Lee Anthony Quinn v David Moss Corporation Limited T/A Damos

[2016] FWC 2424

[2016] FWC 2424

The attached document replaces the document previously issued with the above code on 15 April 2016.

Paragraph numbers on page 1 amended to reflect consecutive order.

Associate to Commissioner Johns

Dated 15 April 2016

[2016] FWC 2424

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394 - Application for unfair dismissal remedy

Lee Anthony Quinn
v
David Moss Corporation Limited T/A Damos
(U2015/15457)

COMMISSIONER JOHNS PERTH, 15 APRIL 2016

Application for Relief of Unfair Dismissal – genuine redundancy – redeployment – whether new position created.

Introduction

[1] On 9 December 2015 Lee Quinn (applicant) made an application to the Fair Work Commission (Commission) pursuant to section 394 of the Fair Work Act 2009 (FW Act) for a remedy in respect of his dismissal by David Moss Corporation Limited (trading as DAMOS) (respondent).
[2] On 4 January 2016 the respondent filed a response to the unfair dismissal application. It objected to the Commission exercising jurisdiction on relation to the unfair dismissal application on the basis that, it submitted, the dismissal was a case of genuine redundancy.
[3] Attempts at conciliation were attempted, but the matter remained unresolved.
[4] Consequently the matter was listed for hearing on the 14 April 2016.

Permission to be represented

On 4 April 2016, the Commission sought submissions from the parties about whether the Commission should grant permission for the applicant and the respondent to be represented by a paid agent and lawyer respectively. A determination of this issue was necessary to ensure that the manner in which any hearing was conducted was fair and just 1.
[5] In deciding the question of permission to represented the Commission, as presently constituted, considered it an important matter that the respondent had raised a jurisdictional objection. It is generally accepted that matters involving a jurisdictional objection are invested with a degree of complexity. That was the case in this matter.

[6] Having considered all the matters submitted by the parties the Commission, as presently constituted, determined that allowing each of the parties to be represented would  enable the matter to be dealt with more efficiently, taking into account the complexity of the matter. Certainly, at the hearing that efficiency was evident and the Commission is indebted to Mr Mallally and Mr Copeland in respect of the same.

Conference or Hearing

[7] On 4 April 2016, the Commission also sought submissions from the parties about whether the Commission should conduct either a conference (section 398) or a hearing (section 399) in relation to the matter.

[8] Taking account any differences in the circumstances and the wishes of the parties to the matter, and considering whether a hearing would be the most effective and efficient way to resolve to the matter I decided to conduct a hearing.

The hearing

[9] At the hearing:

a) the applicant was represented by Mr Patrick Mullally from Workplace Claims Australia. Mr Mullally called the applicant to give evidence on his own behalf. The applicant had previously filed a witness statement (Exhibit “A2”), gave oral evidence and was cross-examined;
b) the respondent was represented by Mr Philip Copeland, solicitor. Mr Copeland called Justin Tunbridge, the respondent’s Commercial Manager, to give evidence. Mr Tunbridge had previously filed a witness statement (Exhibit “R2”), gave oral evidence and was cross-examined;
c) the Commission, of its own motion, called Phil McLeod, the respondent’s Materials Coordinator, to give evidence. Mr McLeod gave oral evidence and was cross-examined.

Background

[10] The following matters were either agreed between the parties or not otherwise substantially contested:

a) The applicant has trade qualifications as a fitter. He also holds a Bachelor of Technology degree in Operations Management. He holds a licence to operate a fork lift.

b) Between November 2005 and May 2009 the applicant worked for the respondent before being made redundant.

c) On 17 June 2013 the applicant was re-engaged by the respondent. He was initially employed as a Demand Planner.

d) In November 2013 the application was promoted to Inventory Manager.

e) In July and August 2014 all of the staff reporting to the applicant (namely the Production Scheduler and Inventory/Purchasing Officer) were made redundant. Also at this time the applicant took a $10,000 pay cut to $90,000.

f) The retrenchment of his staff placed considerable work demands on the applicant. On at least four occasions the applicant approached management about his workload.

g) On 23 February 2015 Mr Tunbridge commenced employment as the Commercial Manager. Part of his role is to conduct efficiency analysis, business and systems process analysis and commercial oversight of the business to reduce costs, eliminate waste and drive efficient business practices.

h) On 29 June 2015 Mr McLeod was re-engaged by the respondent as a casual production employee. Mr McLeod had previously been made redundant by the respondent. Although designated a casual employee Mr McLeod worked full-time hours. He earned $28 per hour and his duties mainly involved assisting both the stores function (loading, unpacking, distribution) and the stock management function (the physical aspect of stock management, warehouse organisation and cycle counting). Mr McLeod was keen to make his position permanent and full-time.

i) In July 2015 Mr Tunbridge negotiated a strategic supply contract with IRPC for a supply of resin. This reduced the applicant’s workload in sourcing resin from various suppliers on a spot basis. At this time the applicant began reporting to Mr Tunbridge.

j) Also in July 2015 Mr Tunbridge identified that the process of manufacturing scheduling within the business was not, in his opinion, being performed adequately. Mr Tunbridge became convinced by the applicant’s argument that a Scheduler was required and agreed to hire one.

k) On 24 July 2015 the applicant advised Mr Tunbridge and the respondent’s Managing Director, John Moss, that he had returned a high PSA test for prostate cancer. The test result led to the applicant undergoing a magnetic resonance imaging (MRI) test.

l) On 3 August 2015 the prostate cancer diagnosis was confirmed. The applicant elected to have radiation treatment. It required 6 weeks off work and the applicant made private arrangements for treatment to minimise the impact on his work. The treatment was due to commence on 3 December 2015 and run through until 29 January 2016. I accept that the applicant was a witness of truth and that he communicated these arrangements to representatives of his employer; most likely Mr Moss.

m) Also on 3 August 2015 the respondent (in response to the applicant’s expressed concerns about his workload) advertised for a Production Scheduler.

n) On 17 August 2016 the previous Scheduler, Carol-Anne Manning, was re-engaged on a salary of $65,000 per annum.

o) In August/September 2015 Mr Tunbridge reviewed the inventory management function and decided to reconfigure the installed but unused Enterprise Resource Planning (EPR) software. The ERP process effectively replaced the applicant’s method of using an Excel spread-sheet and manual analysis.

p) As a result of the operational changes effected by Mr Tunbridge he identified a further opportunity to reduce costs in the business by making the applicant’s position redundant. He determined that the applicant’s remaining tasks could be allocated between himself, Ms Manning and Mr McLeod.

q) Mr Tunbridge discussed his plans with Mr Moss who, in late November 2015 approved making the applicant’s position redundant. Mr Tunbridge determined that there were no other positions that the applicant could have been redeployed into. Having made a definite decision to abolish the applicant’s position, Mr Tunbridge made no attempt to put the applicant on notice about a potential redundancy. Further, he made no attempt to discuss with the applicant how the adverse effects of the redundancy might be mitigated.

r) Also in late November 2015 Mr Tunbridge offered Mr McLeod conversion from being a casual employee to being a permanent full-time employee. Mr McLeod accepted the offer. Consequently, from early December 2015 Mr McLeod’s hourly rate of pay dropped to $25 per hour (i.e. around $49,500 per annum).

s) On 27 November 2015 the applicant’s employment was terminated. On termination he was paid 5 weeks’ notice and 6 weeks’ severance pay (i.e. the 11 week payment took him through until 12 February 2016). Mr Tunbridge told the applicant the decision was not negotiable.

t) On 3 December 2015 the applicant commenced radiation treatment. By reason of the same he has been unable to apply for other employment since the termination of his employment. At the date of the hearing the applicant’s economic loss was nearly 9 weeks’ pay.

u) Also on about 3 December 2015 Mr McLeod’s job title was changed to “Materials Coordinator”.

[11] The applicant submits he was unfairly dismissed and seeks an Order that he be compensated in the amount of $14,500 (being around 15 weeks’ pay at Mr McLeod’s rate of pay).
[12] In essence the applicant says, that armed with the knowledge that the applicant’s position was going to be made redundant, the respondent (namely Mr Tunbridge):

a) ought not have converted Mr McLeod’s employment from casual to full-time, but rather,
b) should have offered the applicant the role that, after the termination of his employment, became titled “Materials Coordinator”; and
c) then terminated Mr McLeod’s employment.

[13] The applicant says he ought to have been given preference in continuing employment over Mr McLeod.
[14] Although the role of Materials Coordinator paid nearly half what the applicant earned as the Inventory Manager, he says that, faced with a choice between the position of “Materials Coordinator” and not having a job at all (on the eve of under-going serious medical treatment), he would have seriously considered the demotion and pay cut. I accept the truthfulness of his evidence in this regard.
[15] Mr Tunbridge says he did not consider the applicant for Mr McLeod’s position because:

a) the position was so far below the position of Inventory Manager;
b) the applicant had previously complained about the pay cut he took in July/August 2014; and
c) he thought the applicant would become disgruntled in the role.

[16] It has long been accepted that if an employer has positions available, even at a lower level, that the redundant employee has the skills to perform, the employer should not presume that the employee will refuse the position. 2 Mr Tunbridge accepted, in answer to questions from me, that his failure to discuss this alternative with the applicant was unfair.

[17] It was also the applicant’s contention that the real (or substantive and operative) reason for the termination of his employment was a prohibited reason associated with his prostate cancer. He says that, having informed his employer of his need for a minimum 6 week course of radiation treatment commencing on 3 December 2015, the respondent decided to terminate his employment the Friday before that treatment began. However, the case before the Commission is not a general protections claim. Notwithstanding, a sinister motive for termination may be considered under s.387(h) of the FW Act in determining if the termination was harsh, unjust or unreasonable.

[18] However, before the Commission can consider if the termination of the applicant’s employment was unfair, it must first be satisfied that it has the jurisdiction to determine the substantive application for an unfair dismissal remedy.

Protection from Unfair Dismissal

[19] An order for reinstatement or compensation may only be issued where the Commission is satisfied the Applicant was protected from unfair dismissal at the time of the dismissal. Section 382 sets out the circumstances that must exist for the Applicant to be protected from unfair dismissal and, in the present matter, the respondent conceded that the applicant was so protected.
[20] There being no dispute, the Commission, as presently constituted, is satisfied, the applicant has completed the minimum employment period and earned under the high income threshold. Consequently, the Commission, as presently constituted, is satisfied the Applicant was protected from unfair dismissal.
[21] I will now consider if the dismissal of the Applicant by the Respondent was unfair within the meaning of the FW Act.

Was the dismissal unfair?

[22] A dismissal is unfair if the Commission is satisfied, on the evidence before it, that all of the circumstances set out at s.385 of the FW Act existed. Section 385 provides the following:

“385 What is an unfair dismissal
A person has been unfairly dismissed if the FWC is satisfied that:

(a) the person has been dismissed; and
(b) the dismissal was harsh, unjust or unreasonable; and
(c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and
(d) the dismissal was not a case of genuine redundancy.

Note: For the definition of consistent with the Small Business Fair Dismissal Code: see section 388.”

Was the Applicant dismissed?

[23] A person has been unfairly dismissed if the termination of their employment comes within the definition of “dismissed” for purposes of Part 3–2 of the FW Act. Section 386 of the FW Act sets out the meaning of “dismissed”. In the present matter the respondent concedes that it dismissed the applicant.
[24] Consequently, the Commission, as presently constituted, finds that the applicant was dismissed from his employment with the respondent within the meaning of s.386 of the FW Act.

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

[25] A person has not been unfairly dismissed where the dismissal is consistent with the Small Business Fair Dismissal Code (the Code). In the present matter the respondent concedes that it was not a small business.
[26] Consequently, the Commission, as presently constituted, finds the respondent was not a small business employer within the meaning of s.23 of the FW Act.

Was the dismissal a genuine redundancy?

[27] The Respondent submits I should dismiss the application because the dismissal was a case of genuine redundancy. Section 389 of the FW Act defines the meaning of genuine redundancy:

“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.”

Was the Applicant’s job no longer required to be performed?

[28] To be satisfied the dismissal was a case of genuine redundancy, I must be satisfied the role of Inventory Manager was no longer required to be performed by anyone because of operational changes to the respondent. It has not been contested by the applicant that the job of Inventory Manager was no longer required. I accept the respondent’s submissions that as a result of changes in operations effected by Mr Tunbridge the role of Inventory Manager was no longer required to be performed as a result of operational requirements.

Did the Respondent comply with any consultation obligations?

[29] I must now consider whether the respondent was obliged by a modern award or enterprise agreement to consult with the Applicant about the redundancy prior to the dismissal. In the present matter the applicant concedes that at the time of the dismissal no industrial instrument applied to the employment relationship. Consequently the question of compliance with consultation obligations does not arise.

Was redeployment reasonable in all the circumstances?

[30] Section 389(2) provides that even if the Commission is satisfied the role of Inventory Manager was no longer required to be performed by anyone and that all consultation obligations in a modern award or enterprise agreement that applied to the Applicant’s employment have been complied with, I must consider if redeployment was appropriate in all the circumstances.
[31] The respondent submits redeployment was not appropriate in the circumstances because:

a) it was not possible to redeploy the applicant into the role of Scheduler because Ms Manning had taken up the role 3 months earlier (i.e. before the decision was made to terminate the applicant’s employment);

b) it was not reasonable to terminate Mr McLeod’s employment as a production employee (storeperson) to create a redeployment vacancy for the applicant because:

i. although Mr McLeod’s employment was initially classified as “casual”, he had always worked full-time hours, was a “good fit” for the position in terms of his skills and prior experience with the respondent and was performing well in the position;

ii. Mr McLeod had consistently expressed a desire to remain employed, Mr Tunbridge had given him assurances in this regard and he was approaching his 6 month election [from casual to full-time employee] date;

c) in any event the applicant was not a suitable fit for Mr McLeod’s position (for the reasons set out above in paragraph [12]).

[32] The applicant submits redeployment was appropriate in the circumstances because the position Mr McLeod held immediately after the termination of the applicant’s employment was a new position (titled “Materials Coordinator”) into which the applicant could have been redeployed on 27 November 2015.
[33] In reply the respondent says there was no “new position” of “Materials Coordinator” or anything else was created. It says that, on converting Mr McLeod’s employment from casual to full-time, his duties did not substantially change. It says Mr McLeod continued to perform the production employee duties with some additional duties arising out the reallocation of some of the applicant’s duties.
[34] There was some evidence during the hearing about how Mr McLeod came to take on the title of “Materials Coordinator”. It was the applicant’s submission that the new title meant a new role (into which he could have been redeployed). Mr Tunbridge gave evidence that,

Several weeks after Mr Quinn’s departure I noticed that Mr McLeod had unilaterally begun using the title of “Materials Coordinator” on his work email footer. I had never discussed the use of the title with Mr McLeod. This title has not been officially approved and in no way changes his required duties as a production employee (storeperson).

[35] Quite contrary to the evidence of Mr Tunbridge, Mr McLeod gave evidence that it was the receptionist who told him (i.e. Mr McLeod) that Mr Tunbridge had told her that his (Mr McLeod’s) new title was to be “Materials Coordinator”. Having heard the evidence of Mr McLeod, a store-person, he did not strike me as the type of person who would “unilaterally” decide to change his title. In fact I doubt he is the type of person who is, in anyway concerned, about titles. While I accept Mr Tunbridge’s evidence that he never discussed the title of “Materials Coordinator” with Mr McLeod (that is consistent with Mr McLeod’s evidence), I reject Mr Tunbridge’s evidence to the extent that it was intended to convey he had no part to play in the re-branding of Mr McLeod’s role.

Consideration

[36] Whether redeployment of an employee is considered reasonable will depend on the circumstances that exist at the time of the dismissal 3 (i.e. in the present matter, on 27 November 2015).

[37] In determining whether the redeployment was reasonable a number of matters may be relevant including:

a) whether there exists a job or a position or other work to which the employee can be redeployed; 4

b) the nature of any available position;

c) the qualifications required to perform the job;

d) the employee’s skills, qualifications and experience; and

e) the location of the job in relation to the employee’s residence and the remuneration (pay and entitlements) which is offered. 5

[38] The starting point for the analysis therefore is ask, on 27 November 2015 “was there a job or position or other work which Mr Quinn could have been redeployed into?” In his evidence before the Commission the applicant conceded that on 27 November 2015 there were no vacant positions into which he could have been redeployed.
[39] Consequently, his case rests upon a finding that the position that Mr McLeod had immediately following the termination of the applicant’s employment was a new job or position.
[40] The applicant invites the Commission to find that, in view of the planning done in the lead up to the termination of his employment, the 3 December 2015 start date for Mr McLeod commencing as the Materials Coordinator was deliberately chosen to deprive the applicant of the opportunity to be redeployed into that role.
[41] The Commission must find, on the balance of probabilities, that there was a job or a position or other work within the employer’s enterprise to which it would have been reasonable in all the circumstances to redeploy the dismissed employee. There must be an appropriate evidentiary basis for such a finding. 6

[42] Having considered all of the evidence in the matter and in particular that of Mr McLeod, I am not satisfied that his position changed so substantially after the termination of the applicant’s employment such that a new job or position was created. The evidence of Mr McLeod supports a finding that his role changed slightly after the termination of the applicant’s employment. This is not an uncommon occurrence when a job is abolished and the duties once performed by one person are shared amongst the remaining staff. The slightly change in Mr McLeod’s duties caused Mr Tunbridge to create a new title for Mr McLeod (that of “Materials Coordinator”), but that is far from establishing that a new job or position was created into which the applicant could reasonably have been redeployed.

[43] Further, had the applicant been redeployed into the position held by Mr McLeod it would have necessitated the termination of Mr McLeod’s employment. The Commission was not directed to any authority for the proposition that an employer must create a new position for an employee whose position has been made redundant by terminating the employment of another employee. There is no authority for the proposition that a full-time employee, like the applicant, should have been given preference in continued employment by the respondent by it refusing to convert Mr McLeod, a long term casual employee, into a permanent full-time employee. It has been established that it is not necessary for an employer to dismiss another employee for the purposes of redeployment.  7

[44] In the circumstances, the Commission, as presently constituted, is satisfied that it would not have been reasonable for the applicant to be redeployed within the respondent’s enterprise or the enterprise of an associated entity.

[45] Consequently, the Commission, as presently constituted finds that the dismissal was a case of genuine redundancy within the meaning of s.389 of the FW Act.

Conclusion

[46] The Commission, as presently constituted, is satisfied that the applicant was protected from unfair dismissal but that the dismissal was a case of genuine redundancy within the meaning of s.389 of the FW Act.
[47] Consequently, the Commission does not have jurisdiction to determine if the termination of the applicant’s employment was harsh, unjust or unreasonable and his substantive application for an unfair dismissal remedy must be dismissed.
[48] An order will be issued with this decision.

COMMISSIONER

Appearances:

Mr Patrick Mullally for the applicant.

Mr Philip Copeland for the respondent.

Hearing Details:

Perth,

14 May,

2016

 1   Warrell v FWC [2013] FCA 291.

 2   Margolina v Jenny Craig Weight Loss Centres Pty Ltd[2011] FWA 5215, confirmed on appeal [2011] FWAFB 9137.

 3   Ulan Coal Mines v Honeysett (2010) 199 IR 363, 370 [26].

 4   Technical and Further Education Commission (t/a TAFE NSW) v Pykett (2014) 240 IR 130, [36].

 5   Ulan Coal Mines v Honeysett (2010) 199 IR 363 [28].

 6   Technical and Further Education Commission (t/a TAFE NSW) v Pykett (2014) 240 IR 130, [36].

 7   Bryson Gilbert & Others v Asciano Services Pty Ltd T/A Pacific National Bulk Rail[2015] FWC 364, [29]

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