Ian James Frances v The Trustee for Dkk Luxton Family Trust T/A Luxton Shutters and Blinds
[2022] FWC 3131
•25 NOVEMBER 2022
| [2022] FWC 3131 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Ian James Frances
v
The Trustee For Dkk Luxton Family Trust T/A Luxton Shutters And Blinds
(U2022/6771)
| COMMISSIONER YILMAZ | MELBOURNE, 25 NOVEMBER 2022 |
Application for relief from unfair dismissal - genuine redundancy - dismissal unfair - compensation ordered
On 30 June 2022 Mr Ian James Frances (the Applicant) made an application to the Fair Work Commission (the Commission) under s.394 of the Fair Work Act 2009 (Cth) (the Act) for a remedy, alleging he had been unfairly dismissed from his employment. This decision follows an earlier decision[1] where I granted an extension of time after Mr Francis filed his application one day late.
Mr Francis commenced employment with Dkk Luxton Family Trust T/A Luxton Shutters and Blinds (the Respondent) on 6 October 2021 in the position of Sales Consultant and was dismissed by reason of redundancy on 8 June 2022.
The Respondent is situated in Melbourne and provides installation services for residential shutters, blinds, curtains and security doors. The Respondent did not respond to the extension of time proceedings and all attempts to contact the Respondent for the purpose of this hearing have also gone unanswered. The Respondent did not file any material or appear in this matter.
I issued directions for these proceedings to the parties on 16 September 2022 and the hearing was held on 3 November 2022. I make my decision based on the material before me from the Applicant. There is no evidence before me that the business has ceased trading. In fact, ASIC records indicate that the business is still registered as a trading entity. However, I observe that the company website is inactive, and Google searches appear to indicate that the business remains open.
Mr Francis submits that the Respondent employs 15 or more employees across its related businesses in manufacturing, selling and distributing its products and as I have no evidence to the contrary, and as Mr Francis worked for more than six months, he has satisfied the requirement of the minimum employment period. In addition, as Mr Francis’ employment was covered by a modern award, I am satisfied that the application has met the requirements of s.382 of the Act.
I have no other jurisdictional matters to consider pursuant to s.396 of the Act other than whether the dismissal was a genuine redundancy.
At the hearing Mr Francis appeared for himself.
Background and submissions of the Applicant
Mr Francis commenced employment with the Respondent on 6 October 2021 in the position of Sales Consultant. His role entailed field sales of blinds, curtains, security doors and shutters.
In a letter from the Respondent dated 8 June 2022, the Applicant’s employment was terminated with effect from the same date. The letter states that it informs Mr Francis of the “outcome of a recent review into Luxton Shutters and Blinds”. The letter states that Mr Francis may be aware of significant challenges for the business, namely reduction in demand for its product and consequently his position of sales consultant is no longer required.
Mr Francis disputes that his position was no longer required. He submits that he was informed that the Respondent no longer intended to advertise in the Bayside southeast suburbs of Melbourne, although he became aware that the remaining consultants covered his area following the dismissal. He submits that he was the most experienced of the sales consultants engaged by the Respondent and that the three consultants employed after him retained their positions despite being less experienced. He further submits that he was the best performing in terms of sales. Mr Francis did not refer to any observable downturn in business, instead he referred to his achieving of performance targets.
Mr Francis tendered in evidence advertisements for permanent full-time receptionist and sales assistant positions advertised by the Respondent on Seek on 8 January and 2 March 2022 and a Seek advertisement for a fitter/installer on 8 June 2022. He submits that the position advertised in June was never offered to him even though he had the skills to fit and install the products. Mr Francis further submits that he was aware that the Respondent had sought assistance through a recruitment agency to hire sales consultants for a new business as late as September 2022.
During the hearing Mr Francis also gave evidence that he understood that the other three sales consultants had been terminated since his extension of time proceedings, with one former sales consultant directly advising him that he had not received his outstanding employment entitlements.
Mr Francis acknowledges that at least he had been paid his notice and accrued leave, while superannuation contributions remained outstanding. However, he described leaving long and secure employment with his former employer after the Respondent gave assurances that the position was intended to be long term with strong growth and career prospects. He noted that due to his age, he was now finding it difficult to secure permanent employment. Mr Francis gave evidence of his efforts to secure employment and of income earned as a self-employed window furnishings consultant.
Was the dismissal harsh, unjust or unreasonable?
Section 385 of the Act states as follows:
“385 What is an unfair dismissal
A person has been unfairly dismissed if the FWC is satisfied that:
(a) the person has been dismissed; and
(b) the dismissal was harsh, unjust or unreasonable; and
(c) the dismissal was not consistent with the Small Business Fair Dismissal
Code; and
(d) the dismissal was not a case of genuine redundancy.
Was the dismissal a case of genuine redundancy?
Under s.389 of the 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.
There is no evidence concerning s.389(a) other than witness evidence from Mr Francis that at the time of his dismissal he was the only sales consultant terminated and that his sales area was serviced by the remaining sales consultants. In terms of compliance with the obligations under the relevant modern award, the Commercial Sales Award 2020 provides the following:
“26. Consultation about major workplace change
26.1 If an employer makes a definite decision to make major changes in production, program, organisation, structure or technology that are likely to have significant effects on employees, the employer must:
(a)give notice of the changes to all employees who may be affected by them and their representatives (if any); and
(b) discuss with affected employees and their representatives (if any):
(i)the introduction of the changes; and
(ii)their likely effect on employees; and
(iii)measures to avoid or reduce the adverse effects of the changes on employees; and
(c)commence discussions as soon as practicable after a definite decision has been made.
26.2 For the purposes of the discussion under clause 26.1(b), the employer must give in writing to the affected employees and their representatives (if any) all relevant information about the changes including:
(a) their nature; and
(b) their expected effect on employees; and
(c) any other matters likely to affect employees.
26.3 Clause 26.2 does not require an employer to disclose any confidential information if its disclosure would be contrary to the employer’s interests.
26.4 The employer must promptly consider any matters raised by the employees or their representatives about the changes in the course of the discussion under clause 26.1(b).
26.5 In clause 26 significant effects, on employees, includes any of the following:
(a) termination of employment; or
(b) major changes in the composition, operation or size of the employer’s workforce or in the skills required; or
(c) loss of, or reduction in, job or promotion opportunities; or
(d) loss of, or reduction in, job tenure; or
(e) alteration of hours of work; or
(f) the need for employees to be retrained or transferred to other work or locations; or
(g) job restructuring.
26.6 Where this award makes provision for alteration of any of the matters defined at clause 26.5, such alteration is taken not to have significant effect.
It is unclear if the reason for the dismissal was due to major change, however, in any event the Respondent did not consult with Mr Francis prior to the dismissal. On assessment of the nature of work performed by Mr Francis and the nature of employing business, I am satisfied that the Commercial Sales Award 2020 (the Award) is the relevant modern award applicable in this matter.
The Respondent did not comply with clause 26 of the Award. Accordingly, I am satisfied pursuant to s.389 that Mr Francis’ dismissal was not a case of genuine redundancy.
Having considered each of the initial matters, I am required to consider the merits of the Applicant’s application. Section 387 of the Act provides that, in considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, I 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 Commission considers relevant.
I am required to consider each of these criteria, to the extent they are relevant to the factual circumstances before me.[2]
Consideration
Was there a valid reason for the dismissal related to capacity or conduct? S.387(a)
In order to be a valid reason, the reason for the dismissal should be “sound, defensible or well-founded.”[3] Further it is the role of the Commission to consider the employer’s reasoning to assess whether that reasoning is valid.[4]
It is not alleged that Mr Francis was dismissed for reason of capacity or conduct, rather, he was informed by letter that the reason for the termination was redundancy. Mr Francis states that in his view it was not a genuine redundancy. He submits that there was no valid reason for his dismissal because at the time of his dismissal the business was still trading, it had not to his knowledge made any other position redundant and he states that there was no consultation at all prior to his dismissal. The reference to business challenges in the letter of termination was not raised prior to his dismissal, nor was he aware of any challenges faced by the business that may affect his employment.
I have no reason to doubt Mr Francis’ evidence that there was no discussion about the alleged challenges being faced by the business nor the absence of compliance with the consultation clause consistent with the requirements of the Award. I have no evidence concerning the employer’s reason for dismissal other than the letter of termination of employment and events as reported by Mr Francis well after his dismissal and following his earlier extension of time application. Mr Francis states that he had driven past the business and could see that the business continued to operate albeit that it appeared three of the four factories were closed. He further stated that he knew that the three other sales consultants were dismissed, but the business was seeking sales consultants for another business through a recruitment agency. We are aware that the Respondent has failed to respond to any communication from Mr Francis or this Commission and that the website has been closed, but there is no ASIC record indicating closure of the business.
In the absence of evidence from the Respondent, I accept the evidence of Mr Francis and find that there is not a valid reason for the dismissal based on capacity or conduct and further, the reason that Mr Francis was made redundant because of reduced demand for product was not substantiated.
Was Mr Francis notified of the valid reason? S.387(b)
Notification of a valid reason for termination must be given to an employee protected from unfair dismissal before the decision is made to terminate their employment,[5] and must be made in explicit[6], plain and clear terms.[7]
Mr Francis states that he was called into a meeting with the Respondent’s Director and verbally advised that his employment had been terminated with immediate effect. A letter of termination was given to Mr Francis on the same day.
While Mr Francis was given a reason for his dismissal when he was dismissed, there is no evidence that he was notified of the reason before the decision to terminate his employment. Further as I do not find that the reason given to Mr Francis was a valid reason, this consideration is not relevant.
Was he given an opportunity to respond to any reason related to his capacity or conduct?
S. 387(c)
An employee protected from unfair dismissal should be provided with an opportunity to respond to any reason for their dismissal relating to their conduct or capacity. An opportunity to respond is to be provided before a decision is taken to terminate the employee’s employment.[8]
It is not alleged that Mr Francis was dismissed for reason of capacity or conduct therefore this consideration is not relevant.
Did the Respondent unreasonably refuse to allow the Applicant to have a support person present? S.387(d)
Mr Francis was not refused a support person, however, when he was called into the office and dismissed, he was not informed of the reason for the meeting, so he did not have an opportunity to consider whether he should ask to have a support person. Nevertheless, this consideration does not apply to this matter.
Was he warned about unsatisfactory performance before the dismissal? S.387(e)
Mr Francis was not dismissed for reason of performance therefore this consideration does not apply.
To what degree would the size of the enterprise and degree of human resource expertise be likely to impact on the procedures followed in effecting the dismissal? SS.387(f) and (g)
The Respondent does not appear to be a small business, nevertheless no assumptions can be made about its resourcing in terms of human resource expertise and there is no evidence on which to rely in relation to this consideration.
What other matters are relevant? S.387(h)
Section 387(h) requires the Commission to take into account any other matters that the Commission considers relevant.
Based on the evidence before me, the business continues to trade and the directors may be opening another business requiring the employment of sales consultants. The reason for the termination of Mr Francis and subsequently the three other sales consultants is not apparent, but nonetheless the Respondent is obligated to comply with minimum award conditions, the National Employment Standards and not disregard employee dismissal protections. There is an absence of evidence that the Respondent has complied with its legal obligations. The setting up of another business with sales consultants in the same field, should there be any substance to this information, is concerning. I do not make any findings in relation to this information, other than to observe that the failure of the Respondent to engage with the Commission at all during proceedings has shown no regard for its legal obligations in respect to Mr Francis.
Was the dismissal harsh, unjust or unreasonable?
Having considered each matter specified in s.387 and in reaching my determination I have considered whether the dismissal was harsh, unjust or unreasonable. I have weighed up all of the circumstances of the dismissal including the evidence tendered by Mr Francis and find the dismissal was harsh, unjust or unreasonable. In the circumstances, I am satisfied that that Mr Francis was unfairly dismissed within the meaning of s.385 of the Act.
As I have found Mr Francis unfairly dismissed, I must now consider remedy.
Remedy
Having determined the preliminary matters and found that Mr Francis was unfairly dismissed, I now consider a remedy of reinstatement or compensation. Mr Francis initially sought reinstatement however, due to the disengagement by the Respondent he no longer seeks reinstatement. Given the absence of engagement by the Respondent in the proceedings together with the information that the other sales consultants had been dismissed and that the Respondent may be recruiting for a new business, the remedy of reinstatement is neither practicable nor appropriate based on the evidence before me.
Under s.390(3) I must not order the payment of compensation unless reinstatement is inappropriate, and that compensation is appropriate in all the circumstances of this matter.
Compensation is not automatic but discretionary[9] and in this matter, Mr Francis has given evidence that he has suffered financial loss as a result of the dismissal. He gave evidence of leaving a long and secure job to join the Respondent with promises of career growth and opportunity to see him into retirement. Further he gave evidence of his age being a barrier to securing new employment and as a consequence he took action to secure work by engaging in paid work as a private consultant. Mr Francis further gave evidence of his loss of earnings resulting from the dismissal. In taking into consideration all of these circumstances I consider an order for compensation is appropriate and it would be unfair not to award compensation.
In considering compensation I am required by s.392(2) of the Act to consider the following:
“(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.”
Viability of the employer’s enterprise
There are no materials on which to rely on concerning the viability of the Respondent’s business should I grant compensation to Mr Francis. According to Mr Francis, he gave evidence that having driven past the business he observed that the business continues to trade, and ASIC searches do not show otherwise. I find that an order for compensation would have no effect on the viability of the business.
Applicant’s length of service
While Mr Francis was employed by the Respondent for a period of eight months, he is a gentleman in his 60s, and in describing his strong skills in sales he acknowledged his absence of skills in computer technology which he noted was a barrier to his attainment of employment. There is no evidence of any performance related concerns while employed by the Respondent and having performed well in sales Mr Francis was confident of ongoing employment with the Respondent. Having considered the submissions I do not consider that the length of employment adds to either a reduction or to increase the amount of compensation.
Remuneration would have received if not for the dismissal
Had Mr Francis not been dismissed for reasons of redundancy when he was, it does appear that dismissal was a strong likelihood having heard evidence that the other three sales consultants were also made dismissed. The exact date of when the other sales consultant were dismissed was unclear. An approximate time frame was after Mr Francis’ dismissal and before my decision on the matter of extension of time. Mr Francis indicated one sales consultant was made “redundant” in or around August 2022. Had Mr Francis been made redundant at the same time he would have retained employment for a period of 6-8 weeks. If Mr Francis retained employment for a period of six weeks, he would have earned $8,400.00 gross in retainer.
Efforts to mitigate loss and amount of remuneration earned
Mr Francis gave evidence that through his efforts to earn an income as a private consultant, his earnings less estimated operating expenses was some $1800 over the six-week period which left him out of pocket by $6,600.00 gross had he not been dismissed on 8 June 2022.
Mr Francis gave no evidence of any further income reasonably likely to be earned, rather he gave evidence that he relied on his personal savings since his dismissal.
While I do consider that even if I grant an order for compensation of $6,600.00 gross less applicable tax there is likely to be challenges for Mr Francis in securing the remedy from the Respondent. Nevertheless, despite these concerns there is no other relevant matter to consider and in my view it would be unfair not to order the compensation I consider appropriate in the circumstances. As indicated, I do consider that Mr Francis would have had a further period of employment of six weeks and I have deducted the remuneration he had earned. I have considered the matters under s.392(2) of the Act with respect to my decision to order compensation.
Conclusion
As I have determined to make an order that the Respondent pay to Mr Francis compensation of $6,600.00 gross tax as required by law, an order[10] to that effect will be issued concurrently with this decision. The order for compensation is to be paid to Mr Francis within 14 days of the date of this decision.
COMMISSIONER
Appearances:
Mr I. Frances on his own behalf.
Hearing details:
2022
Melbourne (By Video using Microsoft Teams)
3 November 2022
[1] [2022] FWC 2459.
[2] Sayer v Melsteel Pty Ltd (2011) FWAFB 7498, [14]; Smith v Moore Paragon Australia Ltd PR915674 (AIRCFB, Ross VP, Lacy SDP, Simmonds C, 21 March 2002), [69].
[3] Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371, 373.
[4] Walton v Mermaid Dry Cleaners Pty Ltd (1996) 142 ALR 681, 685.
[5] Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137, 151.
[6] Previsic v Australian Quarantine Inspection Services Print Q3730 (AIRC, Holmes C, 6 October 1998).
[7] Ibid.
[8] Crozier v Palazzo Corporation Pty Ltd t/a Noble Park Storage and Transport Print S5897 (AIRCFB, Ross VP, Acton SDP, Cribb C, 11 May 2000), [75].
[9] Nguyen v Vietnamese Community in Australia t/a Vietnamese Community Ethnic School South Australia Chapter[2014] FWCFB 7198, [9].
[10] PR748316.
Printed by authority of the Commonwealth Government Printer
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