Joseph Levit v Brobo Group Pty Ltd T/A Brobo Waldown (Aust) Pty Ltd / Atlas Engineering Australia Pty. Ltd - [2014] FWC 60

[2014] FWC 60

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Joseph Levit
v
Brobo Group Pty Ltd T/A Brobo Waldown (Aust) Pty Ltd / Atlas Engineering Australia Pty. Ltd.
(U2013/2422)

COMMISSIONER RYAN

MELBOURNE, 3 JANUARY 2014

Application for relief from unfair dismissal - compensation.

[1] Mr Levit made an application on 21 July 2013 for an unfair dismissal remedy pursuant to s.394 of the Fair Work Act 2009 (the Act) in relation to his dismissal from Brobo Group P/L on 9 July 2013. The reason for the dismissal was that Mr Levit’s position was redundant. The remedy sought by Mr Levit was compensation.

[2] The Employer Response to the Application (Form F3) was filed by Atlas Engineering Australia P/L who identified itself as the employer of Mr Levit. Atlas Engineering Australia P/L contended that Mr Levit’s dismissal was a case of a genuine redundancy within the meaning of s.389 and that the application by Mr Levit should be dismissed.

[3] At the hearing of this matter Ms Tueno, of Counsel, for Mr Levit contended that the employer was Brobo Group P/L and not Atlas Engineering Australia P/L. Ms Tueno also contended that both Brobo Group P/L and Atlas Engineering Australia P/L were associated entities within the meaning of s.50AAA of the Corporations Act 2001 (Cth).

[4] At the commencement of the hearing of this matter Mr Millar of counsel appeared for Atlas Engineering Australia P/L and there was no appearance by Brobo Group P/L. After the evidence of both Mr Levit and witnesses for Atlas Engineering Australia P/L had been dealt with I sought to ascertain whether Brobo Group P/L wished to be heard in relation to the matter. The Commission was advised that Brobo Group P/L had instructed Mr Millar to represent them and that Brobo Group P/L would lead no evidence in the matter nor make any submissions in the matter.

Who is the Employer?

[5] The identification of the employer is a matter in contest between Mr Levit and Atlas Engineering Australia P/L and must be resolved if the Commission is to make any order arising from this matter.

[6] The two possible employers are Brobo Group P/L and Atlas Engineering Australia P/L.

[7] Atlas Engineering Australia P/L has asserted that it was the employer of Mr Levit at the time of the dismissal.

[8] Brobo Group P/L has made no submissions to the Commission nor led any evidence before the Commission.

[9] Mr Levit contends that his employer was Brobo Group P/L.

[10] The evidence of Mr Obrad Golic, Director of Atlas Engineering Australia P/L and Mr Jim Kealy, former General Manager of Atlas Engineering Australia P/L and Mr Levit is sufficiently detailed that together with the submission of both parties it is clear as to who was the employer of Mr Levit at different points of time and the relationship that existed between the various employers.

[11] In February 1994 Mr Levit commenced employment with Brobo Waldown P/L in Cheltenham. Brobo Waldown P/L was owned by the A V Jennings group of companies.

[12] In 2001 Mr Obrad Golic, owner and Director of Atlas Engineering Australia P/L and Mr Danny Milton, Production Manager of Brobo Waldown P/L purchased the business of Brobo Waldown P/L from the A V Jennings group of companies. Mr Golic and Mr Milton conducted the business under the name Brobo Waldown (Aust) P/L. Atlas Engineering Australia P/L was located and operating out of premises at 8 Fowler Rd Dandenong. The business of Brobo Waldown (Aust) P/L was moved to the same address.

[13] As part of the process of purchasing the business from the A V Jennings group of companies Brobo Waldown (Aust) P/L also acquired a number of the former employees of Brobo Waldown P/L including Mr Levit. Mr Levit described the process of moving from Brobo Waldown P/L to Brob Waldown (Aust) P/L as follows:

“18. We were offered employment on the same terms and conditions as were applicable to Brobo Waldown and informed that our entitlements to accrued salary, wages, holiday pay and long service leave will transfer to the new business.” 1

[14] In 2003 there was effectively an amalgamation of the businesses of Brobo Waldown (Aust) P/L and Atlas Engineering Australia P/L. At that time Brobo Waldown (Aust) Pty Ltd changed its name to Brobo Group Pty Ltd. Atlas Engineering Australia P/L continued to exist as a separate legal entity but its operations were conducted under the name of “Brobo Group Pty Ltd”. Employees of Atlas Engineering Australia P/L were transferred to Brobo Group P/L.

[15] In 2005 Mr Milton left the business and Mr Obrad Golic became the sole owner and Director of Brobo Group P/L whilst also being the sole owner and Director of Atlas Engineering Australia P/L.

[16] In 2008 Mr Obrad Golic reorganised the management and organisation of both Brobo Group P/L and Atlas Engineering Australia P/L by placing his brother Mr Dusko Golic in the position of exercising substantial management of the Brobo Group P/L business which was moved into separate premises at 65-67 Williams Road, Dandenong. Mr Obrad Golic continued to manage the business of Atlas Engineering Australia P/L at 8 Fowler Rd Dandenong. The effect of this reorganisation was that the two businesses of Brobo Group P/L and Atlas Engineering Australia P/L traded as separate businesses.

[17] At the time of the re-organisation, some of the staff who were previously employed by Brobo Group P/L were transferred to Atlas Engineering Australia P/L. This included Mr Levit.

[18] Unlike when Mr Levit transferred from Brobo Waldown P/L to Brobo Waldown (Aust) P/L, no formal offer of employment was made to Mr Levit to get him to transfer to Atlas Engineering Australia P/L, nor was anything put to Mr Levit about continuity of service or treatment of leave accruals. Mr Levit was presented with a Tax File Number Declaration form for him to fill in and sign, which enabled Atlas Engineering Australia P/L to treat Mr Levit as its employee. As Mr Levit described it his witness statement:

“I do not recall ever having been offered employment by Atlas Engineering, nor have I ever accepted employment from them.” 2

[19] The company reorganisation initiated by Mr Obrad Golic had no impact on the work of Mr Levit. The work he was doing before the reorganisation was the same after the reorganisation. Mr Levit’s place of work did not change nor did his duties or his relationship with Mr Obrad Golic. Before the reorganisation Mr Obrad Golic was the owner and Director of each of Brobo Group P/L and Atlas Engineering Australia P/L and after the reorganisation Mr Obrad Golic was still the owner and Director of each of Brobo Group P/L and Atlas Engineering Australia P/L.

[20] It was not until October 2012 that Mr Obrad Golic reduced his ownership of Brobo Group P/L by selling a 25% shareholding to his brother Mr Dusko Golic and at the same time Mr Obrad Golic resigned as the Director of Brobo Group P/L and was replaced by his brother Mr Dusko Golic as sole Director.

[21] In March 2013 Mr Obrad Golic further reduced his ownership of Brobo Group P/L by selling a further 35% interest to his brother Mr Dusko Golic to give his brother a controlling 60% of the shares of Brobo Group P/L.

[22] It is not surprising, given this recount of events, that Mr Levit considered himself to be an employee of Brobo Group P/L. The lack of any explanation from Mr Obrad Golic to Mr Levit in 2008 that Mr Obrad Golic intended to terminate Mr Levit’s employment with Brobo Group P/L and employ him at Atlas Engineering Australia P/L effectively denied Mr Levit an opportunity to consider his position at the time and to consider the consequences of leaving his employment with Brobo Group P/L and commencing employment with Atlas Engineering Australia P/L.

[23] A further factor which accounts for Mr Levit’s belief that he was still employed by the Brobo Group P/L was that the separation of Brobo Group P/L and Atlas Engineering Australia P/L was not obvious to employees. Whilst Brobo Group P/L was set up to operate out of separate premises at 65-67 Williams Road, Dandenong, the work which Mr Levit had been performing at 8 Fowler Rd Dandenong as an employee of Brobo Group P/L stayed at that address and the signage on the building continued to clearly identify both Brobo Waldown (Aust) P/L and Atlas Engineering (Aust) P/L. 3

[24] Ms Tueno for Mr Levit relied upon the decision in TCFUA v Bellechie P/L 4 where Ryan J discussed the law in relation to transferring employees between employers. The facts in that matter were not dissimilar to the facts in the present matter in relation to some employees being transferred to another employer in circumstances where the employees did not necessarily understand what was happening and where their consent had not been given. Ryan J said:

“Different considerations apply to Mrs Bono and Mrs Bernadone who were each engaged to work in the “David Keys” business long before the incorporation of Bellechic Pty Ltd. It is not disputed that their employer from the time of engagement up to March 1995 was David Keys Australia Pty Ltd which became Bellhop Pty Ltd. Accordingly, it has to be determined whether the reorganisation of the “David Keys” business which occurred in March 1995 brought about an assignment of their employment to Bellechic Pty Ltd. The principle governing the assignment of a contract of employment was expressed in these terms by Viscount Simon LC in Nokes v Doncaster Amalgamated Collieries Ltd [1940] AC 1014 at 1018:

It is, of course, indisputable that (apart from statutory provision to the contrary) the benefit of a contract entered into by A to render personal service to X cannot be transferred by X to Y without A’s consent, which is the same thing as saying that, in order to produce the desired result, the old contract between A and X would have to be terminated by notice or by mutual consent and a new contract of service entered into by agreement between A and Y.

In citing that authority Fridman, The Modern Law of Employment, suggests at p 479:

Hence assignment of a contract of employment will determine the relationship, unless what has taken place is not in fact an assignment, without the consent of employer or employee, but a novation of the contract, ie, the extinction of the original contract and the creation of a new one by and with the consent of all three parties.

In the present case, there was no express assignment by Bellhop Pty Ltd to Bellechic Pty Ltd of the benefit of the contracts of employment with Mrs Bono and Mrs Bernadone. The only facts from which such an assignment might be heard were that, after March 1995, Bellechic Pty Ltd was named as the employer on their pay slips, issued their group certificates and paid their superannuation contributions. Even if an assignment could arise by implication in that way, which I doubt, the evidence does not sustain an inference that the presumptive assignment was ever accepted by Mrs Bono or Mrs Bernadone. In my view, an inference of that kind is particularly difficult to draw when it is said to arise from the acquiescence in a change of name on a pay slip or group certificate by employees with limited knowledge of English and, apparently, no commercial sophistication.

The evidence is more consistent with the employees’ having regarded the changed mode of payment of wages and accounting for group tax matters of administrative convenience for their employer which did not change its identity. Since Mrs Bono and Mrs Bernadone continued to work in the David Keys business in the same way as they had before March 1995, the preferable analysis is that they remained employees of David Keys Australia Pty Ltd, or Bellhop Pty Ltd as it became, and that company made their services available to Bellechic Pty Ltd upon the latter agreeing to pay their wages and attend to the tax deductions on behalf of Bellhop Pty Ltd. Instances of the loan of an employee from a general employer to a third party are easy to find in the reports but most of the cases are concerned with the attribution of a duty of care owed to the worker rather than the identification of the general employer or the third party as the “true” employer for the application of general contractual principles or a statutory provision like s 178(6) of the Workplace Relations Act 1996 . In the circumstances of the present case, I consider that the evidence tends to the conclusion that, for the purposes of that sub-section, Bellhop Pty Ltd remained the employer of Mrs Bono and Mrs Bernadone.”

[25] There are both stark similarities and stark differences between the present matter and the facts in TCFUA v Bellechie P/L.

[26] In the present matter there was no express assignment by Brobo Group P/L to Atlas Engineering Australia P/L of the benefit of the contract of employment with Mr Levit.

[27] The evidence in the present matter does not sustain an inference that the presumptive assignment was ever accepted by Mr Levit. In fact the evidence in the present matter argues strongly against a presumptive assignment. The fact that both Mr Obrad Golic and Mr Levit had been involved in and agreed to the assignment of the benefit of Mr Levit’s employment contract from Brobo Waldown P/L to Brobo Waldown (Aust) P/L strongly supports a finding that a presumptive assignment of the benefit of Mr Levit’s employment contract with Brobo Group P/L (the renamed Brobo Waldown (Aust) P/L) to Atlas Engineering Australia P/L never occurred. The very fact of the earlier assignment of Mr Levit’s employment contract strongly supports a finding that an assignment of the benefit of Mr Levit’s employment contract with Brobo Group P/L could only have occurred if such an assignment had been specifically consented to by Mr Levit.

[28] The facts in TCFUA v Bellechie P/L permitted Ryan J to come to the following conclusion:

“Since Mrs Bono and Mrs Bernadone continued to work in the David Keys business in the same way as they had before March 1995, the preferable analysis is that they remained employees of David Keys Australia Pty Ltd, or Bellhop Pty Ltd as it became, and that company made their services available to Bellechic Pty Ltd upon the latter agreeing to pay their wages and attend to the tax deductions on behalf of Bellhop Pty Ltd.”

[29] A similar conclusion is not appropriate in the present matter given the very different facts in this matter.

[30] The evidence in the present matter would support the same conclusion as reached by Ryan J in relation to the period between October 2008 and October 2012. During this period Mr Obrad Golic was the effective owner and controller of both Brobo Group P/L and Atlas Engineering Australia P/L even though the businesses were conducted as separate businesses with separate management. The fact that Mr Dusko Golic (Mr Obrad Golic’s brother) was the sole Director of Brobo Group P/L and had management control over the business is not sufficient to displace the fact that Mr Obrad Golic exercised effective control over the company through his ownership of 99.8% of the shares.

[31] However the action by Mr Obrad Golic in October 2012 in selling 25% of the shares in Brobo Group P/L to his brother Mr Dusko Golic evidenced a clear change in the ownership and control of Brobo Group P/L. This change became even more obvious when Mr Obrad Golic sold a further 35% of the shares in Brobo Group P/L to Mr Dusko Golic in March 2013 giving Mr Dusko Golic 60% of the shares in Brobo Group P/L.

[32] At the very least by March 2013 there appears to be a very strong separation between Brobo Group P/L and Atlas Engineering Australia P/L.

[33] At some point in time between October 2008 and March 2013 I conclude that the employment relationship Mr Levit had with Brobo Group P/L was effectively terminated. This may have occurred through frustration or through unilateral breach by Brobo Group P/L or through some other means. I do not need to determine how or when the employment relationship ended between Brobo Group P/L and Mr Levit but I am satisfied that it did end.

[34] By March 2013 it is clear to me that Mr Levit was employed by Atlas Engineering Australia P/L. The employment relationship between Mr Levit and Atlas Engineering Australia P/L ended on 9 July 2013 when Atlas Engineering Australia P/L dismissed Mr Levit.

Associated Entities

[35] Ms Tueno’s primary contention was that Mr Levit’s employer was Brobo Group P/L. Her secondary contention was that Brobo Group P/L and Atlas Engineering Australia P/L are associated entities within the meaning of s.50AAA of the Corporations Act 2001 (Cth).

[36] Whether or not Brobo Group P/L and Atlas Engineering Australia P/L are associated entities is not relevant to determining which entity was the employer of Mr Levit.

[37] The rationale for pursuing the associated entities argument was not overtly made clear to the Commission. However several comments made during the proceedings appear to provide the rationale for Ms Tueno pursuing the associated entities contention:

“MS TUENO: Commissioner, my understanding is that the applicant has not received any redundancy payment.” 5

and

“THE COMMISSIONER: If I’m against you on all of the issues relating to the relationship between the parties and it comes out that I say that Brobo Group Pty Ltd and Atlas Engineering Pty Ltd are associated entities and for that purpose they can be treated together, does it have any impact upon the actual monies that Mr Levit was paid?

MR MILLAR: It may for the purposes - does it have any impact on what he was paid? It may mean that he has a claim he could bring in the Magistrates’ Court.

THE COMMISSIONER: For what?

MR MILLAR: For severance payment.

THE COMMISSIONER: Okay, so that’s sort of the practical issue that sort of flows, isn’t it?

MR MILLAR: Well, perhaps. The appearance or the notice of employer’s appearance or notice of employer’s response from Brobo says Brobo has six employees and the position with Atlas is that, well, when one does the head count on the documents that are before you, they would be heading perilously close to the combined number of employees being around that 15 mark. So I certainly don’t concede that the combined entities would yield a workforce that would attract an entitlement to redundancy pay. But there’s a live issue as to whether they’re above the line if they’re grouped. But in my submission, that’s not a matter, Commissioner, that you need trouble yourself with because that’s a matter that would be before a magistrate if a claim for unpaid entitlements were taken. The task before you, Commissioner, is to ascertain whether the termination of employment was harsh, unjust or unreasonable and that’s a different issue.” 6

[38] I agree with the submission of Mr Millar that the question of whether or not Brobo Group P/L and Atlas Engineering Australia P/L are associated entities is not a matter that the Commission need trouble itself with. It is a question which is not relevant to determining the identity of the employer, nor is it relevant in determining if there was a genuine redundancy, nor is it relevant in determining whether the dismissal was harsh, unjust or unreasonable and nor is it relevant to determining an amount of compensation.

Initial Matters to be considered

[39] Section 396 of the Fair Work Act is as follows:

“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;

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

Was the application made within the period required in subsection 394(2)?

[40] The date of dismissal was 9 July 2013 and the application was filed on 21 July 2013. I am satisfied and so decide that the application in this matter was made within the 21 day period required by s.394(2) of the Act.

Was Mr Levit protected from unfair dismissal?

[41] Mr Levit contended and Atlas Engineering Australia P/L agreed that the employment of Mr Levit was covered by the Manufacturing and Associated Industries and Occupations Award 2010. Mr Levit has on the evidence of Mr Obrad Golic been employed by Atlas Engineering Australia P/L since 2008. I am satisfied and so decide that Mr Levit is an employee protected from unfair dismissal within the meaning of s.382 of the Act.

Was the dismissal consistent with the Small Business Fair Dismissal Code?

[42] I do not have to consider whether the dismissal was consistent with the Small Business Fair Dismissal Code given the concession by Atlas Engineering Australia P/L that the dismissal of Mr Levit had nothing to do with Mr Levit’s conduct or his capacity to do the job. Atlas Engineering Australia P/L relied upon the decision of SDP Richards in Tew v Viemist P/L T/as Headon Financial Planning 7. I accept the correctness of that decision on this point.

Was the dismissal a case of genuine redundancy?

[43] Section 389 of the Act provides that:

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.

[44] The evidence of Mr Obrad Golic, Director of Atlas Engineering Australia P/L, disclosed that Atlas Engineering Australia P/L had suffered a significant loss of work since 2012 and as a result had to make a number of persons redundant. The evidence before the Commission was that Mr Levit was employed as a programmer and operator of CNC milling machines and that there were a number of other employees also employed as CNC operators of CNC milling machines. In addition Atlas Engineering Australia P/L employed a more senior employee in a supervisory managerial role who could also program the CNC milling machines.

[45] I accept the evidence of Mr Golic that Atlas Engineering Australia P/L decided that because of changes in the operational requirements of the business of Atlas Engineering Australia P/L it no longer required Mr Levit’s job to be performed by anyone. The net result was that Atlas Engineering Australia P/L decided to reduce the number of CNC milling machine operators by one position and the employee to be dismissed was Mr Levit.

[46] The evidence before the Commission supports a finding that paragraph 389(1)(a) has been met by Atlas Engineering Australia P/L.

[47] As the Manufacturing and Associated Industries and Occupations Award 2010 8 (the Award) covered Mr Levit’s employment then Atlas Engineering Australia P/L was required to comply with the consultation provisions found in clause 9 of the Award which is as follows:

9. Consultation regarding major workplace change

9.1 Employer to notify

(a) Where an employer has made a definite decision to introduce major changes in production, program, organization, structure or technology that are likely to have significant effects on employees, the employer must notify the employees who may be affected by the proposed changes and their representatives, if any.

(b) Significant effects include 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. Provided that where this award makes provision for alteration of any of these matters an alteration is deemed not to have significant effect.

9.2 Employer to discuss change

(a) The employer must discuss with the employees affected and their representatives, if any, the introduction of the changes referred to in clause 9.1, the effects the changes are likely to have on employees and measures to avert or mitigate the adverse effects of such changes on employees and must give prompt consideration to matters raised by the employees and/or their representatives in relation to the changes.

(b) The discussions must commence as early as practicable after a definite decision has been made by the employer to make the changes referred to in clause 9.1.

(c) For the purposes of such discussion, the employer must provide in writing to the employees concerned and their representatives, if any, all relevant information about the changes including the nature of the changes proposed, the expected effects of the changes on employees and any other matters likely to affect employees provided that no employer is required to disclose confidential information the disclosure of which would be contrary to the employer’s interests.

[48] The evidence in this matter clearly establishes that Atlas Engineering Australia P/L made a definite decision to introduce a major change in production and/or structure, namely that the number of CNC milling machine operators be reduced by one, and that this decision was likely to have significant effects on employees in that it would lead to termination of employment of an employee. In such circumstances Atlas Engineering Australia P/L was then required by clause 9.2 of the Award to commence discussions with the affected employee or employees and their representatives, if any, as early as practicable after the definite decision had been made.

[49] In the circumstances of the present matter the required discussions did not occur.

[50] The evidence of Mr Golic and Mr Kealy, former General Manager of Atlas Engineering Australia P/L was that ongoing briefings and discussions had occurred with employees over a period of time to keep employees informed of the loss of key contracts and the declining position of the business. However, this general information sharing does not replace the need for the employer to comply with the requirements of clause 9 of the Award when it makes a definite decision to introduce major change which is likely to have significant effects on employees.

[51] The evidence of Mr Levit was that he was called into a meeting with Mr Kealy and was told that his employment had been terminated as his position was redundant. 9 After that Mr Kealy suggested that there may in future be casual work for Mr Levit as an independent contractor to Atlas Engineering Australia P/L.10 Atlas Engineering Australia P/L contended that this conversation with Mr Levit was sufficient to achieve compliance with the requirements of clause 9.2 of the Award. The purpose of clause 9.2 of the Award is to require the employer to hold the discussions with an employee whose job has been made redundant prior to terminating the employment of the employee. In the present matter what discussion occurred between Mr Levit and Atlas Engineering Australia P/L was too little too late.

[52] The failure of Atlas Engineering Australia P/L to comply with the requirements of clause 9.2 of the Award means that s.389(1)(b) of the Act has not been complied with and this in turn means that the dismissal of Mr Levit is not a case of a genuine redundancy under s.389 of the Act.

Was the Dismissal Harsh, Unjust or Unreasonable

[53] I now turn to consider whether the dismissal of Mr Levit was harsh, unjust or unreasonable. Section 387 of the Act is as follows:

“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.”

[54] The Commission must consider each relevant criterion under s.387. (Sayer v Melsteel P/L.) 11

387(a) whether there was a valid reason for the dismissal related to the person’s capacity or conduct

[55] Even though the dismissal of Mr Levit does not meet the criteria for being a genuine redundancy under s389 of the Act does not mean that Atlas Engineering Australia P/L did not have a valid reason for the dismissal of Mr Levit. (UES (International) P/L v Harvey) 12

[56] In the present matter Atlas Engineering Australia P/L relies solely upon the fact that there was an operational need to reduce by one the number of employees who programmed or operated CNC milling machines and that this led to Mr Levit’s job being made redundant and Mr Levit being dismissed. (UES (International) P/L v Harvey) 13

[57] The identification of an operational need to reduce the number of CNC milling machine operators by one did not of itself mean that Mr Levit would be dismissed. Where, as in this case, an employer seeks to make redundant one position out of a group then there is a two step process with each step providing a reason for the dismissal. This situation was well described in Kenefick v Australian Submarine Corporation P/L (No 2) where the Full Court said:

“In the circumstances of the present case, the decision to reduce the 170 hull shop employee numbers by nine welders did not, on its own, lead to the termination of employment of any individual. It was one step in a two step process. Only after the second step had been taken, was it possible to identify an individual as a person whose employment would be terminated. The two steps were both necessary to produce the result of the individual termination of employment. The excess of labour and the application of the criteria for selection were both reasons for the termination of the individual. In other words, there were two reasons for the termination of each appellant.” 14

[58] To the extent that one of the reasons for the dismissal of Mr Levit was the operational need to reduce the number of CNC milling machine operators by one then this reason meets the test of being a valid reason. For a reason to be a ‘valid reason’ it must be ‘sound, defensible and well founded’ and must not be ‘capricious, fanciful, spiteful or prejudiced’. (Selvachandran v Peteron Plastics P/L) 15

[59] Atlas Engineering Australia P/L contended that the reason for choosing Mr Levit to be dismissed and to retain the other CNC milling machine operators was threefold. Firstly, Mr Levit was the most expensive of the CNC milling machine operators as he was paid more than the other CNC milling machine operators. 16 Secondly, Mr Levit was less flexible than the other employees in that he had declined to work outside his ordinary hours of work.17 Thirdly, one of the remaining CNC milling machine operators was also able to programme the CNC milling machines and the Production Manager could also assist with the programming and setting of the CNC milling machines.18

[60] The second of these reasons relates to the capacity or conduct of Mr Levit and as such must be tested as to whether it is a valid reason for dismissal.

[61] Mr Obrad Golic in his witness statement described the rationale for dismissing Mr Levit as follows:

“20. After the drop-off in Camerons’ work, for approximately 60% of the time there was no work to be done on the machine which Levit principally operated. I was therefore faced with a decision to move Levit to a different milling machine and terminate the employment of one of the other machine operators or to terminate Levit.

21. The other two milling machinists were Ben Carpenter and Thomas Abraham. All three operators were experienced and long-standing employees of the company. I decided to terminate Levit instead of the other two employees principally because the machine that Lovit was operating was largely idle, but also because in my opinion the other two employees offered more to the company than Levit. Carpenter performed additional duties including acting as a supervisor. Abraham had offered more flexibility in his employment than Levit including being prepared to work afternoon and/ or weekend shifts when required. Whilst Levit had worked overtime and some Saturday mornings on many occasions when Atlas was particularly busy, he refused to work overtime when requested, particularly on weekends. Further, Levit had always refused to undertake any shift work.” (Exhibit R1)

[62] Under cross examination Mr Obrad Golic said:

“PN775. Now, you’ve also said that Mr Levit refused to work overtime and on the weekends. That’s not strictly true, is it?---Well, he did work overtime when required but he did personally – refused me personally on a few occasions.

PN776. But he did work overtime?---Yes, he did.

PN777. When required to do so?---Yes, well, not all the time. That’s what I’m saying.

PN778. Yes, but what I’m saying is that it’s not a situation where he flat out refused to work overtime?---He did at certain times, but he did work a lot of overtime when required, yes.

PN779. Could the witness be shown – sorry, I might not need to show you this, but you do accept that he did work overtime?---Yes.

PN780. And sometimes quite a bit of overtime?---Yes.”

And

“PN1018. Of those employees, why Mr Levit for termination?---Well, as I said, Mr Levit was the most expensive operator we had. In our good days we had two shifts going, afternoon shift and day shift and on many occasions I asked Mr Levit if he could work on a shift. He always refused and, as I said previously, I’m not going to sit here and deny Mr Levit worked overtime when I asked him and so forth. What I’m telling you is on certain occasions he did refuse to work overtime when I personally asked him....”

[63] In the present matter the evidence of Mr Obrad Golic that Mr Levit always refused to undertake any shift work was not challenged by Mr Levit. In the context of this matter the refusal by Mr Levit to work any shift work would be sufficient to constitute a valid reason for dismissal. As a discriminator for choosing between employees the reason is not capricious, fanciful, spiteful or prejudiced but is quite defensible.

[64] I find that the second reason for the dismissal of Mr Levit does constitute a valid reason for dismissal relating to Mr Levit’s conduct or capacity.

[65] This criterion weighs in favour of a finding that the dismissal was not harsh, unjust or unreasonable.

387(b), whether the person was notified of that reason; and

387(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person

[66] It is clear from the evidence in this matter that Mr Levit was not notified of any of the reasons for his dismissal before the dismissal occurred nor was he given any opportunity to respond to any of the reasons including the reason which related to his conduct or capacity.

[67] This criterion weighs in favour of a finding that the dismissal was harsh, unjust or unreasonable.

387(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

[68] This criterion is not relevant in the present matter. There was no unreasonable refusal by Atlas Engineering Australia P/L to allow Mr Levit to have a support person present to assist at any discussions relating to the dismissal. In fact there were no discussions relating to the dismissal. Mr Levit was simply called into a meeting and was dismissal without any discussion occurring at any time between the time that Atlas Engineering Australia P/L made the decision to terminate Mr Levit’s employment and the time that decision was implemented.

s.387(e) - if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal

[69] This criterion is not relevant in the present matter.

387(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

[70] Atlas Engineering Australia P/L is a relatively small enterprise and appears to have an unsophisticated approach to dealing with workplace relations. I conclude that the size of Atlas Engineering Australia P/L would have a significant degree of impact on the lack of sound and procedurally fair procedures to deal with a dismissal of an employee.

[71] In this respect this criterion supports a finding that the dismissal was unfair.

387(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

[72] Atlas Engineering Australia P/L has no dedicated human resource management specialists or expertise in the enterprise and this would have had a significant degree of impact on the lack of sound and procedurally fair procedures to deal with a dismissal of an employee.

[73] In this respect this criterion supports a finding that the dismissal was unfair.

387(h) - any other matters that the FWC considers relevant

[74] An aspect of the case of Mr Levit was his contention that that the dismissal was particularly harsh, unjust and/or unreasonable because of the following:

● Mr Levit was the longest serving employee in relation to the operation of CNC milling machines (including his employment with Atlas Engineering Australia P/L since 2008 and with Brobo Group P/L and Brobo Waldown (Aust) P/L between 2001 and 2008 and with Brobo Waldown P/L between 1994 and 2001)
● Mr Levit was the only operator of the CNC milling machines who could programme the machines
● Mr Levit was the most experienced and most qualified of the CNC milling machine operators
● Mr Levit could programme and operate all of the CNC milling machines and could teach other employees how to operate the machines. (The evidence identified that there were 14 CNC milling machines and 4 operators as at the date of dismissal)
● The remaining CNC milling machine operators were much younger and less experienced that Mr Levit
● Mr Levit’s age of 61 years makes it difficult if not impossible for him to gain new employment as a CNC programmer/operator
● Mr Levit had received verbal commitments from both Mr Golic and Mr Kealy that Mr Levit would be the last employee to be made redundant. 19 Note that Mr Golic conceded that Mr Levit would be one of the last employees to go.20

[75] Atlas Engineering Australia P/L contended that the reason for choosing Mr Levit to be dismissed and to retain the other CNC milling machine operators was threefold. Firstly, Mr Levit was the most expensive of the CNC milling machine operators as he was paid more than the other CNC milling machine operators. 21 Secondly, Mr Levit was less flexible than the other employees in relation to his availability to work outside the ordinary hours of work.22 Thirdly, one of the remaining CNC milling machine operators was also able to programme the CNC milling machines and the Production Manager could also assist with the programming and setting of the CNC milling machines.23

[76] The issues raised by both Mr Levit and Atlas Engineering Australia P/L could have and should have been part of the discussions between Mr Levit and Atlas Engineering Australia P/L pursuant to the requirements of clause 9.2 of the Award. Mere non compliance with the requirement in clause 9.2 of the Award that Atlas Engineering Australia P/L discuss with Mr Levit “the introduction of the changes referred to in clause 9.1, the effects the changes are likely to have on employees and measures to avert or mitigate the adverse effects of such changes on employees and must give prompt consideration to matters raised by the employees and/or their representatives in relation to the changes” does not mean that the dismissal must be unfair. However, in all of the circumstances of this case, the failure of Atlas Engineering Australia P/L to hold such discussions with Mr Levit supports a finding that the dismissal of Mr Levit was harsh, unjust or unreasonable.

Conclusion regarding harsh, unjust or unreasonable

[77] Having considered each of the relevant criterion under s.387 I am satisfied that the dismissal of Mr Levit was harsh, unjust or unreasonable notwithstanding that the reason for the dismissal was a valid reason.

Remedy

[78] The remedy provisions of the Fair Work Act are as follows:

“Division 4—Remedies for unfair dismissal

390 When the FWC may order remedy for unfair dismissal

(1) Subject to subsection (3), the FWC may order a person’s reinstatement, or the payment of compensation to a person, if:

(a) the FWC is satisfied that the person was protected from unfair dismissal (see Division 2) at the time of being dismissed; and

(b) the person has been unfairly dismissed (see Division 3).

(2) The FWC may make the order only if the person has made an application under section 394.

(3) The FWC must not order the payment of compensation to the person unless:

(a) the FWC is satisfied that reinstatement of the person is inappropriate; and

(b) the FWC considers an order for payment of compensation is appropriate in all the circumstances of the case.

Note: Division 5 deals with procedural matters such as applications for remedies.

391 Remedy—reinstatement etc.

Reinstatement

(1) An order for a person’s reinstatement must be an order that the person’s employer at the time of the dismissal reinstate the person by:

(a) reappointing the person to the position in which the person was employed immediately before the dismissal; or

(b) appointing the person to another position on terms and conditions no less favourable than those on which the person was employed immediately before the dismissal.

(1A) If:

(a) the position in which the person was employed immediately before the dismissal is no longer a position with the person’s employer at the time of the dismissal; and

(b) that position, or an equivalent position, is a position with an associated entity of the employer;

the order under subsection (1) may be an order to the associated entity to:

(d) appoint the person to another position on terms and conditions no less favourable than those on which the person was employed immediately before the dismissal.

Order to maintain continuity

(2) If the FWC makes an order under subsection (1) and considers it appropriate to do so, the FWC may also make any order that the FWC considers appropriate to maintain the following:

(a) the continuity of the person’s employment;

(b) the period of the person’s continuous service with the employer, or (if subsection (1A) applies) the associated entity.

Order to restore lost pay

(3) If the FWC makes an order under subsection (1) and considers it appropriate to do so, the FWC may also make any order that the FWC considers appropriate to cause the employer to pay to the person an amount for the remuneration lost, or likely to have been lost, by the person because of the dismissal.

(4) In determining an amount for the purposes of an order under subsection (3), the FWC must take into account:

(a) the amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for reinstatement; and

(b) the amount of any remuneration reasonably likely to be so earned by the person during the period between the making of the order for reinstatement and the actual reinstatement.

392 Remedy—compensation

Compensation

(1) An order for the payment of compensation to a person must be an order that the person’s employer at the time of the dismissal pay compensation to the person in lieu of reinstatement.

Criteria for deciding amounts

(2) In determining an amount for the purposes of an order under subsection (1), the FWC must take into account all the circumstances of the case including:

(a) the effect of the order on the viability of the employer’s enterprise; and

(b) the length of the person’s service with the employer; and

(c) the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed; and

(d) the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal; and

(e) the amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for compensation; and

(f) the amount of any income reasonably likely to be so earned by the person during the period between the making of the order for compensation and the actual compensation; and

(g) any other matter that the FWC considers relevant.

Misconduct reduces amount

(3) If the FWC is satisfied that misconduct of a person contributed to the employer’s decision to dismiss the person, the FWC must reduce the amount it would otherwise order under subsection (1) by an appropriate amount on account of the misconduct.

Shock, distress etc. disregarded

(4) The amount ordered by the FWC to be paid to a person under subsection (1) must not include a component by way of compensation for shock, distress or humiliation, or other analogous hurt, caused to the person by the manner of the person’s dismissal.

Compensation cap

(5) The amount ordered by the FWC to be paid to a person under subsection (1) must not exceed the lesser of:

(a) the amount worked out under subsection (6); and

(b) half the amount of the high income threshold immediately before the dismissal.

Note: subsection 392(5) indexed to $64,650 from 1 July 2013

(6) The amount is the total of the following amounts:

(a) the total amount of remuneration:

(i) received by the person; or

(ii) to which the person was entitled;

(whichever is higher) for any period of employment with the employer during the 26 weeks immediately before the dismissal; and

(b) if the employee was on leave without pay or without full pay while so employed during any part of that period—the amount of remuneration taken to have been received by the employee for the period of leave in accordance with the regulations.

393 Monetary orders may be in instalments

To avoid doubt, an order by the FWC under subsection 391(3) or 392(1) may permit the employer concerned to pay the amount required in instalments specified in the order.”

390 When the FWC may order remedy for unfair dismissal

[79] I am satisfied that the conditions precedent for ordering a remedy, as set out in s.390(1) and (2) exist. Any grant of a remedy is discretionary and in all of the circumstances of this matter I consider that it is appropriate to exercise that discretion and to grant a remedy to Mr Levit.

[80] I note that Mr Levit does not seek reinstatement. Reinstatement would, in light of the reason for the dismissal of Mr Levit, be an inappropriate remedy. I consider that compensation would be an appropriate remedy for Mr Levit.

Remedy—compensation

[81] Section 392 sets out the statutory requirements for the Commission to exercise its discretion to order an amount of compensation to be paid to an employee who has been unfairly dismissed.

[82] There is a clear difference in the structure of s.392 as against s.387.

[83] To make a finding that a dismissal is unfair the Commission must only take into account each of the criteria enumerated in s.387 which is relevant. The list of criteria in s.387 is exhaustive.

[84] In contrast s.392(2) provides a list of relevant criteria which is merely inclusive. Each of the criteria in s.392(2) which is relevant must be considered but this consideration must be undertaken as part of the Commission taking into account all the circumstances of the case. Clearly therefore “all the circumstances of the case” may require consideration of matters which do not fall within any of the criteria enumerated in s.392(2).

[85] Under earlier legislation the Australian Industrial Relations Commission developed simple guidelines the Sprigg test to assist the then Commission properly apply the process of calculating an amount of compensation. The decision of a Full Bench in Smith and Kimball v Moore Paragon Australia Ltd makes clear the necessity of considering “all the circumstances of the case” when calculating an amount of compensation.

“[32] It seems to us that the amounts arrived at by the application of the guidelines in Sprigg in the present matter are on their face manifestly inadequate for employees with the length of service of the Appellants, the circumstances of their dismissal and their poor prospects for future employment. This causes us to sound a warning in relation to the application of Sprigg. The guidelines laid down in Sprigg and refined in Ellawala v Australian Postal Commission are clearly designed to serve the proper and desirable purpose of fostering uniformity and consistency in decision-making by individual members of the Commission when assessing compensation pursuant to s.170CH(6). However, those guidelines are not a substitute for the words of the Act. By virtue of s.170CH(2), any remedy ordered by the Commission must be a remedy that the Commission considers “appropriate” having regard to all the circumstances of the case including the matters set out in s.170CH(2). Section 170CH(6) confers a general discretion “if the Commission considers it appropriate in all the circumstances of the case” to “make an order requiring the employer to pay the employee an amount ordered by Commission in lieu of reinstatement” subject to the Commission having regard “to all the circumstances of the case including” the matters listed in s.170CH(7) - the same list of matters set out in s.170CH(2) - and subject also to the `cap’ provided for in s.170CH(8) and (9). If an application of the guidelines in Sprigg yields an amount which appears either clearly excessive or clearly inadequate, then the member should reassess any assumptions or intermediate conclusions made or reached in applying the guidelines so as to ensure that the level of compensation is in an amount that the member considers appropriate having regard “to all the circumstances of the case” including the matters listed in s.170CH(7) and subject to the `cap’ provided for in s.170CH(8) and (9). In this context it should be borne in mind that the result yielded by an application of the Sprigg guidelines may vary greatly depending upon particular findings in relation to the various steps including, in particular, step one, which necessarily involves assessments as to future events that will often be problematic.” 24

[citations omitted]

[86] Although the structure of the then s.170CH was different to the structure of current s.392 the decision in Smith and Kimball v Moore Paragon Australia Ltd is directly relevant to the proper application of s.392.

[87] The approach I adopt to calculating an amount of compensation is broadly consistent with the approach adopted by Full Benches. There is an inherent logic in not addressing each provision of s.392 in a numerically sequential manner.

The remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed - 392(2)(c)

[88] This criterion requires an exercise in guesswork. “What if” questions are by necessity speculative. The speculation however needs to be informed and reasonable.

[89] If Mr Levit had not been dismissed on 9 July 2013 it should have been expected that Mr Golic and Atlas Engineering Australia P/L would have complied with the award obligation to consult with Mr Levit and the other CNC milling machine operators about the need to reduce the number of CNC milling machine operators by one. If such consultation had occurred this would have included the requirement that Atlas Engineering Australia P/L:

“must discuss with the employees affected and their representatives, if any, the introduction of the changes..., the effects the changes are likely to have on employees and measures to avert or mitigate the adverse effects of such changes on employees and must give prompt consideration to matters raised by the employees and/or their representatives in relation to the changes.” 25

[90] It should not be assumed that the result of compliance with the award obligation to consult would have meant that Mr Levit would have been dismissed. Other possible outcomes were available. However if Atlas Engineering Australia P/L had consulted and still maintained the view that one CNC milling machine operator should be made redundant and that Mr Levit was the preferred candidate for dismissal it is not inevitable that Mr Levit would have been dismissed or that he would have been dismissed as soon as Atlas Engineering Australia P/L wanted. I note that the award contains a dispute resolution clause that Mr Levit could have availed himself of to dispute the actions of Atlas Engineering Australia P/L. The dispute resolution clause provides access to the Fair Work Commission as of right for the purpose of seeking conciliation and access to arbitration if both the employer and employee agree.

[91] The range of possible options had Mr Levit not been dismissed when he was include being dismissed on the same terms as his original dismissal shortly after 9 July 2013 all the way through to long term employment at either the existing rate of pay or at the same lower rate as paid to other CNC milling machine operators. Each of these options is then impacted by “the various probabilities which might otherwise have affected earning capacity” (Ellawalla v Australia Postal Corporation) 26 during any period of prospective employment.

[92] I am prepared to accept that Mr Levit would have received remuneration of at least 13 weeks’ pay if he had not been dismissed. Mr Levit was earning $25 per hour or $950 per 38 hour week. The amount calculated under this criterion is $12,350. This amount would have been taxed at the appropriate rate.

The efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal - s.392(2)(d)

[93] I accept the evidence of Mr Levit that he has sought to mitigate the loss suffered by him because of the dismissal. This criterion therefore is neutral in determining the amount of compensation to be paid to Mr Levit.

The amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for compensation - s.392(2)(e)

[94] I accept the evidence of Mr Levit that he earnt no remuneration since the dismissal and is not likely to earn any up to the date of the making of an order for compensation.

The amount of any income reasonably likely to be so earned by the person during the period between the making of the order for compensation and the actual compensation - s.392(2)(f)

[95] Consistent with the evidence of Mr Levit concerning his inability to earn anything since his dismissal I am prepared to conclude that Mr Levit is not likely to earn any remuneration between the making of an order for compensation and the payment of compensation.

The length of the person’s service with the employer - s.392(2)(b)

[96] Mr Levit’s length of service with Atlas Engineering Australia P/L is 5 years. This is neither short nor long service and would have a neutral effect on the calculation of an amount of compensation.

Any other matter that the FWC considers relevant - s.392(2)(g)

[97] The circumstances by which Mr Levit became an employee of Atlas Engineering Australia P/L is a relevant matter in the determination of an amount of compensation. As the evidence of Mr Obrad Golic makes clear the only document put to employees when Atlas Engineering Australia P/L in 2008 became the employer of Mr Levit and others who were taken over from Brobo Group P/L was a Tax File Number request. In 2008 Mr Obrad Golic, as the effective controller of Brobo Group P/L, made arrangements with his brother Mr Dusko Golic to rearrange the business with the result that some employees of Brobo Group P/L including Mr Levit were transferred from Brobo Group P/L to Atlas Engineering Australia P/L and the business of Brobo Group P/L was split into two components, one remaining with Brobo Group P/L and one transferring to Atlas Engineering Australia P/L. Whilst the two Mr Golic’s appear to have understood what they were doing the evidence in this matter makes clear that Mr Levit did not. I take the view that while the circumstances by which Mr Levit became an employee of Atlas Engineering Australia P/L is a relevant matter in the determination of an amount of compensation it not a relevant matter that should have any significant effect on the determination of an amount of compensation.

[98] Earlier in this decision I concluded that the associated entities contention being pursued by Ms Tueno on behalf of Mr Levit was not a relevant matter in determining an amount of compensation. This must be so because the purpose of an amount of compensation is not to replace an entitlement to remuneration which Mr Levit may have under the Act. If Mr Levit does have an entitlement to a redundancy payment under s.119 of the Act then that entitlement would have been payable regardless of an amount being calculated under s.392(2)(c) based upon an assessment by the Commission that had he not been dismissed Mr Levit would have earnt an amount of remuneration from Atlas Engineering Australia P/L. Equally if Mr Levit has no entitlement to a redundancy payment under s.119 because of the operation of s.121 then compensation for unfair dismissal is not intended to provide Mr Levit with a redundancy payment.

[99] Whilst s.392(2)(b) requires that I take into account the length of Mr Levit’s employment with Atlas Engineering Australia P/L I consider that it is also relevant to take into account Mr Levit’s service with Brobo Group P/L. The combined length of service that Mr Levit had with both Brobo Group P/L and Atlas Engineering Australia P/L was 12 years. This amount of service is significant.

[100] Another relevant factor is Mr Levit’s age of 61 years. Dismissal from any employment at age 61 creates real difficulties in relation to gaining further employment. In the context of the present matter Mr Levit has been employed on the same work, albeit through three separate employers, since February 1994. Whilst this clearly identifies Mr Levit as a long serving loyal employee it may not necessarily translate into a factor which assists Mr Levit gain employment with another employer.

Conclusion as to compensation using the criteria in s.392(2)(b), (c), (d), (e), (f) and (g)

[101] Having considered each of the criteria in s.392 and having taken into account all the circumstances of the case I consider an amount of $15,000 is the appropriate amount of compensation.

Required reduction in the amount of compensation for misconduct - s.392(3)

[102] There was no suggestion that Mr Levit engaged in any misconduct before his dismissal and therefore no reduction can be made to the amount of compensation determined to be appropriate.

Compensation for shock, distress or humiliation, or other analogous hurt, caused to Levit by the manner of the person’s dismissal to be disregarded - s.392(4)

[103] I have disregarded any shock, distress or humiliation, or other analogous hurt, caused to Mr Levit by the manner of his dismissal when considering the amount of compensation to be determined in this matter.

Compensation Cap - s.392(5)

[104] The amount of compensation I have determined as being appropriate is below the compensation cap worked out under s.392(6).

The effect of the order on the viability of the employer’s enterprise - s.392(2)(a)

[105] The issue as to whether any order for compensation would have any effect and if so what effect on the viability of the employer’s enterprise was specifically raised by the Commission with Mr Millar representing the employer at PN1427 - PN1433. Nothing was put to the Commission by Atlas Engineering Australia P/L which disclosed the actual financial state of the business and the effect that any order would have on the financial state of the business. Atlas Engineering Australia P/L was prepared to rely on the evidence of Mr Golic as to the broad state of affairs of the business including the loss of a major contract and the necessity to make one CNC milling machine operator redundant. Whilst I have had regard to this evidence and to the arguments put by Mr Millar it is difficult to quantify the effect of any order for compensation would have on the viability of the employer’s enterprise. Any order to pay any amount of compensation will have some effect on the employer’s enterprise simply because any dollar paid to Mr Levit is a dollar that cannot be used for other purposes of the business of Atlas Engineering Australia P/L. However I consider that even if an order was made requiring Atlas Engineering Australia P/L to pay the maximum amount of compensation to Mr Levit that this would not have a significant adverse effect the viability of the employer’s business. Having calculated an amount of compensation of $15,000 I am satisfied that this amount of compensation will not have a material effect on the viability of the business of Atlas Engineering Australia P/L

[106] Having considered and taken into account each of the criteria enumerated in s.392(2), as affected by subsections 392(3), (4) and (5), I now consider and determine an amount of compensation having taken into account all the circumstances of the case and having regard to all of the provisions of s.392. The amount of compensation to be paid by Atlas Engineering Australia P/L to Mr Levit is the sum of $15,000. Any tax to be paid on this amount is to be paid by Atlas Engineering Australia P/L.

[107] No submission was made by Atlas Engineering Australia P/L that I consider ordering any payment of compensation by way of instalments pursuant to s.393.

[108] I am aware that the timing of this decision coincides with a general closedown period in the manufacturing industry and whilst nothing was put to me that Atlas Engineering Australia P/L would be closed down at this time I err on the side of caution and I will order that payment be made within 30 days of the date of the order.

[109] An order giving effect to this decision will be issued separately.

COMMISSIONER

Appearances:

E. Tueno, of Counsel, for the Applicant

R. Millar, of Counsel, for the Respondent

Hearing details:

2013.

Melbourne:

December 2, 12

1 Exhibit A1.

2 Ibid at 27.

3 Exhibit A3.

4 [1998] FCA 1465.

5 Transcript at PN 1244.

6 Ibid at PN1325 to PN1330.

7 [2013] FWC 2971.

8 MA000010.

9 Exhibit A1 at para 40.

10 Exhibit R2 at para 14.

11 Sayer v Melsteel P/L[2011] FWAFB 7498 at pn [20].

12 UES (International) P/L v Harvey (2012) 215 IR 263.

13 UES (International) P/L v Harvey (2012) 215 IR 263.

14 Kenefick v Australian Submarine Corporation P/L (No 2) 65 IR 366 at 370.

15 Selvachandran v Peteron Plastics P/L, (1995) 62 IR 371 at 373.

16 Transcript at PN768, PN789, PN1018.

17 Exhibit R1 at para 21 and transcript at PN775, PN1018.

18 Transcript at PN954, PN1017.

19 Ibid at PN116 - 121, PN279 - 280, PN293 - 296, PN469.

20 Ibid at PN784, PN819.

21 Ibid at PN768, PN789, PN1018.

22 Ibid at PN775, PN1018.

23 Ibid at PN954, PN1017.

24 Smith and Kimball v Moore Paragon Australia Ltd - PR942856 [2004] AIRC 57 at pn [32].

25 Clause 9.2 of the Manufacturing and Associated Industries and Occupations Award 2010.

26 Ellawalla v Australia Postal Corporation, Print S5109 at pn38.

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