Jessica Tye v Tase 0508 Pty Ltd T/A Bakers Delight Broadmeadows

[2016] FWC 7468

[2016] FWC 7468

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Jessica Tye
v
Tase 0508 Pty Ltd T/A Bakers Delight Broadmeadows
(U2016/2357)

COMMISSIONER BISSETT MELBOURNE, 18 OCTOBER 2016

Application for relief from unfair dismissal – genuine redundancy – application dismissed.

[1] Ms Jessica Tye has made an application to the Fair Work Commission (Commission) seeking relief from unfair dismissal. Ms Tye was employed by Bakers Delight Broadmeadows (Bakers Delight) in a number of roles, most recently as a trainee manager.

[2] In April 2016 Ms Tye formally completed her traineeship. Ms Tye says that, following this, by the actions of Bakers Delight, she was constructively dismissed.

[3] Bakers Delight says that it did not take action such that Ms Tye was dismissed but rather her position was made genuinely redundant and she was redeployed or offered redeployment into an alternative position.

[4] Ms Tye was represented, with permission, by Mr Terns of Counsel. Ms Hayley Stein-Edwards represented Bakers Delight.

Unfair dismissal

[5] Section 385 of the Act states:

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 FairDismissal Code; and

(d) the dismissal was not a case of genuine redundancy.

Note: For the definition of consistent with the Small Business Fair Dismissal Code: see section 388.

[6] A person is protected from unfair dismissal if the person has completed the minimum employment period and a modern award covers, or an enterprise agreement applies, to the person or the person earns less than the high income threshold (s.382 of the Act).

[7] In this case I am satisfied that Ms Tye is protected from unfair dismissal. Further, the application for unfair dismissal was made within the timeframe required by the Act. It is not claimed that the business is a small business and, at the time Ms Tye left employment, there were 15 employees.

[8] Section 396 of the Fair Work Act (the Act) requires that, prior to deciding the merits of an application, the Commission must decide if the application has been made within the required time allowed for making an application; whether the person is protected from unfair dismissal; whether the dismissal is consistent with the Small Business Fair Dismissal Code and whether the dismissal was a case of genuine redundancy.

[9] It is therefore necessary, as a preliminary matter, to determine if the dismissal was a case of genuine redundancy.

[10] Section 389 of the Act states:

    389 Meaning ofgenuine 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.

[11] I have considered each aspect as required of s.389 of the Act.

Did the employer no longer require Ms Tye’s job to be done by anyone?

[12] Ms Tye’s evidence is that she commenced working for Bakers Delight in late 2014. She says that she worked between 20-38 hours per week and that, once she turned 19 years of age, she received $18.52 per hour.

[13] In July 2015 she commenced a management traineeship. She says she worked 30  hours per week and received $18.99 per hour. Ms Tye produced a copy of a letter of offer dated 3 January 2016 which indicted these hours and a rate of $18.99 per hour but says this reflected the arrangement from July 2015.

[14] Ms Tye says that in April 2016 she completed her traineeship. On 25 April 2016 she met with Ms Stein-Edwards to discuss her performance. She says that it was agreed that she would move back into a sales assistant role but says that Ms Stein-Edwards said she would continue to receive 30-38 hours of work per week and work on Sundays. Ms Tye also says that she was told she would go ‘back in the basket’ with the other sales assistants and that her hours would be reduced if she underperformed. 1

[15] On 29 April 2016 Ms Tye received another email from Ms Stein-Edwards which had attached a record of the meeting on 25 April 2016 and a copy of the new letter of offer. 2 Ms  Tye says the ‘record of meeting’ does not mention redundancy and refers to two warning letters when she had only ever received one. The new letter of offer dated 28 April  2016 reduced her hours to 15 per week at a rate of $18.99 per hour.

[16] On 5 May 2016 Ms Tye received an email with a letter dated 25 April 2016 attached from Ms Stein-Edwards indicating that her position (as trainee manager) had been made redundant. 3 The letter advised that Ms Tye would receive two weeks’ notice and would be paid any accrued entitlements. The letter also said that Ms Tye could ‘choose to continue with the part time sales assistant role’. If she chose to do so she should let Ms Stein-Edwards know by the date specified in the offer already forwarded to her.

[17] Ms Stein-Edwards agrees that she met with Ms Tye on 25 April 2016. She says it was agreed at that meeting that Ms Tye would step down from the trainee manager role to a sales assistant. Ms Stein-Edwards says that she told Ms Tye that she would try and keep her on a reasonable amount of money but does not agree that she said she would keep her take home pay about the same. She said it was not the idea that Ms Tye would keep the same pay as the business could not afford it.

[18] Ms Stein-Edwards says that she never discussed with Ms Tye what her take home pay might be but did indicate there would be a change in her hourly rate and that Ms Stein-Edwards thought it would be around $13 per hour. She says there was also a discussion about Ms Tye going back onto a ‘normal’ sales assistant contract and that her hours would be altered. She agrees that she did say to Ms Tye that she would be ‘back in the basket and working alongside the other sales team and returning to a sales assistant role.’ 4 Ms Stein-Edwards says there was no discussion that Ms Tye would remain on around 30 hours per week.

[19] Ms Stein-Edwards agrees that at the meeting on 25 April 2016 she did not mention ‘redundancy’ with respect to the trainee manager role but says that it was made clear that the trainee manager job was going to be removed. Ms Stein-Edwards says she did not remove Ms Tye from the position because of performance matters but because she could not afford to keep the position. She says she raised performance issues to demonstrate that she did have grounds to remove Ms Tye for this reason but did not do so.

[20] Ms Stein-Edwards says she has not filled the trainee manager role previously occupied by Ms Tye.

[21] Ms Stein-Edwards provided uncontested evidence of the state of the finances of the business along with copies of employment contracts provided to sales assistants after January  2016. Her evidence as to the change in hours of sales assistants (other than Ms Tye) was not questioned.

[22] Ms Melanie Meehan gave evidence that she was second in command (2IC) at the business and that she assisted in starting up the business when it was new in 2014 and training staff. She says she met Ms Tye when she recruited her to work in the business. Her evidence is that Ms Tye took on some of the 2IC duties when Ms Meehan was on leave in 2015. On Ms Meehan’s return she discussed with Ms Stein-Edwards that Ms Tye would be a good candidate to take on more responsibility in a higher role. She says that once Ms Tye moved into the trainee manager role she took on a sales role.

[23] Ms Meehan says that when Ms Tye left the business she moved back into the 2IC role. She says however that Ms Tye, as trainee manager, had more responsibilities than she had as 2IC. As 2IC she helps train staff and does some performance management with Ms Stein-Edwards. 5 She says that Ms Tye’s position as trainee manager was to increase business and sales and take on a leadership role within the business.

Conclusion as to whether employer required the job to be done by anyone

[24] I accept the evidence of Ms Stein-Edwards that the position of trainee manager previously occupied by Ms Tye is not occupied by anyone. I accept that Ms Meehan is not doing the job that was done by Ms Tye.

[25] I am satisfied that the work previously being done by Ms Tye continues to be undertaken but accept that it is being carried out by Ms Stein-Edwards with perhaps some being done by Ms Meehan.

[26] That the tasks previously done by Ms Tye are still being done does not mean that Bakers Delight no longer requires the job done by Ms Tye to be done by anyone.

[27] In Jones v Department of Energy and Minerals 6 Ryan J said:

it is within the employer’s prerogative to 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. It is inappropriate now to attempt an exhaustive description of the methods by which a reorganisation of that kind may be achieved. One illustration of it occurs when the duties of a single, full-time, employee are redistributed to several part-time employees. 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… 7

[28] Taking this into account an employee may still be redundant even though aspects of the employee’s former duties are still being undertaken. 8 Submissions to the contrary by Ms  Tye are misplaced.

[29] For the reasons given I am satisfied that Bakers Delight no longer required the job previously done by Ms Tye to be done by anyone.

Has employer has complied with an obligation to consult?

[30] Ms Tye says that the word redundancy was never used in the meeting of 25 April 2016.

[31] Ms Tye has little recollection of the events of January 2016. She could not recall having discussions with Ms Stein-Edwards about ways to save money for the business or the hours of other employees in the business. She says that all she knows is that some of the other staff ‘lost a couple of hours’ 9 in January 2016. However, Ms Tye agreed with Ms Stein-Edwards that the reason she retained her 30 hours a week in January 2016, when other staff had their hours cut, was because she was in the trainee manager role.10

[32] Ms Stein-Edwards says that she did consult with staff over a few months about the situation the business was in although did not use the word ‘consult’ to describe what was occurring. In addition she says that, while she did not tell Ms Tye at the meeting on 25  April  2016 that her position was being made redundant, she did make it clear that the trainee manager position was going to be ‘removed.’

[33] Ms Meehan says that in January 2016 her hours of work were reduced. She says it was discussed at a staff meeting that the business could not afford to maintain the hours and wages if it was to remain viable. She says that her hours were reduced at the time to about seven hour per week as were the hours of others.

[34] She agreed that there had been discussions on how to reduce costs including reducing products and production, and increasing customer numbers and sales.

[35] Mr Paul Deselms gave evidence that he was the Production Manager in the bakery. His evidence is that in January 2016 discussions were held with him that the wages of the business were not sustainable and structural changes needed to be made. He says that his hours were reduced to part-time and ‘Daniel [Ms Stein-Edwards’ husband] stepped up as production manager to ease some of the financial pressures’. 11 His evidence is that other steps were also taken to reduce costs including reductions in product ingredients.

[36] Ms Isabella Mazzeo gave evidence that she worked about eight to ten hours per week and exceeded this only around Christmas time. She says that in January 2016 she received a new employment contract and, while her hours remained the same, she lost her weekend work and the penalties that attached to that. Ms Mazzeo says that she was aware that this occurred because the business could not afford to pay penalty rates. She agrees that she knew it was going to happen and it had been the subject of discussion with Ms Stein-Edwards.

[37] There is no dispute that Ms Tye’s employment was covered by the General Retail Industry Award 2010 (the Award). The consultation provisions are at clause 8 of the Award and require an employer to discuss with employees any major changes that are likely to have significant effects on employees. ‘Significant effects’ includes:

termination of employment; major changes in the composition, operation or size of the employer’s workforce or in the skills required; the elimination or diminution of job opportunities, promotion opportunities or job tenure; the alteration of hours of work; the need for retraining or transfer of employees to other work or locations; and the restructuring of jobs. 12

[38] Whilst Ms Stein-Edwards did not approach the task of consultation in a structured manner or necessarily be aware of the Award obligations placed on her I am satisfied that she did enter into consultation with staff on the parlous financial position of the business and she did discuss with staff a range of options to reduce the cost of the business including reducing product lines, reducing ingredient costs, increasing sales and reducing hours of staff.

[39] Ms Tye said that she did not recall such discussions occurring but, on balance, I am satisfied, based on the evidence of Ms Stein-Edwards, Ms Meehan, Ms Mazzeo and Mr Deselms, that discussion associated with reducing costs to the business through such means did occur.

[40] I am satisfied that Ms Tye was involved in discussions in and around January 2016 in which she was advised of the financial situation of the business and that she had discussions with Ms Stein-Edwards on how the business could save money. I am also satisfied that she was aware that other staff had their hours cut (while she retained her 30 hours per week) because of business pressures to reduce costs.

[41] I am therefore satisfied that Ms Stein-Edwards did consult with employees of Bakers Delight on the changes to be made to the business and the reasons for those changes. Ms Stein-Edwards may not have been aware of the technical requirements of the Award but she appears to have intuitively been aware of the need to engage with her staff about the issues confronting the business and the need to change.

[42] Further, I am satisfied that the time lapse between the discussions with staff in January  2016 and the agreement with Ms Tye to move back into a sales assistant role were separated by a relatively short period of time, such that the consultation in January 2016 and on-going discussion with Ms Tye with respect to her performance and that of the bakery were close enough to be seen to extend to the discussions with Ms Tye about her future and that of the trainee manager role.

[43] I am therefore satisfied that Bakers Delight complied with its Award obligations to consult about the redundancy.

Would it have been reasonable to redeploy Ms Tye?

[44] The circumstances of this case are different to those normally encountered in dealing with dismissal related to genuine redundancy. In this case the employer says she did not terminate Ms Tye’s employment but rather made the role of trainee manager redundant and offered Ms Tye redeployment into a sales assistant position.

[45] Following the discussion on 25 April 2016 when Ms Tye agreed to return to a sales assistant role she worked on 26 and 27 April 2016. Ms Tye says that on 27 April 2016 she had an exchange of emails and texts with Ms Stein-Edwards with respect to her rate of pay as a sales assistant. Her evidence is that Ms Stein-Edwards told her she would receive a rate of pay of $13.29 per hour as a sales assistant. She says she contacted the Fair Work Infoline and was advised the correct rate should be $18.99 per hour. She advised Ms Stein-Edwards of this who said that she would look into it. Ms Stein-Edwards contacted her later that evening and advised that $18.99 was the correct rate of pay. Despite Ms Stein-Edwards telling her that she thought the rate of pay was about $13.00 per hour, Ms Tye took the comments as indicating how much she would be paid. 13 Ms Tye does not appear to accept as genuine Ms Stein-Edwards’ further advice as to the correct rate of pay. In any event there is no evidence that Ms Tye was offered redeployment into a position that paid $13.00 per hour. The contract provided had the higher rate in it.

[46] From 28 April 2016 Ms Tye was on annual leave that she was directed to take by Ms Stein-Edwards. 14

[47] As set out above, on 5 May 2016, Ms Tye received a letter headed ‘Termination of your employment by reason of redundancy’. That letter purported to set out Ms Tye’s termination benefits but went to say:

Or in turn if you chose to continue with the part time sales assistant role please let us know by the date given in an offer already forwarded. 15

[48] The letter of offer referred to was that forwarded to Ms Tye on 29 April 2016. It was for a sales assistant position at a rate of $18.99 per hour working 15 hours per week. The email accompanying the letter of offer said:

I have attached a new letter of offer along with a meeting follow up from monday, as discussed the letter outlines that you will be stepping back as the trainee manager. Please Sign and return paperwork to me by 6th May. 16 (sic)

[49] It is often the case that an employer is criticised for not offering a broad enough selection of positions such that an employee whose job has been made redundant might be able to make an informed choice as to whether to accept redeployment or not. In this case Ms  Tye’s position was made redundant. This is clear from the letter sent to her on 5 May 2016 (but dated 25 April 2016). Ms Tye was offered an alternative position. To the extent that it was a position Ms Tye could chose to be redeployed into there was no basis on which Ms Tye could demand that her hours of work or take home pay not change.

[50] It seems a strange proposition that Ms Stein-Edwards would put Ms Tye into a position with less responsibility than a trainee manager but continue to pay her the same as she was previously earning, particularly given the circumstances of its business.

[51] Ms Tye was not forced to take the sales assistant position. All of the evidence points to the fact that she agreed to vacate the trainee manager role and move back into a sales assistant role. Ms Tye clearly considered this a reasonable role to move into but ultimately she did not have to. She was offered the choice of redeployment to that role or termination of employment due to redundancy. Whilst the redeployment was not acceptable to Ms Tye – such that she considered her employment had been terminated – there is no evidence of any other options being available such that she could have been placed in some alternative role.

[52] On Ms Tye’s evidence it seems that she considered that, while she was no longer performing the trainee manager role, her hours of work should not be reduced or her pay not substantially effected by moving back to a sales assistant position.

[53] For these reasons I am satisfied that it was reasonable to offer Ms Tye redeployment into the sales assistant position. This is particularly so when she was given the option of accepting the position or not (although I recognise that the choice she faces was a job or no job).

[54] To be clear there was no obligation on Bakers Delight to offer redeployment to Ms  Tye into a position such where her salary would be maintained in circumstances where no such position existed within the business.

Conclusion

[55] I am therefore satisfied that the termination of Ms Tye’s employment was a genuine redundancy.

[56] In reaching this conclusion I note that Ms Stein-Edwards did make a decision to not fill the trainee manager role previously occupied by Ms Tye. Ms Tye reached the decision that she had been dismissed from her employment on grounds that the redeployment offered to her was not reasonable because of the reduction in hours from the 30 per week she had worked as trainee manager to 15 hours per week. The weakness in Ms Tye’s argument is that she was not required to take the position offered to her but did have the option to accept redundancy.

[57] It is not necessary for me to decide if Ms Tye was dismissed but even if she was I am satisfied that it remains a case of genuine redundancy.

[58] There are two pertinent observations to make in conclusion. Firstly, if Ms Tye was redundant and the business is not a small business, she is entitled to notice and redundancy pay. Secondly, Ms Stein-Edwards had no basis on which she could require Ms Tye to take annual leave when she did.

[59] Having found that Ms Tye’s situation was one of genuine redundancy I cannot find that she was unfairly dismissed.

[60] The application for unfair dismissal is therefore dismissed. An order to this effect will be issued in conjunction with this decision.

COMMISSIONER

Appearances:

J. Tye for the Applicant

G. Marchetti solicitor for the Applicant

R. Terns of Counsel for the Applicant

D. Stein-Edwards for the Respondent

H. Steins-Edwards for the Respondent

Hearing details:

2016

Melbourne

5 September

Final written submissions:

Respondent: 15 August 2016

Application: 25 July 2016

 1   Transcript PN111.

 2   Exhibit A1, attachment JT-8.

 3   Exhibit A1, attachment JT-12.

 4   Transcript PN450.

 5   Transcript PN706.

 6 (1995) 60 IR 304.

 7   Ibid, 308.

 8   Dibb v Commissioner of Taxation (2004) 136 FCR 388, 404‒405.

 9   Transcript PN185.

 10   Transcript PN190.

 11   Transcript PN924.

 12   General Retail Industry Award 2010, clause 8.1(ii).

 13   Transcript PN208.

 14   Exhibit A1, attachment JT-7.

 15   Exhibit A1, attachment JT-12.

 16   Exhibit A1, attachment JT-8.

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