Laura Toplass v BMM Productions Pty Ltd
[2023] FWC 3044
•22 NOVEMBER 2023
| [2023] FWC 3044 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394—Application for an unfair dismissal remedy
Laura Toplass
v
BMM Productions Pty Ltd
(U2023/7436)
| DEPUTY PRESIDENT SLEVIN | SYDNEY, 22 NOVEMBER 2023 |
Application for an unfair dismissal remedy – whether dismissal was genuine redundancy. Dismissal not genuine redundancy. Dismissal Unfair. Compensation awarded.
Ms Laura Toplass has applied under section 394 of the Fair Work Act 2009 (the Act) for an unfair dismissal remedy. The respondent to the application, BMM Productions Pty Ltd (BMM) contends that Ms Toplass was not unfairly dismissed because the dismissal was a case of genuine redundancy. I find that the dismissal does not meet the description of genuine redundancy in the Act and that Ms Toplass was unfairly dismissed. I have ordered BMM pay Ms Toplass compensation in the sum of $11,500.
The application was heard by way of conference and Ms Toplass represented herself. I granted BMM permission to be legally represented as BMM wished to raise a jurisdictional objection involving some complexity and legal representation would allow the matter to be dealt with more efficiently.
When can the Commission order a remedy for unfair dismissal?
Section 390 of the Act provides that the Fair Work Commission (the Commission) may order a person’s reinstatement, or the payment of compensation to a person if satisfied that the person was protected from unfair dismissal and the person has been unfairly dismissed. Section 382 provides that a person is protected from unfair dismissal if the person is an employee who has completed a period of employment of at least the minimum employment period and the person is covered by a modern award, an enterprise agreement applies to the person, or the person earns less than the high-income threshold. Section 385 relevantly provides that a person has been unfairly dismissed if the Commission is satisfied of four matters: the person has been dismissed; the dismissal was harsh, unjust or unreasonable; the dismissal was not consistent with the Small Business Fair Dismissal Code; and the dismissal was not a case of genuine redundancy.
It was not contested, and I am satisfied, that Ms Toplass is protected from unfair dismissal for the purposes of s 382 as she was employed for longer than the minimum employment period and covered by a modern award. It was not contested, and I am satisfied, that the dismissal here was not consistent with the Small Business Code as the Code did not apply. So, the questions for determination under s 385 in this case are whether the dismissal was a case of genuine redundancy and whether it was harsh, unjust or unreasonable.
Background
Ms Toplass was employed on 31 January 2022 as a Model Manager. At the time of dismissal, she was working part-time four days per week as Senior Model Agent - Curve. On 23 July 2023, Ms Toplass was called to a meeting with Ms Chelsea Bonner, BMM’s Chief Executive Officer, and Katherine Taylor, Director of Operations. Ms Toplass was given no notice of the meeting. At that meeting, Ms Bonner advised Ms Toplass that the business had been struggling, Ms Bonner had injected personal funds into the business to keep it afloat, and that her position was being made redundant. Ms Toplass was provided a written notice of termination and left her employment that day.
The notice stated that the reason for the dismissal arose from a recent of the business’s current and future Sydney operation requirements. The review concluded that the position of Senior Model Agent – Curve was no longer needed. It stated that the decision was not a reflection of Ms Toplass’s performance. The notice went on to state that payment would be in made in lieu of notice and for redundancy. The redundancy payment was said to be in accordance with the National Employment Standards and the Clerical Award.
On 29 July 2023 Ms Toplass found an online advertisement posted by BMM for a Managing Agent. Ms Toplass took the view that she was suitable for the advertised position. The following week Ms Toplass discovered someone else had been employed in the new role. Ms Toplass was familiar with the person appointed who was a friend of another manager at BMM.
Ms Bonner gave evidence that BMM employs staff who work in a related entity Bella Management Group Pty Ltd (Bella). Bella is a modelling and talent agency founded in 2001 which has the primary goal of expanding beauty standards in the fashion industry to be more diverse and inclusive. Ms Bonner states agents are expected to identify and secure work for talent by cold calling, sending out portfolios, and arranging auditions and meetings.
Bella was said to be known for its representation of ‘curve’ models who are models with body types outside the confines of the body types the mainstream fashion industry has historically promoted. At the time Ms Toplass was hired Bella had a division of the business devoted to representing curve models and Ms Toplass was hired within that division.
Ms Bonner described Bella as experiencing significant financial strain from 2020. The onset of COVID-19 and associated lockdowns was said to have contributed. Other contributors were said to be the rise of artificial intelligence services which allow companies to upload designs onto human-like avatars which replace human models at a much lower cost. This has reduced Bella’s main source of revenue being booking fees for models for photo shoots for advertising campaigns, catalogues and e-commerce. Ms Bonner stated that there had been a 33% decline in sales in the NSW Curve division in financial year 2022/23. Ms Bonner said that she had injected significant funds into the business in the first half of 2023 to keep the business afloat. A review of the company’s finances resulted in substantial cost cutting and a restructure of the business to consolidate the curve modelling division with the mainstream division.
Ms Bonner states that there were a number of meetings prior to the dismissal where employees were informed of the financial difficulties facing the business were discussed. At those meetings Ms Bonner told staff that her preference was to ensure no-one lost their jobs because of the financial challenges. Ms Toplass agreed that those discussions took place but said they were not discussions about a restructure of the business. Ms Bonner also described the introduction of new software, known as Hubspot, as part of the restructure. Hubspot is a client relationship management tool used to manage client bookings and other client interactions.
Ms Bonner gave evidence that a restructure to address the financial situation of the business was decided upon which involved making three positions redundant and reducing her own wages. She decided to make Ms Toplass’s role as well as two junior agents redundant, it was also decided to hire someone with fashion experience who could support the business with a high level of technical skills, proficiency in the software used in the business including Hubspot, a good understanding of the Entertainment Act and who could work full time. This new position is the one advertised after Ms Toplass was dismissed. It was a full-time role which paid less than Ms Toplass was being paid. Ms Bonner considered Ms Toplass was not suitable for the new role.
Ms Toplass gave evidence that she had the skillset to perform the new role and that had she been given the opportunity she was willing to take a pay cut to stay with the business and was willing to move back to a full-time role.
Consideration
Was the dismissal a genuine redundancy?
The first question is whether the dismissal was a genuine redundancy for the purposes of s 385 of the Act. Genuine redundancy is defined in s 389. A person’s dismissal is a case of genuine redundancy if the employer no longer wants the person’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise and the employer has complied with any obligation in a modern award or enterprise agreement to consult about the redundancy. Subsection 389(2) also provides that a dismissal is not a genuine redundancy if it would have been reasonable to redeploy the person.
BMM submitted, and I agree, that the evidence demonstrated that the employer no longer wanted Ms Toplass’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise. I consider the restructure of the business by making three positions redundant and hiring someone with an expanded and refocussed role in the face of the financial difficulties Bella was experiencing amounted to changes to operational requirements of Bella’s enterprise. That restructure resulted in the enterprise no longer wanting anyone to perform Ms Toplass’s job.
BMM further submitted that there was no modern award or enterprise agreement applying to Ms Toplass and so there was no obligation to consult. Ms Toplass contended that the Clerks – Private Sector Award 2020 (Clerks Award) applied to her employment. The letter of termination referred to redundancy pay being “in accordance with the Clerks Award.” BMM contended that there was uncertainty about award coverage as Ms Toplass’s position and duties exceeded the kinds of work contemplated by the Clerks Award.
Ms Bonner described the duties of Senior Model Manager – Curve as identifying and securing work for talent by cold calling, sending out portfolios, and arranging auditions and meetings. She said Bella’s main source of revenue was from bookings made for photo shoots for advertising campaigns, catalogues and e-commerce. The job description for the Senior Model Manager – Curve included a long list of key accountabilities including: assisting management identify opportunities for talent, updating positioning on boards, ensuring images are relevant and up to date; managing test shoots by engaging and trialling photographers, scheduling shooting, liaising with models and photographers, selecting and retouching images and updating the website; developing and business opportunities and client relationships; assisting and supporting with scouting new talent; updating social media; working with finances to ensure invoicing is prompt; maintaining a weekly WIP across all jobs, fees and talent movement; maintaining client relationships; other duties such as answering phones, meet and greet and arranging meetings.
The Clerks Award is an occupational award. Clause 4.1 of the Award provides that it covers private sector employees who are wholly or principally engaged in clerical work. Clerical work is defined in clause 2 in this way[1]:
clerical work includes recording, typing, calculating, invoicing, billing, charging, checking, receiving and answering calls, cash handling, operating a telephone switchboard, attending a reception desk and administrative duties of a clerical nature.
The classification structure in Schedule A provides for 5 levels which are described by reference to indicative skills and duties. Clause A1.3 of the Schedule states that the lists of typical duties and skills listed at each level are non-exhaustive and provide an indicative guide only. At the highest level, the list of typical duties and skills reads:
A.7 Level 5
A.7.1 Characteristics
(a) Employees at this level are subject to broad guidance or direction and would report to more senior staff as required.
(b) Employees at this level will typically have worked or studied in a relevant field and will have achieved a standard of relevant or specialist knowledge and experience sufficient to enable them to advise on a range of activities and features and contribute, as required, to the determination of objectives, with the relevant field or fields of their expertise.
(c) Employees at this level are responsible for their own work and may have delegated responsibility for the work under their control or supervision including scheduling workloads, resolving operations problems, monitoring the quality of work produced and counselling staff for performance and work related matters:
(d) Employees at this level would also be able to:
(i) train and supervise employees in lower levels by means of personal instruction and demonstration; and
(ii) assist in the delivery of training courses.
(e) Employees at this level would often exercise initiative, discretion and judgment in the performance of their duties.
(f) Employees at this level may possess relevant post-secondary qualifications. However, this is not essential.
A.7.2 Typical duties and skills required
Indicative typical duties and skills at this level may include:
(a) Application of knowledge of organisation’s objectives, performance, projected areas of growth, product trends and general industry conditions;
(b) application of computer software packages including the integration of complex word processing and desktop publishing, text and data documents;
(c) providing reports for management in any or all of the following areas:
(i) accounts and finances; and
(ii) staffing; and
(iii) legislative requirements; and
(iv) other company activities;
(d) administering individual executive salary packages, travel expenses, allowances and company transport; administering salary and payroll requirements of the organisation.
The description of the work performed by Ms Toplass provided by Ms Bonner and contained in the position description accords with the descriptions of the characteristics and typical duties and skills required for Level 5 classification in the Clerks Award. I do not agree with BMM’s characterisation of those duties being in excess of the duties performed under the Award. I find that the Clerks Award applied to Ms Toplass’s employment.
Clause 38 of the Clerks Award requires employers to consult employees about major workplace change, including changes in structure that are likely to have significant effects on employees. Significant effects include termination of employment and job restructuring. Clause 38 imposed an obligation on BMM to consult affected employees about the restructure it implemented in July 2023 when it dismissed Ms Toplass and two junior agents. The obligations included giving notice to the affected employees and discussing with them and their representative the introduction of the changes, the likely effect on them and measures to avoid or reduce the adverse effects of the changes. Those discussions should have commenced as soon as practicable after a definite decision to restructure had been made. The clause required BMM to give the affected employees information in writing about the changes. In discussions about a restructure, employees may raise matters about the changes and the employer is required to respond to those matters promptly.
The obligation to consult on workplace change is a longstanding and important one, and it is an important workplace right that ensures fairness to employees during periods of change.
BMM did not comply with any of the obligations in clause 38 of the Clerks Award. Consequently, its dismissal of Ms Toplass was not a genuine redundancy within the meaning of s 389 of the Act.
Was the dismissal harsh unjust or unreasonable?
As the dismissal was not a case of genuine redundancy, it is left to consider whether the dismissal was harsh, unjust or unreasonable. In considering that question I must take into account the matters set out in s 387 of the Act.
Ms Toplass was dismissed for operational reasons. The letter of termination stated that the dismissal was not a reflection on her performance. Consequently, s 387(a), going to whether there was a valid reason for the dismissal related to capacity or conduct, is not relevant. Similarly, s 387(b), which goes to whether the employee was notified of the valid reason related to capacity or conduct, is not relevant. Section 387(c) and (d), going to whether the employee was given an opportunity to respond to the reason and was permitted to have a support person, is also not relevant. Section 387(e) goes to warnings about unsatisfactory performance, so is also not relevant here. Section 387(f) goes to the size of the enterprise. Because BMM had 17 employees at the time of Ms Toplass’ dismissal, I do not find this to be a relevant factor.
Section 387(g) goes to whether dedicated human resource management specialists or expertise would likely impact on the procedures followed in effecting the dismissal. BMM did not have dedicated human resource specialists. If it did have, I expect it would not have taken the view that the Clerks Award did not apply ,and would have complied with its obligations to consult about the restructure. I find this to be a factor in favour of a finding that the dismissal was harsh, unjust or unreasonable.
Section 386(h) requires that I consider other relevant matters. I believe two matters are relevant. The first is that BMM had policies which drew its attention to the need to comply with Award obligations concerning redundancy. Those obligations include to consult over restructures. A failure to observe award obligations is a serious matter. Despite those obligations, BMM failed to consult.
Second, and relatedly, the decision to dismiss was made without giving Ms Toplass information about the restructure and the opportunity to discuss whether she could play a role under the new arrangements. Ms Toplass should have been given that opportunity. In this case there was scope for some accommodation of Ms Toplass. Ms Bonner focussed on the introduction of the new software, Hubspot, and said she did not believe Ms Toplass was trained in the program. Ms Toplass said that she was. Ms Bonner said that the new role would be for less remuneration. Ms Toplass said that she would have taken a pay cut. Ms Bonner said that the role was full-time. Ms Toplass said that she could have changed her arrangements and worked full time. I find that the failure to consult had a significant impact on Ms Toplass as it denied her a real opportunity to keep her employment.
In all the circumstances, I am satisfied that Ms Toplass was unfairly dismissed within the meaning of s 385 of the Act.
Remedy
Ms Toplass did not seek reinstatement. Reinstating Ms Toplass either to her former position or another position would be inappropriate as it would likely result in displacing another employee. Consequently, I am satisfied that reinstatement is inappropriate. Ms Toplass seeks compensation. I am satisfied that it is appropriate to make an order for payment in lieu of compensation.
Section 392(2) of the Act requires all of the circumstances of the case be taken into account when determining an amount to be paid as compensation in lieu of reinstatement. I find the following circumstances relevant to an order for compensation. Ms Toplass was dismissed because her position was made redundant; she was not consulted about redundancy; she was denied the opportunity to have input into any of the decisions made leading to the restructure; she was not provided with information about the restructure; and that she was entitled under the Clerks Award to be provided with that information and an opportunity to have input into the decision-making process. I also find that there was considerable scope for Ms Toplass to be accommodated in the new structure. Despite the misgivings of Ms Bonner, which I consider could have been resolved, Ms Toplass may still be working for BMM today.
Subsection 392(2) of the Act also requires me to consider the matters listed in paragraphs 392(2)(a) to (g). In relation to paragraph (a), I was provided with profit and loss statements for the Bella Management group and note that an order of compensation will have an impact on the financial situation of the company which had suffered a reduction in revenue up to and including the 2022/23 financial year. For the purposes of paragraph (b) I note that Ms Toplass had only worked for BMM for around 18 months. For paragraph (c), the evidence was that Ms Toplass was training to become a registered nurse and that her studies were directing her on a path away from the fashion industry. This requires some speculation, but I consider Ms Toplass would have only lasted in employment until the end of the academic year. In those circumstances she would have earned 4 months’ pay at the lower salary of $75,000.00, which was offered to the new position created in the restructure. This would be a figure of around $25,000.00. As to mitigation mentioned in section 392(2)(d) of the Act, Ms Toplass has been trying to find other work but has been unsuccessful. Regarding paragraphs (e) and (f), Ms Toplass has not earned remuneration since the dismissal and is unlikely to have any earnings from the time of any order for compensation and the payment of the compensation. A relevant factor in this case is the termination pay received by Ms Toplass at the time she was dismissed. The payment was $3,269.23.
The well-established approach[2] to the assessment of the quantum of compensation under s 392 of the Act is to apply the “Sprigg formula” derived from the Australian Industrial Relations Commission Full Bench decision in Sprigg v Paul’s Licensed Festival Supermarket.[3]
The approach in Sprigg is as follows:
Step 1: Estimate the remuneration the employee would have received, or have been likely to have received, if the employer had not terminated the employment (remuneration lost).
Step 2: Deduct monies earned since termination. Workers’ compensation payments are deducted but not social security payments. The failure of an applicant to mitigate his or her loss may lead to a reduction in the amount of compensation ordered.
Step 3: Discount the remaining amount for contingencies.
Step 4: Calculate the impact of taxation to ensure that the employee receives the actual amount he or she would have received if they had continued in their employment.
Applying this formula, the remuneration lost was $25,000.00 less the termination payment of $3,269.23 giving a figure of $21,7300.00. I will reduce this amount for contingencies being the uncertainty associated with the new role. The impact the payment will have on the business is also relevant in the final determination of the amount of compensation. I will reduce the amount of the order to take those factors into account. There is no reason to make a reduction in the amount of compensation on account of misconduct by Ms Toplass under s 292(3), as there was no misconduct.
Conclusion
For the reasons outlined, I consider that Ms Toplass was unfairly dismissed and a payment of $11,500 from BMM to Ms Toplass as compensation in lieu of reinstatement is an appropriate remedy.
An order requiring payment in this amount will issue separately.
DEPUTY PRESIDENT
Appearances:
Applicant: Ms Laura Toplass
Respondent: Mr Pararajasingham (Barrister)
Instructed by Ms Emma Watt (Solicitor)
Hearing details:
Sydney
24 October 2023
[1] Clerks Award, cl 4.1.
[2] See Bowden v Ottrey Homes Cobram and District Retirement Villages[2013] FWCFB 431 and Double N Equipment Hire Pty Ltd t/a A1 Distributions v Humphries[2016] FWCFB 7206.
[3] (1998) 88 IR 21.
Printed by authority of the Commonwealth Government Printer
<PR768453>
0
2
0