Meliza Tanzania v Green Travel Service Pty Ltd T/A GTS Travel
[2016] FWCFB 1155
•23 NOVEMBER 2015
| [2015] FWC 6457 [Note: An appeal pursuant to s.604 (C2015/7971) was lodged against this decision - refer to Full Bench decision dated 22 February 2016 [[2016] FWCFB 1155] for result of appeal.] |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Meliza Tanzania
v
Green Travel Service Pty Ltd T/A GTS Travel
(U2015/7738)
COMMISSIONER ROBERTS | SYDNEY, 23 NOVEMBER 2015 |
Section 394 -application for unfair dismissal remedy – jurisdictional objection – small business – redundancy - Small Business Fair Dismissal Code.
[1] This decision concerns an application lodged on 19 May 2015 by Ms Tanzania pursuant to s.394 of the Fair Work Act 2009 (the Act) in relation to the alleged unfair termination of her employment by Green Travel Service Pty Ltd T/A GTS Travel (GTS or the Company).
[2] The Company raised a threshold jurisdictional objection arguing that it was a small business within the meaning of the Act and had followed the Small Business Fair Dismissal Code (the Code) in effecting Ms Tanzania’s redundancy and therefore an unfair dismissal had not occurred. Ms Tanzania disputed that the Company is a small business in that it is an associated company of Safe2Travel (Singapore).
[3] The application came before me for jurisdiction and arbitration hearing in Sydney on 24 August 2015. An earlier hearing dealing with an order for production was held on 18 August 2015. Prior directions were issued for the filing of written submissions, witness statements and any supporting documents.
[4] At the hearing on 24 August 2015, Ms Tanzania represented herself. The Company was represented by Mr P Sheng, a Director of GTS. Ms Tanzania gave sworn evidence. Mr Sheng and Ms J Hynes gave sworn evidence for GTS.
Background
[5] Ms Tanzania commenced employment with GTS on or about 21 March 2011 as a Leisure and Cruise Consultant. She was later promoted to the position of Retail and Corporate Supervisor from 14 April 2014 and held that position until the termination of her employment on 1 May 2015.
[6] On 29 April 2015 she received an email from Mr Sheng informing her of the Company’s intention to abolish the Retail Department and she was asked to join the Corporate Department. On 1 May 2015, she was advised that she would no longer be offered the position in the Corporate Department. The Company claims that this made Ms Tanzania redundant. GTS claims that the termination of Ms Tanzania’s employment was the result of a genuine redundancy and the Commission is jurisdictionally barred from further consideration of Ms Tanzania’s substantive application for relief.
Legislative Framework
[7] Sections 385 and 389 of the Act provide:
“385 What is an unfair dismissal
A person has been unfairly dismissed if FWA is satisfied that:
(a) the person has been dismissed; and
(b) the dismissal was harsh, unjust or unreasonable; and
(c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and
(d) the dismissal was not a case of genuine redundancy.
Note: For the definition of consistent with the Small Business Fair Dismissal Code: see section 388.
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.
(a) the employer’s enterprise; or
(b) the enterprise of an associated entity of the employer.”
[8] The Explanatory Memorandum to the Fair Work Bill 2008 (Explanatory Memorandum) provides the meaning of genuine redundancy as follows:
“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 red eployment 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.”
[9] Ms Tanzania’s employment was not governed by an Enterprise Agreement. The parties were unable to nominate which Modern Award had underpinned her employment. My own subsequent researches show that the most likely applicable Modern Award is the General Retail Industry Award 2010 1 (the Retail Award) which replaced the terms and conditions in or derived from the Travel Industry – Agencies – General Award – 1999.2
[10] Clause 8 (Consultation) of the Retail Award provides:
“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.”
[11] Clause 15 (Redundancy) of the Retail Award states that redundancy pay is to be made as provided for in the National Employment Standards.
Evidence
Mr Sheng
[12] Mr Sheng gave sworn evidence and adopted both a primary witness statement 3 and two supplementary witness statements.4 Mr Sheng is a Director of GTS and works full time for the Company. He said that GTS had eleven employees at the time of the termination of Ms Tanzania’s employment. GTS has a business partnership with Safe2Travel which is based in Singapore. The operations of GTS are not directed by Safe2Travel, although its Chief Executive Officer is a Director of GTS.
[13] GTS closed its retail arm from early May 2015 and this led to the redundancy of Ms Tanzania’s position. In effecting the termination of Ms Tanzania’s employment, the Company followed the Code.
[14] Attached to the witness statement of Mr Sheng were a number of documents including material relating to the Company from the Australian Securities and Investments Commission, Directors’ reports, income and expenditure statements, together with audited accounts. I have paid regard to that material in the making of this decision.
[15] In cross examination by Ms Tanzania, Mr Sheng was questioned at length about the relationship between GTS and Safe2Travel. I will not detail that material here, but have paid regard to it. Mr Sheng went on to say that the GTS Directors had been discussing what to do about the Retail Division for some three to four months and finally decided to close the Division with the resulting redundancy of Ms Tanzania.
Ms Hynes
[16] Ms Hynes gave sworn evidence and adopted a witness statement. 5 Ms Hynes has been the Operations Manager at GTS since February 2013.
[17] Ms Hynes said that Ms Tanzania preferred to work in the Retail Division and had expressed a view that she did not feel comfortable doing corporate work. When a decision was made to close the Retail Division, Ms Tanzania was asked to accept a transfer to corporate work. This occurred on 29 April 2015 and Ms Tanzania was asked to respond quickly to the offer. Ms Tanzania responded in the following terms: 6
Hi Peter
Thank you for your trust with me.
It is sad news that retail department will be removed after all the works that has been in place – up until now
As everyone know, I have no background in Corporate and this is something that I have to think about it carefully and will be a big decision for me for my career path whatever decision I make.
As per our conversation, I just need to clarify a few things before I make my decision:
- Is my working hour will be the same?
- As I said, I don’t mind helping corporate department but it will takes time for me to learn. I am not sure how long will it takes but I know it will be for a while to know into details by heart.
At the same time I want to feel confident in job that I do so I can provide the best service to all my clients. This new role is totally a stranger for me because I never do any work that I am not confident with it at all and will never take any responsibility for something that I am not familiar with. I hope company understand this situation. Let me know if that’s ok.
- what will be the option if I don’t move into corporate?
I will let you know my decision once everything is clear. If I have any more question I will send a follow up email.
Thank you for your understanding.
Kind Regards,
Meliza Tanzania
Supervisor
[18] Ms Hynes went on to say that: “…by Friday afternoon (1 May 2015) and based on Meliza’s response, a decision was made by the two directors of the company that Meliza’s employment with Green Travel Service would have to be terminated as her job in retail was redundant given her supervisor position was no longer required in the company and that she could not move into a corporate consultant position.”
[19] In her supporting oral evidence, Ms Hynes said that GTS is not a subsidiary of Safe2Travel.
[20] In cross examination, Ms Hynes said that she did not know that Ms Tanzania’s position was to be made redundant and was only told that the Retail Department was closing when she received the same email as Ms Tanzania. Regarding the relationship between GTS and Safe2Travel, Ms Hynes said that GTS does not receive directions from Safe2Travel.
Ms Tanzania
[21] Ms Tanzania gave sworn evidence and adopted a witness statement. 7
[22] Ms Tanzania said that she was informed on 29 April 2015 that the Retail Department was to be closed and was offered a position in the Corporate Department. At approximately 1pm on 1 May 2015 she emailed Mr Sheng with a number of questions relating to the Corporate Department and her proposed role within it. At 4:30pm on the same day her employment was terminated. When she asked Mr Sheng why this had occurred, he said that the owner of GTS, Mr Fung, had made the decision.
[23] In cross examination Ms Tanzania said that she believed she had been unfairly dismissed and that the termination of her employment was not a genuine redundancy:
“I believe it is unfair because I was not made aware of it before. Early in the morning when I asked you questions in regards to the email that you forwarded on to me, and then before accepting totally 100 percent in the corporate role, so I need to clarify myself and ask you a few questions before I take the role and jump into the role. Then a few hours later you mention to me that I was made redundant, so obviously the company offered me something and then two hours later, decide to take it out. So it is a little bit unfair. For me it is a little bit harsh to do that to staff that always perform more than 110 percent to the company and then being treated like that.” 8
Submissions
[24] Both Parties filed written submissions and various other materials. I have paid regard to all of the written and oral submissions and the various materials put before me. In essence, Ms Tanzania submits that the termination of her employment was unfair and was not the result of a genuine redundancy. She disputes that GTS is a small business within the meaning of the Act and maintains that it is, in effect, a subsidiary of Safe2Travel. There is no dispute that, on its own, GTS would qualify as a small business, and there is further no dispute that if the employees of Safe2Travel are included, then it would not qualify as a small business. In short, GTS maintains that it is a small business and is not a subsidiary of Safe2Travel and that the termination of Ms Tanzania’s employment resulted from the closure of GTS’s Retail Department.
Conclusions and Findings
[25] Firstly, I will deal with the jurisdictional issue. On the balance of probabilities, I find that GTS is a small business (having some eleven employees) within the meaning of the Act and is not a subsidiary of Safe2Travel based in Singapore. Accordingly, the Code applies.
[26] It appears from the evidence of Mr Sheng and the submissions from GTS that the Company relies on being a small business to jurisdictionally bar Ms Tanzania from making a claim for unfair dismissal because she was made genuinely redundant. It is my further finding that, despite being a small business, GTS did not effect a genuine redundancy in the case of Ms Tanzania.
[27] It is clear from the provisions of s.389 that a genuine redundancy could only have occurred if GTS had complied with the consultation obligations contained in clause 8 of the Retail Award. The Explanatory Memorandum emphasises this point at s.1550.
[28] The Company invited me to form the conclusion that the dismissal of Ms Tanzania was the result of a genuine redundancy and therefore the termination was effected for a valid reason and could not be characterised as harsh, unjust or unreasonable.
[29] In UES (Int’l) Pty Ltd v Harvey 9(Harvey), the majority of the Full Bench found that a dismissal was not a case of genuine redundancy within the meaning of s.389 because the company had not consulted about the redundancy in accordance with its obligation in the applicable modern award.10
[30] In Maswan v Escada Textilvertrieb T/A ESCADA 11 (Escada), Vice President Watson said: “The failure to notify and consult with Mr Maswan in accordance with the award is a serious defect in the procedure.”12 His Honour went on to say: “The failure to consult is not a trivial matter.”13 Subsequent case law has been consistent with Harvey and Escada.
[31] In the case before me it is clear that no consultation occurred between GTS and Ms Tanzania and the provisions in the Retail Award were not followed. It is plain from the proceedings that Ms Tanzania was advised that the Retail Division was to be closed and was then offered a position in the Corporate Division. She asked a number of quite reasonable questions of GTS about the proposed move to the Corporate Division and GTS responded by terminating her employment. The initial offer of a transfer to the Corporate Division shows that redeployment within the Company was, at least at one time, an option.
[32] Given the requirement that the consultation provisions in the Award be followed before a dismissal can be considered to be a genuine redundancy, and the fact that no such consultation occurred, I find that the termination of Ms Tanzania’s employment was not a case of genuine redundancy. GTS’s jurisdictional objection is therefore dismissed as far as it relies on compliance with the Code being a complete defence.
[33] This does not mean that it automatically follows that there was no valid reason for Ms Tanzania’s employment to be terminated on operational grounds or that the termination was harsh, unjust or unreasonable. Such matters need to be determined on the particular facts applying to the ending of the employment relationship between Ms Tanzania and GTS.
[34] I do not doubt the genuineness of the displacement of Ms Tanzania following the Company’s decision to close its Retail Department. However, the Company’s subsequent actions in first offering Ms Tanzania an alternative position, and then terminating her employment when she asked some reasonable questions about that position, mean that there was no valid reason for termination of employment, and I so find.
[35] In a recent decision, 14 his Honour Vice President Hatcher said:
“My conclusion is that because I cannot find on the evidence that there was a valid reason for the dismissal, the dismissal was therefore harsh, unjust and unreasonable.” 15
[36] I now move to determine the questions of harsh, unjust and unreasonable and any resulting remedy. In this regard, I do not intend to traverse the evidence and submissions of the parties but I have paid regard to all the relevant material in making my determination.
[37] The question of valid reason is dealt with above. There were no allegations against Ms Tanzania relating to her performance or behaviour as an employee. In relation to the remaining criteria set out in s.387 of the Act, I find that Ms Tanzania had no opportunity to respond to the reasons given for her dismissal and that there were no discussions relating to the dismissal. The size of GTS’s enterprise may have impacted to a significant degree upon the procedure followed by the Company in effecting the dismissal. GTS does not have access to dedicated human resource management specialists or expertise.
[38] I have also taken into account a number of other factors. These include Ms Tanzania’s length of employment with GTS, the fact that no performance or behaviour issues are alleged against her, her age, skill set and future employment prospects, together with the personal effects of the termination of employment on her. All in all, I find that the termination of employment was harsh and unjust.
[39] Section 390 of the Act sets out the criteria concerning the ordering of remedy for unfair dismissal and I have paid regard to each of those criteria.
[40] It is accepted that the first remedy to be considered by the Commission after making a finding that a dismissal was unfair is the possibility of reinstatement. Ms Tanzania does not seek reinstatement and in all the circumstances of this case, reinstatement would not be a practical option.
[41] Where reinstatement is not ordered, the Commission may order the payment of monetary compensation. Section 392(2) of the Act sets out the criteria for deciding a suitable level of compensation and I have paid regard to each of those criteria.
[42] All in all, I find that the termination of the Applicant’s employment lacked a valid reason and was harsh and unjust in the manner in which it was carried out. An order will be issued that GTS pay Ms Tanzania $7,500 (less appropriate tax according to law). This figure is based on six weeks wages based on her previous annual salary of around $65,000. The sum awarded does not include any obligation the employer may have in relation to compulsory superannuation contributions, or any other statutory entitlement(s) due to Ms Tanzania. I have arrived at the awarded figure after considering all the material before me. The sum awarded is to be paid within fourteen days of the date of this decision.
[43] In accordance with s.381(2) of the Act, I am further satisfied that each party has been afforded a ‘fair go all round’.
[44] An Order reflecting this decision is in PR572039.
COMMISSIONER
Appearances:
M Tanzania, the Applicant.
P Sheng, for Green Travel Service Pty Ltd T/A GTS Travel.
Hearing details:
2015.
Sydney:
August 18, 24.
1 MA000004.
2 AP799612.
3 Exhibit S1.
4 Exhibits S2 and S3 respectively.
5 Exhibit S5.
6 See Annexure B to Exhibit S5.
7 Exhibit T1.
8 PN451.
9 [2012] FWAFB 5241 per Senior Deputy President Acton and Commissioner Bissett.
10 Ibid at para 40.
11 [2011] FWA 4239.
12 Ibid at para 37.
13 Ibid at para 39.
14 [2014] FWC 6202.
15 Ibid at para 29.
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