Lindsay Marks v WCK Pty Ltd T/A Kookaburra Homes

[2014] FWC 9382

[2014] FWC 9382

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Lindsay Marks
v
WCK Pty Ltd T/A Kookaburra Homes
(U2014/12576)

SENIOR DEPUTY PRESIDENT O’CALLAGHAN ADELAIDE, 23 DECEMBER 2014

Application for unfair dismissal remedy - genuine redundancy - unfair dismissal - compensation.

[1] On 16 September 2014 Mr Marks lodged an unfair dismissal application in relation to the termination of his employment with WCK Pty Ltd T/A Kookaburra Homes (Kookaburra Homes). The application has been referred to me for determination. It was the subject of a determinative conference on 18 December 2014.

[2] At this conference Mr Marks represented himself and Kookaburra Homes was represented by Ms Daniels, its Human Resources Manager. Whilst Kookaburra did not initially contend that any of the initial matters specified in s 396 of the FW Act were relevant to Mr Marks’ application, at the commencement of the conference it asserted that Mr Marks was made redundant. Consistent with the requirements of s 396, I have initially considered this issue.

[3] Mr Marks was employed from March 2013 to 2 September 2014 as a maintenance worker. There is no dispute that, on 11 February 2014 he suffered a fractured foot whilst at work. This injury was accepted as a compensable injury. Mr Marks was cleared for modified duties on 10 April 2014 but Kookaburra Homes advised that suitable work was not available to him. On 1 September 2014 he was cleared to return to work on full duties. He advised Kookaburra Homes of this and was told not to return to work until Ms Daniels had heard from his doctor. On 2 September 2014 he was advised by telephone that his employment was terminated with effect from that day. Mr Marks received correspondence confirming this on 4 September 2014.

[4] Mr Marks contends that the termination of his employment was unfair in that it lacked a valid reason and occurred in a manner which deprived him of the opportunity for any input. The Kookaburra Homes position is that it covered Mr Marks’ absence from work using other staff, including an employee from Port Lincoln as a consequence of a downturn in work at its Port Lincoln facility to assist in maintenance work. Kookaburra advised that, during Mr Mark's absence it contracted out the fit-out function which he undertook. Consequently, Kookaburra contended that, by the time Mr Marks was able to return to full duties, the position he previously held was no longer required.

The Evidence

[5] Mr Marks’ evidence was that after being cleared for modified duties on 10 April 2014 he visited the workplace 12 times in an endeavour to return to work in some category. He was consistently advised that Kookaburra Homes had no restricted duties and had a “no light duties policy”. Mr Marks provided doctor’s certificates to cover his absences. His evidence was that he considered that the approach adopted by Kookaburra Homes breached its own return to work policies. Mr Marks asserted that the quantity of new home building work being undertaken by Kookaburra Homes meant that there was an ongoing role for him as a maintenance employee. Mr Marks’ evidence was that:

“I notified (phoned) my supervisor (Brett McEvoy) immediately that I was cleared for full duties and would be returning to work the following day.

It wasn’t long after that my supervisor returned my phone call telling me the employer (Ros Daniels) in head office wanted to see a copy of my doctor’s certificate before allowing me to return to the workplace.” 1

[6] Further, Mr Marks stated:

“Tuesday 2/9/14 I sent a text to my supervisor (Brett McEvoy) asking if I could come into work yet. He responded via text, stating no I could not return to work and informed me that my employer (Ros Daniels) will be in touch with my Work Cover case manager (Hannah potter at Gallagher bassett) this time, and she would contact me later in the day.

Two hours later I received a phone call from the onsite Manager (Wayne Goodwin) in Murray Bridge, he firstly asked me if I had received an email from my employer (Ros Daniels). I responded with no I haven’t received an email.
Manager (Wayne Goodwin) went on to say that they no longer have a position for me, I clarified and repeated by saying “what I don’t have a job” (Wayne Goodwin) replied no you no longer work here, effective immediately and I would be paid sick leave for today and paid out accordingly. The only reason given for the dismissal was Wayne said “you have been off for so long, we have had to fill your position”.” 2

[7] Mr Marks confirmed that he had obtained alternative employment on 3 November 2014 and that, until that time he had continued to receive weekly WorkCover income maintenance payments set at 70% of his average weekly earnings.

[8] Ms Daniels evidence was that:

“Due to the downturn of the Building Industry in Lindsay’s absence we covered Lindsay’s position with the current staff we had at our Murray Bridge branch and also utilised our maintenance worker from our Port Lincoln branch as he didn’t have sufficient work here to do. We continue to cover our maintenance obligations in Murray Bridge with these staff and we have not replaced Lindsay. Therefore we do not have a position available for Lindsay.”

[9] In the conference Ms Daniels expanded on this advice. Whilst a substantial amount of her evidence did not reflect firsthand knowledge I have accepted it in general terms. She confirmed that fit out work previously undertaken by Mr Marks was contracted out and that the maintenance work which he had done was now shared between a long standing casual employee who had worked with Mr Marks, another existing employee and an employee redeployed from Port Lincoln depending on work requirements. Ms Daniels agreed that Mr Marks was not told that his position was redundant until 2 September 2014. She said that she understood that the Kookaburra managers at the Murray Bridge facility were hoping that a suitable position would emerge for him. She also advised that she understood that Kookaburra could not dismiss Mr Marks while he was absent on workers compensation and had consequently done so immediately he was cleared for a return to work. Ms Daniels advised that she had contacted the WorkCover claims agent on 2 September 2014 and advised of Kookaburra's intention to terminate Mr Marks’ employment. She referred to correspondence subsequently received from the claims agent some weeks after the termination of Mr Marks’ employment.

[10] Ms Daniels confirmed that on termination Mr Marks had been paid two week’s notice and had received outstanding leave and other payment entitlements due to him. While she had not paid Mr Marks any redundancy pay she conceded in the conference that she had misunderstood that obligation and that four weeks redundancy pay was due to Mr Marks consistent with the provisions of the Building and Construction General On-site Award 2010 (the Award) under which he was engaged.

A case of genuine redundancy

[11] Section 385 states:

“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.”

[12] Section 389 sets out the requirements necessary for a genuine redundancy in the following terms:

“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.”

[13] Consequently, if the termination of Mr Marks’ employment met each of these requirements it could not be unfair. I have considered these factors accordingly.

[14] In terms of s.389(1)(a) I am satisfied that during Mr Marks’ absence Kookaburra restructured its Murray Bridge maintenance and fit out operations such that the job previously undertaken by Mr Marks was abolished.

[15] In terms of s.389(1)(b) I directed Ms Daniels’ attention to the consultation provisions specified in clause 8 of the Award. Ms Daniels agreed that no consultation consistent with those provisions had occurred with Mr Marks.

[16] Whilst the operation of the South Australian workers compensation system is clearly beyond my jurisdiction in this matter I note that I have expressed concern to Ms Daniels relative to serious flaws in her understanding of elements of that system and have recommended that advice on these issues be sought in the future. In this respect I particularly refer to Ms Daniels’ position that the WorkCover system prevented her from informing Mr Marks of changes to his job whilst he was absent from work and her apparent lack of understanding of the potential implications of a unilateral termination of Mr Marks’ employment.

[17] Because of the absence of any consultation with Mr Marks prior to the termination of his employment, I have concluded that the circumstances specified in s.389 have not been met. I note that insufficient information relative to s.389(2) has been provided to me but I do not need to reach a conclusion in this respect. Simply put, the termination of Mr Marks’ employment does not meet the requirements necessary for effective exemption from consideration of whether that dismissal was unfair.

[18] Section 387 states:

“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.”

[19] I have considered each of these factors on the evidence before me.

Valid Reason

[20] Notwithstanding subsequent legislative changes I have adopted the principles set out by Northrop J in Selvachandran v Peterson Plastics Pty Ltd. 3 I consider that the restructuring of the maintenance and fit-out functions at the Murray Bridge Kookaburra facility effectively abolished all, or a substantial portion of the job previously undertaken by Mr Marks and that these structural changes represented a valid reason for the termination of his employment.

Notification of the reason

[21] Mr Marks was notified of the reason for the termination of his employment. Notwithstanding this, I consider it significant that reason was not described to him as a redundancy even though Kookaburra described the termination in those terms in the conference before me. Mr Marks was not told whether the restructuring had anything to do with his incapacity or his performance.

Opportunity to respond

[22] Mr Marks was not given an opportunity to respond to the proposition that his employment would be terminated.

Any unreasonable refusal to allow a support person

[23] Kookaburra did not refuse to allow Mr Marks to have a support person but the advice provided to him, by telephone on 2 September 2014 that he was dismissed meant that there was simply no opportunity for him to make a request to have a support person with him in any discussions. Consequently, in the circumstances of this matter, this is a factor indicative of unfairness.

Size of the employer’s enterprise - procedures followed

[24] Kookaburra employs in excess of 100 people. The absence of any consistent policies or procedures, or for that matter, the absence of any apparent understanding of Kookaburra’s workers compensation obligations is difficult to reconcile with an employer of that size.

Size of the employer’s enterprise - access to dedicated human resource management expertise

[25] Ms Daniels is the Kookaburra Human Resources Manager. She was intricately involved in the termination of Mr Marks’ employment.

Other matters relevant

[26] There are a number of other matters which I consider relevant to any determination about the fairness of Mr Marks’ termination of employment. Firstly, in the conference before me, Kookaburra conceded that it had not paid Mr Marks any redundancy pay consistent with the four-week entitlement set out in s.119(2) of the FW Act. I have already noted that Kookaburra did not describe the termination of Mr Marks’ employment to him, on 2 September 2014, as a redundancy. I consider that failure to pay him redundancy pay represents an element of unfairness in these circumstances. In reaching this conclusion, I have noted that Kookaburra acknowledged the redundancy payment obligation in the conference before me.

[27] Secondly, Kookaburra’s failure to consult with Mr Marks about the proposed termination of his employment so as to comply with its Award obligations in this regard must be regarded as a further indication of unfairness. Had that consultation occurred, Mr Marks would have been in a position where he could obtain further advice about his rights, including his workers compensation rights and it is possible that he could have explored possible redeployment options with Kookaburra.

[28] Thirdly, Kookaburra’s understanding of its rights and obligations pursuant to the workers compensation system was flawed such that it considered that it was unable to discuss with Mr Marks changes made to his job until he was cleared to return to work and that Kookaburra considered it was able to terminate his employment immediately he presented as able to return to work without giving him any notice of that situation.

[29] Each of these other matters are indicative of inherent unfairness.

Conclusion - harsh, unjust or unreasonable

[30] I have concluded that the termination of Mr Marks’ employment was not harsh in that it occurred for a valid reason. However, the manner in which that termination of employment was effected was unreasonable and Kookaburra’s failure to comply with its employment obligations toward Mr Marks was simply unjust. Accordingly, I have concluded that the termination of Mr Marks’ employment was unfair. In these circumstances s.390 enables me to consider a remedy.

Remedy

[31] The primary remedy is that of reinstatement. Mr Marks does not pursue reinstatement as he has subsequently obtained alternative employment. Given Mr Marks’ position and changes in the operations of Kookaburra at Murray Bridge, I do not consider that reinstatement is appropriate. The circumstances of the termination of his employment mean that I consider that an amount of compensation in lieu of reinstatement is appropriate. Section 392 sets out the factors which I am required to take into account in considering any amount of reinstatement. I have addressed these in the following terms.

[32] There is nothing to indicate that the amount of compensation being considered would affect the viability of the Kookaburra enterprise. Mr Marks was employed for some 17 months. I do not consider this to be a particularly long period of employment. At the time of the termination of Mr Marks’ employment he was in receipt of workers compensation income maintenance payments equating to 70% of his average weekly earnings. He was cleared to return to full duties. Had Mr Marks not been dismissed I would have expected him to receive his ordinary rate of pay whilst the consultation process relative to changes in the maintenance and fit out functions at Murray Bridge occurred. Whilst that process may not have taken very long, information about whether it may have identified redeployment opportunities is simply not available to me. I have concluded that, had he not been dismissed on 2 September 2014, Mr Marks was unlikely to have worked for more than a further four weeks. That four weeks estimate is consistent with normal obligations relative to the operation of the workers compensation system. I have noted that, during that time, Mr Marks may have disputed the proposed termination of his employment through the workers compensation system.

[33] I am satisfied that Mr Marks endeavoured to mitigate his losses and have noted that he has obtained alternative employment commencing on 3 November 2014. That employment is of a casual nature. It has generated income which is somewhat variable and, in overall terms, less than his income at Kookaburra. Mr Marks’ evidence was that, after the termination of his employment he continued to receive workers compensation income maintenance payments until he commenced employment on 3 November 2014. I have concluded that Mr Marks’ casual employment is likely to continue for the foreseeable future.

[34] In terms of other matters considered relevant, I have concluded that the provision of appropriate advice to Mr Marks about the basis for the termination of his employment should have given rise to recognition of his entitlement to redundancy pay. Accordingly, I have included that entitlement in the amount being ordered.

[35] I have also noted the extent to which it is possible that Kookaburra may have a penalty imposed upon it through the WorkCover system but do not consider this to be a factor relevant to the compensation payable to Mr Marks.

[36] In arriving at a conclusion in this matter I have applied the approach set out in Sprigg v Paul’s Licensed Festival Supermarkets 4. I have taken care to ensure that the application of this approach does not result in an amount of compensation payable to Mr Marks which would exceed his earnings were he to have remained in employment with Kookaburra. On that approach I have concluded that the shortfall in pay over the estimated four-week employment period amounts to a total of 120% of a week’s pay plus the four weeks redundancy pay. In this respect I have assessed Mr Marks’ salary as $1044.28 per week before tax. An Order (PR559494) giving effect to this decision will be issued.

Appearances:

L Marks on his own behalf.

R Daniels appearing for the respondent.

Hearing (Determinative Conference) details:

2014.

Adelaide:

December 18.

 1   Exhibit M1, para 18, 2nd and 3rd dot point

 2   Exhibit M1, para 18, 5th and 6th dot point

 3 (1995) 62 IR 371 at 373

 4   AIRC, Print R0235, (24 December 1998)

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