Keith Clayborough v Spiral Tube Makers Pty Ltd trading as Duraduct
[2010] FWA 8497
•5 NOVEMBER 2010
[2010] FWA 8497 |
|
DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Keith Clayborough
v
Spiral Tube Makers Pty Ltd trading as Duraduct
(U2010/6959)
COMMISSIONER WILLIAMS | PERTH, 5 NOVEMBER 2010 |
Termination of employment.
[1] This application has been lodged by Mr K Clayborough who is applying for an unfair dismissal remedy under s.394 of the Fair Work Act 2009 (the Act). The respondent employer is Spiral Tube Makers Pty Ltd trading as Duraduct.
[2] The application was dealt with by a Fair Work Australia conciliator however the matter was not settled.
[3] Mr Clayborough was self represented and Duraduct was represented by Mr A Martin, one of Duraduct’s Directors.
Background
[4] Mr Clayborough successfully applied for the position of Business Development Manager with Duraduct in August 2009. His employment commenced on 17 August 2009.
[5] Approximately five to six weeks later Mr Clayborough says that via a telephone call from Melbourne the then state manager for Western Australia, Mr Hornsey, was made redundant. Mr Clayborough says that approximately four weeks later the position of state manager was ‘reinvented’ and a new state manager was hired.
[6] Mr Clayborough’s position was made redundant and he was dismissed in March 2010.
The legislation
[7] The relevant provision of the Act is set out below:
s.396 Initial matters to be considered before merits
FWA 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.
The evidence
[8] In this case Duraduct have argued that the dismissal was a case of genuine redundancy.
[9] Section 389 provides the 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.
[10] The evidence of Mr Clayborough is that by letter dated 13 August 2009 Duraduct made an offer of employment to him. That offer of employment in the concluding paragraphs included the statement that Duraduct was looking for a commitment for a long term and would issue Mr Clayborough with a contract of employment for a minimum of three years.
[11] Mr Clayborough says this was the main reason he accepted the position.
[12] Mr Clayborough completed a three-month probationary period successfully and following this his salary was increased.
[13] By letter dated 12 March 2010 Duraduct advised Mr Clayborough that it had decided to make his position redundant as of that date due to financial problems. The letter stated Mr Clayborough’s work had been admirable.
[14] Mr Clayborough says he recognises that the financial damage to himself and his family caused by this redundancy was minimal because he obtained suitable employment within a matter of days of his dismissal. However he argues that what occurred was in breach of his three-year contract with Duraduct.
[15] Evidence was also given by Mr Martin. His evidence was that he visited the Western Australian branch in February 2010 to review the operations and the declining business they were experiencing. The branch had been in operation for 18 years but in recent years was not trading profitably. The global financial crisis was a factor.
[16] Mr Martin says he had frank discussions with all members of staff regarding these issues and the need to bring the branch back to profitability. He says he made it clear that one of the options was to shed staff if improvements did not happen.
[17] Mr Martin says he also had a one-on-one discussion with some staff including Mr Clayborough. Mr Martin’s evidence was that he discussed with Mr Clayborough that his position would be made redundant if they could not achieve some immediate sales. Mr Martin’s evidence was that Mr Clayborough seemed to understand the situation.
[18] Specifically Mr Martin says he discussed these matters with Mr Clayborough whilst they were driving to the Perth airport on 23 February 2010.
[19] Mr Martin’s evidence was that eventually Duraduct came to the decision that some staff would have to be made redundant and Mr Clayborough was one of those selected. Mr Martin says Mr Clayborough’s position has not been replaced to date.
[20] Mr Martin says that notwithstanding the written offer of employment made to Mr Clayborough, Duraduct did not formalise the arrangement with a written contract.
[21] Mr Martin also tendered a profit and loss statement for Duraduct’s Western Australian branch for the 2009-2010 financial year. This statement, Mr Martin says, shows that the branch was making losses which by the end of February 2010 had totalled in excess of $800,000.
[22] Neither party in cross-examination challenged the factual statements made by the other in their evidence.
Consideration
[23] Sections 396(a), (b) and (c) are not relevant to this application.
[24] The matter to be determined by the Tribunal is whether s.396(d) is applicable, that is, was this dismissal a case of genuine redundancy?
[25] In this instance Mr Clayborough does not challenge what Duraduct has said were the reasons for his dismissal. Duraduct says the reason for his dismissal was the deteriorating financial position of Duraduct. In response to these financial difficulties Duraduct decided to reduce its costs by shedding a number of staff. Mr Clayborough was one of those and to date his position has not been filled.
[26] I conclude then that Duraduct did no longer require Mr Clayborough’s job to be performed by anyone and this was because of changes in the operational requirements of Duraduct’s enterprise.
[27] There is no suggestion that there was a modern award or enterprise agreement that applied to Mr Clayborough’s employment and even if there was there is nothing before the Tribunal regarding any obligations on Duraduct to consult about redundancy contained therein.
[28] Finally there is no suggestion that it would have been reasonable in the circumstances for Mr Clayborough to have been redeployed within Duraduct’s enterprise or the enterprise of an associated entity.
[29] Therefore I am satisfied that within the meaning of s.389 this dismissal was a case of genuine redundancy.
Conclusion
[30] Section 385 of the Act defines what an unfair dismissal is as follows:
A person has been unfairly dismissed if FWA 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.
[31] A person has been unfairly dismissed only if all of the criteria in s.385(a), (b), (c) and (d) are satisfied.
[32] In this instance the dismissal was a case of genuine redundancy. Consequently because of s.385(d) Mr Clayborough has not been unfairly dismissed.
[33] It is always regrettable for employees to be dismissed through no fault of their own in circumstances of redundancy. In Mr Clayborough’s case his upset at being made redundant was heightened by the fact that his dismissal occurred relatively recently after taking up his new position. Mr Clayborough also reasonably had expectations of long-term employment because of the statements made by Duraduct in its offer of employment to him. These circumstances however do not alter the fact that the dismissal was a case of genuine redundancy. That being the case the legislation deems such a dismissal not to be unfair.
[34] As a result this application must be dismissed and an order to that effect will issue in conjunction with this decision.
COMMISSIONER
Appearances:
K Clayborough on his own behalf.
A Martin for Spiral Tube Makers Pty Ltd trading as Duraduct.
Hearing details:
2010.
Perth:
November 2.
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