[2016] FWC 8097

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Lisa Widmer
v
The Kylie Pearce Family Trust T/A ABC Dentistry
(U2016/2844)

DEPUTY PRESIDENT ASBURY

BRISBANE, 22 DECEMBER 2016

Application for relief from unfair dismissal – genuine redundancy.

BACKGROUND

[1] Ms Lisa Widmer applies under s.394 of the Fair Work Act 2009 (the Act) for an unfair dismissal remedy arising from her dismissal from her role as Practice Manager at The Kylie Pearce Family Trust T/A ABC Dentistry (“ABC Dentistry”) where she was employed from 4 May 2012 until her dismissal took effect on 29 May 2016.

[2] In its form F3 Employer Response to Unfair Dismissal Application ABC Dentistry initially asserted that Ms Widmer was guilty of serious misconduct and that the dismissal was consistent with the Small Business Fair Dismissal Code (the Code). The material on the file indicates that notwithstanding the jurisdictional objection, ABC Dentistry, through its lawyer, agreed to attend a conciliation conference conducted by a Fair Work Commission Conciliator. The Conciliator’s notes further indicate that the Principal of ABC Dentistry Dr Pearce had indicated an inability to attend but that during the conference her lawyer requested that the Conciliator attempt to connect her to the conference call. It is noted by the Conciliator that Dr Pearce refused to participate in the conciliation, raised her voice to the Conciliator and that her representative, after being given an opportunity to confer privately with Dr Pearce, requested that the conciliation be adjourned and relisted. A further conciliation conference was convened and the matter was not resolved.

[3] The matter was then listed for hearing in relation to the jurisdictional objection with respect to the Code and Directions for the parties to file and serve material were issued. The material filed on behalf of ABC Dentistry did not address the question of whether the dismissal was consistent with the Code, but rather asserted that the dismissal was a case of genuine redundancy. The employer, through its then representative Mr McIvor of Mullins Lawyers, later withdrew this jurisdictional objection and the associated misconduct allegations, claiming an administrative error in completing the Form F3.

[4] At the hearing ABC Dentistry sought and was refused permission to be legally represented. Permission was refused on the grounds that it would be unfair to Ms Widmer who is not legally qualified and was representing herself, particularly in light of advice from the lawyer seeking permission to represent ABC Dentistry that the Company would seek costs if its jurisdictional objection was upheld. I was also of the view that the matter was not sufficiently complex so that the Commission could be satisfied that it could be dealt with more efficiently if ABC Dentistry was granted permission to be represented by a lawyer.

THE ISSUES IN DISPUTE

[5] It is not in dispute that Ms Widmer’s application was made within the time required by s. 394(2) of the Act and that she is a person protected from unfair dismissal. ABC Dentistry is a small business employer, however as the dismissal is not for misconduct and is now not asserted to be consistent with the Code, it is not necessary to determine whether the dismissal was consistent with the Code.

[6] ABC Dentistry asserts that the dismissal is a genuine redundancy because the tasks previously performed by Ms Widmer have been redistributed to other employees including Dr Pearce and Ms Widmer’s role no longer exists. It is not in dispute that the Health Professionals and Support Services Award 2010 (the Award) applied to Ms Widmer’s employment. ABC Dental asserts that it complied with obligations in the Award to consult with Ms Widmer in relation to the redundancy. ABC Dentistry further contends that it was not reasonable in all the circumstances to redeploy Ms Widmer and that an offer to do so was withdrawn because of its unsustainable financial position. If the Commission finds that the dismissal is not a case of genuine redundancy in accordance with the meaning in s. 389 of the Act, ABC Dentistry submits in the alternative, that the dismissal of Ms Widmer is not unfair.

[7] Ms Widmer contends that her dismissal is not a case of genuine redundancy on the basis that the financial reasons relied on by ABC Dentistry are without foundation and that the work she performed continues to be performed by other staff, including a new employee, hired since Ms Widmer was dismissed. Ms Widmer also contends that ABC Dentistry did not comply with the consultation requirements in the Award and that the real reason for her dismissal is that Ms Widmer was taking sick leave or had sought maternity leave. Ms Widmer further contends that there was no consideration of redeployment and that given that she was pregnant at the time of her dismissal and would have been willing to negotiate a new employment contract, if proper consultation had taken place and redeployment opportunities considered, Ms Widmer would still be employed. Ms Widmer submits that her dismissal was unfair and seeks compensation on the basis that the employment relationship has broken down to the extent that reinstatement would not be appropriate.

[8] It is therefore necessary to consider whether Ms Widmer’s dismissal was a case of genuine redundancy within the meaning in s. 389 of the Act. If the dismissal is not a case of genuine redundancy within the meaning of that section it is then necessary to consider whether the dismissal was unfair, on the basis of the criteria in s. 387 of the Act.

LEGISLATION

Section 389 of the Act provides as follows:

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.

[9] The Explanatory Memorandum to the Fair Work Bill 2008 (“the Explanatory Memorandum”) provides some insight into the scope of meaning of a genuine redundancy, as contemplated under the Act.

Clause 389 – Meaning of genuine redundancy

1546. This clause sets out what will and will not constitute a genuine redundancy. If a dismissal is a genuine redundancy it will not be an unfair dismissal.

1547. Paragraph 389(1)(a) provides that a person’s dismissal will be a case of genuine redundancy if his or her job was no longer required to be performed by anyone because of changes in the operational requirements of the employer’s enterprise. Enterprise is defined in clause 12 to mean a business, activity, project or undertaking.

1548. The following are possible examples of a change in the operational requirements of an enterprise:

• a machine is now available to do the job performed by the employee;

• the employer’s business is experiencing a downturn and therefore the employer only needs three people to do a particular task or duty instead of five; or

• the employer is restructuring their business to improve efficiency and the tasks done by a particular employee are distributed between several other employees and therefore the person’s job no longer exists.

1549. It is intended that a dismissal will be a case of genuine redundancy even if the changes in the employer’s operational requirements relate only to a part of the employer’s enterprise, as this will still constitute a change to the employer’s enterprise.

1550. Paragraph 389(1)(b) provides that it will not be a case of genuine redundancy if an employer does not comply with any relevant obligation in a modern award or enterprise agreement to consult about the redundancy. This does not impose an absolute obligation on an employer to consult about the redundancy but requires the employer to fulfil obligations under an award or agreement if the dismissal is to be considered a genuine redundancy.

1551. Subclause 389(2) provides that a dismissal is not a case of genuine redundancy if it would have been reasonable in all the circumstances for the person to be redeployed within the employer’s enterprise, or within the enterprise of an associated entity of the employer (as defined in clause 12).

1552. There may be many reasons why it would not be reasonable for a person to be redeployed. For instance, the employer could be a small business employer where there is no opportunity for redeployment or there may be no positions available for which the employee has suitable qualifications or experience.

1553. Whether a dismissal is a genuine redundancy does not go to the process for selecting individual employees for redundancy. However, if the reason a person is selected for redundancy is one of the prohibited reasons covered by the general protections in Part 3-1 then the person will be able to bring an action under that Part in relation to the dismissal.

[10] In Ulan Coal Mines Limited v Honeysett and Others 1a Full Bench of the Commission observed in relation to s. 389 of the Act that an employee seeking a remedy for unfair dismissal cannot succeed if the dismissal was a case of genuine redundancy. If the dismissal is a case of genuine redundancy then the employer has a complete defence to such an application. While the Full Bench in that case was considering redeployment under s. 389(2)(b) of the Act the comments are generally applicable to all of the provisions in the section. The provisions in s. 389(1) and (2) place limitations on the employer’s capacity to mount the defence. It is axiomatic that the employer seeking to establish the defence must prove on the balance of probabilities that it no longer requires the job of the dismissed employee to be performed by anyone because of changes in the operational requirements of its enterprise. Further the defence is not available if:

the employer has not complied with any obligations in a modern award or enterprise agreement to consult about the redundancy; or

it would have been reasonable in all of the circumstances to redeploy the employee with the employer’s enterprise or an associated entity of the employer.

[11] It is possible that with respect to a dismissal the Commission may be satisfied that the employee’s job is redundant on the basis that the employer no longer requires the job of the dismissed employee to be performed by anyone because of changes in the operational requirements of its enterprise, but at the same time may not be satisfied that the obligations with respect to consultation or redeployment have been met. The fact that the obligations with respect to consultation or redeployment have not been met does not result in a finding that the dismissal is not a redundancy, but rather that it is not a genuine redundancy within the meaning in s. 389 of the Act, and with the result that the employer does not have a complete defence to an unfair dismissal application in relation to the dismissal resulting from the redundancy.

[12] It is also possible that the Commission may not be satisfied that the employer has hired someone else to perform the same or substantially the same job and has used the redundancy process to simply dismiss an employee for some other reason. Such a dismissal will also not be a genuine redundancy within the meaning in s. 389 of the Act. However, in determining whether a dismissal is because the employer no longer requires the job to be done by anyone due to restructuring, it is not appropriate for the Commission to place itself in the shoes of the employer and superimpose its own views, or those of a dismissed employee, on the conduct of or decisions made by an employer in restructuring its business. It is not open to the Commission to determine that restructuring is inappropriate simply because a dismissed employee is not happy with the outcome or because there may have been other alternatives to restructuring.

[13] The Commission’s role is to determine whether the job is no longer required to be performed by anyone including where the collection of duties and tasks that were previously performed by an employee in the job in question have been redistributed to other employees due to changes in the employer’s operational requirements, and then to determine whether or not the employer has met the requirements in s. 389 of the Act necessary to establish a defence against an unfair dismissal application.

[14] If the dismissal is not a genuine redundancy because it does not come within the meaning in s. 389, it is then necessary for the Commission to consider whether it was unfair by applying the criteria in s. 387 of the Act which are in the following terms and to decide:

(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.”

[15] The employer bears an onus of establishing that there was a valid reason for a dismissal.² A valid reason for dismissal is one that is “sound, defensible or well founded” and not “capricious, fanciful, spiteful or prejudiced.”³ While the employer bears the onus of establishing the validity of the reason for dismissal, the dismissed employee bears the onus of establishing that the dismissal was unfair.

[16] The matters in s.387 go to both substantive and procedural fairness and it is necessary to weigh each of those matters in any given case, and decide whether on balance, a dismissal is harsh, unjust or unreasonable. A dismissal may be:

Harsh - because of its consequences for the personal and economic situation of the employee, or because it is disproportionate to the gravity of the misconduct;

Unjust - because the employee was not guilty of the misconduct on which the employer acted; and/or

Unreasonable - because it was decided on inferences that could not reasonably have been drawn from the material before the employer.⁴

[17] It does not follow that a failure to meet obligations to consult with or consider redeployment of an employee will result in a finding that the dismissal was unfair when it is considered against the criteria in criteria in s. 387 of the Act. A dismissal on the basis that the person’s job is redundant may be for a valid reason, notwithstanding that the dismissal is not a case of genuine redundancy because the employer has not established a defence under s. 389 of the Act.

MODERN AWARD OBLIGATIONS TO CONSULT ABOUT REDUNDANCY

[18] As previously noted, it was not in dispute that the Health Professionals and Support Services Award 2010 applied to Ms Widmer’s employment. The obligation in the Award to consult about redundancy is found in clause 8.1 which is in the following terms:

8.1 Consultation regarding major workplace change

(a) Employer to notify

(i) Where an employer has made a definite decision to introduce major changes in production, program, organisation, 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.

(ii) 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.

(b) Employer to discuss change

(i) The employer must discuss with the employees affected and their representatives, if any, the introduction of the changes referred to in clause 8.1(a), 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.

(ii) 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 8.1(a).

(iii) 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.

EVIDENCE

[19] It is not in dispute that Ms Widmer commenced employment with ABC Dentistry on a casual basis in the position of receptionist, on or around 7 May 2012. In September 2012, Ms Widmer was promoted to the position of front desk manager and in July 2015 to the position of practice manager. At the time of her dismissal, Ms Widmer was working 76 hours per fortnight and her salary was $73,195.00 per annum. Dr Pearce, who gave evidence on behalf of ABC Dentistry, is the Owner/Dentist, responsible for the overall operation of the business as well as providing dental care to patients. Dr Pearce is a specialist paediatric dentist.

[20] According to Dr Pearce, ABC Dentistry employs a trainee part-time dental assistant who works 15 hours per week; a part-time dental assistant who works 24 hours a week; and a casual receptionist who works 15 hours a week. A casual dental therapist who worked 16-20 hours a week is no longer employed. As the only qualified specialist dentist, Dr Pearce is responsible for generating income for the business and if Dr Pearce is not available, the business will not generate revenue. Accordingly, the financial viability of the business is entirely dependent on Dr Pearce’s availability to attend patients on a regular basis.

[21] Dr Pearce operates her business through a dental company and a family trust. All fees for services are paid to the dental company. Only 60% of the income of the dental company is able to be transferred to the family trust. All costs of running the business are paid by the family trust including wages, rent and other costs. Dr Pearce had a practice of putting her own money into the family trust to ensure that it was ahead and had done this by increasing her personal overdraft.

[22] Dr Pearce states that as the Practice Manager, Ms Widmer was the highest paid administrative and support staff member. Since December 2015, the business has experienced a significant downturn in work as a result of a downturn in the economy and the fact that Dr Pearce’s availability to attend patients due to her seeking fertility treatment and giving birth to a child in September. Prior to the birth of her first child, Dr Pearce worked 3.5 days per week and this was reduced to two shorter days of five hours after the birth and four weeks of maternity leave. During March 2016, Dr Pearce took further time off to again undergo fertility treatment and was due to give birth to her second child in November 2016.

[23] Dr Pearce states that she was concerned about the financial viability of the business before the birth of her first child, as she was anticipating the need to have time off for the birth (by C-section) and the ensuing period and that prior to September 2015, she knew that the business may not be in a position to cover wages, rent and ancillary operating costs. Dr Pearce also states that by February 2016 she was aware that the business was not generating sufficient revenue and she was at risk of not being able to pay staff wages and running at a loss. Dr Pearce claimed, that upon her return to work in April Ms Widmer told her words to the effect that the business “was the worst she had ever seen it”. Dr Pearce states that she called several meetings in April to address these concerns and to focus on ways to reduce operating costs. She states that her investigations indicated that the practice was unable to fill the diary for the total number of hours that clinical staff were available, and that this suggested the problem was a downturn in dental attendance as opposed to the availability of dental staff.

[24] Dr Pearce said that over the weekend commencing 1 May 2016, she reviewed the financial position of the business and it became clear that she needed to reduce operating costs. Dr Pearce received advice from her bookkeeper that: there was no money in the bank; staff wages could not be paid if the business did not reduce its costs; and if wages were not cut immediately the business would not be able to function. Dr Pearce tendered an email exchange with her accountant over the period 1 – 2 May 2016 in which there was a discussion about the fact that wages were 46.14% of gross service fees and could not be supported; Ms Widmer’s salary of $80,000 per annum was unsustainable and that Dr Pearce had decided to give Ms Widmer one months’ notice that her contract would end and that she would be employed on her old salary on a part-time basis for 24 hours per week. 5 Dr Pearce said that she decided that Ms Widmer’s position was the logical one to remove in the restructure of her business as Ms Widmer was the highest paid administrative employee.

[25] On 3 May 2016 Dr Pearce and Ms Widmer had a meeting. Dr Pearce’s evidence is that the purpose of the meeting was to discuss the proposal to make Ms Widmer’s position of Practice Manager redundant, but that this meeting “coincided” with a previously arranged meeting with Ms Widmer relating to a performance appraisal. Dr Pearce said that during the meeting she explained the severe financial duress the business was under and that she had decided to restructure the business by making Ms Widmer’s position redundant. Dr Pearce claims she asked Ms Widmer’s opinion as to the proposal but Ms Widmer was unable to provide any reasons or factors to dissuade her that the redundancy was the best course of action and Dr Pearce decided that she would proceed to make Ms Widmer’s position redundant. Dr Pearce said that Ms Widmer queried why her position had been selected for redundancy and was told that her salary was the highest administrative salary and that Dr Pearce could undertake the role of practice manager but could not assume the roles of nursing/dental assistants.

[26] Dr Peace states that she then offered Ms Widmer redeployment to a new position of Senior Administrator working two days per-week. Dr Pearce stated that Ms Widmer expressed her concerns about the reduction of her hours from four days on a salaried position to two days at an hourly rate and was not in a position to respond to the offer at the meeting. Dr Pearce said that she then provided Ms Widmer with a letter outlining that her role had been made redundant and setting out the offer of the Senior Administrator position. Dr Pearce said that she gave the letter to Ms Widmer on 3 May 2016 notwithstanding that the letter was dated 2 May. The letter raises a number of concerns in relation to Ms Widmer’s performance and asserts that she had been counselled about the requirement for management of the practice to be kept at a high standard. The letter also states that on 3 May 2016 Ms Widmer has been provided with a detailed performance review and an outline of the problems.

[27] The letter goes on to state that the financial position of the practice is dire and essentially that Ms Widmer has contributed to the financial difficulties by failing to consider matters such as staffing requirements and ordering needs. It is further stated that Ms Widmer’s current contract is no longer tenable from a financial position and that there has been no improvement in productivity or impact on the business income that could justify the increase in salary from Ms Widmer’s previous salary. The letter concludes with the following:

“Your current contract will be ending on the 29 May 2016. The leave that you have accrued thus far will be transferred to time in lieu as your current pay rate does not include leave loading. A new contract will be offered to you, of the previous rate of pay, $29 per hour, to do senior administration work. This previous rate of pay is greater than the highest pay rate on the medical support services award (Level 9 pay point 3 is $26.93), and more than adequate for the jobs that are expected. You will be expected to carry the senior administrative role, which will include some administration as directed.

Your efforts must be acknowledged, however it is not viable to continue this contract as the job is not being done to the level required, and the practice cannot continue to afford your wage.

On the new contract you will be engaged on a permanent part-time basis with a minimum of 24 hours per week. You will accrue leave, and you will be allowed to take maternity leave as previously discussed. You can bring your baby to work and have it cared for (only if there is a person to care there already, and they are happy to do so). If there is nobody present to care for your child, then you will need to arrange other care on those days. I will not be providing additional care.”

[28] On or around 5 May 2016 Dr Pearce had a meeting with her accountant to review the Company’s financials and was advised that the business operating costs were still too high; it was operating at a loss; and that if costs were not further reduced the financial position of the business would be untenable. The accountant informed Dr Pearce that the business could not afford the Senior Administration Officer wage. According to Dr Pearce, this caused her to make the difficult decision to withdraw the offer of alternative part-time employment she had made to Ms Widmer on the basis that the business could not sustain Ms Widmer’s wage. Dr Pearce also said that the situation was exacerbated by the need for Dr Pearce to take a second period of maternity leave for the birth of her second child due in November 2016.

[29] Accordingly, Dr Pearce issued a further letter to Ms Widmer on 10 May 2016, advising that a further investigation of the financial position of ABC Dentistry had been undertaken; the offer of a position as Senior Administration Officer was withdrawn and the original redundancy notification would stand. Further the letter advised that Ms Widmer’s employment would cease on 29 May 2016. Dr Pearce said that this decision coincided with a decision to cease all radio advertising for the practice on 9 May and to increase the business overdraft further to cover the costs of wages and other operating costs. Documentation from a broadcasting organisation and a bank officer was tendered to support these assertions.

[30] Ms Widmer was absent on sick leave from 3 May until her employment ended on 29 May 2016 and was paid sick leave for that period. Dr Pearce maintained that she met the consultation requirements in the Award but in the event that she was required to undertake a longer period of consultation Ms Widmer’s employment would only have been extended by one to two days at the most and further consultation would not have alleviated the need to make Ms Widmer’s position redundant.

[31] Dr Pearce also said that at the point she informed Ms Widmer that her position was redundant, there were issues with her work performance. These were said to be inability to set rosters properly and that Ms Widmer unilaterally approved increases in wages for staff without seeking written approval or varying the relevant contracts of employment. According to Dr Pearce these issues did not play any part in the decision to make Ms Widmer’s position redundant. After Ms Widmer was informed that her employment would cease and while she was absent on sick leave, an issue arose in relation to a purchase on ABC Dentistry’s eBay account of goods for Ms Widmer’s personal use. A letter was sent to Ms Widmer dated 6 May 2016 in relation to this matter, alleging serious misconduct and requiring Ms Widmer to attend a meeting at a mutually convenient time to discuss the allegations. Dr Pearce accepted at the hearing that this did not constitute misconduct and that Ms Widmer had paid for the goods purchased with her own funds.

[32] In relation to Ms Widmer’s evidence that she had expressed annoyance at Ms Widmer’s proposal to take maternity leave, Dr Pearce said that she had never discussed maternity leave with Ms Widmer and maintained that she had been supportive of Ms Widmer when she announced her pregnancy. In response to the proposition put to her in cross-examination that this was at odds with the reference to Ms Widmer taking maternity leave in the letter of 2 May 2015, Dr Pearce said that Ms Widmer had not made a formal application for maternity leave but had expressed a wish to take four months of maternity leave. Dr Pearce said that the reference to maternity leave in the letter was to confirm that maternity leave would be granted.

[33] Dr Pearce was cross-examined at length by Ms Widmer. In relation to her financial position, Dr Pearce agreed that she went away on two occasions and underwent fertility treatment notwithstanding the dire circumstances claimed by her. Dr Pearce rejected the proposition that she should have “cut her holiday short” after she had undertaken a week of fertility treatment and said that the treatment took longer than a week. Dr Pearce also maintained that when she increased wages two weeks before deciding to dismiss Ms Widmer on the grounds of redundancy, she was not aware of the financial circumstances of the business. In response to the proposition that as a Director of ABC Dentistry she should stay on top of its financial position, Dr Pearce said that she had not been provided with timely advice by her accountant that while she had concerns for some time about the financial position of the business, she did not realise the full extent of that position until the weekend of 1 May 2015 when she had discussions with her accountant.

[34] In relation to redeployment, Dr Pearce maintained that other employees on lower salaries could do administrative tasks which had been undertaken by Ms Widmer. Dr Pearce also agreed with the proposition that along with being the sole paediatric specialist, raising a child and being pregnant with her second child, that she could do all of Ms Widmer’s role plus bookkeeping in three days a week. In relation to redeployment, Dr Pearce said that there is a casual receptionist who works two or three days a week as required. Dr Pearce maintained that she had not hired any additional staff to undertake Ms Widmer’s role.

[35] During cross-examination of Dr Pearce, Ms Widmer raised the issue of redeployment to the role of a dental assistant and asserted that she was training to undertake that role. This was raised in Ms Widmer’s submissions where she asserted that she had the skills necessary to work as a receptionist and a dental assistant but Ms Widmer did not give any evidence of the training she had undertaken to perform the role of a dental assistant. Dr Pearce said under cross-examination about this matter that:

She had employed a part-time trainee dental assistant after Ms Widmer ceased employment to replace another employee in that role who had resigned and the trainee is working less hours than former employee;

Ms Widmer is not trained in the full range of tasks undertaken by a dental assistant and is capable only of assisting in the event of an emergent situation where a trained dental assistant is not available;

While it is not necessary under the Award for a dental assistant to have a formal qualification, if Ms Widmer undertook a TAFE course to obtain such qualification she would be required to pay full fees of approximately $5,000; and

The wages for the dental assistant position is $20 per hour and Ms Widmer was not suited to the position on a permanent basis.

[36] Dr Pearce also said that she had paid for Ms Widmer to undertake a practice management course and believed that Ms Widmer was more suited to an administrative position than to a position as a dental assistant. In response to the proposition that as Ms Widmer was 26 weeks pregnant when she was dismissed and might have considered some other role instead of being unemployed, Dr Pearce had the following exchange with Ms Widmer during cross-examination:

“---You expressed that to me in our meeting.

What did I express to you in the meeting?---That you weren’t happy that the position - the hours would reduce in the role and that I was taking responsibilities away from you.

I expressed that about the senior administrator position, that it was a shock to me, because I had no warning that this was coming and then you are handing me a new contract where my salary would basically be cut in half as well as my hours and my title. So, yes, of course I had questions about this new role, but you didn’t ask me if I - anything about being a dental assistant or - yes, you didn’t consult with me about a new position instead. I was left unemployed? -There’s no capacity to pay you on that salary as a dental assistant. There’s no capacity for us to pay that salary at all within the practice.

But I wasn’t asking for that salary? -But you’ve just stated that you’re not happy that your role got reduced at a fair price.

No, I was - I asked you a few questions about the new role, because it was such a - it was a demotion. It was such a significant reduction in hours and title, that I obviously had questions about it as to why this came all of a sudden? -It was a reduction to your previous role that you’d just changed in August the year before. Less than 12 months in the position.

Okay. I’m just saying that it was a shock at the time in that you didn’t consult with me about any other positions within the company. You just handed me the new contract and asked me to sign it? -I didn’t ask you to sign it. I gave it to you for consideration. There was no - nobody asked you to sign it then and there.” 6

[37] Ms Widmer did not cross-examine Dr Pearce about the possibility of redeployment to the position of receptionist. In cross-examination, Ms Widmer put to Dr Pearce that when Ms Widmer was employed with ABC Dentistry the hours worked by the casual receptionist were in the order of 28 per week. Dr Pearce said that the casual receptionist had been rostered for more hours than required and maintained that the receptionist was now working two to three days per week for a total of 15 hours depending on the number of days in each week that Dr Pearce was working.

[38] In relation to her alleged failure to consult Ms Widmer about the redundancy, Dr Pearce said that Ms Widmer was on sick leave and she was advised by an Association which provides Human Resource Management Services to dental practices that she should not contact Ms Widmer during a period of sick leave. In response to the proposition that she had made up her mind to dismiss Ms Widmer prior to the meeting on 2 May 2015, Dr Pearce said:

“Unfortunately when there is no money in the bank you have to make decisions. I’m sorry, I knew that something had to be done and we could no longer afford that - your wage anymore. There is no way that we could afford it with our financial situation that I drafted that. Had I known, you know, that I should have waited a few days or had access over a long weekend to more specific advice, then that may have changed slightly, but it’s not - it can’t change the fact that we can’t afford the wage and we still can’t afford the wage.” 7

[39] Ms Widmer’s evidence differed to that of Dr Pearce in several instances. Ms Widmer states that she became pregnant in December 2016 and informally advised Dr Pearce of her pregnancy in February 2016. Ms Widmer claims that the business was busy, based on the patient diary, in February 2016, before she and Dr Pearce both took a month’s leave. Ms Widmer stated that upon her return from leave in March 2016 the diary was no longer full and as a result the business generated less revenue in March 2016. Contrary to Dr Pearce’s evidence, Ms Widmer suggested that this was a result of patients preferring to see the specialist (Dr Pearce) who had been on leave, and as such patients had preferred to wait for her return, and this was not evidence of a downturn in business as such but rather a deferral of appointments.

[40] Ms Widmer stated that Dr Pearce returned to work in April 2016 and on 13 April 2016 Dr Pearce advised her by SMS to increase certain staff member’s hourly pay-rates, by up to $3 per-hour in the case of one employee, $2 an hour for another employee and an unknown increase to a third employee. Ms Widmer presented the Commission with photographic evidence of these instructions from Dr Pearce in the form of a screen shot of a text message on her mobile telephone. Ms Widmer also states that at this time, Dr Pearce was pleased with how busy the business was and commended the staff’s work collectively.

[41] Ms Widmer claimed that the business had been renting an adjoining office suite since late 2015, costing $2500 per-month and that Dr Pearce was planning on renovating to allow for (personal) childcare and additional workspace. Ms Widmer also asserted that the Commission should give consideration to the fact that in the past 18 months Dr Pearce has travelled overseas on two occasions to undergo fertility treatment and had a holiday in Vietnam and infer that the business’ financial position is not as dire as Dr Pearce claims. Ms Widmer also said that when Dr Pearce returned to work after having her baby, she chose to have a minimum of two staff working on the front desk to care for her baby, including a babysitter, which increased staff wages. Ms Widmer also asserted that the workload of ABC Dentistry could not be managed with a receptionist working only 15 hours per week and doubted Dr Pearce’s evidence in this regard.

[42] Ms Widmer states that on 18 April 2016 she requested a meeting to discuss her approaching maternity leave with Dr Pearce, and indicated that she would like to take four months leave from August 2016 to January 2017. Ms Widmer claims that Dr Pearce responded with words to the effect that the business would not be able to adequately replace her and trying to do so would be a “nightmare”. Ms Widmer further states that on 29 April 2016 Dr Pearce emailed her in relation to a performance review and requested that she complete a self-appraisal form and attend a meeting on 3 May 2016 to discuss her performance in her role. This email was tendered to the Commission and makes no mention of impending redundancy or issues with the business.

[43] According to Ms Widmer, at the meeting of 3 May 2016, Dr Pearce requested that she provide her with the previously requested self-appraisal, in accordance with the 29 April 2016 request. Ms Widmer claims that Dr Pearce then criticised her performance in the role, her self-appraisal, and then explained that the employer could not afford the wages of the team. Ms Widmer states that Dr Pearce then provided her with the Termination Letter and the New Contract, dated 2 May 2016.

[44] Ms Widmer also states that the meeting on 3 May was the first occasion at which any issues with the financial performance of ABC Dentistry were raised with her and that the immediate expectation of Dr Pearce that Ms Widmer respond to a significant workplace change cannot be considered an appropriate level of consultation, particularly when the meeting was “fuelled with negativity and confrontation”. Ms Widmer said that she left the meeting feeling anxious and distressed and after consulting her doctor, took sick leave for the period from 4 May to 27 May 2016. While Ms Widmer was on sick leave she received an SMS message from Dr Pearce stating that it was not acceptable for her to email medical certificates and that Dr Pearce was disappointed with her attitude.

[45] Ms Widmer asserts that Dr Pearce decided to revoke the offer of redeployment due in part to Ms Widmer taking sick leave. Ms Widmer further asserts that while she was on sick leave, Dr Pearce made no attempt to contact her to apologise for her conduct in the meeting or to schedule any further meetings about the new employment contract. On 10 May 2016 Ms Widmer was advised by email that the new employment contract was withdrawn and that her position was redundant.

[46] Further, Ms Widmer stated that after her employment was terminated, she was informed that Dr Pearce had hired a new dental assistant and trained the current dental assistants to take on reception work. Ms Widmer asserts that since a large portion of her work involved receptionist duties as well as relief work as a dental assistant, there was an opportunity to redeploy her within the business.

[47] Ms Widmer obtained alternative employment in July 2016 and was working on a casual basis for up to 10 hours per week until two weeks before she gave birth to her child on 6 September. Ms Widmer will return to that employment after Christmas and plans to increase her hours to full time employment. In response to a question from the Commission, Ms Widmer said that the possibility of her accepting a part time position as a receptionist or dental assistant would have been high at the time she was made redundant. Ms Widmer also said she did not think it would be easy to get further employment given that she was pregnant and may have wanted to reduce her hours. Later in her evidence Ms Widmer said, that she had a healthy pregnancy and would have worked up until 38 hours per week up until two weeks before she gave birth to her child.

[48] Ms Widmer agreed that bookings were down when she and Dr Pearce returned from leave in April 2016. In response to the proposition put to her in cross-examination that the business would have suffered a further downturn if Dr Pearce took more time off later in the year to have another baby, Ms Widmer said that Dr Pearce could have hired another dentist to work in her absence. Ms Widmer said that she was not aware of the difficulty faced by Dr Pearce in finding a locum to undertake paediatric dentistry. Ms Widmer rejected the assertions that she was aware of the financial position of ABC Dentistry. Ms Widmer also maintained that she was told at the meeting on 3 May 2016 that the business could not afford to pay her salary because she was not performing at the required level. Ms Widmer rejected the proposition that she was asked at the meeting about whether there was an alternative to making her position redundant but agreed that she had suggested that a dental therapist should be made redundant because he was not generating very much income for the practice.

[49] In response to the proposition that she had been offered redeployment, Ms Widmer had the following exchange with Dr Pearce during cross-examination:

“Because the severity of our financial situation was so poor that I needed to make decisions and that was clear in the correspondence from the bookkeeper. It’s not a decision that I would make lightly on any day of when you have to try and correct a financial situation that it doesn’t look like it’s very easy to get out of. Is it true that I excused you from your work for a period to gather composure before returning to the workplace? -Yes.

So do you agree that I offered you redeployment as a senior administration officer? -I didn’t take it as an offer of redeployment. I thought it was more a termination letter because it was such a significant reduction in wages. There was no consulting with me about an alternate employment. You didn’t ask me - okay, you didn’t speak to me about it. You could have said, “Lisa, would you be willing to take on a role as a dental assistant, do some administration, et cetera?” You didn’t discuss it with me. You told me, “This is the new position, sign it.” So - - -

I’m just confused because earlier you said that you’re not happy with the $29 an hour, which was your contracted amount from August the previous year, is that correct? -I didn’t say I wasn’t unhappy with that wage. I’m only making $25 an hour how so there’s no reason to think that I wouldn’t consider a lower rate of pay.

But you were upset at the time in the meeting and you said you would only be offered 24 hours a week work. You questioned me specifically on this? -Because I was wondering where it came from - I had no idea that that meeting was about discussing my future employment. You told me it was to review my performance and then all of a sudden I’m expected to accept a position where there’s 24 hours a week. I didn’t say that I wouldn’t accept it. I was just querying as to why I could go from working over 76 hours a fortnight and why you were reducing my hours to 24 hours.” 8

[50] Ms Widmer also said that she did not recall Dr Pearce purchasing maternity uniforms for her and maintained that while Dr Pearce was supportive from the outset of her pregnancy, Dr Pearce’s attitude changed when Ms Widmer said that she wanted to take maternity leave.

CONSIDERATION

Genuine redundancy

[51] I turn now to the question of whether Ms Widmer’s dismissal was a case of genuine redundancy within the meaning in s. 389 of the Act.

Was Ms Widmer’s job no longer required to be performed by anyone because of changes in operational requirements?

[52] I am satisfied and find that Ms Widmer’s job was no longer required to be performed by anyone because of changes in operational requirements of Dr Pearce’s business. I do not accept Ms Widmer’s submission that this is not the case because the financial reasons given by Dr Pearce are without foundation and that work that she performed is still being performed by other staff. A job may be redundant if the duties and tasks performed by a particular employee are distributed to other employees so that there is no job for that particular employee. The job will be redundant regardless of whether the change to the operations of the business is because of financial difficulties. It may be simply that an employer wishes to increase efficiency or implement cost savings by reducing the numbers of employees performing work.

[53] It is clear from the evidence that Dr Pearce decided she no longer required a full time practice manager and that she based this decision on a number of factors including that the salary for that position was higher than that of other employees in the practice and that the duties performed by Ms Widmer could be performed by other employees including Dr Pearce.

[54] Ms Widmer’s attempts to cast doubt on the financial position of Dr Pearce and her business by asserting that Dr Pearce would not have undergone fertility treatment and taken leave to do so or would not have gone on holidays if her position was so dire, are misconceived. Equally misconceived is Ms Widmer’s questioning of Dr Pearce’s decision to employ two people at the front desk, including a babysitter. A business owner who decides to restructure a business and remove a position, does not have to establish dire financial circumstances in order to make good that the dismissal of an employee in that position is a case of genuine redundancy. What is relevant is that the employer no longer requires the job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise. The motivation or rationale for those changes is not determinative.

[55] As previously noted, it is not appropriate for the Commission to put itself in Dr Pearce’s shoes and determine whether or how it would restructure her dental practice. It would be entirely inappropriate for the Commission to accept a submission that Dr Pearce should have refrained from undertaking fertility treatment overseas or from going on an overseas holiday and that the restructuring of her business is not genuine on that basis. Dr Pearce is a specialist dentist and the only person working in the business with paediatric dentistry qualifications. The business cannot operate successfully unless Dr Pearce is performing dental work. It is entirely understandable that Dr Pearce would have restructured her business around her child care needs and engaged a babysitter who could also perform other duties. If Dr Pearce chooses to rent an additional space adjacent to her practice so that her child can be cared for close by, then that is a matter for Dr Pearce. If Dr Pearce chooses to allocate funds for the rental of such a space rather than using them to employ a practice manager, then that is also a matter for Dr Pearce. Doubtless the ability to implement such arrangements is a benefit of long years of study to become a dentist and of owning and operating a dental practice.

[56] It is also the case that the Commission does not sit in judgement on the management skills or decisions of an employer determining to restructure its business. It is not to the point that Dr Pearce may have taken her eye off the finances of the business and made some decisions, such as an increase in wages, inconsistent with the financial circumstances she alleges. It is open for Dr Pearce to conclude that she does not require a practice manager and that she can undertake part of that role herself and redistribute other aspects of the role to other employees and to restructure her business accordingly. Provided that the restructuring is genuine and not a ruse to dismiss an employee or for the purposes of replacing that employee with a person to do the same or substantially the same job, the job will be redundant. Dr Peace is entitled to pursue such a restructuring regardless of the impact that her own management decisions may have had on the need for her to do so.

[57] There is no evidence that Dr Pearce employed any person in the position of practice manager after Ms Widmer’s dismissal. Rather the evidence establishes that duties previously performed by Ms Widmer were redistributed to remaining staff and that Dr Pearce took on some of those duties. Thus a collection of tasks, responsibilities and duties which comprised the job of practice manager were broken down and redistributed to other employees. Ms Widmer’s job was thereby rendered redundant.

Did Dr Pearce comply with obligations under the Award to consult with Ms Widmer about the redundancy?

[58] I do not accept that Dr Pearce met the obligations under the Award to consult with Ms Widmer about the redundancy. Those obligations, as is the case with the terms of modern awards, included that having made a definite decision to make Ms Widmer’s job redundant, Dr Pearce discuss the change and its likely effect and measures to avert or mitigate any adverse effects.

[59] In relation to award consultation obligations, Vice President Watson observed in Masawan v Escada Textilvertrieb T/A Escada 9 that:

“These provisions are of long standing, emanating from the Termination, Change and Redundancy Test Case in the early 1980s and from time to time have been reflected in legislation. The requirement to discuss proposed changes and consult about those changes has been held to require meaningful consultation and not merely an afterthought. Consultation after an irrevocable decision has been made has been held to not amount to meaningful consultation.” 10

[60] In the present case, Dr Pearce irrevocably decided that Ms Widmer’s job would be made redundant without consulting her. Ms Widmer attended a meeting thinking that it was to discuss a performance appraisal only to be greeted with the news that her job was no longer required and that she would be redeployed to a role with a significant reduction in working hours and wages. Furthermore the tone of the letter handed to Ms Widmer confirming those changes was confusing, suggesting as it did that the rationale for the changes was her work performance.

[61] Thereafter Ms Widmer went on a period of sick leave. While Ms Widmer was on sick leave, she was informed by letter that the offer to redeploy her to another position was withdrawn and that her employment would cease. There was no further discussion with Ms Widmer. Ms Widmer contends that had Dr Pearce consulted her in a civilised manner, she would have been open to negotiating a new employment contract due to her circumstances. Ms Widmer also asserted that in the past she had worked as the sole employee for ABC Dentistry taking on both dental assisting and receptionist roles within the practice.

[62] The fact that Ms Widmer was on sick leave when the decision to withdraw the offer of alternative employment was made did not excuse Dr Pearce from the obligation to consult Ms Widmer about her redundancy. Such consultation could have included the subject of whether Ms Widmer could have been redeployed into any of the other positions which remained or whether some combination of duties could have been agreed on so that Ms Widmer remained in employment on a different basis. For example, it may have been possible for agreement to be reached that Ms Widmer would undertake receptionist duties, which she had previously performed, and that those duties would be undertaken on a part-time rather than a casual basis.

[63] Dr Pearce knew that Ms Widmer was pregnant and that the decision to terminate her employment would have an additional impact due to the fact that this would make it more difficult for her to obtain alternative employment. If Dr Pearce did not consider this fact then I have no doubt it would have been brought to her attention by Ms Widmer, had Dr Pearce consulted with Ms Widmer about the dismissal as she was required by the Award to do. Unsurprisingly the manner in which Dr Pearce went about informing Ms Widmer of the proposed redeployment caused her distress and in such an environment, meaningful consultation did not occur. The decision to withdraw the offer of redeployment was not discussed with Ms Widmer at all.

[64] Dr Pearce’s discussions with Ms Widmer about her redundancy fell well short of the obligations under the Award. There could and should have been consultation before Ms Widmer was advised that she was to be redeployed to a position with less hours and a significantly reduced wage rate and further consultation before that offer was withdrawn. It follows that on this basis Ms Widmer’s dismissal was not a case of genuine redundancy.

Was it reasonable in all of the circumstances for Ms Widmer to be redeployed within ABC Dentistry?

[65] Given my finding about the failure of Dr Pearce to meet consultation obligations in the Award, it is not necessary to make a finding about redeployment. However I have considered this matter because it is relevant to the merits of Ms Widmer’s application which it will be necessary to consider given that Ms Widmer’s dismissal was not a case of genuine redundancy.

[66] Section 389(2) of the Act requires consideration of whether on an objective basis, it would have been reasonable in all of the circumstances to redeploy an employee within the employer’s business or a related business. The term “redeploy” is given its ordinary meaning – to move a worker from one activity to another or to transfer to another job, task or function. 11 The Explanatory Memorandum states that reasons why redeployment may not be reasonable include that the employer may be a small business where there is no opportunity for redeployment or there are no positions available for which the employee has qualifications or experience. It is also clear that the question of whether it would have been reasonable to redeploy an employee must be considered on the basis of the factual circumstances which existed at the time the decision not to redeploy was made. While some forward examination of circumstances past the point an employee is dismissed might be required, the exercise of considering whether redeployment would have been reasonable does not involve consideration of the facts at the point the Commission is deciding that question.

[67] In the present case, the significant deterioration in the relationship between Dr Pearce and Ms Widmer evidenced in the hearing of this matter, is not relevant to the question of whether it would have been reasonable for Dr Pearce to redeploy Ms Widmer to some other position at the point the decision to make Ms Widmer’s job redundant was taken.

[68] ABC Dentistry is a small business and at the point the decision was made to make Ms Widmer’s job redundant, the capacity for Dr Pearce to redeploy her was limited. Ms Widmer was employed as practice manager. The decision of Dr Pearce was that this job was no longer required and the duties associated with the job would be redistributed. The jobs that remained in the practice after the decision to make Ms Widmer’s job redundant were paediatric dentist, dental technician, dental assistant and receptionist.

[69] The role of paediatric dentist is filled by Dr Pearce and Ms Widmer is not qualified to undertake that role. Ms Widmer was not qualified to undertake the role of dental technician and in any event that role no longer exists. I do not accept that it would have been reasonable to redeploy Ms Widmer into the role of dental assistant. Ms Widmer was not qualified to carry out that role other than on a limited basis. She had done so only in the emergent situations where there were no other persons available to undertake the dental assistant role. Ms Widmer’s area of expertise was practice management and I accept Dr Pearce’s evidence that she would not have been suited to the role of dental assistant and lacked the necessary skills. Furthermore, the dental assistant roles are part time and the rates paid to those employees are significantly less than the rate paid to Ms Widmer.

[70] It is also the case that the roles of dental assistant are filled by existing employees employed on a part-time basis and at the time that Ms Widmer was dismissed, there was no position as a dental assistant available. I do not accept that it would have been reasonable for Dr Pearce to effectively dismiss one or both of her part-time dental assistants in order to make a position available into which Ms Widmer could be redeployed. Accordingly, I am satisfied that it would not have been reasonable to redeploy Ms Widmer into a position as a dental assistant.

[71] The issue of whether it would have been reasonable to redeploy Ms Widmer into a position as receptionist is not clear cut. The receptionist position is a casual position. There is no evidence about who holds the position or how long that person has held the position. There is no evidence as to why that position is a casual position and whether there would be any operational barriers to the position being filled on a part-time rather than a casual basis. As the applicant in the jurisdictional objection, Dr Pearce bears the onus of establishing the basis upon which it is said that it would not have been reasonable to redeploy Ms Widmer to some other position in her business.

[72] Ms Widmer was previously employed by Dr Pearce as a receptionist and asserts that she could have undertaken that position had appropriate consultation occurred. Dr Pearce has provided no evidence to counter that assertion. Accordingly, on the balance of probabilities, I am unable to be satisfied that it would not have been reasonable to redeploy Ms Widmer into a position as receptionist. I accept that Ms Widmer was employed on a weekly basis and to have redeployed her into a casual position would have been a substantial change to her employment which would have brought it to an end. However, given the lack of consultation about the redundancy and alternatives to ending Ms Widmer’s employment, I am unable to be satisfied that it would not have been reasonable to redeploy Ms Widmer into the position of receptionist on a part-time basis rather than a casual basis. Accordingly, the jurisdictional objection advanced by ABC Dentistry also fails on this ground.

Unfair dismissal

[73] Given my findings in relation the jurisdictional objection it is necessary to consider whether Ms Widmer’s dismissal was unfair, by reference to the criteria in s. 387 of the Act. Notwithstanding what was set out in the Form F3 Employer Response to Unfair Dismissal Application, Ms Widmer was not dismissed for misconduct and the Small Business Fair Dismissal Code is not relevant to her application. I turn now to consideration of the criteria in s. 387 of the Act.

[74] The reason for Ms Widmer’s dismissal was not related to her capacity or conduct and s. 387(a) of the Act is not relevant to the question of whether her dismissal was unfair. Ms Widmer was dismissed as a consequence of Dr Pearce deciding to restructure her business by removing the position of practice manager and redistributing the duties to other employees including herself and because Dr Pearce decided that there was no other position into which Ms Widmer could be redeployed.

[75] Given that Ms Widmer was not dismissed on the basis of her capacity or conduct the criterion in s. 387(b) in relation to notification of the reason for dismissal is also not relevant. In any event I am satisfied that Ms Widmer was notified of the reason for her dismissal. Regardless of the confusing letter given to Ms Widmer on 3 May 2016, the letter of 10 May 2016 clearly states that Ms Widmer’s position is redundant and that the offer of an alternative part-time position is withdrawn and that her employment will cease on 29 May 2016.

[76] In relation to ss. 387(c) and (e) of the Act, as Ms Widmer was not dismissed on the basis of her capacity or conduct it is not necessary to consider whether she had been given an opportunity to respond to allegations or had been warned about these matters. There is no evidence that Ms Widmer requested a support person in discussions about her dismissal and it does not appear that there were any discussions other than the meeting on 3 May 2016. In relation to ss. 387(f) and (g), ABC Dentistry is a small business and does not employ dedicated human resource management specialists. Dr Pearce accessed a helpline operated by an association which provides support to dental practices. However in my view, the manner in which Dr Pearce dealt with Ms Widmer’s dismissal was impacted by the size of her business and the fact that the human resource management specialists to whom she had access could only have provided limited assistance by way of a helpline.

[77] There are a number of other considerations which in my view are relevant to the consideration of whether Ms Widmer’s dismissal was unfair. For the reasons set out above, Ms Widmer’s dismissal was due to redundancy. Ms Widmer’s job was no longer required to be performed by anyone due to operational changes. Dr Pearce was entitled to make the decision to restructure her operations and the decision was not unreasonable.

[78] The failure by Dr Pearce to consult Ms Widmer in accordance with the obligations under the Award is a serious defect in the dismissal procedure. The adverse impact of Ms Widmer’s dismissal was exacerbated by the fact of her pregnancy and the increased likelihood that she would be unable to obtain other employment because of the fact of her pregnancy. It is also the case that the manner in which Dr Pearce went about effecting the dismissal left much to be desired.

[79] The letter handed to Ms Widmer on 3 May 2016 is both confusing and contradictory. On the one hand the letter raises issues with Ms Widmer’s work performance and on the other hand it informs her that her contract will end on 29 May 2016 because the practice can no longer sustain her wage and offers her an alternative position. The letter and the information in it came out of left field in circumstances where Ms Widmer believed that she was attending a meeting for the purposes of a performance review process, and where there is no evidence that any issues had ever been raised with Ms Widmer about her work performance. The offer of alternative employment was withdrawn without any further discussion and Ms Widmer was informed of this by letter while she was absent from the workplace on sick leave. Further, the notice that Ms Widmer should have received on termination of her employment was effectively absorbed into her sick leave payments.

[80] It was not reasonable for Dr Pearce to effect the dismissal in this manner. I do not accept that Dr Pearce reasonably believed that she should not have a discussion with Ms Widmer about her dismissal because Ms Widmer was absent on sick leave. Dr Pearce had no compunction about sending a text message to Ms Widmer chastising her about emailing medical certificates and a letter accusing Ms Widmer of serious misconduct while Ms Widmer was absent on sick leave. In my view, Dr Pearce could and should have waited for Ms Widmer to return to work in order to have a discussion with her about the circumstances which led her to withdraw the offer of an alternative position and before effecting the dismissal.

[81] On balance, these factors render the dismissal of Ms Widmer unfair. The dismissal was harsh because of its consequences for Ms Widmer given her personal circumstances and because the manner in which the dismissal was effected denied Ms Widmer an important right to be consulted. While consultation may not have changed the outcome, it is an important right and Ms Widmer was denied any opportunity to discuss ways in which the loss of a full time position could be mitigated. Further, Ms Widmer was not paid notice termination of her employment in circumstances where she was absent on sick leave.

Remedy

[82] Given that I have found that Ms Widmer’s dismissal was unfair, it is necessary to consider the question of remedy. As required by s.390 of the Act, I am satisfied that Ms Widmer was protected from unfair dismissal and that she has been unfairly dismissed. I am also of the view that Ms Widmer should have a remedy in respect of her unfair dismissal. Ms Widmer did not seek reinstatement. In my view reinstatement is not appropriate. I have reached this conclusion because the position of Practice Manager held by Ms Widmer is no longer available as the business has been restructured. It was also obvious in the hearing of this matter that the relationship between Ms Widmer and Dr Pearce is acrimonious and could not be re-established.
[83] I have made the necessary findings that are prerequisite to awarding compensation. In relation to the assessment of compensation, s. 392 of the Act provides as follows:

“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.

(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.”

[84] The approach to the calculation of compensation is set out in a decision of a Full Bench of the Australian Industrial Relations Commission in Sprigg v Paul’s Licensed Festival Supermarket. 12 That approach, with some refinement, has subsequently been endorsed and adopted by Full Benches of the Commission in Bowden v Ottrey Homes Cobram and District Retirement Villages inc T/A Ottrey;13 Jetstar Airways Pty Ltd v Neeteson-Lemkes14and McCulloch v Calvary Health Care (McCulloch).15

[85] In McCulloch¸ the Full Bench considered, in some detail, the question of how a contingency discount should be applied to the calculation of the remuneration the dismissed person would have received, or would have been likely to receive, if the person had not been dismissed. The Full Bench pointed out in McCulloch that a deduction for contingencies is applied to prospective losses, or losses occasioned after the date of the hearing. The Full Bench also noted that at the time of the hearing any such impact on the earning capacity of the dismissed person between the date of dismissal and hearing will be known, and a finding can be made on the basis of whether the dismissed person’s earning capacity has in fact been affected during the relevant period.

[86] I turn now to the particular criteria I am required to consider in deciding the amount of compensation to be awarded to Ms Widmer for her unfair dismissal.

The effect of the order on the viability of ABC Dentistry – s. 392(2)(a)

[87] Dr Pearce gave evidence about dire financial circumstances facing the business. As Ms Widmer points out, Dr Pearce did not provide any evidence of those circumstances in the form of bank statements or other financial records. I do not think that the quantum of compensation I intend to order will have an effect on the viability of ABC Dentistry to the extent that Ms Widmer’s right to remedy for her unfair dismissal is outweighed.

Length of Ms Widmer’s service – s. 392(2)(b)

[88] Ms Widmer held the position of practice manager from July 2015 and prior to that held a weekly position as front desk manager from September 2012. Ms Widmer had a total period of weekly employment of three years and eight months and a further period of casual employment of some four months.

Remuneration Ms Widmer would have or would likely have received – s. 392(2)(c)

[89] I do not accept that Ms Widmer would have remained in employment for any significant period of time. Ms Widmer’s job as practice manager was redundant and the only possible position into which she could have been redeployed was as a part-time receptionist. Ms Widmer’s assertion, that she would have considered such a position, had it been offered to her, is not convincing. Such a position would have been a retrograde step for Ms Widmer.

[90] I have serious doubts about how consultation between Dr Pearce and Ms Widmer would have played out, given the attitude displayed by Ms Widmer in the hearing of her application. Ms Widmer went to great lengths in the hearing to dispute the validity of the decision to make her position redundant. While I accept that Ms Widmer does dispute this decision, it was completely inappropriate for Ms Widmer to call into question Dr Pearce’s personal and business choices in the manner that Ms Widmer did.

[91] The manner in which Ms Widmer conducted her cross-examination of Dr Pearce leaves me in no doubt that any attempt by Dr Pearce to discuss the redundancy with Ms Widmer would have ended in acrimony and I have real doubts that Ms Widmer would have accepted a position as a part-time receptionist notwithstanding Ms Widmer’s statement that a “civilised” consultation process may have achieved this outcome.

[92] Proper consultation could have been conducted in a four week period as is reflected in the letter of 3 May 2015 which informed Ms Widmer that her contract would end on 29 May 2015. I am satisfied that had proper consultation taken place, Ms Widmer’s employment would have continued for a further four week period beyond the conclusion of her sick leave.

[93] Based on the payslip tendered by Ms Widmer, in a further four week period, Ms McInnes would have earned an amount of $5,630 and been paid superannuation contributions of $534.84.

Ms Widmer’s efforts to mitigate loss – s. 392(2)(d)

[94] I am satisfied that Ms Widmer made reasonable efforts to mitigate her loss. At the point she was dismissed, Ms Widmer was 26 weeks pregnant and could only have worked for a further period of 12 weeks given her intention to cease working two weeks before the expected birth of her child. These circumstances would have been an impediment to Ms Widmer finding alternative employment and the fact that she succeeded evidences that she took reasonable steps to obtain such employment.

The amount of any remuneration earned since dismissal – s. 392(2)(e)

[95] On termination of her employment Ms Widmer did not receive any payment in lieu of notice and notice was subsumed into a period of sick leave. I make no deduction for the sick leave that was paid to Ms Widmer. Given that Ms Widmer was a full time weekly employee when employed by ABC Dentistry and that the casual employment Ms Widmer obtained after her dismissal commenced after the time frame I have used to assess compensation, I do not propose to make any deduction for the earnings from that employment.

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

[96] Given the period of time I have used as the basis for the calculation of compensation does not extend to the point at which the Order for compensation is made, this factor is not relevant in the present case.

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

[97] I consider it relevant that Ms Widmer was 26 weeks pregnant when she was dismissed and that the loss of her employment, particularly at the time it occurred, caused her financial difficulty and also meant that she could not access maternity leave.

Deduction for misconduct

[98] Ms Widmer did not engage in misconduct and I make no deduction on that basis.

CONCLUSION

[99] I conclude as follows:

1. An order for the payment of compensation in the amount below would not affect the viability of ABC Dentistry’s business.

2. Ms Widmer had a relatively lengthy period of employment and no deduction from compensation should be made on this basis.

3. But for the dismissal, Ms Widmer would likely have earned an amount of $5,630 and been paid superannuation contributions of $534.84.

4. I make no deduction for contingencies.

5. I make no deduction for failing to mitigate loss.

6. I make no deduction for the sick leave paid to Ms Widmer before her dismissal took effect.

7. I make no deduction for income likely to be earned during the period between the making of my order and the actual compensation.

8. This leaves an amount of compensation of $5,630 plus superannuation contributions of $534.84;

9. I make no deduction in respect of misconduct.

10. The amount of compensation is less than the compensation cap calculated in accordance with s. 392(5) and s. 392(6).

[100] In all of the circumstances of this case I consider that it is appropriate that I make an Order for compensation. The Order will issue with this Decision and will require ABC Dentistry to pay compensation to Ms Widmer of a gross amount of $5,630 plus superannuation contributions of $534.84. The compensation ordered will be subject to the deduction of taxation as required by law. The order will require the payment to be made by no later than 11 January 2017.

DEPUTY PRESIDENT

Appearances:

Ms. L. Widmer appeared on her own behalf.

Dr. K. Pearce appeared on behalf of the Respondent.

Hearing details:

2016.

4 October.

1 [2010] FWAFB 7578.

2 Allied Express Transport Pty Ltd v Anderson (1998) 81 IR 410 at 5; Yew v ACI Glass Packaging Pty Ltd (1996) 71 IR 201 at 204.

3 Selverchandron v Peteron Plastics Pty Ltd (1995) 62 IR 371 at 373.

4 Stewart v University of Melbourne (U No 30073 of 1999 Print S2535) Per Ross VP citing Byrne v Australian Airlines (1995) 185 CLR 410 at 465-8 per McHugh and Gummow JJ.

5 Statement of Kylie Pearce 15 April 2016 Annexure KP-1

6 PN245 – PN250.

7 PN194.

8 PN491 – PN494.

9 [2011] FWA 4239.

10 [2011] FWA 4239 at [19] citing CFMEU v Newcastle Wallsend Coal Company Ltd (1998) IR 202.

11 Technical and Further Education Commission t/as TAFE NSW v Pykett (2014) 2040 IR 130; [2014] FWCFB 714 at [25].

12 (1998) 88 IR 21.

13 [2013] FWCFB 431.

14 [2014] FWCFB 8683.

15 [2015] FWCFB 2267.

Printed by authority of the Commonwealth Government Printer

Lisa Widmer v The Kylie Pearce Family Trust T/A ABC Dentistry