Michael Roberton v Car Stackers International Pty Ltd

[2014] FWC 2046

[2014] FWC 2046

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Michael Roberton
v
Car Stackers International Pty Ltd
(U2013/12300)

DEPUTY PRESIDENT GOOLEY MELBOURNE, 31 MARCH 2014

Application for relief from unfair dismissal - genuine redundancy - jurisdictional objection dismissed.

[1] Mr Michael Roberton was employed by Car Stackers International Pty Ltd (Car Stackers) from 24 May 2012 until he was dismissed on 2 August 2013. Mr Roberton alleged his termination was unfair. Car Stackers submitted that Mr Roberton’s employment was terminated due to a downturn in the business. It was submitted that this was a genuine redundancy.

[2] At the hearing Mr Bakri, a legal practitioner, sought permission to appear for Mr Roberton and Mr McHugh, Car Stackers’ General Manager, did not oppose permission being granted. I granted Mr Bakri permission to appear as it would not be possible for Mr Roberton to represent himself and it would be unfair not to permit him to be represented in circumstances where Mr McHugh did not object.

[3] Car Stackers Australia Pty Ltd responded to Mr Roberton’s application but it was agreed at the hearing that the employer was Car Stackers International Pty Ltd. Mr McHugh advised that he represented Car Stackers International Pty Ltd so I allowed the amendment to be made to the application. 1

[4] Mr McHugh gave evidence that in June 2013, sales had dropped considerably and in July 2013 sales continued to slide. 2

[5] On 2 August 2013, after a discussion with the Operations Manager and the Business Development Manager, it was decided that it was necessary to make at least one person redundant. 3

[6] As a result, Mr McHugh commenced the consultation process provided for in the enterprise agreement. 4

[7] On this day, due to a lack of work, Mr Roberton was working in the factory. 5

[8] Mr McHugh called Mr Roberton into his office intending to make him aware of the slowdown of work and the delay in supply and to advise him that Car Stackers would be consulting all employees about changes within the business. 6

[9] Mr McHugh said that he told Mr Roberton he was required to consult with all staff about any major workplace changes. Mr McHugh said at this time Mr Roberton said “so you are going to sack me?” Mr McHugh asked him to calm down and told him he was not getting the sack but he refused and continued with his aggressive demeanour. 7

[10] Mr McHugh asked Mr Roberton if he wanted a representative but he said no. Mr McHugh told Mr Roberton that “because of the intimidation, threatening and aggressive behaviour that [he] could not continue the discussion.” Mr McHugh then decided that Mr Roberton would be the person that would be made redundant.

[11] Whilst Mr Roberton was packing up, Mr McHugh prepared a Centrelink and Incolink form and gave them to him.

[12] Mr McHugh said that staff numbers have been further reduced and while Car Stackers had 14 employees at the time of the redundancy they now had 9.

[13] Mr McHugh explained the employment of the additional staff in May. It was his evidence that they were under “enormous pressure and contract obligations to finish contracts by a certain time. The only way to do that was to throw more labour on it, but our intention is always to keep people employed and grow our business. Unfortunately due to a downturn our business has gone the other way.” 8

[14] It was his evidence that he intended calling a meeting of all the other employees the following week to advice of the situation and that the only reason he had met with Mr Roberton that day was because he was the only one not on site. 9 He said that meetings did take place the next week with other employees and one other employee was made redundant.

[15] Mr Roberton has a different version of events. It was his evidence that when he went into Mr McHugh’s office, Mr McHugh said “sorry Mick but I’m going to have to make you redundant” and gave him a pre-prepared letter. 10 It was his evidence that about four to five weeks prior to his termination the company hired another five permanent employees. It was his evidence that he was never told that the company lacked work; it was not raised at toolbox meetings nor were there any memos or written material provided to employees. He further submitted that there was work available for him to do. Mr Roberton denied being offered a representative11 or that Mr McHugh made any reference to the enterprise agreement. He denied behaving in a threatening, aggressive or intimidating manner.12

[16] Mr Roberton said that he would have been prepared to take annual leave or use up his RDO’s, take leave without pay, cut his hours or work casually just to keep working.

[17] Mr Dwight, the Business Development Manager, gave evidence that Mr Roberton had been transferred from the site to the warehouse as the work he was doing was coming to an end and they did not require as many people on-site to finish the job. It was his evidence that sales had dropped off and many of the jobs were coming to an end. 13

[18] He met with Mr McHugh and the Operations Manager on the morning of 2 August 2013. At that meeting they discussed the current projects and upcoming work and it was decided that there would need to be workplace changes and that they needed to commence the redundancy process as required by the enterprise agreement. 14

[19] When he was returning to his office later in the day he saw Mr Roberton in Mr McHugh’s office. He overheard part of the conversation. He could hear Mr Roberton repeatedly saying that he was being sacked and he heard Mr McHugh telling Mr Roberton that he had not been sacked. Mr Dwight said that Mr Roberton sounded furious and did not appear to be listening to what was being said. He said Mr McHugh tried to calm him down but he would not sit down and discuss the situation. Mr Roberton then left the office claiming he had been sacked. 15

[20] He confirmed that the business now had 9 employees.

[21] The Operations Manager was not called to give evidence because he had left the business.

The legislative framework

[22] The Fair Work Act provides at s.385 of the Act that a person has not been unfairly dismissed in cases of genuine redundancy.

What is an unfair dismissal

A person has been unfairly dismissed if the FWC is satisfied that:

(a) the person has been dismissed; and

(b) the dismissal was harsh, unjust or unreasonable; and

(c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and

(d) the dismissal was not a case of genuine redundancy.

[23] A genuine redundancy is defined at s.389 of the Act as follows:

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.

Was there a redundancy?

[24] I accept the evidence of Car Stackers that the downturn in their business made it necessary for them to reduce the number of employees. This was not disputed by Mr Roberton. 16

Did the employer meet its obligations under the agreement to consult with Mr Roberton?

[25] Car Stackers accepted that the relevant award was the Building and Construction General On-site Award 2010 (the Award).

[26] The Award contains the standard consultation clause which I do not reproduce here.

[27] The Award obliged Car Stackers once it had made a definite decision to introduce major change:

● to notify their employees who may be affected by the proposed changes;

● to discuss with the employees the introduction of the changes and the effects the changes are likely to have on them and measures to avert or mitigate the adverse effects of such changes;

● give prompt consideration to matters raised by the employees; and

● for the purposes of such discussion, provide in writing to the employees concerned all relevant information about the changes.

[28] I accept the evidence of Mr McHugh that it was his intention to commence this process by having a discussion with Mr Roberton. However that discussion was curtailed because of Mr Roberton’s presumption that he was being sacked. While there is a conflict in the evidence between Mr McHugh and Mr Roberton, I prefer Mr McHugh’s evidence as Mr McHugh’s evidence is in part corroborated by the evidence of Mr Dwight. Further, there is no evidence to support a finding that prior to his meeting with Mr Roberton that Mr McHugh had selected him for redundancy.

[29] The decision of Mr McHugh to terminate Mr Robinson’s employment at this time meant that the consultation, required by the Award, was curtailed as Mr Roberton’s employment was terminated before such discussions were completed. Even though Mr McHugh was annoyed at Mr Roberton’s response there was no need to immediately terminate his employment. Mr McHugh could have simply asked Mr Roberton to leave and he could have continued the consultation process with the other employees as planned. He did not. As a result no discussion occurred about measures that may have been taken to mitigate the adverse effects of the decision to reduce the number of employees, before Mr Roberton’s employment was terminated.

[30] I find that the consultation required by the Award did not occur and therefore this is not a genuine redundancy.

Could Mr Roberton have been redeployed?

[31] Given my decision in this matter, it is necessary for me to consider whether redeployment was possible. There was no evidence that there were any vacant positions either with Car Stackers or any associated entities to which Mr Roberton could have been redeployed. An employer is not required to terminate another employee to create a vacancy. I accept that there were no positions to which Mr Roberton could reasonably have been redeployed.

Was the termination of employment harsh, unjust or unreasonable?

[32] There was no submission that the dismissal was consistent with Small Business Fair Dismissal Code.

[33] In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the Commission must take into account the following:

Whether there was a valid reason for the dismissal related to Mr Roberton’s capacity or conduct (including its effect on the safety and welfare of other employees): s.387(a)

[34] In UES (Int’l) Pty Ltd v Leevan Harvey 17 a Full Bench held that the reason for the termination of the applicant in that case did not relate to his capacity or conduct because the applicant was made redundant. It found that there was a sound defensible and well founded reason for the termination due to the changes in operational requirements and there were no redeployment opportunities. In circumstances where the genuine redundancy objection failed because of a lack of consultation section 387(a) - (e) were held to be neutral considerations.

[35] I consider that this case is distinguishable from the facts in UES. Here a decision had been made to make one position redundant. A further decision was made to consult employees about the situation. No decision had been made to make Mr Roberton redundant. Before the consultation occurred Mr Roberton’s employment was terminated. The real reason Mr Roberton’s employment was terminated on that day was because of his conduct at the consultation meeting.

[36] Mr Roberton’s employment was terminated because of his reaction to the news that there were to be redundancies. So much was accepted by Mr McHugh. There was no evidence that Mr Roberton behaved badly on any other occasion. I accept Mr McHugh’s evidence that he did not tell Mr Roberton that he was being sacked. Whatever caused Mr Roberton to assume that he was to be made redundant does not excuse his response but neither does it justify his immediate termination. It cannot be said that Mr Roberton’s employment was terminated because his position had been identified as redundant. At the time Mr McHugh made that decision he had not identified Mr Roberton as the person to be redundant and there was no evidence that, but for his conduct, he would have been selected. 18 I find that there was not a valid reason for the termination of his employment.

Whether Mr Roberton was notified of that reason: s.387(b)

[37] Mr Roberton was not notified of the reason for the termination of his employment before the decision to terminate his employment was made.

Whether Mr Roberton was given an opportunity to respond to any reason related to the capacity or conduct of the person: s.387(c)

[38] Mr Roberton was not given an opportunity to respond to the reason before the decision to terminate his employment was made.

Any unreasonable refusal by the employer to allow Mr Roberton to have a support person present to assist at any discussions relating to dismissal: s.387(d)

[39] I prefer the evidence of Mr McHugh that Mr Roberton was advised that he could have a support person present and that Mr Roberton declined that opportunity. In any event there was no refusal by Mr McHugh to allow Mr Roberton to have a support person present.

If the dismissal related to unsatisfactory performance—whether Mr Roberton had been warned about that unsatisfactory performance before the dismissal: s.387(e)

[40] The dismissal did not relate to unsatisfactory performance. As such this criterion is not relevant.

The degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal: s.387(f)

[41] This is a small business employing at the relevant time 14 employees. I accept that the size of the business impacted on the procedures adopted by Mr McHugh.

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: s.387(g)

[42] Car Stackers did not have any dedicated human resource management specialists or expertise. This clearly had an impact on the procedures adopted. Car Stackers was aware of its obligations and did not follow through with them. It is not usual for employees faced with the prospect of redundancy to react negatively. Given the need to consult with the other employees as well, a more experienced human resources person would have reconvened its meeting with Mr Roberton at another time to allow him to calm down. Mr McHugh decided to terminate Mr Roberton there and then without affording him procedural fairness.

Any other matters that the Commission considers relevant: s.387(h)

[43] Car Stackers had an obligation to consult with the employees. It did not do so. However the consultation process it adopted was impacted negatively by Mr Roberton’s conduct. Had Mr Roberton sat down and listened to Mr McHugh he may not have lost his job.

Conclusion

[44] There was no valid reason for the termination of Mr Roberton’s employment and he was not afforded procedural fairness. For the reasons set out above, I find that the termination of Mr Roberton’s employment was harsh, unjust or unreasonable.

Remedy

[45] Mr Roberton is seeking reinstatement of his employment. However, I do not in all the circumstances consider that reinstatement is appropriate. The unchallenged evidence of Mr McHugh is that there was a further reduction in employee numbers. Given Mr Roberton’s response to Mr McHugh’s attempt at consultation, I consider that in all likelihood he would have been made redundant after any consultation had occurred, if not in the first round of redundancies, soon after.

[46] In assessing any amount in lieu of reinstatement, the Commission is required to have regard to the following:

The effect of the order on the viability of the employer’s enterprise: s.392(a)

[47] There was no evidence that that any order would affect the viability of the Car Stackers’ business. However I have accepted the evidence of Mr McHugh that there has been a downturn in business.

The length of the person’s service with the employer: s.392(b)

[48] Mr Roberton had worked for the company for 15 months and was a daily hire employee.

The remuneration that the person would have received, or would have been likely to receive, if Mr Roberton had not been dismissed: s.392(c)

[49] I accept the submission of Mr Roberton that had consultation occurred he might not have been selected for redundancy in that there may have been volunteers or other arrangements could have been made. Mr McHugh’s evidence was that after exploring other alternatives to redundancy Car Stackers had to further reduce the number of employees. While Mr Roberton may not have been made redundant in the first round, I find that it was likely that he would have been made redundant within a relatively short period of time.

[50] Therefore, I conclude that he would have remained in employment for a further month. In that time he would have earned $977.94 per week if working off site, or $1,052.05 if working on site. As it is not clear if he would have remained off site for the four weeks, I have averaged the payments and therefore he would have earned $4,059.98 plus $375.55 superannuation.

The efforts of Ms Roberton (if any) to mitigate his loss suffered because of the dismissal: s.392(d)

[51] Mr Roberton has sought employment but has been unsuccessful.

The amount of any remuneration earned by Mr Roberton from employment or other work during the period between the dismissal and the making of the order for compensation: s.392(e)

[52] Given my decision this criteria is not relevant. I have not had regard to the amount paid to Mr Roberton from Incolink because he would have been entitled to that payment if he had been made redundant four weeks later.

The amount of any income reasonably likely to be so earned by Mr Roberton during the period between the making of the order for compensation and the actual compensation: s.392(f)

[53] This criterion is not relevant.

Any other matter that the Commission considers relevant: s.392(g)

[54] There we no other matters drawn to the Commission’s attention

[55] There is no deduction for misconduct. 19

Conclusion

[56] Having found that Mr Robertson was unfairly dismissed I order that he be paid compensation of $4,059.98 less applicable tax and $375.55 paid to his superannuation fund within 14 days of the date of this decision.

DEPUTY PRESIDENT

Appearances:

Mr Bakri for the Applicant.

Mr McHugh for the Respondent.

Hearing details:

2014

Melbourne

7 February

 1   Transcript at PN14 - 30 and PR547580.

 2   Exhibit R1 at [2]-[3].

 3 Ibid at [6].

 4   I should note that while Mr McHugh thought that Car Stackers were bound by an enterprise agreement, it was accepted by both parties that it was not.

 5 Exhibit R1 at [5].

 6 Ibid at [7].

 7   Ibid at [10]-[12].

 8   Transcript at PN 339.

 9   Ibid at PN 349.

 10   Exhibit A1 at [15]-[16].

 11   Transcript at PN 89.

 12   Ibid at PN 95.

 13   Exhibit R2 at [4]-[5].

 14 Ibid at [6].

 15   Ibid [9]-[10].

 16   Transcript at PN 460.

 17   [2012] FWAFB 5241

 18   Transcript at PN 653 and 669.

 19   S.392(3) of the Act

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