer must discuss with the employees affected and their representatives, if any, the introduction of the changes referred to in clause 9.1(a), the effects the changes are likely to have on employees and measures to avert or mitigate the adverse effects of such changes on employees and must give prompt consideration to matters raised by the employees and/or their representatives in relation to the changes.
(ii) The discussions must commence as early as practicable after a definite decision has been made by the employer to make the changes referred to in clause 9.1(a).
(iii) For the purposes of such discussion, the employer must provide in writing to the employees concerned and their representatives, if any, all relevant information about the changes including the nature of the changes proposed, the expected effects of the changes on employees and any other matters likely to affect employees provided that no employer is required to disclose confidential information the disclosure of which would be contrary to the employer’s interests.

9.2 Consultation about changes to rosters or hours of work

(a) Where an employer proposes to change an employee’s regular roster or ordinary hours of work, the employer must consult with the employee or employees affected and their representatives, if any, about the proposed change.

(b) The employer must:

(i) provide to the employee or employees affected and their representatives, if any, information about the proposed change (for example, information about the nature of the change to the employee’s regular roster or ordinary hours of work and when that change is proposed to commence);
(ii) invite the employee or employees affected and their representatives, if any, to give their views about the impact of the proposed change (including any impact in relation to their family or caring responsibilities); and
(iii) give consideration to any views about the impact of the proposed change that are given by the employee or employees concerned and/or their representatives.

(c) The requirement to consult under this clause does not apply where an employee has irregular, sporadic or unpredictable working hours.

(d) These provisions are to be read in conjunction with other award provisions concerning the scheduling of work and notice requirements.”

[20] Ms Gomes is in her mid fifties and comes from a non-English speaking background.

[21] Ms Gomes was regarded by all of the management witnesses as a loyal, hardworking and good employee with no disciplinary issues during the course of her seven years of employment.

[22] Ms Gomes was initially engaged to perform work at the Wingfield plant and in April 2012 was transferred to Woodville when some of the production functions relevant to her were also transferred. When at Wingfield, Ms Gomes worked on the sewing line and on a heat-sealing machine but had also undertaken quality assurance work on the tuber machine and some work in association with a new machine, known as the W&H bottomer.

[23] At the time of her dismissal, Ms Gomes was a full-time employee at the Woodville plant. Ms Gomes was routinely working on two machines; one of these being on the sewing line and the other a heat-sealing machine. The applicant had also worked on the “wicketers machines” and had received a competency statement from the employer in that regard. Ms Gomes had the skills associated with these and other previous roles however she is not trade qualified and was considered to be an “unskilled” worker in that context.

[24] At the Woodville plant there are various different operations including the “textiles” area, which manufactures woven packaging and includes the heat-sealing machine. The sewing line and wicketer machine are in the “conversions” area, where materials are made into the finished product. In the “Extrusion” department plastic packaging materials are manufactured.

[25] Pope Packaging’s business is seasonal to a degree with the highest demand generally between July and December. The business operates in a competitive environment and has also suffered a significant downturn in sales in recent years. This has led to a significant reduction in the production of bags that are processed on the sewing line and to other changes, such as the introduction of new equipment with greater production output and to the increased utilisation of skilled workers performing a broader range of functions.

[26] In the above context, and observing a declining (future) order book, Pope Packaging decided that it did not have an ongoing need to retain two employees on the sewing line and related work. It determined that Ms Gomes position would be abolished and that she would be made redundant. This decision was taken after considering the skill level and experience of both employees performing work in that area.

[27] On 4 April 2014, immediately after the decision had been made, Ms Gomes was given a letter advising her of the redundancy. There was also at that time a conversation with her Manager however, beyond the payment of a redundancy benefit, there was no discussion about measures to mitigate the consequences for Ms Gomes and there was no opportunity for her or her representative to suggest any such measures.

[28] Ms Gomes received the following termination letter detailing the reasons for dismissal and the termination payment:

“Dear Susana,

Further to our recent meeting, we confirm that unfortunately your employment with the company will terminate due to redundancy effective Friday 4^th April 2014. As discussed, your position no longer exists due to the recent downturn of business.

The Company has considered all reasonable options for redeployment and regrets that there are no suitable alternative positions available to you.

You are entitled to four weeks and one week’s notice of termination of employment. You are not required to work out your notice period and you will be paid the sum of $3,201.50 in lieu of notice.

You will be paid thirteen (13) weeks redundancy pay in the amount of $8,323.90 in accordance with the National Employment Standards.

A calculation for your employment entitlements will be mailed to you. This will include any outstanding pay or leave entitlements when it has been updated.

We thank you for your contribution to the Company and wish you well for the future.”

[29] Pope Packaging uses a labour hire company (Randstad) to supply casual employees. Casual labour hire employees are a regular feature of the two workplaces conducted by Pope Packaging. These employees are utilised for various purposes including to deal with fluctuations in production, to backfill for leave and other absences, and on occasions to provide particular skills. 3

[30] At the Woodville plant there are generally casuals who work in the “textiles” area, “conversions” area, stores and “extrusion” department. The number of such casual declined significantly between April and June 2014, when the substantive evidence on this was led.

[31] At the Wingfield plant, casuals have been utilised in Quality Control and I note that Ms Gomes had previously worked as a Quality Controller for 4 years and is qualified and experienced in that regard. This was however at a time when a previous (less automated and slower) machine was being used. Casuals have been used generally in other areas including in conversion, extrusion, stores and textiles. The number of casuals at Wingfield increased marginally between April and June. 4

[32] The evidence reveals that with some exceptions, the casual labour hire employees have been used on a relatively periodic and fluctuating basis. The exceptions include the use of casuals to backfill positions whilst a significant training program has been implemented on a new and upgraded machine. This has taken place for some time prior to and after Ms Gomes’ dismissal and was about to conclude at the time of the last hearing of this matter in October 2014. Another exception is that a casual position has been utilised on an ongoing basis in the stores area at Wingfield.

[33] It is also evident that with rare exceptions, there have been one or more casuals in “non-skilled” areas at most times in recent years. The use of those casuals is however declining, particularly at Woodville, as part of the employer’s response to the trading position.

[34] The evidence reveals that a casual employee has from time to time been engaged to undertake work in the heat-sealing area following Ms Gomes’ dismissal. However, the weight of evidence is that Ms Gomes was not replaced on an ongoing or regular basis by casual labour and that the extent of hours in that specific role did not generally represent a full-time position even when filled.

[35] There is some tension between the parties as to the capacity of Ms Gomes to perform certain alternative tasks. For the most part, this centres upon the degree of manual lifting involved in certain functions. There are certain areas where Pope packaging has traditionally employed only male employees as a result of the degree to manual handling involved. This would appear to be discriminatory and not a basis upon which the Commission would limit consideration of alternative roles.

[36] The evidence is that there are some roles that involve the lifting of considerable weights, and despite access to some lifting equipment, the physical handling of pallets and shafts involve weights between 35 and 44kg with the bottomer and tuber machines respectively. Ms Gomes, realistically, expressed some concerns about her capacity to do that part of that work and this is a reasonable assessment given her particular stature.

[37] It is however evident that provided Ms Gomes obtained a forklift licence, and if required 5 a Certificate III, she would be capable of performing the storeperson role in the warehouse. That licence could be obtained with as little as two days training depending upon the aptitude of Ms Gomes.

[38] The evidence also reveals that there were positions available at the time that Ms Gomes could have occupied for most, if not all, of the period since her dismissal that have been filled by the labour hire casuals. Some of these have been regular and within her existing skill range or would have been so with minimal training. In so finding, I do note that the overall use of casuals has declined at the Woodville plant and the positions directly associated with the significant training program were about to conclude at the time of the final hearing in this matter. There are also some positions, including those that are trade-qualified, that would not have been suitable for Ms Gomes.

4. Was Ms Gomes’ dismissal unfair within the meaning of the Act?

[39] Section 385 of the Act provides as follows:

“385 What is an unfair dismissal
(1) 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.”

[40] Ms Gomes was dismissed, the employer does not contend that it is a small business within the meaning of the Act, and has conceded that the termination was not a genuine redundancy within the meaning on the Act.

[41] On that basis, the dismissal will be unfair if it is found to be harsh, unjust or unreasonable.

[42] The Act relevantly provides as follows:

“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.”

[43] It is clear that s.387 of the Act contemplates that an overall assessment as to the nature of the dismissal must be made by the Commission. In so doing, the Act sets out a number of considerations that must, where relevant, be weighed up in totality.

[44] It is convenient therefore to use the various provisions of s.387, with reference to the relevant circumstances, to outline my consideration of the matter.

Section 387(a) – whether there was a valid reason for the dismissal related to Ms Gomes’ capacity or conduct (including its effect on the safety and welfare of other employees)

[45] Valid in this context is generally considered to be whether there was a sound, defensible or well founded reason for the dismissal. Further, in considering whether a reason is valid, the requirement should be applied in the practical sphere of the relationship between an employer and an employee where each has rights, privileges, duties and obligations conferred and imposed on them. That is, the provisions must be applied in a practical, commonsense way to ensure that the employer and employee are each treated fairly. 6

[46] The consideration raised by s.387(a) of the Act relates to the capacity or conduct of the dismissed employee. In this case, it is evident to me that the reason for the dismissal of Ms Gomes was directly related to the decision of management not to require her position to be filled by any of its employees. This was a redundancy 7 undertaken in the context of changing production demand and requirements, and was a sound and well founded decision to that point.

[47] However, those reasons do not relate to Ms Gomes’ capacity or conduct as contemplated by s.387(a) of the Act. I note that Ms Gomes has not contended that her selection for the redundancy was itself unfair. This was apparently made on the basis of comparative skills in relation to another employee and this aspect was not challenged in this matter. In terms of the substantive basis for the redundancy more broadly, this is not a valid reason, at least as contemplated by this consideration.

Section 387(b) – whether Ms Gomes was notified of the reasons for dismissal

[48] This consideration has been applied such that the notification relates to the valid reason contemplated by s.387(a) of the Act 8 and that it must be done prior to the dismissal.9

[49] Ms Gomes was notified of the reason as part of her dismissal but the reason does not relate to any valid (within the meaning of s.387(a)) and was not provided in advance of the dismissal.

Section 387(c) – whether Ms Gomes was given an opportunity to respond to any reason related to her capacity or conduct

[50] This does not arise here for reasons outlined above.

Section 387(d) – any unreasonable refusal by the respondent to allow Ms Gomes a support person

[51] There was no meeting or prior consultation about the dismissal in which the concept of a support person might arise. This has other implications for the fairness of the dismissal however as there was no request for a support person, this consideration is not relevant in its right.

Section 387(e) – if the dismissal is related to unsatisfactory performance by Ms Gomes – whether she has been warned about that unsatisfactory performance before the dismissal.

[52] This does not arise here for reasons outlined above.

Section 387(f) – the degree to which the size of the respondent’s enterprise would be likely to impact on the procedures followed in effecting the dismissal.

Section 387(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.

[53] Pope Packing is a large employer and any concerns about the impact of the procedures it adopted cannot be mitigated through a consideration of its size. It also does not rely upon the consideration in s.387(g) of the Act to advance its case. 10

Section 387(h) - other matters considered to be relevant

[54] Although the real basis for the dismissal was not related to Ms Gomes capacity or conduct in the sense contemplated by s.387(a) of the Act, it represents a sound, objective and well-founded reason for dismissal.

[55] In UES (Int’l) Pty Ltd v Harvey 11 (UES) a Full Bench of the Commission dealt with similar circumstances and concluded as follows:

“[27] The terms of s.389 of the FW Act suggest the process for selecting individual employees for redundancy is not relevant to whether a dismissal was a case of genuine redundancy. The relevant Explanatory Memorandum confirms as much. Setting aside jurisdictional pre-requisites and the matters in s.396(a) to (c), FWA only needs to consider s.387(a) concerning whether there was a valid reason for a person’s dismissal related to the person’s capacity or conduct if one or more of the criteria in s.389 of the FW Act, which sets out the meaning of genuine redundancy, have not been met. The criteria in s.389 which have not been met can be taken into account in FWA’s consideration as to whether the dismissal was harsh, unjust or unreasonable as part of s.387(h), being “any other matters that FWA considers relevant.

... ...

[47] As we have earlier indicated, there were sound, defensible and well-founded reasons for Mr Harvey’s dismissal, being that UES no longer required his job to be performed by anyone because of changes in the operational requirements of its enterprise and it was not reasonable in all the circumstances to relevantly redeploy him. We regard such valid reasons as matters relevant to our consideration as to whether Mr Harvey’s dismissal was harsh, unjust or unreasonable. They are matters telling against a conclusion that the dismissal was harsh, unjust or unreasonable.” 12

[56] Adopting this approach, the redundancy and associated reason for dismissal, although not relevant to s.387(a), remains an important and relevant consideration when determining the fairness of the dismissal.

[57] In Maswan v Escada Textilvertrieb T/A ESCADA, 13 Watson VP said:

“[39] In my view a decision to dismiss on account of redundancy will only be harsh, unjust or unreasonable if the rationale for the decision is seriously undermined or if there is a serious error in procedure such that renders the termination unfair in the circumstances. Here the decision appears open to the employer to make. The failure to consult is not a trivial matter. But as it is clear that consultation was highly unlikely to have negated the operational reasons for the dismissal or lead to any other substantive change, I do not believe that the failure to consult prior to the date of termination rendered the dismissal unfair. Given the evidence in relation to the operational need to restructure, I am of the view that it is likely that Mr Maswan would have been dismissed in any event, even if timely consultation had occurred.”

[58] In UES, the Full Bench also considered the potential impact of failure to consult in the following terms:

“[48] UES, however, failed to consult with Mr Harvey as required by the “consultation regarding major workplace change” clause in the modern award that applied to his employment. In the circumstances the failure to so consult was unreasonable. We regard such a failure to consult as also a matter relevant to our consideration as to whether Mr Harvey’s dismissal was harsh, unjust or unreasonable. Further, it is a matter telling for a conclusion that Mr Harvey’s dismissal was harsh, unjust or unreasonable.”

[59] It is clear that the duty to consult is an important part of the change and redundancy provisions of the modern award and the obligations upon an employer in those circumstances. In terms of the impact upon the fairness of a dismissal, the failure to consult as required is a factor to be taken into account. For my part, the weight to be given to that factor depends upon the degree that the absence of proper consultation led to any unfairness in practice.

[60] The obligation under clause 9 of the modern award is, in the case of redundancy or other major change, for the employer to discuss with the employees affected and their representatives, if any, the introduction of the changes, the effects the changes are likely to have on employees, and measures to avert or mitigate the adverse effects of such changes on employees. In addition, the employer must give prompt consideration to matters raised by the employees and/or their representatives in relation to the changes.

[61] The discussions contemplated above must commence as early as practicable after a definite decision has been made by the employer to make the changes and for the purposes of such discussion, the employer must provide in writing to the employees concerned and their representatives, if any, all relevant information about the changes including the nature of the changes proposed, the expected effects of the changes on employees and any other matters likely to affect employees. However, no employer is required to disclose confidential information where the disclosure of which would be contrary to the employer’s interests. 14

[62] Pope Packaging concedes that it did not meet this obligation. The evidence reveals that management knew or should have known that Ms Gomes was a member of the AMWU.

[63] Ms Gomes contends that the various redeployment options that could and should have been considered as part of the consultations include those positions in which the labour hire casuals are engaged from time to time. 15 Pope Packaging did not directly take issue with that approach however it contends that the circumstances under which the labour hire casuals are engaged in this business were not such that there were any available positions or functions relevant to Ms Gomes.

[64] In my view, when assessing the nature and impact of potential redeployment that might have arisen in that context, each such case will require determination on its own facts and the criteria will always be reasonableness in the specific circumstances. This must be arrived at objectively by the application of sound judgement and good sense by the Commission as an exercise of statutory discretion. In making that assessment, the circumstances of the parties, including the legitimate right of the business to conduct its affairs and make staffing decisions, subject to fairness, must be taken into account. Further, the nature of available positions, the qualifications required to perform the jobs, the employee’s skills qualifications and experience, the location of the job and comparative remuneration would all be generally relevant. 16

[65] It is evident that Pope Packaging did not understand or apply its consultation obligations in that regard. I have found that Ms Gomes’ position was made redundant and not directly replaced with the ongoing or regular use of casual labour. However, there were other opportunities within the workplace, particularly at Wingfield, where Ms Gomes could have been redeployed for all or most of the period since her dismissal. This includes a position on the W&H machine, backfilling for the training places and more generally for leave relief. Further, with some reasonable training, Ms Gomes could have been engaged in the stores in an ongoing position that was occupied by a labour hire casual on a weekly basis for much of that time.

[66] To the extent that some of these roles may have involved periods where a relief role was not required, Ms Gomes was willing to take leave to cover any gaps.

[67] On that basis, the failure to consult and to genuinely explore redeployment options had a real impact upon the outcome leading to the dismissal of Ms Gomes.

[68] The payment of the NES-based redundancy benefit to Ms Gomes upon her dismissal is a relevant consideration militating against a finding of unfairness.

[69] Ms Gomes performed her roles within Pope Packaging well and positions for which she was suitable, remained at the time of her dismissal. However, she does not come from an English speaking background. This means that the consequences of her dismissal are significant. On their own, these considerations do not lead to unfairness, however when combined with the circumstances and findings outlined above, these factors become relevant to the assessment of the dismissal.

Conclusion on nature of dismissal

[70] I find that the dismissal of Ms Gomes was unjust and unreasonable. There was a sound reason to make her position redundant however the absence of consultation and the failure to properly consider redeployment options as part of that consultation has created unfairness in the particular circumstances of Ms Gomes. Despite the redundancy payment, the net impact in losing her employment was unfair.

[71] The dismissal was therefore unfair within the meaning of the Act.

5. Remedy

[72] Division 4 of Part 3-2 of the Act provides as follows:

“Division 4—Remedies for unfair dismissal

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.

391 Remedy—reinstatement etc.

Reinstatement

(1) An order for a person’s reinstatement must be an order that the person’s employer at the time of the dismissal reinstate the person by:

(a) reappointing the person to the position in which the person was employed immediately before the dismissal; or
(b) appointing the person to another position on terms and conditions no less favourable than those on which the person was employed immediately before the dismissal.

(1A) If:

(a) the position in which the person was employed immediately before the dismissal is no longer a position with the person’s employer at the time of the dismissal; and
(b) that position, or an equivalent position, is a position with an associated entity of the employer;

the order under subsection (1) may be an order to the associated entity to:

(c) appoint the person to the position in which the person was employed immediately before the dismissal; or
(d) appoint the person to another position on terms and conditions no less favourable than those on which the person was employed immediately before the dismissal.

Order to maintain continuity
(2) If the FWC makes an order under subsection (1) and considers it appropriate to do so, the FWC may also make any order that the FWC considers appropriate to maintain the following:

(a) the continuity of the person’s employment;
(b) the period of the person’s continuous service with the employer, or (if subsection (1A) applies) the associated entity.

Order to restore lost pay
(3) If the FWC makes an order under subsection (1) and considers it appropriate to do so, the FWC may also make any order that the FWC considers appropriate to cause the employer to pay to the person an amount for the remuneration lost, or likely to have been lost, by the person because of the dismissal.

(4) In determining an amount for the purposes of an order under subsection (3), FWC must take into account:

(a) 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 reinstatement; and
(b) the amount of any remuneration reasonably likely to be so earned by the person during the period between the making of the order for reinstatement and the actual reinstatement.

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.

393 Monetary orders may be in instalments

To avoid doubt, an order by the FWC under subsection 391(3) or 392(1) may permit the employer concerned to pay the amount required in instalments specified in the order.”

[73] The prerequisites of ss.390(1) and (2) have been met in this case.

[74] Section 390 makes it clear that compensation is only to be awarded as a remedy where the Commission is satisfied that reinstatement is inappropriate and that compensation is appropriate in all the circumstances.

[75] Ms Gomes contends that reinstatement is the appropriate remedy and she is also seeking orders for back-pay and the maintenance of her continuity of service. Ms Gomes is prepared to repay her redundancy payment to the extent that it is offset by arrears of wages owed since the termination. The applicant further contends that reinstatement is appropriate as the relationship between the parties has not been damaged and there has been no loss of trust and confidence. Ms Gomes is prepared to work at either the Woodville or Wingfield plant.

[76] Pope Packaging contends that the application should be dismissed and Ms Gomes is not entitled to a remedy. In the alternative, the employer contends that even if it be found that the termination was unfair, the employment relationship would not have continued much longer due to the constraints with redeployment. It further contends that reinstatement would not be an appropriate remedy on the basis that there was a redundancy, the Commission should take great care in interfering with management authority, and it would not be appropriate to displace other employees or make changes to the employer’s employment and business strategies.

[77] Accordingly, Pope Packaging contends that the only appropriate remedy would be a small award of compensation and it has raised issues about the applicant’s attempts to mitigate her loss at least immediately after her dismissal.

[78] There are two alternative forms of “reinstatement” under the Act. Reinstatement to the former position (s.391(1)(a)) or appointing the employee to another position on terms and conditions no less favourable than those on which they were employed immediately before the dismissal (s.391(1)(b)). It is the second form of order that is being pursued by Ms Gomes.

[79] For reasons outlined above, it is necessary to initially consider whether reinstatement is appropriate.

[80] No concerns arise in terms of a loss of trust and confidence. Ms Gomes was, and is, well regarded and there have been no issues with her work performance or conduct.

[81] I am, on the balance of probabilities, satisfied that there are sufficient available positions that Ms Gomes could occupy in consequence of a reinstatement order. These include a role in the stores, which was not filled at time of hearing and the employer was on notice that reinstatement was being sought, and in backfilling a range of “non-skilled” relief and other positions with very minimal additional training. To the extent that some of these later roles are not constantly required, I note that Ms Gomes was willing to take leave to cover the few gaps where no relief is required from time to time.

[82] If reinstated with continuing service and lost wages, Ms Gomes would need to refund the 13 weeks redundancy payments provided. This would also be appropriate given that Ms Gomes would in effect not now be redundant as a result of such an order and she has indicated that she would return the payments

[83] Whilst there are competing considerations, particularly given the circumstances of the business, the evident remedial benefit of reinstatement for the applicant means on balance that I consider reinstatement to another position on terms and conditions no less favourable than those on which they were employed immediately before the dismissal is appropriate.

[84] It is not necessary for the Commission to specify that position 17 and this will provide appropriate flexibility for Pope Packaging to arrange its business and staffing around this decision.

[85] Given that an order is to be made under s.391(1) of the Act, two further considerations arise; namely the maintenance of continuity of service (s.391(2)) and the potential for an order to restore lost pay (s.391(4)).

[86] I consider that it is appropriate to make an order for continuity of service as contemplated by s.391(2) of the Act.

[87] The capacity to make an order for the restoration of lost pay is also a discretion and does not automatically follow a reinstatement order.

[88] It is evident from the approach of the Commission (and its predecessors) to s.391(3) of the Act (and its earlier equivalent provision) that the exercise of this discretion can include consideration of any misconduct by the employee that has led to the dismissal 18 and that any “deduction” from any order for lost wages can extend to some or all of that amount.19 There is no suggestion of any misconduct in this case.

[89] In making an assessment of an amount, assuming that it is appropriate to do so, the Commission is obliged to take into account the amount of any remuneration earned by the applicant from employment or other work during the period between the dismissal and the making of the order for reinstatement, and the amount of any remuneration reasonably likely to be earned by them during the period between the making of the order for reinstatement and the actual reinstatement (s.391(4)).

[90] Ms Gomes was paid five weeks notice and this was paid after the dismissal and should be taken into account. The applicant remains unemployed and there is no evidence of any other employment related income, or reasonably likely income, in the relevant periods.

[91] I find that it appropriate in all of the circumstances to make an order for lost wages under s.391(3) of the Act on the proviso that Ms Gomes returns the net amount of redundancy payments (13 weeks) paid to her as a result of the dismissal. Further, there was some delay in the hearing of this matter (approximately six weeks) due to the applicant’s case and some account of this is appropriate in terms of any order for lost wages. In addition, the five weeks notice already paid should also be deducted. On that basis, a reduction of eleven weeks in the amount of lost wages that would otherwise be payable under the order will be made.

[92] Given the time of the year and the need for both Pope Packaging and Ms Gomes to make arrangements leading into the reinstatement, I will allow a longer than normal lead time for the orders to apply.

6. Conclusions and orders

[93] I have found that the dismissal of Ms Gomes was unfair within the meaning of the Act.

[94] I have also found that reinstatement to another position on terms and conditions no less favourable than those on which they were employed immediately before the dismissal is appropriate.

[95] An order for continuity of service and, subject to the proviso that Ms Gomes returns the net amount of redundancy payments paid to her as a result of the dismissal, and order for the restoration of most, but not all, of the lost pay, will also be made.

[96] Orders 20 to that end are being issued in conjunction with this decision.

[97] Should there be a dispute about the value of the lost wages, liberty is granted to either party to seek a determination of that detail.

Appearances:

T Hardie with K Ralph of the AMWU for Ms Gomes.

T Kidman, of Crawford Legal with permission, for OE & DR Pope Pty Ltd T/A Pope Packaging.

Hearing details:

2014

Adelaide

August 11, 12 and October 21.

 1   Section 397 of the Act.

 2   Gomes v OE & DR Pope Pty Ltd T/A Pope Packaging[2014] FWC 4482.

 3   A skilled machine operator in the extrusion section of the Woodville plant.

 4   Based upon Randstad invoicing.

 5   There was some indication that an additional qualification was required - evidence of Mr Doak. However, there was no requirement of that sort as part of an advertisement recently placed for a position in the stores (Transcript PN1866).

 6   Selvachandran v Peterson Plastics Pty Ltd (1995) 62 IR 371 as cited in Potter v WorkCover Corporation, (2004) 133 IR 458 per Ross VP, Williams SDP, Foggo C and endorsed by the Full Bench in Industrial Automation Group Pty Ltd T/A Industrial Automation [2010] FWAFB 8868, 2 December 2010 per Kaufman SDP, Richards SDP and Hampton C at par [36].

 7   See s.119 of the Act and Whittaker v Unisys Australia Pty Limited [2010] VSC 9.

 8   Chubb Security Australia Pty Ltd v Thomas, 2 February 2000, Print S2679 at [41].

 9   Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137 at [73].

 10   Transcript PN2011.

 11   See UES (Int’l) Pty Ltd v Harvey[2012] FWAFB 5241 at [47] in relation to the relevance of a “valid” reason that does not fit within the scope of s.387(a) of the Act.

 12   I note that although Kaufman SDP dissented from the majority on certain matters, he agreed at [67] with their approach on the capacity to have regard to the redundancy as a sound reason for dismissal under s.387(h).

 13   [2011] FWA 4239.

 14   See Ventyx Pty Ltd v Murray[2014] FWCFB 2143.

 15   Relying upon Suridge v Boral Window Systems Pty Ltd[2013] FWA 3126.

 16   Although set out in the context of s.392 of the Act, the observations of the Full Bench in Technical and Further Education Commission T/A TAFE NSW v Pykett[2014] FWCFB 714 at [35] are apposite.

 17   Ibid at [48] to [53] and Anthony Smith v Sinclair (1996) 67 IR 240.

 18   Kenley v JB Hi Fi AIRCFB, 22 June 2000, Print S7235 at [36]; Coal & Allied Mining Services Pty Ltd v Lawler [2011] FCAFC 54 and Lindsay Douglas Lawrence v Coal & Allied Mining Services Pty Ltd T/A Mt Thorley Operations/Warkworth[2010] FWAFB 10089.

 19   Holcim (Australia) Pty Ltd v Mr Raimond Serafini[2011] FWAFB 7794.

 20   PR559429.

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