Groszek v Toyvision International Pty Ltd

[2015] FWC 697

[2015] FWC 697

FAIR WORK COMMISSION

REASONS FOR DECISION

Fair Work Act 2009
s.394 - Application for unfair dismissal remedy

Ms Paula Groszek
v
Toyvision International Pty Ltd
(U2013/17228)

DEPUTY PRESIDENT ASBURY BRISBANE, 2 FEBRUARY 2015

Application for relief from unfair dismissal - objections on grounds of genuine redundancy and small business fair dismissal code - relationship between provisions dealing with genuine redundancy and small business fair dismissal code - employer who gives redundancy as reason for dismissal cannot rely on small business fair dismissal code as an alternative

BACKGROUND

[1] In a decision issued on 19 December 2014 I found that Ms Paula Jane Grozsek was unfairly dismissed and ordered that Toyvision International pay Ms Grozsek an amount of compensation of $5,288.46 less taxation, representing 5 weeks wages. I gave brief reasons for that decision and indicated that I would provide more detailed reasons in due course. Those reasons are as follows.

[2] Toyvision International Pty Ltd (Toyvision) is a toy wholesale and import business and imports toys from China. Ms Paula Jane Grozsek was employed as Sales Representative (on Ms Grozsek’s evidence her title was Sales Manager) by Toyvision. Ms Grozsek was notified on 2 December 2013 that her employment would terminate on 16 December 2013 on the basis that operational and financial requirements meant that her role was no longer needed. On 7 December, apparently after a disagreement about the payment of car allowance during her two week notice period, Ms Grozsek was told that her employment would cease immediately.

[3] Ms Groszek applied under s.394 of the Fair Work Act 2009 (the Act) for an unfair dismissal remedy with respect to her dismissal. It is not in dispute that Ms Grozsek is a person protected from unfair dismissal and that she was dismissed. Toyvision objected to the application on the ground that the dismissal was a case of genuine redundancy. In the alternative, Toyvison contended that it is a small business employer and if it is found that the dismissal was not a case of genuine redundancy, it was consistent with the Small Business Fair Dismissal Code (the Code).

[4] The hearing and determination of Ms Grozsek’s application was not assisted by her representative, Australian Dismissal Services. Ms Grozsek’s application was prepared and submitted by that organisation under the signature of Ms Grace Collier. The contact person was Mr Steve Grapsas. The application sought relief that included a number of matters not available as remedies in an unfair dismissal application such as claims for payment of leave entitlements and commission said to be owed under Ms Groszek’s contract of employment and a claim for an amount of $7,000 to compensate for a bracelet said to have been stolen from Ms Groszek while she was working in Melbourne.

[5] A conciliation conference was conducted and the matter was not resolved. Directions were issued in relation to the conduct of the matter and it was listed for hearing for three days. There were delays in the provision of material by Ms Groszek on the basis that Ms Grosczek and/or her representative were attempting to resolve the matter by agreement. Those attempts were not successful. Extensions were granted to both parties.

[6] Two days before the hearing, Australian Dismissal Services lodged a Form F54 Notice of representative ceasing to act. Ms Groszek sought an adjournment on the basis of the withdrawal of her representative and asserted that she was not told that Australian Dismissal Services would not represent her at a hearing until the point that organisation withdrew as her representative. Ms Groszek also broke her foot and required treatment for that injury which further delayed proceedings.

[7] Toyvision was represented by a lawyer from the outset. When Australian Dismissal Services withdrew, Ms Groszek objected to Toyvision continuing to be legally represented. I granted permission for Toyvision to be represented by a lawyer on the basis that its Directors are from a non-English speaking background and Ms Groszek was initially represented by a paid agent. In my view, it was unfair to penalise Toyvision by refusing permission for the continuation of legal representation because Mr Grozsek’s representative withdrew from the matter prior to the hearing. I was also of the view that to give permission for Toyvision to be legally represented would allow the application to be dealt with more efficiently, particularly given the inclusion of a considerable amount of irrelevant material in the application.

THE ISSUES IN DISPUTE

[8] There is a dispute about the length of Ms Grozsek’s employment. Ms Groszek asserts that she was employed in January 2002 by Mr Sigmund Rutkowski, the Director of a company known as Toyvision Pty Ltd. Ms Groszek appears to contend that there was a transfer of business between Toyvision Pty Ltd and Toyvision International Pty Ltd. Mr Xu and Mr Zha contend that there was no transfer and instead they started a new business after purchasing the stock of Toyvision Pty Ltd.

[9] There is some evidence that at or around the time that Mr Xu and Mr Zha started their business, Ms Grozsek agreed to transfer shares she held in the former Toyvision Pty Ltd to them. Ms Grozsek also contends that Toyvision International Pty Ltd took over the stock, premises and telephone lines of Toyvision Pty Ltd and she commenced work without any break in her employment. The evidence about this matter is not clear. However, regardless of the length of Ms Grozsek’s employment, Toyvision Pty Ltd is a small business employer and Ms Grozsek is not entitled to severance payments as provided in the National Employment Standards. For this reason and others, which will be apparent, it is not necessary to decide the length of Ms Grozsek’s service.

[10] The issues in dispute are whether Ms Grozsek’s dismissal was a case of genuine redundancy as provided in s. 389 of the Act. If the dismissal was not a case of genuine redundancy it is necessary to determine whether it was unfair. To determine this issue it is necessary to consider the interaction between s. 385(c) in relation to the Small Business Fair Dismissal Code and s. 385(d) in relation to genuine redundancy. If the dismissal was unfair, it is then necessary to determine the issue of appropriate remedy.

GENUINE REDUNDANCY

Legislation

[11] In relation to the meaning of “genuine redundancy” s. 389 of the Act provides as follows:

“389 Meaning of genuine redundancy

(1) A person’s dismissal was a case of genuine redundancy if:

(a) the person’s employer no longer required the person’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise; and

(b) the employer has complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy.

(2) A person’s dismissal was not a case of genuine redundancy if it would have been reasonable in all the circumstances for the person to be redeployed within:

(a) the employer’s enterprise; or

(b) the enterprise of an associated entity of the employer.”

[12] When a person’s job is no longer required to be performed by anyone is not an absolute consideration. The Explanatory Memorandum to the Fair Work Bill relevantly provides:

“Clause 389 – Meaning of genuine redundancy

1546. This clause sets out what will and will not constitute a genuine redundancy.  If a dismissal is a genuine redundancy it will not be an unfair dismissal.

1547. Paragraph 389(1)(a) provides that a person’s dismissal will be a case of genuine redundancy if his or her job was no longer required to be performed by anyone because of changes in the operational requirements of the employer’s enterprise.  Enterprise is defined in clause 12 to mean a business, activity, project or undertaking.

1548. The following are possible examples of a change in the operational requirements of an enterprise:

● a machine is now available to do the job performed by the employee;

● the employer’s business is experiencing a downturn and therefore the employer only needs three people to do a particular task or duty instead of five; or

● the employer is restructuring their business to improve efficiency and the tasks done by a particular employee are distributed between several other employees and therefore the person’s job no longer exists.

1549.  It is intended that a dismissal will be a case of genuine redundancy even if the changes in the employer’s operational requirements relate only to a part of the employer’s enterprise, as this will still constitute a change to the employer’s enterprise.

1550. Paragraph 389(1)(b) provides that it will not be case of genuine redundancy if an employer does not comply with any relevant obligation in a modern award or enterprise agreement to consult about the redundancy.  This does not impose an absolute obligation on an employer to consult about the redundancy but requires the employer to fulfil obligations under an award or agreement if the dismissal is to be considered a genuine redundancy.

1551.Subclause 389(2) provides that a dismissal is not a case of genuine redundancy if it would have been reasonable in all the circumstances for the person to be redeployed within the employer’s enterprise, or within the enterprise of an associated entity of the employer (as defined in clause 12).

1552. There may be many reasons why it would not be reasonable for a person to be redeployed.  For instance, the employer could be a small business employer where there is no opportunity for redeployment or there may be no positions available for which the employee has suitable qualifications or experience.

1553. Whether a dismissal is a genuine redundancy does not go to the process for selecting individual employees for redundancy.  However, if the reason a person is selected for redundancy is one of the prohibited reasons covered by the general protections in Part 3-1 then the person will be able to bring an action under that Part in relation to the dismissal...”

Was Ms Grozsek’s job no longer required to be performed by anyone because of changes in operational requirements?

[13] Mr Xu states that between January 2013 and November 2013 there were discussions with Mr Zha about a significant business downturn in Queensland where Ms Grozsek was the sales representative. This issue was discussed with Ms Grozsek in a series of emails and telephone calls. Mr Xu said that he communicated with Ms Grozsek by email because she had accused him of pushing her too much and was not speaking to him. Mr Xu did not tender the emails referred to in his witness statement. Ms Grozsek tendered a number of emails said to demonstrate that her budget was unrealistic. 1

[14] The emails tendered by Ms Grozsek include an email dated 14 October 2013 in which Mr Xu is critical of Ms Grozsek’s performance and states that in order to maintain her current salary, she must achieve a budget of $40,000 per month or $120,000 per quarter. Ms Grozsek’s response of 15 October 2013 is headed “Orders/bullying” and states that Ms Grozsek does not have enough redemption stock and that Mr Xu is threatening her wages and should not do so again. The email goes on to make suggestions about freight arrangements for stock and requesting that Ms Grozsek have greater involvement in ordering stock. Mr Xu’s response dated 15 October 2013 states that Ms Grozsek always has reasons and excuses for not achieving budget, and points out that her salary is higher than that paid to any other employee, hence her higher budget.

[15] Mr Xu’s response goes on to state that when Ms Grozsek underperforms, it is expected that she will give solutions not excuses and that more redemption stock will be brought in for her although this should not be an excuse for underperformance. Mr Xu also states that Ms Grozsek is to concentrate on sales for the rest of the month.

[16] Mr Xu also said in his evidence that he was concerned throughout 2013 that Ms Grozsek was the highest paid and most experienced salesperson, but was not achieving the sales figures that were expected or that were equal to less experienced sales staff. Mr Xu had discussions with Mr Zha between January and November 2013 in relation to the fact that Queensland sales were not satisfactory and that the business could not support Ms Grozsek’s employment. Mr Xu and Mr Zha agreed that expenses needed to be cut and consolidation of the business was required. It was decided that the focus should be on healthy and profitable states, primarily New South Wales and that as the weakest State in terms of sales was Queensland, consideration should be given to making Ms Grozsek’s position redundant

[17] As an alternative, Mr Xu and Mr Zha offered a new contract to Ms Grozsek in or around August 2013 with a reduced salary and sales targets. This was rejected by Ms Grozsek. In early November 2013, Mr Zha had a telephone discussion with Ms Grozsek about the situation, during which Mr Zha told Ms Grozsek that the business could not continue to support her role, given the downturn and loss of sales in Queensland. Mr Zha said that during this discussion, Ms Grozsek asked whether he wanted her to go. Mr Zha said that he told Ms Grozsek that he did not want to let her go but would see what happened in November. Mr Zha also told Ms Grozsek that this was the last chance.

[18] Mr Zha said that he had a further discussion with Ms Grozsek on 29 November 2013, during which he told her that “the figures have not improved probably I can’t keep this position any more”. When Ms Grozsek responded by saying she did not have a good range of stock for Christmas, Mr Zha said that he told her that other states had done very well and that he did not think there was anything else he could do for her after all of the discussions about her employment. A letter informing Ms Grozsek that her employment was terminated was sent to her on 2 December 2013. That letter stated that following a review it had been determined that a Queensland Sales Representative was no longer needed and that as a result of low sales figures and high freight prices the Company would focus on New South Wales and Victoria in the next few years. Mr Xu confirmed that the decision to make Ms Grozsek’s position redundant was made on 29 November 2013.

[19] Mr Xu said that after reviewing sales figures for the three states in which the Company was operating, it was decided that Ms Grozsek’s position would be made redundant. Mr Xu agreed with Mr Zha’s evidence that this decision was made on 29 November 2013 after he reviewed the sales figures with Mr Zha.

[20] Mr Xu said that since the termination of Ms Grozsek’s employment the business has started to recover, as it has been consolidated to focus solely on New South Wales. Toyvision has not approached or recruited any salespersons in Queensland. An interested salesperson who approached the Company seeking employment was advised that it was not employing salespersons in the foreseeable future. Mr Xu also said that he cannot see any time in the foreseeable future where a full time salesperson would be employed in Queensland.

[21] I am satisfied on the material before the Commission that Toyvision no longer required the job held by Ms Groszek to be performed by anyone. Toyvision has consolidated its enterprise to concentrate on the New South Wales sector of its business.

Did a modern award apply to Ms Grozsek’s employment?

[22] There is no contention that Ms Grozsek was covered by a modern award. Accordingly, for the purposes of considering whether Ms Grozsek’s dismissal was a genuine redundancy it is not necessary to make a finding about whether Toyvision has met any obligations to consult as provided in a modern award.

Was it reasonable for Mr Grozsek to be redeployed?

[23] In Ulan Coal Mines Limited v Honeysett and other 2 the Full Bench said:

“The question remains whether redeployment within the employer’s enterprise or the enterprise of an associated entity would have been reasonable at the time of dismissal. In answering that question a number of matters are capable of being relevant. They include the nature of any available position, the qualifications required to perform the role, the employee’s skills, qualifications and experience, the location of the job in relation to the employee’s residence and the remuneration which is offered.”  3

[24] Further the Full Bench said:

“It is an essential part of the concept of redeployment under s.389(2) that a redundant employee be placed into another job in the employer’s enterprise as an alternative to termination of employment. Of course the job must be suitable, in the sense that the employee should have the skills and competence required to perform it to the required standard either immediately or with a reasonable period of retraining. Other considerations may be relevant such as the location of the job and the remuneration attaching to it. Where an employer decides that, rather than fill a vacancy by redeploying an employee into a suitable job in its own enterprise, it will advertise the vacancy and require the employee to compete with other applicants, it might subsequently be found that the resulting dismissal is not a case of genuine redundancy. This is because it would have been reasonable to redeploy the employee into the vacancy. In such a case the exception in s.385(d) would not apply and the dismissed employee would have the opportunity to have their application for a remedy heard...” 4

[25] The nature of the qualifications and experience held by the Ms Grozsek are important to determining the issue of redeployment. Ms Grozsek was employed as a Sales Manager or Sales Representative. There was evidence that another person was employed as a Sales Representative in New South Wales at or around the time that Ms Grozsek was dismissed. Ms Grozsek said that had she known that her position was to be made redundant and her employment terminated, she would have been prepared to relocate to New South Wales and take up the position that was available in that State.

[26] The evidence about attempts to redeploy Ms Grozsek was unsatisfactory. Mr Xu said that he attempted to redeploy Ms Grozsek but there was no position available and another position could not be created. Ms Grozsek asserted that there was a position for a sales representative for Toyvision in New South Wales that was available at the time or her dismissal or shortly after it took effect and that she would have accepted that position. There was no evidence of any consideration being given to redeploying Ms Grozsek into that position. There was evidence that Ms Grozsek had protested strongly about a previous attempt to reduce her salary and I have doubts that she would have accepted the position.

[27] However, Toyvision has not established that it gave any real consideration to redeploying Ms Grozsek and has not called sufficient evidence about the New South Wales position to enable me to be satisfied that it would not have been reasonable to redeploy Ms Grozsek into that position.

[28] I also note that there was no discussion of any kind with Ms Grozsek about the possibility of redeployment or any other steps that could have been taken to bring that about. There was no evidence as to why there could not have been a discussion with Ms Grozsek in relation to redeployment to a sales representative position in New South Wales. In my view, the requirement for the Commission to be satisfied that redeployment was or was not reasonable in all of the circumstances of a particular case, requires the employer to give evidence about whether it considered redeployment, and if not, why it did not do so.

[29] An employer who provides no evidence about the factors considered in deciding that redeployment was not an option in a particular redundancy and who has had no discussions with the employee about the redundancy and the possibility of redeployment (even if that possibility is nil) will have great difficulty in satisfying the criteria in s. 389(2) of the Act.

[30] Toyvision has raised a jurisdictional objection on the ground that Ms Grozsek’s dismissal was a case of genuine redundancy and bears the onus of establishing that this is so. 5 Toyvision has all the information relating to its objection, and is required to lead evidence to establish its case on the balance of probabilities.6 Toyvision has not satisfied me that it would have been unreasonable to redeploy Ms Grozsek. Accordingly I not am satisfied that Ms Groszek’s dismissal was a case of genuine redundancy and dismiss the objection on this ground.

SMALL BUSINESS FAIR DISMISSAL CODE

Legislation

[31] Section 388 of the Act provides:

“388 The Small Business Fair Dismissal Code

(1) The Minister may, by legislative instrument, declare a Small Business Fair Dismissal Code.

(2) 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.”

[32] It is not in dispute that Toyvision is a small business. It is necessary to determine whether Toyvision is able to rely on the provisions of the Small Business Fair Dismissal Code as an alternative basis for contending that Ms Grozsek was not unfairly dismissed and it is therefore necessary to consider whether Ms Grozsek’s dismissal was consistent with the Code. The Small Business Fair Dismissal Code provides as follows:

“Small Business Fair Dismissal Code

Commencement

The Small Business Fair Dismissal Code comes into operation on 1 July 2009.

Summary Dismissal

It is fair for an employer to dismiss an employee without notice or warning when the employer believes on reasonable grounds that the employee’s conduct is sufficiently serious to justify immediate dismissal. Serious misconduct includes theft, fraud, violence and serious breaches of occupational health and safety procedures. For a dismissal to be deemed fair it is sufficient, though not essential, that an allegation of theft, fraud or violence be reported to the police. Of course, the employer must have reasonable grounds for making the report.

Other Dismissal

In other cases, the small business employer must give the employee a reason why he or she is at risk of being dismissed. The reason must be a valid reason based on the employee’s conduct or capacity to do the job.

The employee must be warned verbally or preferably in writing, that he or she risks being dismissed if there is no improvement.

The small business employer must provide the employee with an opportunity to respond to the warning and give the employee a reasonable chance to rectify the problem, having regard to the employee’s response. Rectifying the problem might involve the employer providing additional training and ensuring the employee knows the employer’s job expectations.

Procedural Matters

In discussions with an employee in circumstances where dismissal is possible, the employee can have another person present to assist. However, the other person cannot be a lawyer acting in a professional capacity.

A small business employer will be required to provide evidence of compliance with the Code if the employee makes a claim for unfair dismissal to Fair Work Australia, including evidence that a warning has been given (except in cases of summary dismissal). Evidence may include a completed checklist, copies of written warning(s), a statement of termination or signed witness statements.”

[33] The effect of s.385(d) of the Act is that when a dismissal is consistent with the Small Business Fair Dismissal Code, it is not an unfair dismissal and that is the end of an unfair dismissal claim. If the dismissal is not consistent with the Code, the Commission must then consider whether the dismissal is unfair on the basis of the general criteria in s. 387 of the Act. The Small Business Fair Dismissal Code deals with “summary dismissal” on the ground of serious misconduct and “other dismissal” on the basis of the employee’s conduct or capacity to do the job.

[34] In circumstances where a small business employer dismisses an employee on the basis of the employee’s conduct or capacity, the small business employer must give the employee a reason why he or she is at risk of dismissal, and that reason must be a valid reason based on the employee’s conduct or capacity to do the job.

[35] The terms of the Small Business Fair Dismissal Code make it clear that to effect a dismissal that is consistent with the Code, the small business employer must nominate the reason for the dismissal in advance of the dismissal and give that reason to the employee. The employee must be warned verbally or preferably in writing, that he or she is at risk of being dismissed if there is no improvement, and be given an opportunity to respond to the warning and rectify the problem.

[36] In short, the small business employer seeking to establish consistency with Code is stuck with the reason given to the employee. Validity and the other procedural requirements are assessed in the context of the reason given by the employer. The employer cannot rely on a reason not given to the employee at the point the dismissal is put in train. This can be contrasted with the provisions in s. 387(a) where the employer can rely on facts in existence at the time of the dismissal to establish a valid reason, notwithstanding that that reason was not the reason given to the employee at the time the dismissal was effected.

[37] In Iannello v Motor Solutions Australia Pty Ltd 7Vice President Watson held that the Small Business Fair Dismissal Code does not deal with termination on the ground of redundancy. In the present case, the reason given for Ms Grozsek’s dismissal was that her position was no longer required. The dismissal letter refers to reduced sales but does not indicate that this reduction is because of Ms Grozsek’s conduct or capacity to do the job. There is also a reference to higher freight costs as a reason for ceasing operations in Queensland.

[38] Toyvision has not lead any evidence of specific compliance with the Code; there is no evidence that Toyvision was aware that the Code existed at the time of the dismissal. The evidence given on behalf of Toyvision about compliance with the Code is also essentially the same evidence the Company relies upon to establish that the dismissal was a case of genuine redundancy. The Respondent’s evidence is that they held several discussions with the Applicant over an extended period about the level of sales being achieved in Queensland. On the one hand the Respondent relies upon these discussions as consultation with Ms Groszek in relation to impending redundancy of her position, and on the other, as evidence of discussions in relation to unsatisfactory performance.

[39] On balance I am not satisfied that the reason for Ms Grozsek’s dismissal related to her conduct or capacity and accordingly, the Small Business Fair Dismissal Code does not apply to the dismissal. I dismiss the objection of Toyvision to Ms Grozsek’s dismissal on this ground and turn to consideration of whether the dismissal was unfair by reference to the criteria in s. 387 of the Act.

UNFAIR DISMISSAL

Legislation

[40] In deciding whether a dismissal is harsh, unjust or unreasonable, the Commission must take into account procedural and substantive matters set out in s.387 of the Act as follows:

“387 Criteria for considering harshness etc.

(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 the dismissal; and

(e) If the dismissal related to unsatisfactory performance – 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 FWA considers relevant.”

[41] A valid reason for termination of employment is “sound, defensible or well founded” and not “capricious, fanciful, spiteful or prejudiced.” 8 The reason for termination must also be defensible or justifiable on an objective analysis of the relevant facts9, and the validity is judged by reference to the Tribunal’s assessment of the factual circumstances as to what the employee is capable of doing or has done.10 The matters in s.387 go to both substantive and procedural and substantive fairness and it is necessary to weigh each of those matters in any given case, and decide whether on balance, a dismissal is harsh, unjust or unreasonable. A dismissal may be:

Harsh - because of its consequences for the personal and economic situation of the employee, or because it is disproportionate to the gravity of the misconduct;

Unjust - because the employee was not guilty of the misconduct on which the employer acted; and/or

Unreasonable - because it was decided on inferences that could not reasonably have been drawn from the material before the employer. 11

[42] Having found that Toyvision no longer required Ms Groszek’s job to be done by anyone I am consequently satisfied that there was a valid reason for Ms Grozsek’s dismissal. Regardless of whether Ms Grozsek was responsible for poor sales levels in Queensland, I am satisfied that the sales levels were low and that there were sound, defensible and well founded reasons for the Directors to decide to focus their attention on other States and to cease to employ a sales representative in Queensland.

[43] I am not satisfied that Ms Grozsek was given an opportunity to respond to the reason for her dismissal. There were numerous discussions both orally and by email between Ms Grozsek and the Directors during which they expressed their concerns about the viability of the Company’s operations in Queensland. Ms Grozsek participated in those discussions and email correspondence from Ms Grozsek to the Directors of Toyvision showed that she had no compunctions at all about responding to their concerns in forceful terms defending her performance and providing reasons why the sales levels in Queensland were low.

[44] However there was no evidence of any discussion or advice to Ms Grozsek that consideration was being given to dismissing her as a result of the low sales levels. Ms Grozsek was not refused representation at such a discussion because the discussion did not take place. It appears that the Directors simply decided that they would dismiss Ms Grozsek and informed her by letter of that decision.

[45] If the dismissal was because of Ms Grozsek’s work performance the evidence does not satisfy me that it was clearly put to Ms Groszek that her performance was unsatisfactory and that a failure to improve would lead to her dismissal. An email, dated 4 November 2013, less than one month before Ms Groszek’s dismissal, was in evidence with the subject of “letter of warning”. This email is limited in detail and does not specify that dismissal could potentially occur as a result of non-compliance. I also consider that the provision of this email and termination within a single month is not a reasonable period within which the Respondent could expect Ms Groszek’s performance to improve. The evidence is that Ms Groszek was continually advised that if sales did not improve her position was at risk of becoming redundant. The manner in which this was put to Ms Groszek did not provide her with an appropriate opportunity to respond to any performance concerns or to improve her performance. There is no evidence of any steps taken by the Toyvision’s Directors to assist Ms Groszek improve her performance.

[46] I have taken into account the impact that the size of the Toyvision’s business and the absence of dedicated specialists have likely had in effecting the dismissal. I am also of the view that the failure to properly consult Ms Grozsek about the decision to make her position redundant or the possibility of redeployment and the fact that she was paid two weeks in lieu of notice, are matters that are relevant to the unfairness of her dismissal.

[47] On balance, Ms Grozsek’s dismissal was unfair and I am satisfied that she should have a remedy for her unfair dismissal.

REMEDY

Legislation

[48] Because the position held by Ms Groszek is no longer required by the Toyvision and because of the size and nature of its enterprise, I am satisfied that reinstatement is not appropriate. I will now consider an order for compensation.

[49] Section 392 of the Act provides:

“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.”

The effect of the order on the Toyvision’s viability

[50] Other than evidence about the declining sales in Queensland, which brought about the decision to dismiss Ms Grozsek, no specific submissions or evidence as to the Toyvision’s viability were made on behalf of the Company. Ms Grozsek asserts that the Company has the funds to meet an order for compensation and that additional funds have been injected into the Company by the Directors since her dismissal.

The length of Ms Grozsek’s service

[51] The length of Ms Grozsek’s service was in dispute and there is insufficient evidence upon which I can determine this issue. Toyvision submits that Ms Grozsek’s service commenced in “mid 2011” and that she had been employed for approximately 2.5 years. Ms Grozsek asserts that the length of her service was 11 years. What is clear is that Ms Grozsek was employed by a person who became involved with Toyvision at the outset and held shares in her previous employer which she transferred to the Directors of Toyvision. This is suggestive that Ms Grozsek’s service was longer than the period asserted by Toyvision in the present proceedings.

The remuneration that Ms Grozsek would have received, or would have been likely to receive, if she had not been dismissed

[52] I am of the view that Ms Grozsek’s employment would not have continued for an extended period of time. The tone of the email exchanges between Ms Grozsek and the Directors of Toyvision leave much to be desired. It is apparent that every attempt by the Directors of Toyvision to discuss sales or performance with Ms Grozsek was met with hostility and denial of responsibility and I have no doubt that the relationship between the parties would not have subsisted for much longer.

[53] In my view, a reasonable period in which to discuss the reasons for Ms Grozsek’s position being made redundant and possible redeployment would have been eight weeks. For the purposes of assessing compensation, I am not prepared to assume that Ms Grozsek would have accepted an offer of redeployment to New South Wales and given the state of the relationship between Ms Grozsek and the Directors of Toyvision I doubt that any agreed position with respect to Ms Grozsek moving to New South Wales to take up a position could have been reached. Ms Grozsek received three week’s wages in lieu of notice. That amount is to be deducted from any award of compensation.

The efforts of Ms Grozsek (if any) to mitigate the loss suffered because of the dismissal

[54] Ms Grozsek did not give evidence about attempts to mitigate the loss of her employment. However, given the relatively short period that I consider the employment relationship would have remained on foot I do not consider that this factor should be given much weight in this matter.

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

[55] There is no evidence that Ms Grozsek earned any amounts from employment or other work subsequent to her dismissal. Given my findings in relation to the period for which it would have been reasonable Ms Grozsek to remain in employment this factor is not relevant.

The amount of any income reasonably likely to be so earned by Ms Grozsek during the period between the making of the order for compensation and the actual compensation

[56] For the reasons given above, this factor is not relevant in the circumstances of this matter.

Other relevant matters

[57] No other matters were identified as relevant in this matter.

[58] On that basis I Ordered that Toyvision pay to Ms Grozsek the amount of $5,288.46 being five weeks wages at her base salary less tax as required by law.

DEPUTY PRESIDENT

 1   Exhibit 3.

 2   [2010] FWAFB 7578.

 3 Ibid at [28].

 4 Ibid at [30].

 5   Crema and Others v Abigroup Contractors[2012] FWA 5322, Commissioner Cribb, at [81].

 6  See for example Govinda Prasad Dhungel v The Baking Company Australia Pty Ltd[2012] FWA 4717, Deputy President Sams; Eva v Victorian Radio Network Pty Ltd [2007] AIRC 814, Commissioner Eames.

 7   [2010] FWA 3125.

 8   Selverchandron v Peteron Plastics Pty Ltd (1995) 62 IR 371 at 373.

 9   Rode v Burwood Mitsubishi Print R4471 at [90] per Ross VP, Polites SDP, Foggo C.

 10   Miller v University of NSW [2003] FCAFC 180 at pn 13, 14 August 2003, per Gray J.

 11   Stewart v University of Melbourne (U No 30073 of 1999 Print S2535) Per Ross VP citing Byrne v Australian Airlines (1995) 185 CLR 410 at 465-8 per McHugh and Gummow JJ.

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