Jeremy Hurley v Tex Onsite Pty Ltd

[2020] FWC 4724

[2020] FWC 4724

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Jeremy Hurley
v
Tex Onsite Pty Ltd
(U2020/4065)

DEPUTY PRESIDENT HAMILTON MELBOURNE, 3 SEPTEMBER 2020

Application for unfair dismissal remedy – jurisdiction: genuine redundancy.

[1] On 2 April 2020, Mr Jeremy Hurley (applicant) lodged an application for an unfair dismissal remedy under section 394 of the Fair Work Act 2009 (Cth) (the Act). The applicant, who was employed as a Chief Pilot, was made redundant on 12 March 2020. The employer objection that the matter was a genuine redundancy within section 389(1)(a) of the Act was disposed of by consent. It was agreed that the consultation clause in an award applied and was not complied with. This agreement was the result of my questions and was oddly not raised by the applicant. Therefore, it was agreed that there was not a genuine redundancy.

[2] It is to the credit of the employer that he was willing to make this concession, even though on the facts such a conclusion was inevitable.

[3] The remaining issue in dispute was then s.387, whether the termination of employment was harsh, unjust or unreasonable. Both sides put submissions and evidence on this issue.

[4] I was concerned that the applicant’s legal costs before the final conference were as I understood it $13,500, and that even assuming success in the matter any compensation order might be no more than the period that it would take for a termination to be lawful, with the consultation clause complied with. This might be on some authorities as low as one week. There was a question as to the utility of the proceedings. I raised this with the parties. Nevertheless, they insisted that the matter be continued.

[5] It is a matter of agreement that Tex Onsite is in severe financial difficulties. The Supplementary Report by Administrators of 5 June 2020 1 shows that it is not able to fully pay its creditors. It needs to overturn and recoup from past transactions even to pay $5.15 in the dollar, and with the recouped transactions being approximately half of the assets. In addition Mr Hurley will under the Deed of Company Arrangement (“DOCA”) receive the amount of 12 weeks’ pay and four weeks’ notice, presumably on the basis that he is redundant, and that the job he was doing is no longer done by anyone, although with some considerable delay. However, curiously, in these proceedings the applicant argues that the job he was doing is still there. These appear to be fundamentally inconsistent positions to put, although this is unnecessary to my decision as I note later. In addition, other employees of Tex Onsite have been made redundant.

[6] The applicant’s submissions address little attention to the difficult financial position that Tex Onsite is in 2. However, the full context of the evidence must be assessed, which includes the position of the employer as well as the effect of redundancy on the employee.

[7] On 7 November 2019 Cor Cordis Pty Ltd were appointed as Receivers and Managers of the Respondent’s group of companies. On 12 March 2020, Cor Cordis Pty Ltd sent an e-mail to employees advising that the Company’s secured creditor had agreed to partially retire the Receivers and Managers and that the business would operate under the control of TEX@site Pty Ltd, pursuant to a licence agreement entered into between that company and the Administrators.

[8] I convened a Mention/Directions Hearing on 12 August 2020. I proposed that the matter be conducted by way of determinative conference pursuant to section 399 of the Act. No party objections were made, and it was agreed. A further determinative conference was held on 13 August 2020.

[9] Mr Geoff Lake, Counsel, was granted permission to appear for the applicant pursuant to s.596 of the Act, instructed by Ms Phi Tran, solicitor, given the complexity of the proceedings. The respondent appeared on his own behalf.

[10] The following witnesses gave sworn evidence:

•  Mr Jeremy Hurley; and

•  Mr Michael Kirwan.

[11] I have had regard to all submissions and evidence.

The Legislative Framework

[12] 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.

[13] In cases where a redundancy is found not to be genuine, section 387 of the Act provides the criteria to be used to determine whether a dismissal was unfair:

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.

[14] The Air Pilots Award 2010, 3 provides the following with respect to consultation about redundancy:

30. Consultation about major workplace change

30.1 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.

30.2 For the purposes of the discussion under clause 30.1(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.

30.3 Clause 30.2 does not require an employer to disclose any confidential information if its disclosure would be contrary to the employer’s interests.

30.4 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 30.1(b).

30.5 In clause 30 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.

30.6 Where this award makes provision for alteration of any of the matters defined at clause 30.5, such alteration is taken not to have significant effect.

Submissions

[15] A summary of submissions is attached to this decision. 4

Consideration

[16] It was agreed that the applicant was covered by the Air Pilots Award 2010 as a Chief Pilot, referred to in for example clause 2 of the award. The consultation clause therefore applied. It was agreed that it was not complied with. 5 The termination was therefore not a ‘genuine redundancy’ as s.389(1)(b) requires that for the termination to be genuine redundancy any consultation clause that applies must be complied with. I therefore dismiss the redundancy objection.

[17] In relation to s.387 it is agreed that there is no valid reason related to capacity or conduct, that the procedural fairness provisions s.387(b) and (c) were not met, that s.387(e) is not relevant, that the business is a smaller business but not a small business within s.387(f), and that there were not human resource practitioners within s.387(g). However, the applicant claims that he asked for a support person, and the employer denies this. Further there is a disagreement about s.387(h).

Section 387(d) - Support person

[18] The applicant denies he was offered a support person. 6 Mr Kirwan says that he offered the employee a support person. For reasons given later, I overall prefer the evidence of Mr Kirwan. The applicant was offered a support person.

Section 387(h) – Other relevant matters

[19] In Ulan Coal Mines Limited v Henry Jon Howarth 7 a Full Bench of the Commission said:

“[17] It is noted that the reference in the statutory expression is to a person’s “job” no longer being required to be performed. As Ryan J observed in Jones v Department of Energy and Minerals (1995) 60 IR 304 a job involves “a collection of functions, duties and responsibilities entrusted, as part of the scheme of the employees’ organisation, to a particular employee” (at p. 308). His Honour in that case considered a set of circumstances where an employer might rearrange the organisational structure by breaking up the collection of functions, duties and responsibilities attached to a single position and distributing them among the holders of other positions, including newly-created positions. In these circumstances, it was said that:

“What is critical for the purpose of identifying a redundancy is whether the holder of the former position has, after the re-organisation, any duties left to discharge. If there is no longer any function or duty to be performed by that person, his or her position becomes redundant…” (at p.308)

This does not mean that if any aspect of the employee’s duties is still to be performed by somebody, he or she cannot be redundant (see Dibb v Commissioner of Taxation (2004) FCR 388 at 404-405). The examples given in the Explanatory Memorandum illustrate circumstances where tasks and duties of a particular employee continue to be performed by other employees but nevertheless the “job” of that employee no longer exists.

[18] In Kekeris v A. Hartrodt Australia Pty Ltd[2010] FWA 674 Hamberger SDP considered whether a dismissal resulting from the restructure of a supervisory team was a case of genuine redundancy. As a result of the restructure, four supervisory team leader positions were replaced by three team leader positions. The Senior Deputy President said:

“When one looks at the specific duties performed by the applicant prior to her termination they have much in common with those of two of the new positions in the new structure. The test is not however whether the duties survive. Paragraph 1548 of the explanatory memorandum makes clear that it can still be a ‘genuine redundancy’ where the duties of a previous job persist but are redistributed to other positions. The test is whether the job previously performed by the applicant still exists.” (at par [27])

[19] In the present case, the Commissioner appears not to have drawn an appropriate distinction in his reasoning between the “jobs” of the mineworkers who were retrenched and the functions performed by those mineworkers or take proper account of the nature of the restructure at the mine which led to an overall reduction in the size of the non-trades mineworker workforce. The Company restructured its operations in various ways including by outsourcing certain specialised, ancillary and other work and increasing the proportion of trade-qualified mineworkers in underground development and outbye crews. As a result, it was identified that there were 14 non-trades mineworker positions which were surplus to the Company’s requirements. The mineworkers whose employment was to be terminated were determined according to the seniority principle as provided in the Agreement. This did not mean that the functions or duties previously performed by the retrenched mineworkers were no longer required to be performed. It also did not mean that the positions of some of these mineworkers (e.g. in underground crews) did not continue, although those positions might after the restructure be filled by more senior non-trades mineworkers transferred from other parts of the operations or by trade-qualified mineworkers. However fewer non-trades mineworker jobs were required overall at the mine as a result of the operational changes introduced and, for this reason, the jobs of the 14 mineworkers selected for retrenchment could be said to no longer exist.

[20] These circumstances readily fit within the ordinary meaning and customary usage of the expression in s.389(1)(a) of the Act where a job is no longer required to be performed by anyone because of changes in the operational requirements of the employer’s enterprise.”

[20] Mr Kirwan is associated with a number of businesses. The employer in this case is Tex Onsite Pty Ltd, and another business, with separate ownership is TEX@Site. The applicant was employed by Tex Onsite. His employment was terminated on 12 March 2020 by letter which provided:

“Dear Sir
TEX Onsite PTY LTD
(Administrator Appointed)

Unfortunately, on behalf of the company, I regret to advise that your services are no longer required and advise that your employment is terminated with immediate effect. The reason for your termination is because of redundancy.

Your final pay for the period of the administration to the date of your termination will be made on the 19th of March 2020.

If you request, I will arrange a separation certificate (for Centrelink purposes) to be provided to you.

You will have a claim against the Company for amounts due to you under your employment contract. I will contact you when I am to advise what moneys may be available from the Company’s assets to pay your entitlements.

I understand that sometimes employees wish to have a confidential discussion about Company matters. Please contact me directly if there is something you wish to raise in confidence.

If you have any Company property, information or records in your possession, please contact Tony Johnson on 0428 137 324 to make arrangements for collection or drop-off.

On behalf of the Company, I thank you for the support and services you have provided.

If you have any queries about this letter or the administration generally, please contact Michael Kirwan acting under license as Administrator.

Yours sincerely

TEX ONSITE PTY LTD (Administrator Appointed)”

[21] Mr Kirwan was restored to running the business on that same day. He immediately terminated the employment of the applicant without consultation or forewarning. However, he says that he spent some time before that planning the restructure, 8 and I accept that evidence.

[22] Mr Kirwan says that the bulk of the applicant’s duties were as Chief Pilot, and that he performed other duties on an ad hoc basis. He says that those other duties were no more than 5 per cent of the applicant’s workload, and that the qualifications of the applicant to perform other duties was limited, for example limited laboratory qualification and accreditation. He says that the last flight for Tex Onsite was in January 2020. However, a flight was undertaken for Tex@Site on 20 March 2020 using a contractor pilot on that one occasion, and the plane is now grounded in Townsville and cannot be serviced because that would require a flight to Victoria, and this part of the business has effectively ceased, and he will sell the aeroplane. The position is complicated, or arguably so, because Tex@Site undertook that flight, not Tex Onsite.

[23] The applicant gave evidence which included that:

“5. At paragraph 7 of my First Witness Statement I state that in or around 2015, Mr Kirwan asked me to perform the roles and responsibilities of Vehicle Manager, Compliance Manager and Laboratory Technician in addition to my role as Chief Pilot.

6. When I commenced my role with the Respondent in 2010, my role was 100% related to aviation and my duties were consistent with what would be conventionally understood to fit within a ‘Chief Pilot’ role. My role and its aviation focus continued unchanged for approximately the first five years of my employment until in or around 2015 when these additional roles and responsibilities were allocated to me.

7. In 2015, the business started to experience some financial challenges. It was at this time that Mr Kirwan asked me to take on these other roles in the business and my role transitioned from one predominately focused on aviation to one that had a broader management focus. While I continued to perform my aviation role alongside these other roles, the aviation aspects of my role took only a comparatively small amount of my time.

8. In or around late 2015, Mr Kirwan also asked me to take over managing the Respondent’s property assets. The property role had been previously been performed by Brad Reeves who was an accountant employed by the Respondent and who left the business at this time in around 2015. The property role involved managing the leases of the buildings used in the business, selling property, arranging valuations and responsibility for maintenance and upkeep. I continued to manage property for the Respondent from this point until the termination of my employment. No one else performed this role during this period.

9. From the addition of these roles to my employment duties in 2015 and continuing through 2016, I estimate that my duties were roughly equally distributed across each of my five roles within the business – being aviation, vehicles, property, compliance and laboratory technician.

10. From in or around late 2017, my aviation specific duties, being those duties described at paragraph 6 of my First Witness Statement, formed approximately only 5% of my role with the Respondent. The remaining 95% of my role was distributed equally between my roles of Vehicle Manager, Compliance Manager, Laboratory Technician and Property Manager, each of which I continued to perform up until the date of my dismissal. From at least late 2017, I was the only person at the Respondent performing these roles and duties save for the ‘Laboratory Technician’ role (as there were other employees who also performed work in the Respondent’s laboratory in addition to me).

11. Attached and marked “JH-11” is a copy of my Pilot’s Logbook in 2019, which I am required to maintain under the Civil Aviation Regulations and which contains details of all company flights that I operated in 2019. The Pilot’s Logbook indicates that in 2019 I took only 11 flights which were spread across only seven days in 2019. While I was responsible for overseeing and managing two pilots and the Respondent’s aircraft fleet throughout 2019, I spent approximately one hour per week performing this managerial aspect of the role.

12. The following emails demonstrate my performance of the Property Manager role, which involved management of the Respondent’s leases, the sale of property, property valuations, maintenance and upkeep:

a. On 18 January 2016, I sent an email to Four Walls Commercial in relation to the Respondent’s lease of a property and stating, among other things, ‘I have recently taken over the responsibility for property management for our company’. A copy of the email chain in relation to this lease is attached and marked “JH-12”.

b. On 7 March 2016, Mr Kirwan sent an email to me requesting estimates of values for several properties. A copy of the email is attached and marked “JH-13”.

c. On 13 May 2016, I sent an email to Ray White requesting a rent appraisal for one of the Respondent’s properties. A copy of the email chain in relation to this appraisal is attached and marked “JH-14”.

13. The following emails demonstrate my performance of the Vehicle Manager role as described at paragraph 8 of my First Witness Statement:

a. On 13 March 2018, I received an email from Steadfast Brokers requesting a quote for the assessment and repairs of a motor vehicle…

…

16. From January 2020, I also assumed the Sales Manager role as described at paragraph 19 of my First Witness Statement, which accounted for approximately 25% of my duties from January 2020.”

[24] Mr Hurley will under the DOCA receive the amount of 12 weeks’ pay and four weeks’ notice, presumably on the basis that he is redundant, although with some considerable delay. He also appears in these proceedings and denies that he is redundant. Some consistency between the two positions would be desirable, and it is not apparent to me on the material before me. He who comes to equity must come with clean hands, or perhaps an explanation. This may also affect the credibility of his evidence, namely that he has already made a concession through the redundancy benefits he accepts and will receive that the job he was doing is no longer done by anyone, although this is not necessary to my decision. It may be however a further factor reinforcing the conclusions I have reached on the evidence.

[25] Mr Kirwan did not attend conciliation conferences, did not meet directions to provide submissions and evidence, and the submissions and evidence put was short in nature. He explained his actions on the basis that he was spending his time on insolvency and receivership issues and trying to maintain his businesses having regard to the reduction in orders and sales arising from the COVID-19 crisis. 9

[26] I do not wish this decision to contribute to a further flood of opportunistic excuses for failure to comply with directions and attend conferences. However, in this unusual case I accept Mr Kirwan’s explanation, although it is not a full answer. I note that little if any sympathy for Mr Kirwan’s position was expressed by the applicant, who was perhaps understandably focussed on his personal position. Nevertheless, as with consultation before making Mr Hurley redundant, Mr Kirwan should have made a greater effort at meeting directions, given the need for claims of this sort to be properly considered and responded to. I also note that Mr Kirwan is not a trained human resource professional, and this accounts to some extent for his decisions in this matter, including a decision not to cross examine the applicant.

[27] I found Mr Kirwan’s evidence to be credible and largely consistent. His evidence was repeatedly challenged in cross examination, and he maintained his evidence. Some of the questioning appeared to confuse or correlate Tex Onsite and Tex@Site work, and did not take account of the evidence given by Mr Kirwan. 10 This is to some extent understandable, given Mr Kirwan’s limited submissions. Nevertheless his evidence seemed credible. I accept that Mr Hurley believes otherwise, but his evidence with respect did not deal with the circumstances of the employer and other companies in any real sense, although for example the Administrators of 5 June 202011 was provided by the applicant, and could have been the subject of further comment. The applicant submissions and evidence were hostile and recriminatory in nature, focussed understandably on the harshness for him, rather than providing candid evidence about the employer’s alleged trading problems. Mr Kirwan in contrast took pains to be considerate in his descriptions of Mr Hurley’s work.12 I will return to that. It is open to various companies for an employer to restructure by ending or reducing work in one company, while another company with different although arguably to some extent related ownership to expand business. In this case the expansion if that it was what it was, was very limited in nature, with little activity of Tex@Site in the aviation business.

[28] The administrator’s records clearly demonstrate that Tex Onsite is in severe financial difficulties, and the applicant did not attempt to deny this. The Supplementary Report by Administrators of 5 June 2020 13 outlines the estimated return to creditors14 and shows the following would be added to assets: ‘Potential Voidable Transaction Recoveries (available to a Liquidator) 477,000’. The legal costs incurred for doing this would be between $50,000 and $70,000. The liquidators comment that:

“The DOCA provides for a return of 5.15 cents in the dollar to the participating creditors, the payment from the execution of the DOCA and distribution will not be finalised in one dividend distribution, rather an interim dividend will be paid as contributions are received.

The alternative of placing the Company into Liquidation and selling the assets of the Company via auction, would be a time consuming and expensive process that would diminish any return to creditors.” 15

[29] Clearly Tex Onsite is in some financial difficulties, not being able to fully pay its creditors, and having to recoup from past transactions even to pay $5.15 in the dollar, and with the recouped transactions a large part of the assets, being approximately half of the assets.

[30] Mr Kirwan gave evidence 16 that:

•  Jeremy Hurley was not unfairly dismissed and his employment with Tex Onsite as the Chief Pilot was genuinely made redundant.

•  As you may be aware, Receivers and Managers were appointed to Tex Onsite and Kirwan Training Pty Ltd (Subject to Deed of Company Arrangement) (Receivers and Managers Appointed) on 7 November 2019.

•  Tex Group only had one operational aeroplane which was grounded in January 2020 in Western Australia, after the Receivers and Managers terminated the employment of the pilot operating that aeroplane.

•  In his statement of claim Jeremy Hurley notes a number of ad hoc tasks that he was performing however these tasks were being performed while he was working for the Receivers and Managers.

•  As far as his employment with Tex Onsite and his role as Chief Pilot is concerned, that position was redundant as the only operational aeroplane was grounded in Western Australia in January 2020 and none of the other planes owned by the company are airworthy.’

[31] He also gave evidence 17 that:

“1. Robert O’Neil Made redundant same day

2. Grant Mounsey Made redundant a few weeks later

3. Ramesh Bhudia Made redundant a few weeks later”

[32] He gave evidence 18 that:

“Yes we are no longer flying planes to service clients. We have also greatly reduced amount of staff”

[33] The downturn in business and cessation of aviation activity is it appears a consequence of the economic downturn 19 and perhaps other events, and this is largely agreed.20 I also accept Mr Kirwan’s account of Mr Hurley’s duties in preference to the account given by the applicant. The overall evidence given by Mr Hurley contained little if any acknowledgement of the reality of the insolvency and consequent restructure. His evidence focussed more on personal grievances, which is understandable but does not address the full picture of the business and its financial difficulties, even though for example he obtained the receiver’s report, which is quoted in this decision, and shows that the state of the company is difficult. For example, the applicant’s evidence referred to the COVID-19 crisis, but virtually only in connection with the effect on the applicant:

“26. The aviation industry has been significantly affected by COVID-19 and very few commercial flights are being flown anywhere in Australia. Because of this, employment prospects in this industry are currently very poor.” 21

[34] I accept that this is true and take it into account. Nevertheless the crisis has also obviously had an effect on Tex Onsite, and a fairer submission would have specifically acknowledged this in a broader sense and dealt with it. Given that this is not done it seems safer to rely on the evidence of Mr Kirwan, who explained his position during evidence and cross examination, although regrettably not through much written evidence. However, this can be supplemented as noted above by Administration documents provided by the applicant.

Other accusations made by Mr Hurley

[35] Mr Hurley accused Mr Kirwan of being motivated in the termination by hostility arising from his actions which included taking a car away from his son. 22 Mr Kirwan denied such hostility.23 I prefer the evidence given by Mr Kirwan. I saw little or no evidence of this hostility in the evidence given by Mr Kirwan, and there was little or no corroboration of this hostility. There was however considerable evidence of a very difficult trading and economic situation, and an insolvency situation, and a redundancy is consistent with that evidence, and understandable, and other employees were also made redundant. I saw little if any recognition of the very difficult trading and economic situation in the evidence given by Mr Hurley, which was accusatory, and focussed almost entirely on his own circumstances. The applicant’s evidence was not a reliable guide to the overall redundancy circumstances, as opposed to the impact on him. I accept that his circumstances are difficult, but so is Mr Kirwan’s trading and insolvency position, and both are relevant and have to be properly addressed.

Redeployment

[36] As previously mentioned, Mr Kirwan said that he spent some time before 12 March planning a restructure. It was not simply that Mr Kirwan was restored to control of the business, and then immediately did all the planning and decisions. There was contrary to the submissions put by the other side, time and consideration enough to properly consider redeployment. I accept Mr Kirwan’s evidence on this point. There was in the circumstances little reason to doubt this. The applicant did not for example convincingly put forward a job he could have been redeployed into, 24 and I prefer the evidence given by Mr.Kirwan, which was consistent with the overall evidence about the position of the employer. The aeroplane work conducted by Tex@Site was by a contractor,25 and Mr Kirwan gave evidence that as Chief Pilot flying was only a small part of his duties. The applicant agreed that someone would need to be made redundant given the financial difficulties the company was faced with and that it was reasonable for the company to redistribute work.26 I accept that Mr Kirwan could not reasonably redeploy the applicant.

Hardship of applicant

[37] I accept that the applicant suffers hardship as submitted. 27

Conclusion

[38] I have taken account of all the submissions and evidence put and my findings set out above and give them weight. I find that because of procedural fairness failings the termination of Mr Hurley was harsh, unjust or unreasonable. Parliament has legislated to require consultation before a genuine redundancy is such, and I must give Parliament’s intention weight.

Remedy

[39] The applicant asked for the maximum compensation to be awarded, or close to it. 28

[40] Firstly, I find that reinstatement is inappropriate and that an order of compensation is appropriate, within s.391.

[41] Secondly, in relation to s.392 I make the following findings:

Effect on viability – s.392(2)(a)

[42] There was some evidence that the business is in a position to order the full six months maximum compensation. 29 However, the business is clearly in difficulties, given that it has been in receivership and is currently operating under a DOCA assigned to Mr Kirwan as the administrator.30 I make a small discount on this account.

Length of service – s.392(2)(b)

[43] It is not in dispute that the service is in the order of 10 years. 31

Remuneration would have received – s.392(2)(c)

[44] This is a somewhat difficult assessment to make. I note the applicant submissions of a lengthy period of two years, which does not take account of the redundancy consultation which would have occurred. I find that the applicant would have been further employed and remunerated for a period of one week, during a consultation period pursuant to the consultation clause in the award.

Mitigation s.392(2)(d)

[45] I accept that the applicant has mitigated his loss by seeking employment and that job seeking is difficult now at present.

Amount of income earnt s.392(2)(e)

[46] There is on the applicant submissions no such income, and I accept this.

Income reasonably likely to be earnt s.392(2)(f)

[47] There is no such income.

Any other matter s.392(2)(g)

[48] As already stated, the employer made the applicant redundant because the bundle of jobs the employee was doing are no longer done by anyone, although the termination was flawed by lack of consultation. This lack of consultation is accepted by Mr Kirwan, which is to his credit.

Sprigg formula

[49] In Gloria Bowden v Ottrey Homes Cobram and District Retirement Villages Inc. T/A Ottrey Lodge 32a Full Bench set out the approach to be followed in assessing compensation, and I adopt this.

[50] As I noted above, the viability of the company is experiencing difficulties resulting from the COVID – 19 crisis, and a significant order might affect its viability to some extent. I take account of all the assessments made above. I assess the period of employment as that period that would have been taken if the consultation clause had been followed as required by law, which I assessed as one week. I note that in some cases such a period is assessed as one week, 33 and in some decisions I decided on 3-4 weeks.34 Compensation based on the period in which consultation would have occurred, as this is the period of potential further employment within for example Sprigg, was upheld by a Full Bench.35

[51] I order the applicant to prepare an order for one weeks’ pay, including superannuation of 9.5 per cent, and provide it to the respondent within two weeks. The respondent is to advise me if he agrees with the monetary amount in the order within one week of receipt of that. If the parties are agreed I will issue the order as sought. If the parties are not in agreement they may provide a submission within one week following the two week period set out above setting out the appropriate amount, and I will issue an order on the basis of those written submissions.

DEPUTY PRESIDENT

Appearances:

Mr Jeremy Hurley, Applicant
Mr Geoff Lake, Counsel
Ms Phi Tran, Instructing Solicitor
Mr Michael Kirwan, Respondent

Hearing details:

2020.
Melbourne (via Teleconference).
13 August.

Printed by authority of the Commonwealth Government Printer

<PR722471>

Appendix 1 – Summary of submissions

Applicant submissions 36

1. The Applicant was employed by the Respondent between 22 February 2010 and 12 March 2020.

2, From April 2010 the Applicant worked full time and received remuneration of $122,520 per annum, exclusive of superannuation and annual qualification renewals.

3. In the role of Chief Pilot the Applicant’s extensive responsibilities included, inter alia:

(a) overseeing the Respondent’s aviation service;

(b) managing the Respondent’s Pilots;

(c) managing and maintaining the Respondent’s aircrafts;

(d) upgrading aircraft equipment;

(e) training new staff;

(f) performing safety checks;

(g) flying aircrafts around Australia; and

(h) acting in the capacity of Vehicle Manager, Compliance Manager, Laboratory Technician and Sales Manager.

4. With respect to the dismissal, the Applicant contends he was dismissed on 12 March 2020, in accordance with section 386(1) of the Fair Work Act 2009 (Cth). The Respondent terminated the Applicant’s employment by way of:

(a) issuing the letter of termination to the Applicant in the meeting on 12 March 2020, which confirmed that the Applicant’s employment was terminated with immediate effect’;

(b) verbally confirming that the Dismissal had immediate effect on 12 March 2020;

(c) failing to confirm that the Applicant remained an employee of the Respondent or to direct the Applicant to attend work, despite repeated inquiries by the Applicant’s legal representatives; and

(d) making reference to the Applicant’s “employee entitlements” and “termination payments” notwithstanding its assertions that the Applicant remained an employee of the Respondent.

5. In the lead up to the Applicant’s dismissal, the applicant states that on 7 November 2019 Cor Cordis Pty Ltd was appointed as Receivers and Managers of the Respondent, following which Mr M Kirwan ceased to perform his role.

6. In early January 2020 the Applicant completed two lists of required vehicles and surplus vehicles. On the list of required vehicles, the Applicant recommended that the Respondent retain a Volkswagen Amarok and install and roof rack onto it. On 15 January 2020 Mr M Kirwan verbally reprimanded the Applicant in relation to the Applicant’s recommendation regarding the Volkswagen Amarok.

7. On 12 March 2020, the Receiver and Manager handed back control of the company to Mr Kirwan. On the same day the applicant was asked to a meet with Mr Mathew Williamson (Chief Operating Officer) and Mr Kirwan. During this meeting Mr M Kirwan stated, ‘Are you aware that I’m appointed as the administrator under licence? That means I can make decisions’. Mr M Kirwan then handed a letter to the Applicant which notified him that his employment was terminated ‘because of redundancy’. After reading the letter the Applicant asked, ‘Is it effective immediately?’; and Mr M Kirwan replied, ‘Yep’.

8. The Applicant asserts despite the letter of termination stating that the Applicant’s ‘services are no longer required’ and the reasons for termination being because of redundancy, the applicant submits that the Dismissal was not a case of genuine redundancy. At the time of the Dismissal, the Applicant’s services were still required, contrary to the Letter of Termination. In the alternate, it was reasonable in all the circumstances for the Applicant to be redeployed within the Respondent’s enterprise or the enterprise of an associated entity of the Respondent.

10. The Applicant asserts that the Respondent failed to warn or consult the Applicant in relation to the alleged redundancy and consider any redeployment options for the Applicant. Further, as the redundancy was affected on the same day Mr Kirwan was given control over the company indicates that the decision was made hastily.

11. With respect to the dismissal being harsh unjust and/or unreasonable, the applicant asserts:

•  There was no valid reason for dismissal. The Respondent has provided no substantive reasons relating to the redundancy of the Applicant’s role, either by way of changes to the operational structure or justifying why the applicant’s role in particular was made redundant. Further, no issues were raised with the Applicant regarding his conduct or performance during his employment or in the lead up to the Dismissal, save for the verbal reprimand made by Mr M Kirwan.

•  As there was no valid reason for the Dismissal and accordingly, the Applicant was not notified of any valid reason for the Dismissal. the Applicant has not been notified of that reason and the Applicant was not notified of the reason before the decision to terminate was made.

•  The Respondent failed or refused to even allow the Applicant an opportunity to respond to his purported redundancy

•  The Applicant was not provided with the opportunity to have a support person present at the meeting on 12 March 2020, during which he was given the Letter of Termination.

•  The size of the Respondent’s enterprise and the lack of a dedicated human resource department should not excuse it from failing to undertake the appropriate procedure in respect of the Dismissal

•  With regard to other factors the impact of the dismissal on the Applicant’s economic situation, the unblemished employment history, the position not being genuinely redundant, failure of the Respondent to afford the Applicant procedural fairness, and the harsh consequences of the dismissal on the Applicant should be regarded by the Commission.

•  The Applicant seeks the maximum compensation as a remedy.

Respondent Submissions 37

12. The Applicant was not unfairly dismissed and his employment with Tex Onsite as the Chief Pilot was genuinely made redundant.

13. Receivers and Managers were appointed to Tex Onsite and Kirwan Training Pty Ltd, subject to Deed of Company Arrangement (DOCA) and Receivers and Managers were appointed on 7 November 2019.

14. Tex Group only had one operational aeroplane which was grounded in January 2020 in Western Australia after the Receivers and Managers terminated the employment of the pilot operating that aeroplane.

15. The applicant refers to a number of ad hoc tasks that he was performing however these tasks were being performed while he was working for the Receivers and Managers

16. The position of Chief Pilot was redundant as the only operational aeroplane was grounded in Western Australia in January 2020 and none of the other planes owned by the company are airworthy.

17. There has been changes in the operational requirement of the business as planes are no longer servicing clients and the amount of staff has been greatly reduced.

 1   Digital Court Book, 232.

 2   Ibid, 187.

 3   MA000046.

 4   Appendix 1 – Summary of submissions.

 5   Audio Recording of Mention/Directions, 12 August 2020, 0:21:02.

 6   Digital Court Book, 185 [17c].

 7   [2010] FWAFB 3488.

 8   Audio Recording of Determinative Conference, 13 August 2020, 1:33:23.

 9   Ibid, 2:16:09.

 10   Ibid, 1:32:28.

 11   Digital Court book, 232.

 12   Audio Recording of Mention/Directions (Part 1), 12 August 2020, 0:08:55; Audio Recording of Determinative Conference, 13 August 2020, 0:16:45.

 13   Digital Court Book, 232.

 14   Ibid, 243.

 15   Ibid, 242.

 16   Ibid, 133.

 17   Ibid, 140.

 18   Ibid, 144.

 19   Audio Recording of Determinative Conference, 13 August 2020, 01:22:01.

 20   Digital Court book, 187.

 21   Ibid, 187.

 22 Ibid, 11 [45].

 23   Audio Recording of Determinative Conference, 13 August 2020, 0:34:24.

 24   Audio Recording of Mention/Directions (Part 2), 12 August 2020, 0:23:54.

 25   Audio Recording of Determinative Conference, 13 August 2020, 1:30:26.

 26   Audio Recording of Mention/Directions (Part 2), 12 August 2020, 0:25:24.

 27 Digital Court Book, 72-3 [84].

 28 Ibid, 73 [56].

 29   Ibid, 264.

 30   Audio Recording of Mention/Directions (Part 1), 12 August 2020, 0:03:13.

 31   Digital Court Book, 5 [8], 135 [2a].

 32   [2013] FWCFB 431.

 33   Aron Solway v Vision Blonde Pty Ltd[2020] FWC 4233.

 34   Aleksandra Cvejic v Academy Services Pty Ltd[2015] FWC 5905.

 35   Aleksandra Cvejic v Academy Services Pty Ltd[2015] FWCFB 8264.

 36   Digital Court Book, 61-74.

 37  Digital Court Book, 106-29.