Joseph Dantzic v Functional Solutions International Pty Ltd

[2019] FWC 2348

[2019] FWC 2348

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Joseph Dantzic
v
Functional Solutions International Pty Ltd
(U2018/9619)

COMMISSIONER BISSETT MELBOURNE, 15 APRIL 2019

Application for an unfair dismissal remedy.

[1] Mr Joseph Dantzic (Applicant) has made an application to the Fair Work Commission (Commission) seeking relief with respect to his dismissal from Functional Solutions International Pty Ltd (Respondent). The Applicant commenced employment with the Respondent on 21 September 2015. His employment was terminated on 29 August 2018.

[2] The Respondent claims that the dismissal of the Applicant was a genuine redundancy as defined in the Fair Work Act 2009 (FW Act). Alternatively it says that it is a small business such that the Small Business Fair Dismissal Code (Code) applies and that it complied with the Code.

[3] The Applicant claims that the dismissal was not a genuine redundancy and that he was unfairly dismissed.

[4] The application was heard by me by way of a determinative conference.

Legislation

[5] Section 385 of the FW 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.

[6] Section 396 of the FW Act states that:

396 Initial matters to be considered before merits

The FWC must decide the following matters relating to an application for an order under Division 4 before considering the merits of the application:

(a) whether the application was made within the period required in subsection 394(2);

(b) whether the person was protected from unfair dismissal;

(c) whether the dismissal was consistent with the Small Business Fair Dismissal Code;

(d) whether the dismissal was a case of genuine redundancy.

[7] It was not disputed and I am satisfied that the application was made within the 21 day time period of the date of dismissal.

The Small Business Fair Dismissal Code

[8] The Code applies to summary dismissals or dismissals without notice and to dismissals “based on the employee’s conduct or capacity to do the job.”

[9] The Applicant was not summarily dismissed or dismissed for serious misconduct. Further, the Respondent does not claim that the Applicant was dismissed for reasons associated with his conduct or capacity.

[10] It is apparent that the Code only applies to dismissals is relation to conduct or capacity. It does not apply in circumstances where the dismissal was a result of redundancy and where it is claimed to be a genuine redundancy as defined by the FW Act. An assessment of the dismissal in this case against the Code is therefore neither appropriate nor necessary. 1

[11] As the Code does not have application to a claimed genuine redundancy I am satisfied that the dismissal was not consistent with the Code.

[12] I will therefore consider if the application was a matter of genuine redundancy.

Genuine redundancy

[13] Section 389 of the FW Act states 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.

[14] Evidence was given in the proceeding by the Applicant and by Mr Michael Fernandez, the owner/Director of the Respondent.

Was Mr Dantzic’s job no longer required to be performed because of changes in operational requirements?

[15] The Applicant gave evidence that, prior to his dismissal, he was required to train another staff member (Mickey) to do the work that he had been doing of editing videos. Further, he said that Jerry, another staff member, who had been doing editing for about 12 months, was error prone in his work such that the Applicant had to correct much of his work.

[16] The Applicant asserted that as there were others still doing video editing at the time he was dismissed this was evidence that the job he had been doing was still required to be performed. His dismissal was therefore not a genuine redundancy.

[17] The Applicant says that he was not given any warning that his job was on the line. He says that the dismissal meeting on 29 August 2018 took three minutes, he was told in the meeting that he was no longer needed and that he could finish then or at the end of the day.

[18] The Applicant agreed that he was aware the Respondent was in some financial trouble and that the loss of customers was raised by Mr Fernandez at the regular Monday morning meetings.

[19] The Applicant believes that his employment was terminated because he was not a member of Mr Fernandez’s family.

[20] Mr Fernandez gave evidence that the Respondent is a small business operating in a niche market (providing edited television content to schools and library automation software). He said that two years ago the Respondent had approximately 1,200 customers but that this had fallen to approximately 580 by the end of 2018.

[21] He said that staff were aware of the loss of customers as this had been raised at the regular Monday meetings. Mr Fernandez said that he regularly advised staff over the last 12 months that if it continued to lose customers the business would have to terminate staff.

[22] Mr Fernandez said that three months prior to dismissing the Applicant he had terminated the employment of a person in the accounts area. He said that since the Applicant was dismissed he has dismissed two employees and a further employee has resigned. He said that none of these staff have been replaced. Mr Fernandez said that the only family members employed by the business are himself, his wife who does administration and sales, his son who is the General Manager, his daughter who looks after the website and his son-in-law who manages the help desk. The Respondent also employs a small number of other staff who are not family members.

[23] Mr Fernandez said that the reason he selected the Applicant to be made redundant was because he was the most expensive person on the payroll at the time. He said that he had no problems with the Applicant’s performance or conduct. He had to cut costs and he had not replaced the Applicant.

[24] Mr Fernandez said he explained this to the Applicant at the termination meeting. He said he told the Applicant that the decision to terminate his employment was an economic one and that he did not have to work out his notice but might use the paid notice to look for alternative employment.

Consideration

[25] I am satisfied on the basis of the evidence of Mr Fernandez that the Respondent has reduced staff and, since the dismissal of the Applicant, has reduced staff numbers further. I am satisfied that the Respondent has not replaced the Applicant.

[26] Whilst the Applicant may consider that the decision to terminate his employment was an arbitrary one it is well established that whether a dismissal is a genuine redundancy does not go to the process of selecting a person for redundancy. 2 That the Respondent retained employees who could do the work of the Applicant does not mean that the dismissal was not a genuine redundancy.3 That the Respondent has retained members of Mr Fernandez’s family does not mean the redundancy was not a genuine redundancy.

[27] On the basis of the evidence before me I am satisfied that the Respondent no longer required the Applicant’s job to be done by anyone in that the work of the Applicant was redistributed to others who remained employed.

Did the employer comply with the requirement to consult?

[28] The Applicant says that there was no consultation with him about the decision to make his position redundant and that he could have been considered for another job with the Respondent. The Applicant said that his employment with the Respondent was covered by the Broadcasting, Recorded Entertainment and Cinemas Award 2010 4 (BREC Award).

[29] Mr Fernandez says that employees were kept abreast of the difficulties associated with a reduced customer base and that this was discussed regularly at the Monday morning meetings.

[30] I am satisfied that the BREC Award requires that consultation occur with employees if a definite decision has been made to introduce changes likely to have a significant effect on employees. A significant effect includes the loss of jobs. 5

Consideration

[31] The Respondent is a small business and I appreciate that Mr Fernandez was of the view that he had kept employees informed of the loss of customers and that this might lead to the need to reduce staff. However, he is required by the relevant award to do more than he did. He should have had a direct discussion with the Applicant about the likely abolition of his position and at least given the Applicant a chance to put forward a means by which the loss of his employment might be averted.

[32] Given that consultation did not occur as required under the BREC Award I am not satisfied that the dismissal was a genuine redundancy as defined in the FW Act.

Was the dismissal unfair?

[33] In determining if the dismissal was unfair (it not being a genuine redundancy and not a dismissal to which the Code applies) it is necessary to determine if the dismissal was harsh, unjust or unreasonable. In determining if the dismissal was harsh, unjust or unreasonable it is necessary to consider all of those matters set out in s. 387 of the FW Act.

[34] Section 387 states that:

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.

[35] I am satisfied that the reason for the dismissal of the Applicant is that his job was no longer required to be done by anyone due to changes in the operational requirements of business. He was not dismissed in relation to his conduct or capacity. This much was affirmed by Mr Fernandez in his evidence. Whilst the reduction in staff required may provide a legitimate reason for dismissal there was no valid reason for the dismissal of the Applicant related to his conduct or capacity (s.387(a)).

[36] I am satisfied that the Applicant was advised of the reason for his dismissal after the decision to dismiss him had been made. He was not aware that his employment was to be terminated until he attended a meeting with Mr Fernandez on 29 August 2018 where he was advised his employment was terminated.

[37] Given that the Applicant was advised of his dismissal after the decision had been taken I am not satisfied that he was given an opportunity to respond to the reason for dismissal prior to the decision being taken (s.387(b) & (c)).

[38] The Applicant was not unreasonably refused a support person in his meeting with Mr Fernandez. By the same token he was not given notice of the meeting or advised in advance of the reason for the meeting such that he could have taken a support person had he chosen to.

[39] The Applicant says that the dismissal meeting went for three minutes. Mr Fernandez says it went for 15 to 25 minutes. I do not need to make a finding on how long it did go for but there is no evidence the Applicant requested that it be stopped so he could get a support person. Mr Fernandez said, and the Applicant did not dispute, that at the end of the meeting he got up, gathered his things and left without a word to anyone.

[40] I the circumstances I am not satisfied that the Applicant was unreasonably denied access to a support person (s.387(d)). Mr Fernandez would be wise in the future however to give employees some notice of a meeting such as that he had with the Applicant and invite the employee to bring a support person along if they chose.

[41] The dismissal did not relate to work performance (s.387(e)).

[42] The Respondent is a small business. It appears to have had between eight and 14 staff over the last 12 months or so. I am satisfied that it has limited or no access to human resource expertise and that this would have impacted on how the dismissal was affected. I do note that Mr Fernandez sought to keep his employees aware of how the business was going and did not hide the ramifications of a falling customer base (s.387(f) & (g)).

[43] I have taken into account that the reason for the dismissal of the Applicant is because the Respondent no longer required that job to be done by the Applicant or anyone, that the Respondent was suffering from financial loss due to erosion of its customer base, that it has not replaced the Applicant and that it has further reduced staff numbers. I do not consider it relevant that the Respondent has kept on family members in the process of reducing staff numbers.

Conclusion as to harsh, unjust or unreasonable

[44] There was a sound reason for the dismissal of the Applicant being that the Respondent did not require his job done by anyone because of the impact of the falling customer base. There was, however, no valid reason associated with the capacity or conduct of the Applicant. The Respondent failed to consult with the Applicant and this is a relevant consideration in determining if his dismissal was harsh, unjust or unreasonable. A failure to consult however, will not, in all cases, render the dismissal due to redundancy, harsh, unjust or unreasonable. 6

[45] In the circumstances of this case I am not satisfied that the dismissal was harsh, unjust or unreasonable.

[46] The Respondent is a small business with a falling customer base. Even if it had consulted with the Applicant it is highly unlikely that a different outcome would have eventuated. As the Applicant acknowledged in his evidence the Respondent was in financial trouble. There was little apparent scope for the Respondent to do anything but what it did. That the Respondent has continued to downsize supports a finding that the steps it took were not unreasonable. Further, the redundancy was justified.

[47] I acknowledge the effect of the dismissal on the Applicant. The Applicant has however gained further employment. I do acknowledge it is not on-going employment or full-time employment. The Applicant however has chosen not to request a reference from the Respondent (which Mr Fernandez said he would gladly give) and has considered the last three years as a “gap” in his Curriculum Vitae. It is not clear why he has done so except that he took the view that his employment was terminated for poor performance which was not the case and, in any event, does not reflect what he says occurred at the dismissal meeting. Whilst the economic effects of the dismissal have been difficult for the Applicant I am not convinced they have been harsh. To the extent that he has not been able to find work in the industry this is, in part, because of the attitude he has taken to the last three years of his employment.

Conclusion

[48] For these reasons I cannot find that the dismissal was unfair.

[49] The application is dismissed and an order 7 to this effect will be issued with this decision.

COMMISSIONER

Appearances:

J. Dantzic, on his own behalf.

M Fernandez and Q. Fernandez for the Respondent.

Hearing details:

2019.

Melbourne:

March 28.

<PR706673>

 1   Iannello v Motor Solutions Australia Pty Ltd[2010] FWA 3125,  Groszek v Toyvision International Pty Ltd[2015] FWC 697 and  Marafioti v Gonzalez Pty Ltd T/A Mac's Crafts[2017] FWC 5484.

 2   UES (Int’l) Pty Ltd v Harvey[2012] FWAFB 5241.

 3   See Explanatory Memorandum to the Fair Work Bill paragraph 1548.

 4   MA000091.

 5   Clause 8.

 6   UES (Int’l) Pty Ltd v Harvey[2012] FWAFB 5241 at [49].

 7   PR706976.

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