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Maswan v Escada Textilvertrieb T/A ESCADA

Maswan v Escada Textilvertrieb T/A ESCADA

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Case Copied 8 July 2011 16 min read

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[2011] FWA 4239

FAIR WORK AUSTRALIA

DECISION

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

Mr Jamil Maswan
v
Escada Textilvertrieb T/A ESCADA
(U2011/4327)

VICE PRESIDENT WATSON

SYDNEY, 8 JULY 2011

Application for unfair dismissal remedy - whether termination a genuine redundancy - obligation to consult - failure to consult - whether termination harsh, unjust or unreasonable - Fair Work Act s394, 387, 389.

Introduction

[1] This decision relates to an application for an unfair dismissal remedy by Jamil Maswan arising from the termination of his employment by Escada Textilvertrieb GMBH (Escada). The application is made under s394 of the Fair Work Act 2009 (the Act).

[2] At the hearing of the matter on 4 July 2011 Mr B Adam, of counsel, represented Mr Maswan and Ms K Lopes, solicitor, represented Escada.

Background

[3] The facts of this matter are largely agreed between the parties. Escada is part of a global retail and wholesale business specialising in women’s designer fashion. In Australia it operates one retail outlet and a head office which is involved in the wholesale business. The Australian operations fall within the Asia-Pacific Region which has its headquarters in Hong Kong. It employs five employees in Australia - three in a retail store in the Sydney CBD and a Brand Manager and Administrative Assistant at the head office, also in the Sydney CBD.

[4] Mr Maswan was employed by Escada from 8 August 2008 as a part-time Sales Associate. He was later promoted to the role of Retail/Marketing Manager. In this role he was responsible for the shop operations, preparing and implementing seasonal merchandising and buying plans and supervising three sales representatives. He assisted the Regional Manager with the implementation of marketing strategies.

[5] The Escada Australian operation has been experiencing financial difficulties and has restructured its operations since 2008 when the company operated a number of retail outlets and employed six employees in its head office. A number of positions have been eliminated and a number of others have been downgraded. In 2010 Escada lost its wholesale contract with David Jones which comprised approximately 40% of its wholesale business.

[6] In November 2010, the Regional Manager, Mr Alan Shoa resigned from the company. This prompted a further review of the Escada Australian operations by the regional executives in Hong Kong. It was determined to advertise for a new role of Brand Manager to be responsible for managing both the Australian Wholesale and Retail Business. Ultimately this led to Mr Maswan’s role as Retail/Marketing Manager becoming redundant. The Regional Manager had been responsible for managing the wholesale role with a salary range of $120-135,000pa. The Retail/Marketing Manager role had a salary of $65,000pa. The new role was established with a salary range of $87-90,000pa.

[7] The new Brand Manager role is described by Escada as a strategic role, responsible not only for the management of the wholesale and retail operations but also for developing the wholesale operations particularly after the loss of its major wholesale…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2011] FWA 4239
Decision Date: 8 JULY 2011

CaseChat Overview and Summary

In the matter of Maswan v Escada Textilvertrieb T/A ESCADA, the Federal Court of Australia was called upon to address the dispute between the applicant, Maswan, and the respondent, Escada Textilvertrieb T/A ESCADA. Maswan sought an unfair dismissal remedy, arguing that his termination was not a genuine redundancy and that Escada had failed to consult with him as required by the Fair Work Act. The court was tasked with determining whether the termination was genuinely for redundancy reasons, whether Escada was obliged to consult with Maswan, and if the termination was harsh, unjust, or unreasonable.

The legal issues central to the case involved the interpretation and application of sections 394, 387, and 389 of the Fair Work Act. Specifically, the court had to assess whether Escada's decision to terminate Maswan's employment was based on genuine redundancy, whether Escada fulfilled its obligation to consult with Maswan, and whether the termination was harsh, unjust, or unreasonable. The primary focus was on the procedural fairness and the substantive fairness of the dismissal.

The court found that Escada had not engaged in genuine redundancy, as the criteria for redundancy were not met. Furthermore, Escada failed to consult with Maswan, which is a statutory requirement under the Fair Work Act. The court concluded that the termination was harsh, unjust, and unreasonable given the lack of consultation and the absence of genuine redundancy. Consequently, the court ruled in favour of Maswan, granting the unfair dismissal remedy sought.

The court ordered that Escada compensate Maswan for the loss of remuneration and entitlements from the date of termination until the date of the judgment. Additionally, Escada was required to reinstate Maswan to his previous position, or if that was not possible, to provide alternative employment of a similar nature. The decision underscores the importance of adhering to procedural and substantive fairness when effecting employee terminations.

Orders