Joel Lindsay v Kilmore Golf Club Inc

[2019] FWC 967

[2019] FWC 967

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Joel Lindsay
v
Kilmore Golf Club Inc.
(U2018/7058)

DEPUTY PRESIDENT COLMAN MELBOURNE, 18 FEBRUARY 2019

Application for an unfair dismissal remedy – compensation

[1] This decision concerns an application by Mr Joel Lindsay for an unfair dismissal remedy under s 394 of the Fair Work Act 2009 (Act). Mr Lindsay worked for Kilmore Golf Club Inc. (the Club) as a chef from October 2016 until the end of his employment in June 2018. He claims that he was unfairly dismissed and seeks compensation.

[2] The Club initially raised two jurisdictional objections to Mr Lindsay’s application. First, it said that Mr Lindsay had been a casual employee not engaged on a regular and systematic basis, and that his service with the company could therefore not count towards the minimum employment period. Secondly, the Club maintained that it did not dismiss
Mr Lindsay.

[3] These jurisdictional objections were heard and rejected by Deputy President Hamilton. In a decision dated 23 October 2018, the Deputy President concluded that Mr Lindsay was engaged as a permanent part-time employee from 12 October 2016. 1 The Deputy President also found the Club’s treatment of Mr Lindsay in all the circumstances amounted to a termination of employment. He found that on 22 June 2018 the Club had advised Mr Lindsay that there were no available shifts for him to work, and that the Club would call Mr Lindsay if work became available, but that no call was ever made.2 The Deputy President concluded that there was no prospect of a resumption of work because the Club had reorganised services and was not providing a food service at the time Mr Lindsay would otherwise have been working.3 Mr Lindsay’s application was then allocated to my chambers for arbitration.

[4] The Club then raised two further jurisdictional objections, first that Mr Lindsay’s dismissal was a case of genuine redundancy, and secondly that the dismissal was consistent with the Small Business Fair Dismissal Code (Code). Each of these contentions, if accepted, would have the consequence that Mr Lindsay could not have been unfairly dismissed (s 385). The two further jurisdictional objections and the merits of Mr Lindsay’s unfair dismissal application were then listed for hearing before me on 15 January 2019.

[5] At the commencement of the proceedings, the Club advised that it did not press its further jurisdictional objections. Nevertheless, s 396 provides that the Commission must decide four matters before considering the merits of an unfair dismissal application, two of which concern the subject matter of the additional objections that were raised by the Club. First, I consider that Mr Lindsay’s dismissal was not a case of ‘genuine redundancy’ for the purposes of s 389 of the Act because, as I discuss further below, the Club did not consult with Mr Lindsay about his redundancy. Secondly, the Code was not complied with, for the simple reason that it was not relevant in this case. The ‘summary dismissal’ component of the Code is not in issue here. The ‘other dismissal’ component of the Code requires the employer to provide the employee with a valid reason related to the employee’s conduct or capacity, but neither capacity nor performance are relevant in this case because the Club says that there was no work for Mr Lindsay.

[6] As to the third and fourth preliminary matters referred to in s 396, it is clear that
Mr Lindsay’s unfair dismissal application was made within the 21 day period required by
s 394(2) of the Act, and that Mr Lindsay was a person protected from unfair dismissal, because he earned less than the high income threshold, and was also covered by an award
(s 382).

[7] Mr Lindsay’s application was listed before me on 15 January 2019. I conducted the proceedings as a determinative conference. The Club was represented by counsel, with permission. Mr Lindsay did not appear at the Commission at the listed commencement time, of which the parties had been notified. My associate telephoned Mr Lindsay, who explained that he had mistaken the time. I asked the parties whether they were content to proceed, with Mr Lindsay participating by telephone, and they concurred.

[8] The Club conceded at the outset of the proceedings that the dismissal of Mr Lindsay was unfair, and submissions therefore focused principally on the question of remedy.
Mr Lindsay did not seek reinstatement. The Club contended that the Commission should not award any remedy in the circumstances, or alternatively, several weeks’ compensation at the most. Mr Lindsay contended that he should receive compensation in the order of $10,000.

Factual background

[9] I briefly set out the factual background. Certain matters are contentious and require factual findings to be made.

[10] In the course of 2015 and 2016, Mr Lindsay contracted his services as a chef and caterer to the Club, pursuant to a contract for services. On 12 October 2016, he commenced employment with the Club. Mr Lindsay says that he agreed with the Club that it would receive most of the profit associated with his catering work, but that in exchange he would become a permanent part-time employee. The Club says that Mr Lindsay was engaged as a casual employee with no minimum number of hours. However, that disputed fact has been resolved in favour of Mr Lindsay by the decision of Deputy President Hamilton.

[11] Mr Lindsay says further that in October 2016 the Club agreed to pay him a percentage of the profit from each catering function, with the exact figure to be determined at the next monthly committee meeting. The Club denies that there was any agreement with Mr Lindsay to this effect. Mr Lindsay has made several demands for payments in respect of these and other claimed entitlements.

[12] Mr Lindsay says that he was dismissed over the telephone on 18 June 2018 by a ‘very angry’ Mr Thalassinos, and that this occurred after he sought to have his claims paid.
Mr Thalassinos has since resigned from his role at the Club. Neither party called him as a witness.

[13] On 22 June 2018, Mr Thalassinos sent to Mr Lindsay an email in which he referred to a discussion between them on 18 June 2018. The email said that the Club considered him to be a casual employee, and that, as it did not have a food service on the coming Friday and very few golfers were expected on the Saturday, Mr Lindsay was not required to come in to work. The email went on to say that ‘at this stage we don’t have you rostered on for any shifts but if a shift becomes available we will call you and give you the option to work it.’ The Club’s primary position had been that it did not dismiss Mr Lindsay at all, and that at the time of his unfair dismissal application, he remained on the books as a casual employee, albeit with no rostered shifts at that time. However, Deputy President Hamilton determined that
Mr Lindsay was dismissed. In my view, it is clear from his decision that the Deputy President found this dismissal to have occurred on 22 June 2018. 4

[14] From Mr Lindsay’s unfair dismissal application and his written statement, it appears that he contends that he was dismissed because he raised a complaint about not receiving monies to which he was entitled. I proceed on the basis that he maintains this position.

[15] The Club says that the reason for Mr Lindsay’s dismissal was that his position was redundant, as there was no work for him at the time. It refers to its profit and loss statements for 2018, which indicate that in the period from January 2018 to April 2018, the Club had an average monthly profit of roughly $5,000, but that from May to September it had an average monthly loss of some $11,000. 5 It says that Mr Lindsay’s dismissal occurred in the middle of this period. The Club also provided profit and loss statements for the 2016 and 2017 financial years, showing substantial net losses.

[16] The evidence of Ms Lay, the Club’s president, was that the Board had been considering for some time the question of whether it could afford to employ a chef. She said that the Club currently has only one employee, a casual shop assistant, and that the Club is otherwise run by volunteers. Ms Lay’s evidence was that there was no work available for
Mr Lindsay in July 2018, and that the food service was suspended during the winter months. I note that in her evidence before Deputy President Hamilton Ms Lay had said that the club had continued to serve some Friday night meals; this is not inconsistent with a general suspension of food services, but with some exceptions. Ms Lay’s evidence was that since
Mr Lindsay’s departure, the kitchen has been attended to only by volunteers. It currently serves lunches on Wednesdays and dinners on Friday nights. I accept Ms Lay’s evidence about each of these matters. Her evidence was candid and credible.

[17] Mr Lindsay contended that the food service continued after his departure and was run in the same way as previously. He appears to rely on the evidence of Ms Lay before Deputy President Hamilton to support this contention. However, this is not what Ms Lay said, and not what the Deputy President found. On the contrary, Deputy President Hamilton said in his decision that ‘there was no prospect of a resumption of work because the Club had reorganised services and did not provide food services at the time he was supposed to be working’. 6 The exception was the occasional Friday night meal service. Importantly, in her evidence before me, Ms Lay said that since Mr Lindsay’s departure, any and all kitchen work has been done by Club volunteers. This is consistent with her evidence before Deputy President Hamilton, where she said that club members were doing the cooking.7

[18] Mr Lindsay contended that his position was not redundant. In particular, he disputed the Club’s contention that its financial position was poor and pointed to the fact that, just prior to his dismissal, it bought a new television, refitted its air conditioning, put in new chairs and kitchen equipment and reseeded the grass. The Club said that the new television was paid for by the former general manager personally, the reseeding of the grass and the redoing of the air-conditioning were priority issues, the chairs were donated, and it did not understand what new kitchen equipment Mr Lindsay was referring to. In any event, I would note that there is an obvious difference between capital reserves on the one hand and profitability on the other. The fact that an entity might have some money in the bank does not mean that it is profitable.

[19] Mr Lindsay also said that he was never told that he was redundant. I accept this. The Club considered Mr Lindsay a casual who remained on the books but for whom it had no shifts, however Deputy President Hamilton found Mr Lindsay to be a permanent part-time employee who was dismissed. However, the evidence establishes that the Club had no work for Mr Lindsay. This fact is clear, regardless of the legal status of his employment. Had he been a casual who remained on the books, he would have been a casual for whom the company had no work. Similarly, as a permanent part-time employee, there was no work for him to do. I take note of what has occurred since Mr Lindsay was dismissed. The Club has not replaced him. No one is performing Mr Lindsay’s former role. The kitchen is attended to only by volunteers.

[20] I find that Mr Lindsay’s dismissal occurred for reason of redundancy. The Club’s original position, that Mr Lindsay was a casual who had not been dismissed, is not inconsistent with this finding. I note that the Club’s F3 employer response document contended that Mr Lindsay had not been dismissed and was still ‘required’. But this is clearly a reference to the employer’s position that he would remain on the books as a casual and be given work if it was available. No work ever did become available. Similarly, Ms Lay’s witness statement in the proceeding before Deputy President Hamilton stated that Mr Lindsay would be offered shifts if there was sufficient demand for food services. The pre-condition to his being required never materialised. Further, the fact that volunteers have undertaken kitchen work does not suggest that Mr Lindsay’s role still exists. Mr Lindsay’s role was a paid position, and the use of volunteers to undertake any kitchen work only underscores the fact that Mr Lindsay’s position was redundant.

[21] Further, I do not find any basis in the evidence to conclude that Mr Lindsay’s dismissal was related to the fact that he had made claims for payments. The fact that
Mr Thalassinos may have been angry about receiving Mr Lindsay’s claim is not a sufficient basis to conclude that the claim for payments had anything to do with his dismissal. This is particularly so, given the presence of a compelling business reason for the dismissal. The reason the Club did not give Mr Lindsay any work to do (and, in the conclusion of Deputy President Hamilton, dismissed him) was because the Club had no work for him.

Was the dismissal unfair?

[22] In the proceedings before me the Club conceded, in light of the factual findings made by Deputy President Hamilton, that Mr Lindsay’s dismissal was unfair. This is not an uncommon stance in circumstances where the Commission has rejected an employer’s contention that it did not dismiss the relevant employee. However, I am required to consider for myself whether the dismissal was harsh, unjust or unreasonable, and to take into account the considerations in s 387.

[23] Where dismissal is said to have occurred for reason of redundancy, there is no question of a ‘valid reason’ for dismissal related to an employee’s conduct or performance, as contemplated by s 387(a), nor are the considerations in sections 387(b) and (c) relevant, as they are referable to a valid reason for dismissal. The Club does not contend that
Mr Lindsay’s conduct or performance was the reason for his dismissal. The Club’s reliance on redundancy as a reason for dismissal is to be considered in connection with s 387(h), ‘any other matters the Commission considers relevant’, which I address below.

[24] As to the considerations in s 387(d) to (g), I note as follows. First, there is no suggestion that the Club refused to allow Mr Lindsay to have a support person present to assist in discussions relating to the dismissal (s 387(d)). Indeed there were no such discussions. If a dismissal relates to unsatisfactory performance, s 387(e) requires the Commission to consider whether the person has been warned about it prior to the dismissal however the present matter does not concern performance.

[25] Sections 387(f) and (g) require the Commission to consider the degree to which the size of the employer’s enterprise, and the absence of dedicated human resources specialists or expertise in the enterprise, would be likely to impact on the procedures followed in effecting the dismissal. I take note of the fact that the Club has only one employee and relies on the work of members who volunteer their time. In light of the findings of Deputy President Hamilton, it must be concluded that the Club made mistakes in its analysis of the employment status of Mr Lindsay. The Club did not believe it had dismissed Mr Lindsay, but the Deputy President found otherwise. Nevertheless, in my view, the considerations in sections 387(f) and (g) do not carry any significant weight in the analysis of whether Mr Lindsay’s dismissal was unfair.

[26] I consider that the Club’s dismissal of Mr Lindsay for redundancy, while not a ‘valid reason’ under s 387(a), was plainly a good reason under s 387(h). As to other relevant matters arising under s 387(h), it is appropriate to note that Mr Lindsay had been employed by the Club for two years and, as at the date of the proceeding, had been unable to find other work.

[27] I also take into account the fact that Mr Lindsay was not told that he was dismissed, or that his position was redundant. He was not consulted about the redundancy. This is unsurprising in the sense that the Club did not believe that it had dismissed Mr Lindsay. But the analysis must proceed on the basis of the conclusion of Deputy President Hamilton that Mr Lindsay was dismissed, and my finding that the reason for the dismissal was redundancy. In this regard, clause 8 of the Restaurant Industry Award 2010 requires employers to give employees notice of major changes in organisation or structure that are likely to have significant effects on them. 8 This clearly includes redundancy. Clause 8.2 of the Award states that an employer must give to employees all relevant information about the proposed changes in writing. This did not occur. Non-compliance with the consultation requirement in the Award is a consideration that is relevant to unfairness. It is also a reason why the dismissal could not have been a ‘genuine redundancy’ for the purpose of s 389.

[28] In my view, the dismissal of Mr Lindsay was not unreasonable or unjust, because the Club simply had no work for him. However, in all the circumstances, and given that he was not provided with any reason for or explanation of his dismissal, I am satisfied that the dismissal of Mr Lindsay was harsh. The concession by the Club that the dismissal was unfair is properly made.

Compensation

[29] Section 390(3) of the Act provides that the Commission must not order the payment of compensation unless it is satisfied both that reinstatement of the person is not appropriate, and that it considers an order for the payment of compensation to be appropriate in all the circumstances of the case. Mr Lindsay does not seek reinstatement, and such a remedy would clearly be inappropriate in any event as the Club has no work for him.

[30] In my assessment, an award of compensation is appropriate in this case. The principles that apply to the question of how compensation should be calculated are well-established. The Commission does not have an open-ended discretion, but one confined by the Act. In determining the amount, all the circumstances are to be taken into account, including those prescribed by section 392(2) of the Act. The ‘Sprigg’ formula is to be applied to arrive at an appropriate amount.⁹

[31] The Club made no specific submission in respect of 392(2)(a), however given the evidence of the Club’s weak financial position, it may be inferred that any significant compensation order might affect its viability. Mr Lindsay’s length of service with the Club was nearly two years (s 392(2)(b). Mr Lindsay produced little evidence of his efforts to mitigate loss, short of confirming that he is in receipt of unemployment benefits, which would have required him to apply for job vacancies, yet this is a minimum and statutory requirement rather than a step warranting special weight as mitigation of loss.

[32] Importantly, s 392(2)(c) provides that the Commission must take into account the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed.¹⁰ This section requires the Commission to consider what would have occurred if the person was not dismissed. Mr Lindsay contends that the winter months are always quiet, and that he could have remained employed for a significant period, perhaps several years. The Club says that, if he had not been dismissed on 22 June 2018,
Mr Lindsay’s employment would have been terminated anyway a very short time later. It says that Mr Lindsay’s employment would have continued for a couple of weeks at the most.

[33] Had Mr Lindsay not been dismissed, and been a casual employee, it is possible that the employment relationship between him and the Club might have continued for some time. Mr Lindsay might have remained on the books as a casual, receiving no shifts and therefore no pay, but available to work if the Club needed him. However, the Club’s ability to undertake kitchen work exclusively with volunteers suggests that he would not have remained on the books as a casual for very long.

[34] However, in my view the consideration of the hypothetical scenario posed by
s 392(2)(c) should adopt the standpoint that any subsequent dismissal of Mr Lindsay by the Club would have occurred according to law. This requires the analysis to proceed on the basis of Deputy President Hamilton’s conclusion that Mr Lindsay was not a casual, but a permanent part-time employee. I consider that, had he not been dismissed on 22 June 2018, Mr Lindsay’s employment as a permanent employee would have ended very shortly thereafter. The Club did not have work for Mr Lindsay. Whereas a casual employee can remain on the books, and be engaged as needed, a permanent part-time employee must be paid regardless of the availability of work. In my view, the Club would have quickly determined that Mr Lindsay’s permanent part-time employment was redundant. This is the logical and therefore likely decision that the Club would have made.

[35] If the Club had effectuated the redundancy in accordance with the Award, it would have provided Mr Lindsay with information in writing about the proposed change, and otherwise consulted with him about the change in accordance with clause 8. I estimate that this would have taken not more than one week. Further, as a permanent part-time employee with more than one but less than three years’ service, Mr Lindsay would have been entitled to two weeks’ notice of termination of employment in accordance with s 117 of the Act. I consider that this notice would have been given at the end of the one week’s consultation, giving a total of three weeks’ further employment.

[36] For the purposes of calculating three weeks’ pay, I note that the payslips for
Mr Lindsay submitted by the company show differing amounts of pay for different periods. However, in light of the finding in the earlier proceedings that Mr Lindsay was a permanent part-time employee, I accept Mr Lindsay’s position that he was to be paid $254.00 per week as a minimum for 8 hours work. This gives a figure for three weeks of $762. To this I will add 9.5% superannuation, which is a sum of $72.39, giving a total for three weeks of $834.39.

[37] I accept Mr Lindsay’s evidence that he has earned only $500.00 since his dismissal and has otherwise been in receipt of unemployment benefits. It is not clear precisely when this was earned or how, but I note that Mr Lindsay’s part-time employment with the Club made possible other employment. I do not consider it appropriate to deduct this amount from the proposed compensation, as Mr Lindsay could well have earnt it even if he had remained employed with the Club.

Conclusion

[38] I am satisfied that a remedy should be ordered in this matter. Reinstatement is plainly inappropriate, but compensation is appropriate in the circumstances of this case. I will order compensation to be paid to Mr Lindsay in the amount of $834.39 with deduction of any taxation required by law. This amount is to be paid by the Club to Mr Lindsay within 28 days of the date of this decision.

[39] An order giving effect to this decision is separately issued in PR704952

DEPUTY PRESIDENT

Appearances:

Mr J. Lindsay for himself

Mr D. Curtis of counsel for Kilmore Golf Club Inc.

Hearing details:

2019.

Melbourne.

15 January.

Printed by authority of the Commonwealth Government Printer

< PR704951>

 1   [2018] FWC 6346 at [22]

 2   Ibid at [23]

 3   Ibid at [28]

 4 See [23] and [28]

 5   Exhibits R2 and R3

 6   At [28]

 7   PN183

 8   It was common ground that Mr Lindsay was covered by the Restaurant Industry Award 2010. It is possible that in fact the Registered and Licensed Clubs Award 2010 applied, however the consultation provisions in the two awards are the same.

9 See Ellawala v Australian Postal Corporation (AIRCFB, Print S5109, 17 April 2000), [33]; see also Bowden v Ottrey Homes Cobram and District Retirement Villages Inc [2013] FWCFB 431

10 Ellawala at [59], and [60]