Mikaylah Miller v CCM Quality Meats Pty Ltd

[2021] FWC 4989

[2021] FWC 4989

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Mikaylah Miller
v
CCM Quality Meats Pty Ltd
(U2021/4034)

DEPUTY PRESIDENT COLMAN MELBOURNE, 13 AUGUST 2021

Unfair dismissal application – whether ‘genuine redundancy’ – no consultation – dismissal unfair – compensation ordered

[1] Ms Mikaylah Miller has made an application for an unfair dismissal remedy pursuant to s 394 of the Fair Work Act 2009 (Act). In a decision dated 8 July 2021 ([2021] FWC 3967), I determined that Ms Miller had served the minimum employment period with the respondent, CCM Quality Meats Pty Ltd (company), and dismissed the company’s jurisdictional objection to her application. The present decision concerns the merits of Ms Miller’s application, as well as the company’s further objections that the dismissal was a case of genuine redundancy and was consistent with the Small Business Fair Dismissal Code (Code).

[2] Section 396 of the Act requires that I decide four matters before considering the merits of Ms Miller’s application. I am satisfied of the following. First, Ms Miller’s application was made within the 21-day period required by s 394(2) of the Act. Secondly, Ms Miller was a person protected from unfair dismissal, as she earned less than the high-income threshold and, as I have already determined, she has served the minimum employment period. Thirdly, as I explain below, the dismissal was not a case of genuine redundancy. Fourthly, although the company is a small business for the purposes of the Act, the Code is not relevant to this matter, because the reason for dismissal did not relate to conduct or capacity.

[3] Ms Miller’s unfair dismissal application was listed before me for determination on 12 August 2021. Ms Miller gave evidence, as did Mr Stephen Allan, the owner of the company.

Factual setting

[4] Ms Miller commenced working as a casual cashier and assistant in the company’s butcher shop on 15 January 2020. She became a permanent part-time employee on 19 December 2020. On 11 May 2021, Ms Miller received a text message from Ms Ribaric, which stated that management had decided to ‘reduce shop trading hours, therefore we can no longer offer you any more shifts at this stage.’ It is not disputed that by this text message the company intended to terminate, and did terminate, Ms Miller’s employment.

[5] Mr Allan instructed Ms Ribaric to send the text message to Ms Miller that morning. In his evidence, Mr Allan said that there had been a decrease in retail sales of some 20 percent, brought about by the COVID-19 pandemic. He said that as a consequence, the company ordered less stock and had less work for employees to do, and there was a need to reduce costs. Mr Allan said that he decided that he no longer required two of the cashier / assistant roles, or the cleaner, and that these three roles were made redundant. Mr Allan was very candid in his evidence that, of the four or five cashier / assistants working for the company at the time, he decided to dismiss Ms Miller and another employee, ‘Debbie’, because they were the least reliable. Mr Allan conceded that the company did not consult with Ms Miller about her redundancy or provide her with any notice that her employment would be terminated. I note that following the determination of the jurisdictional objection, the company belatedly paid to Ms Miller two weeks’ pay in lieu of notice of termination of employment. The company submitted that it had not been aware that it was required to give, or pay out, notice.

[6] Ms Miller said that she did not believe the company’s explanation that her dismissal was related to a decline in work, and that it did not make sense to her that a reduction in shop hours of only one hour per day would render her position redundant. She also said that on the day after her dismissal she went to the shop to return her uniform and saw an advertisement in the shop window stating: ‘cashier positions available, enquire within’. Ms Miller said that she had not seen the advertisement before. Ms Miller said that her sister remained an employee of the company working at the shop, and that her sister had told her that a person called ‘Andrea’ was now doing Ms Miller’s job, and that another employee had returned early from maternity leave. Mr Allan gave evidence that the job notice had been placed in the shop window some months earlier and had simply been left in the window by oversight. He said that the company had not hired any new cashier / assistants since Ms Miller and Debbie were dismissed, and that Andrea had been hired before Ms Miller’s dismissal. He said that the employee who had been on maternity leave had returned to work only some weeks prior to the proceedings.

[7] Ms Miller said that she believed that she had been treated unfairly, because she was dismissed by text for no good reason without warning or notice. She said that she had spoken with Debbie who had confirmed that on 11 May 2021 she received an identical termination text to the one received by Ms Miller. She said that her dismissal had taken her by surprise, that there had been no indication from the company that her employment was at risk, and that she was not consulted or warned about the redundancy of her position, or even told explicitly that redundancy was the reason for her dismissal. Ms Miller denied that she had been unreliable and said that she had been one of the hardest working employees.

Findings

[8] I found both Ms Miller and Mr Allan to be credible witnesses. I make the following findings. First, I accept Mr Allan’s evidence that the company had experienced a 20 percent decline in business, that this resulted in a reduction in the amount of product ordered and the amount of work required to be done in the shop, and that this had led to a need to reduce costs. Secondly, I find that, although the text message by which Ms Miller was dismissed referred to a reduction in shop hours as the reason for dismissal, the actual reason was the reduction in business and the corresponding need to reduce costs. In my view, the fact that the company dismissed both Ms Miller and another cashier on the same day supports this conclusion. Thirdly, I accept Ms Miller’s evidence that she saw the advertisement for cashier positions in the shop window the day after her dismissal. Fourthly, I accept Mr Allan’s evidence that this was an old advertisement that had been left in the shop window by mistake. I should add that I also accept Ms Miller’s evidence that she had not seen the advertisement previously, but this does not mean that the advertisement was not there. Fifthly, I accept Mr Allan’s evidence that he has not hired any cashier / assistants since the dismissal of Ms Miller. As to Ms Miller’s evidence that an employee called Andrea was now doing her work, I accept Mr Allan’s evidence that Andrea was hired before Ms Miller’s dismissal. I also accept that the employee who was previously on maternity leave had only recently returned to work. Ms Miller did not contest this.

Genuine redundancy

[9] Under s 385 of the Act, a dismissal cannot be unfair if it was a case of ‘genuine redundancy’, which is defined as follows by the Act at s 389:

“(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.”

[10] I consider that the company no longer required Ms Miller’s job to be performed by anyone because of changes in the operational requirements of its enterprise. It wanted to reduce staff in response to the reduction in business. The cleaning role and two cashier positions were therefore made redundant.

[11] Next, it is necessary to consider whether the company complied with any obligation in a modern award or enterprise agreement that applied to Ms Miller’s employment to consult about the redundancy. The Meat Industry Award 2020 (Award) applied to Ms Miller’s employment. Clause 32 of the Award requires an employer to consult with employees about major workplace change. Clause 32.1 states that, where an employer has made a ‘definite decision’ to make major changes that are likely to have significant effects on employees (which includes termination), the employer must give notice of the changes to all employees who may be affected by them, and discuss the changes and their likely effect on employees. Clause 32.2 provides that the employer must give written information about the change to the affected employees, including in relation to it nature and expected effects.

[12] The company did not do these things. The requirement of s 389(1)(b) has therefore not been satisfied in this case. This compels a conclusion that the dismissal was not a ‘genuine redundancy’. It is not necessary to consider the remaining element of ‘genuine redundancy’. The company’s objection to the unfair dismissal application on the basis that the dismissal was a ‘genuine redundancy’ is rejected. I will proceed to consider the merits of Ms Miller’s application.

[13] Before doing so, I briefly address the company’s contention that the dismissal was consistent with the Code and that Ms Miller was therefore not unfairly dismissed (see s 385(c)). Although the company is a small business employer, because it employed fewer than 15 employees at the time of Ms Miller’s dismissal (see s 23), the Code has no application to the present matter. The first stream of the Code is not relevant, because Ms Miller was not dismissed for serious misconduct, and the second stream is not applicable because it is concerned with dismissal for a valid reason ‘based on an employee’s conduct or capacity to do the job.’ Cases where redundancy is the reason for dismissal fall outside the scope of the Code.

Was the dismissal unfair?

[14] A finding that a dismissal was not a case of genuine redundancy does not necessarily lead to a conclusion that the dismissal was unfair. Rather, if the Commission rejects a contention that a dismissal was a case of genuine redundancy, as well as any other jurisdictional objections, the Commission proceeds to consider the unfair dismissal application on its merits.

[15] Section 387 states that in considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the Commission must take into account the matters in subsections 387(a) to (h).

[16] In circumstances of dismissal for reason of redundancy, no relevant finding can be made in relation to the consideration in s 387(a), namely whether there was a ‘valid reason for the dismissal related to the person’s capacity or conduct’. The company does not contend that there was any valid reason for dismissal related to Ms Miller’s capacity or conduct. Rather, its reliance on redundancy as the reason for dismissal is to be considered in connection with s 387(h), ‘any other matters the Commission considers relevant’, to which I shall return below.

[17] Similarly, the considerations in ss 387(b) and (c) are not material in the present case. They concern whether the employee was ‘notified of that reason’ (i.e. the valid reason in 387(a)), and whether the person was given an opportunity to respond to any reason related to capacity or conduct. It is relevant to consider whether the person was notified of the reason for dismissal or afforded an opportunity to respond to it, but under s 387(h).

[18] The consideration in s 387(d) is whether there was ‘any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal.’ There were no relevant discussions in this case.

[19] If a dismissal relates to unsatisfactory performance, s 387(e) requires the Commission to consider whether the person has been warned about that performance prior to the dismissal. The present matter is a case of dismissal for reason of redundancy, not poor performance. I note however that Ms Miller’s performance was taken into account by the company in selecting her for redundancy but that the company did not raise with her any concerns about performance. I take this into account under s 387(h) below.

[20] The Commission is required to consider the degree to which the size of the employer’s enterprise, and the degree to which the absence of dedicated human resources specialists or expertise in the enterprise, would be likely to impact on the procedures followed in effecting the dismissal (ss 387(f) and (g)). I note that the company is a small business employer, and that this likely affected its approach to the dismissal of Ms Miller. I take this into account.

[21] Then there is s 387(h), ‘any other matters that the FWC considers relevant’. My findings in relation to the ‘genuine redundancy’ jurisdictional objection are relevant to the question of whether the dismissal was unfair. The company did not need Ms Miller’s role to be undertaken by anyone. It still needed cashier / assistants, but fewer of them. I consider that Mr Allan’s decision to make the position redundant was a legitimate reason to end the employment in the circumstances. The fact that the dismissal was not a ‘genuine redundancy’ for the purposes of the jurisdictional objection does not mean that the dismissal was not a real redundancy. Mr Allan selected Ms Miller and a second employee for redundancy because he considered them to be the least reliable. But this does not detract from the fact that there was a legitimate business reason for the dismissal. Ms Miller’s dismissal for redundancy in the present circumstances occurred for a good reason. I take this into account in my consideration of s 387(h). It is a consideration that tells against a finding that the dismissal was unfair.

[22] It is also relevant to consider Ms Miller’s contention that she could have been redeployed instead of being made redundant. However, the company is a small business, and in the context of a decision to reduce staff in response to a downturn in business, it seems unlikely to me that redeployment would be realistic. There was no evidence of any other work that Ms Miller could have performed.

[23] It is important to consider the manner in which Ms Miller’s employment was terminated. She was entitled under the Award to be properly consulted about her redundancy, in the manner contemplated by the Award. This did not occur. The process leading to Ms Miller’s dismissal (to the extent there was any process) was deficient, because the company did not comply with the requirements of clause 32 of the Award. Further, Ms Miller did not receive a proper explanation of the reasons for her dismissal. She was told, in a text message, that the shop hours were reducing. This did not make sense to Ms Miller as a reason for her dismissal, because the reduction in hours was small. The real reason was that there was less work for employees to do, and a need to reduce costs. Further, the reason Ms Miller was selected for redundancy was connected to the company’s assessment of her reliability. The company should have explained these things to Ms Miller.

[24] Ms Miller received no notice of termination, and was only belatedly paid the amount in lieu of notice required by the Act. Ms Miller’s employment was ending in difficult economic times, which could present challenges to finding a new job. Indeed, it has transpired that Ms Miller has not been able to find another job despite applying for many. If the Award consultation provisions had been followed, Ms Miller would have had at least some actual notice of the termination of her employment, and could have begun to look for new work from the position of still being employed. She would also have had time to reflect on her position and make informed decisions about her next step. In my opinion, because of the business circumstances of the company at the time, its decision to dismiss Ms Miller was not unreasonable or unjust. However, in the circumstances of this case, including in particular the company’s failure to comply with the consultation provision in the Award, the dismissal was unfair.

Remedy

[25] Ms Miller seeks compensation. Section 390(3) states that the Commission must not order compensation unless it is satisfied both that reinstatement is inappropriate, and that it considers an order for the payment of compensation is appropriate in all the circumstances. Reinstatement is inappropriate in this case. Ms Miller’s position has ceased to exist. I consider that an award of compensation is appropriate.

[26] Section 392(2) provides that in determining an amount of compensation, the Commission must take into account all the circumstances of the case, including the matters in ss 392(a) to (g). The principles that apply to the question of how compensation should be calculated are well-established. The method for calculating compensation under s 392 of the Act is informed by the decision of the Full Bench in Bowden v Ottrey Homes Cobram and District Retirement Villages Inc [2013] FWCFB 431.

[27] As to the consideration in s 392(2)(a), there is no evidence as to the company’s current financial situation, and I would not conclude than an order for compensation might affect its viability. As to Ms Miller’s length of service (s 392(2)(b)), I note that she had worked for the company for nearly a year and a half.

[28] Section 392(2)(c) of the Act requires the Commission to take into account the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed. The Commission must consider what would have occurred if the person was not dismissed, and in particular how long the person would have remained employed. This is a hypothetical scenario which cannot be described with certainty. However, given the 20 percent downturn in business, and the fact that the company had decided to make three positions redundant including Ms Miller’s, I consider it likely that if Ms Miller’s employment had not been terminated on 11 May 2021, it would have been terminated a short time later. I assess this hypothetical situation from an assumption that any subsequent dismissal would have occurred according to law. If the Award had been observed, the company would have properly consulted with Ms Miller about her redundancy, including by providing her with information in writing about her redundancy and the reasons for it, as contemplated by clause 32. I consider that this would have taken not more than one week.

[29] For the purposes of calculating one week’s pay, I note Ms Miller’s evidence, which was not contradicted by the company, that she was paid $21.00 an hour. I accept Ms Miller’s evidence that at the time of her dismissal she had been working 30 hours a week. This produces a figure for one week’s pay of $630. To this I will add 9.5% in respect of superannuation, which is $59.85, resulting in a sum of $689.85. I accept Ms Miller’s evidence about her efforts to obtain employment since her dismissal, and in particular that she has applied unsuccessfully for many jobs. She has taken appropriate steps to mitigate the loss suffered from her dismissal. No deductions should be made from the amount I have identified.

[30] I am satisfied that a remedy should be ordered in this matter. Reinstatement is inappropriate, but compensation is appropriate in the circumstances. I will order compensation to be paid to Ms Miller in the amount of $689.85, with deduction of any taxation required by law. This amount is to be paid by the company to Ms Miller within 28 days.

[31] Ms Miller sought compensation of much more than this. She considers that she should receive the maximum amount of compensation awardable and that the Commission should consider the significant financial consequences her dismissal has had for her. However, the Act requires the Commission to take into account the particular matters I have mentioned and to approach the assessment of compensation in a particular way. Section 392(4) also prohibits the Commission from including in an order for compensation a component for distress, humiliation or other analogous hurt caused to the person by the manner of the dismissal.

[32] Finally, Ms Miller contended that during her employment she was underpaid. However, the Commission has no power to determine underpayment claims. Such claims must be brought in a court.

[33] An order giving effect to this decision is separately issued in PR732787.

DEPUTY PRESIDENT

Appearances:

M. Miller for herself
S. Allan for the respondent

Hearing details:

2021
Melbourne
12 August

Printed by authority of the Commonwealth Government Printer

<PR732788>