Loren Hahn v Aloe Vera Industries

[2019] FWC 1868

[2019] FWC 1868

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Loren Hahn
v
Aloe Vera Industries
(U2018/9635)

COMMISSIONER SIMPSON BRISBANE, 2 APRIL 2019

Application for an unfair dismissal remedy – Failure to consult – Not a genuine redundancy –– dismissal unreasonable on account of failure to consult – Failure to offer a different position prior to termination taken into account – Compensation ordered

[1] This matter concerns an application under s.394 of the Fair Work Act 2009 (the Act) by Ms Loren Hahn who alleges that the termination of her employment with Aloe Vera Industries (Aloe) was unfair.

[2] Ms Hahn commenced employment with Aloe in February 2015 as a casual employee. Ms Hahn filed her unfair dismissal application on 18 September 2018, stating her dismissal date was 3 September 2018.

[3] Aloe’s Form F3 Response provided that Ms Hahn was advised of her dismissal on 8 May 2018 to take effect on 11 May 2018. In my Decision of 7 February 2019 1 dealing with Aloe’s objection that the application was filed out of time, I considered the facts relevant to the dismissal date and determined that Ms Hahn’s employment came to an end on 3 September 2018. That decision was not challenged by Aloe.

[4] This decision concerns Ms Hahn’s substantive application, and requires me to consider among other things whether Ms Hahn’s letter of 27 August 2018, and the Respondent’s failure to respond, resulted in the termination of Ms Hahn’s employment on 3 September being at the initiative of the Employer, or her own. By agreement with the parties the matter proceeded as a determinative conference. I indicated at the commencement of proceedings I would have regard to the evidence provided in the earlier proceedings including statements provided. 2 In addition to this evidence a further email of Ms Hahn was adopted as evidence for the purpose of the determinative conference3 and further statements were also provided by Mr Maguire4 and Ms Thorley.5

[5] On 5 March 2019 Ms Hahn made an application for an order pursuant to s.590 that Aloe produce all training records between April 2018 and December 2018, for the purpose of determining new employees engaged between April and December 2018.

[6] On 18 March 2019 Aloe produced 2 lists. The first list purported to show all new starters from Aloe’s personnel records and Aloe said it can be seen from the list that only one person commenced work on 14 November 2018 in the wet packing facility and was recruited as a permanent employee. Ms Thorley clarified at the conference this person was engaged as a casual. Of the other employees on the list, three were to replace warehouse staff who had resigned and one was for the dry powder facility which is a totally separate operation. The first list also contained the name of an employee engaged on 27 June 2018.

Background

[7] Ms Hahn’s claim that her dismissal was unfair rests on two arguments. The first argument is that she was dismissed because she made a complaint of workplace sexual harassment against another employee of Aloe, and that Aloe did not wish to employee her anymore because of her having made the complaint. The second argument is that after she stopped receiving casual hours of employment, another employee was engaged in a role that she could have performed.

[8] While some of the relevant background to this matter was previously outlined in my Jurisdictional Decision of 7 February 2019, I reiterate the following for completeness.

[9] Ms Hahn stated she made a complaint in March 2018 to Ms Kelli Thorley, a manager employed by Aloe, that another employee of Aloe had sexually harassed her. She stated that subsequently, she was advised on or around 15 May 2018 that there was no more work for her until the end of August 2018. Subsequently she requested confirmation from Ms Thorley that she would not be earning income for a time for the purposes of seeking the assistance of Legal Aid for a separate legal matter. Aloe provided her a letter on 30 May 2018 which stated as follows:

“30 May 2018

To Whom it May Concern,

Loren Hahn has been employed by Aloe Vera Industries Pty Ltd as a casual worker for an extended period. During this period, we have been able to offer semi regular employment hours as our orders have been buoyant.

Recently one of our major customers has suffered a down turn in sales, which has reduced the work available to us. Although we cannot predicate with any certainty, we believe that this order reduction will last for possibly a few months, however may pick up again going into Christmas.

Therefore, due to this down turn in sales we are unable to offer work to Loren and have no clear indication of when this may change.

Yours sincerely,

Kelly Thorley

Production Manager.”

[10] Ms Hahn stated that she was not subsequently contacted by Aloe for provision of further work, and hence she sought advice from the Fair Work Ombudsman (FWO) regarding her employment with Aloe. Further to speaking with FWO, Ms Hahn sent a letter of 27 August 2018 to Aloe, advising that she would allow them a week to offer her work; otherwise she would regard the end of that period, 3 September 2018, to be her dismissal date. That letter read as follows:

“Dear Kelli,

As I have been working for Aloe Vera Industries as a casual employee for the last 3 years and was suddenly told in May by yourself that you no longer have work for me until late August, early September. Then you sent me a letter advising me of a new date of Christmas holidays, which was news to me because the letter I asked you to send me was to verify that I currently didn’t have hours so I could access Legal Aide (sic). I am yet to hear back from you so I am giving you till the 3^rd of September to start giving me regular work again. If I don’t hear back from you by next Monday the 3^rd of September I am going to take that date as being my dismissal date of my employment with Aloe Vera Industries”.

[11] Ms Hanh did not receive a response to her letter dated 27 August from Aloe.

Applicant’s Submissions and Evidence

[12] As to the reason for her dismissal, Ms Hahn provided in her F2 Unfair Dismissal application that she considered her dismissal to be in relation to her raising a complaint of workplace sexual harassment. Ms Hahn stated that she was not provided any reasons for the dismissal, nor was she provided any warnings, either verbal or written, prior to the dismissal. She stated “it all came about because I complained of being sexually harassed”.

[13] Further, despite Aloe’s letter of 30 May 2018 stating “Although we cannot predicate with any certainty, we believe that this order reduction will last for possibly a few months, however may pick up again going into Christmas”, Ms Hahn stated that at the date of filing her F2 application, she had not received any work and further that Aloe had employed new staff and therefore had “no interest in giving me my job back”.

[14] Ms Hahn sent an email to chambers on 5 March 2019 advising that she did not wish to file any further material in relation to her unfair dismissal claim, however also filed the form F52 for an order for production of training records referred to above. Ms Hahn said she would rely on these records to show all new employees that were employed during the time that Aloe advised her that there was no work for her.

[15] On Wednesday 27 March 2019, Ms Hahn sent email correspondence to the Commission stating that on a Thursday around mid-morning in late March or early April 2018 she made a sexual harassment complaint against another employee. Ms Hahn said she was not sure of the date. Ms Hahn said she was instructed to go home and not return until the following Tuesday. Ms Hahn said she was told by Ms Thorley that the employee she had complained about had been told to avoid her, and that Mr John Maguire, General Manager, would be back in a week to properly deal with the matter.

[16] Ms Hahn said during the time after the complaint and before Mr Maguire’s return the harassment was ongoing and she advised Ms Thorley. Ms Hahn said on the morning Mr Maguire returned she was called into his office and Mr Maguire said that he had spoken to the employee she had made the complaint about and that the employee seemed to be embarrassed by his actions. Ms Hahn claimed that she said to Mr Maguire that she didn’t think a talking to would suffice and she felt that the employee’s behaviour warranted a written warning at least. Ms Hahn claimed that Mr Maguire told her that he couldn’t give the employee a written warning because it was a “he said, she said” situation and that it would be best for all parties to just forget this ever happened. Ms Hahn said she left Mr Maguire’s office shocked and annoyed that the employee was being let off for sexually harassing her.

[17] Ms Hahn said she continued working for Aloe and was subsequently told that there was not ongoing work for her for a period of time. The conversation she had with Ms Thorley was on 8 May 2018, and a subsequent conversation with Ms Carolyn Gray appears to have been on or around the following Tuesday 15 May 2018.

[18] As already set out above, in late May Ms Hahn rang Ms Thorley and asked for a letter confirming that Aloe didn’t have current work for her and the letter was provided. Her evidence retraced earlier evidence given in the extension of time proceedings which I won’t repeat.

[19] Ms Hahn said she rang FWO on 26 August 2018, and said she sought advice as she believed that the reason Aloe had not called her was because Mr Maguire and Ms Thorley did not want to take her sexual harassment claim seriously.

[20] Ms Hahn said that despite Aloe’s claims that a decrease in sales meant that no casual work was available; on 29 June 2018 a new employee by the name of Ms Bell was hired. Ms Hahn said that when work became available the production manager hired someone else. Ms Hahn said both Ms Thorley and Mr Maguire denied in the course of the earlier extension of time hearing that Aloe had not employed anyone between May and August 2018 however the training record shows Ms Bell was employed on 27 June 2018.

Respondent’s Submissions and Evidence

[21] Mr Maguire provided three statements in total for these proceedings for Aloe.

Allegations of harassment

[22] Mr Maguire stated that on 22 March 2018, whilst on holiday in Japan, he was made aware that there had been an incident involving Ms Hahn and another employee. He stated that the employee concerned had been Ms Hahn’s “partner or some months previous”.

[23] He gave evidence that he decided to suspend Ms Hahn and the other employee on full pay on 22 March 2018 until Monday, 26 March 2018, when he would be back in Australia and able to review the matter. His evidence was that he met with the alleged harasser on the Monday, whom expressed surprise at the allegations, and confirmed that he had been in a “live-in” relationship with Ms Hahn. Mr Maguire advised the alleged harasser at that meeting that he would be meeting with Ms Hahn the following day, and that the matter could could have “serious repercussions for him”, and he asked that the employee not contact Ms Hahn at home that evening or the next day. 6

[24] Mr Maguire’s evidence was that, on speaking with Ms Hahn the following day, she confirmed she had been in a relationship with the alleged harasser. Mr Maguire advised her he had spoken with the alleged harasser, and had warned him of the seriousness of the matter, and he asked about Ms Hahn’s feelings regarding this. Mr Maguire’s evidence was that Ms Hahn stated she did not want him to be dismissed.

[25] Mr Maguire stated that he gave the alleged harasser a warning, and advised of the serious consequences “if there were any further comments”. He stated that following this, the matter was not mentioned again by either party, and no further notification was received from Ms Hahn, until receipt of a WorkCover certificate on 21 May 2018, advising she was making a claim for anxiety relating to the allegations of harassment.

Events leading to Ms Hahn’s dismissal

[26] Mr Maguire stated that in May 2018, Aloe’s “second largest customer, Uppercut” substantially reduced their orders from Aloe without notice, for the foreseeable future. He stated that orders by Uppercut had previously comprised 50% of Aloe’s total production for the “wet manufacturing and packing”. He said that the company had previously been running at approx. $250-$300K/month for at least the previous 12 months which reduced to $100K.

[27] As a result of Uppercut reducing their ordering, and the consequential financial losses, Mr Maguire’s evidence was that a reduction of Aloe’s staff became necessary. He stated that a dismissal of six casual staff was required. 7

[28] He stated that at the time Aloe employed up to 56 individuals, and as at December 2018 Aloe employed only 42 individuals, as no increase in orders had been secured.

[29] Mr Maguire stated that Ms Hahn’s comments as to sexual harassment in relation to her dismissal were not valid, as this matter had been resolved 8 weeks prior; he noted the dismissal was due to a shortage of work, and that Ms Hahn was one of the six casual employees whose positions were no longer required.

[30] Mr Maguire said that the employment records previously submitted demonstrate that a reduction of labour has been ongoing for the last few months.

[31] Ms Thorley also gave evidence. Ms Thorley refuted the assertion that a previous sexual harassment complaint from 27 March 2018, in anyway influenced her decision concerning casual not receiving hours of work.

[32] Ms Thorley said in relation to the material produced to the Commission, that Ms Bell was employed in late June 2018 following a vacancy arising in the manufacturing area. Ms Thorley said that Ms Bell was initially employed in the packing area for a short time to assist her in understanding her role in the manufacturing area. The second list provided shows the reduction in labour by either dismissal, resignation or redundancy which totals 21. Ms Thorley said it covers mainly the dry packing area, warehouse resignations and also includes 3 admin/management positions.

Consideration

Genuine Redundancy

[33] Section 389 reads 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.”

[34] Keeping in mind my earlier Decision that the termination had effect from 3 September 2018, I am satisfied from the evidence that from May Aloe did not have productive work for Ms Hahn. The evidence is clear that a major contract had been lost from May and casuals were no longer being offered work. However Aloe did not at that time communicate a termination of employment to Ms Hahn, instead holding out possible further casual employment. As of 3 September 2018 the situation had not changed and the role previously performed by Ms Hahn was not required.

[35] The manner in which this termination has been effected is unusual when viewed in context of s.389(1)(b). Aloe did not attempt to consult about redundancy in May 2018 as is consistent with my earlier Decision. Aloe merely advised Ms Hahn as a long term regular and systematic casual that they would not be requiring her services for a time and would advise her in the coming period when hours would again be offered.

[36] Ms Hahn said she later received the subsequent letter concerning her legal aid application that said work may pick up again going into Christmas. Common sense dictates that whilst Ms Hahn was not formally terminated by Aloe until 3 September as I have previously found, it must have been apparent to Ms Hahn from Aloe’s communications with her prior to 3 September 2018, that there was a real likelihood she may not again receive paid employment from Aloe. It remains the case however that Aloe did not comply with the consultation requirements of clause of the Pharmaceuticals Award. I will return to this point below.

[37] I am satisfied on the basis of the evidence that it would not have been reasonable in all of the circumstances for Ms Hahn to have been redeployed as at the time of termination on 3 September 2018 as the evidence supports a conclusion that there was not a role for Ms Hahn to be redeployed into at that time. I will deal with the issue of the position offered to Ms Bell below, however I am satisfied Aloe has not offended s.389(2).

[38] Given my findings concerning s.389(1)(b) concerning failure to consult about the termination it is necessary to consider whether the termination was harsh, unjust or unreasonable.

Harsh, Unjust or Unreasonable

[39] In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the Commission must take into account a range of matters set out at s.387 of the Act.

Was there a valid reason for dismissal?

[40] I have not been satisfied on the basis of the evidence that there was any connection between Ms Hahn’s March 2018 complaint and the termination of her employment. This claim is speculative and is inconsistent with the alternative position of Aloe, made out on the evidence, that Ms Hahn and a number of other employees were no longer being offered ongoing hours of work from May 2018 on the basis of a loss of a contract, and Ms Hahn’s position was no different from the other employees who were all advised around the same time. Given my finding concerning Ms Hahn’s first argument, it is apparent that the dismissal was not related to capacity or performance and s.387(a) is a neutral consideration.

Was the person notified of the reason?

[41] On the facts of this case s.387(b) is a neutral consideration.

Were the Applicants notified of the reasons for their dismissals and given the opportunity to respond to the reasons?

[42] On the facts of this case s.387(c) is a neutral consideration.

Was there an unreasonable refusal to a support person?

[43] On the facts of this case s.387(d) is a neutral consideration.

Warnings of unsatisfactory performance?

[44] On the facts of this case s.387(e) is a neutral consideration.

Did the size of the business likely impact on the procedures followed in effecting dismissal? Did Aloe have a dedicated Human Resources team?

[45] Aloe submitted that it employs 42 staff; however no evidence was provided regarding Human Resource expertise. I consider this a neutral criterion.

Any other matters

[46] Aloe submitted that the Applicant’s employment was terminated due to a downturn in business and production requirements, which resulted in six casual employees no longer being offered work in May 2018. The evidence supports Aloe’s claim that work had reduced and the number of employees had fallen significantly. As I have found above, Ms Hahn’s job was no longer required as at 3 September 2018, the time when termination occurred, and there were no other redeployment opportunities available at that time.

[47] Aloe did not strictly comply with s.389(1)(b) however it should have been evident to Ms Hahn as a casual employee, particularly after the letter Ms Thorley prepared in support of her quest for legal aid assistance that the earlier proposed potential available work date was being further pushed back, that there was a real likelihood she may not again be offered work by Aloe.

[48] Another matter that is relevant however is the decision to offer employment to Ms Bell in late June 2018 in circumstances where it would appear that work could have been offered to Ms Hahn. I asked a number of questions of Mr Maguire, Ms Thorley and Ms Hahn in the course of the conference concerning the work offered to Ms Bell and whether it could have been offered to Ms Hahn.

[49] Ms Thorley indicated it was not offered because it was full time and Ms Hahn had previously expressed a preference for less than full time hours. Ms Hahn contradicted this claim saying she had sought more shifts when employed and would have accepted the role had it been offered to her. Aloe did not dispute that the role was not offered to Ms Hahn.

[50] The fact that the role was not available at the time of termination makes this issue irrelevant for the purposes of s.389(2), and s.387(a), however I am of the view that Aloe could have at least offered the role to the employees who had not been receiving hours from May, keeping in mind Ms Hahn had worked on a regular and systematic basis for a period of over three and half years at that time. When I asked Aloe why it did not do so, Ms Thorley indicated Aloe understood employees have obtained other employment by that time however that was clearly not the case for Ms Hahn.

Conclusion on s.387

[51] This is an unusual case. For the same reasons as those found in UES (International) Pty Ltd v Harvey, 8due to Aloe’s failure to consult as required by the Pharmaceuticals Industry Award 2010 following the decision to terminate, this is not case of genuine redundancy and therefore leads to the conclusion that the termination was unfair because the failure to consult was unreasonable.

[52] At all times after May 2018 Aloe was (erroneously) approaching the matter on the basis that it believed it had terminated Ms Hahn. Ms Hahn’s employment was not brought to an end until September 2018. I am satisfied that the employment was terminated at the initiative of Aloe because it was confirmed by Mr Maguire and Ms Thorley in the course of the conference that they received the correspondence of Ms Hahn of late August and made a deliberate decision to ignore her request for clarification on the status of her employment on the basis they believed she ceased to be an employee months earlier. The evidence also shows that the circumstances of the business were such that not much really changed that might have achieved a different result for Ms Hahn in the period between May and September with the exception of the opportunity for employment that was offered to Ms Bell in late June 2018.

[53] It is clear that operational changes dictated that Aloe simply could not offer more work to Ms Hahn as at September 2018, and given it was of the belief her employment came to an end in May 2018 it would not have occurred to Aloe that it was under any obligation to offer her the position that became available in late June 2018. The evidence from the February hearing and the substantive hearing discloses that Ms Hahn was still an employee at the time Ms Bell was employed and was therefore denied an opportunity to continue her employment with Aloe in circumstances where she says she would have accepted the role had it been offered.

Remedy

[54] Ms Hahn said she did not seek reinstatement but compensation in lieu of reinstatement. Reinstatement would not be available in any event for the reasons set out above. Applying the approach in UES v Harvey would have yielded a result the equivalent of the time it would have taken Aloe to comply with its obligations in the relevant modern award. This case has the added complication of the circumstances surrounding the employment of Ms Bell.

s.392(2)(c)

[55] I am of the view that Ms Hahn would have received, or been likely to receive if she had not been dismissed, another weeks pay in order for Aloe to comply with its obligations to consult as required under the modern award. That amounts to a sum of $535 gross which is what I understood was an average weekly rate earned by Ms Hahn. The amount of compensation should include an additional amount of 9.5% superannuation.

s.392(2)(e)

[56] Ms Hahn indicated she was employed in the months of November and December 2018 earning an average of $600 a week as a net amount which exceeds her earnings at Aloe.

s.392(2)(f)

[57] No deduction is made for the period of one week as no other income was earned during that time.

s.392(2)(g)

[58] I am of the view that the failure of Aloe to offer the role filled in late June 2018 to Ms Hahn adds an additional element to this case that warrants some compensation. When the formula set out in Sprigg v Paul’s Licensed Festival supermarket 9yields an amount that is inadequate then the Commission should reassess the assumptions made in reaching that amount.10

[59] Whether the role Ms Bell was given, may have been offered and accepted by one of the other casual employees (who was also not been receiving hours at the relevant time) can only be a matter of speculation, however it remains a possibility Ms Hahn may have accepted such an offer had it been made. I am not inclined to order a substantial amount of compensation on account of these events, however it is appropriate that an order is made that makes some acknowledgement of that failure. I intend to order an amount of a further two weeks’ pay increasing the amount of compensation payable to $1,605 gross plus superannuation.

s.392(2)(a)

[60] Whilst Mr Maguire made some submissions as to the position of Aloe there was no suggestion that Aloe was not solvent. The evidence does not suggest an order for an amount of $1,605 plus superannuation would affect the viability of Aloe.

s.392(2)(b)

[61] Ms Hahn had in the order of three and a half years employment with Aloe. This is not a basis to reduce the amount in compensation.

s.392(2)(d)

[62] Ms Hahn indicated she did not initially seek employment after termination but gained employment in October 2018. Ms Hahn explained that she cares for a child with a diagnosed disability. I do not intend to reduce the amount on the basis of Ms Hahn’s efforts to mitigate her loss.

s.392(3)

[63] Misconduct does not contribute to the decision and is not a basis to reduce the amount.

s.392(5)

[64] The amount of $1,605 gross taxed according to law plus 9.5% superannuation is less than the compensation cap in s.392(5).

Conclusion

[65] I have concluded that an order for the payment of an amount of $1,605 gross plus 9.5% superannuation, less taxation as required by law, by Aloe Vera Industries Pty Ltd to Ms Hahn in lieu of reinstatement is appropriate in all of the circumstances of the case. An order to this effect will be issued with this decision.

COMMISSIONER

Appearances:

Ms L. Hahn appearing on her own behalf.

Mr J. Maguire on behalf of the Respondent.

Hearing details:

2019,

Brisbane:

2 April

Printed by authority of the Commonwealth Government Printer

<PR706079>

 1   [2019] FWC 724

 2   Exhibits 1,2 and 3 tendered in [2019] FWC 724

 3   Exhibit 4

 4   Exhibit 5

 5   Exhibit 6

 6   Exhibit 2

 7   Exhibit 5 para 1-3

 8 (2012) 215 IR 263

 9 (1998) 88 IR 21

 10   Smith v Moore Paragon Australia Ltd (2004) 130 446 [32]