Miss Alisha Magri v SSKB Executive Services Pty Ltd

[2014] FWC 253

[2014] FWC 253

FAIR WORK COMMISSION

DECISION

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

Miss Alisha Magri
v
SSKB Executive Services Pty Ltd
(U2013/12576)

COMMISSIONER SIMPSON BRISBANE, 29 JANUARY 2014

Termination of employment jurisdiction objection - genuine redundancy - not covered by Real Estate Industry Award - no requirement to consult - application dismissed.

[1] The following Decision, now edited, was issued during proceedings on 23 January 2014.

[2] These are my reasons in determining the matter. The application, as we know, concerns an application under section 394 of the Fair Work Act by Ms Alisha Magri who has alleged that the termination of her employment with SSKB Executive Services Pty Ltd was unfair in accordance with the definition contained in section 385 of the Act. By way of background the evidence is that SSKB Executive Services Pty Ltd is a company in a group of companies and SSKB Executive Services employs some 84 employees, being all of the employees of the companies in the group. The respondent company provides the staff to each of the companies in the group.

[3] Simland Pty Ltd trading as Star BMS is a member company of the group and is staffed by employees of the respondent. Star BMS, according to the statement of Mr Sheehan, is a business providing professional advice to clients about facilities management. Star BMS specialises in servicing community title property in accordance with the evidence in his statement. The key service is supervising common property on behalf of bodies corporate.

[4] Ms Magri was employed by the respondent on 19 September 2012 pursuant to a letter of offer, and an employment agreement, which was attached to the statement of Mr Sheehan. The evidence is that the employment remained on foot for approximately 10 months. There is no dispute that the employer is not a small business employer, therefore the qualifying period is six months and there is jurisdiction to deal with the application on that basis.

[5] The application for unfair dismissal was filed on 15 August. A conciliation conference was conducted, I understand, in September which did not resolve the matter. A jurisdictional objection has been raised by the respondent based upon an argument that the applicant was subject to a genuine redundancy. For reasons of convenience the evidence concerning both the jurisdictional objection and the substantive matter have been heard together today because of the fact that obviously evidence going to the issues is intertwined and that was the most efficient way to proceed.

[6] We proceeded today as a determinative conference in accordance with my power under section 398 rather than in a formal hearing by agreement with the parties. Ms Magri, as applicant, has filed an application early this week for production of documents and for the attendance of an employee of the respondent who was an employee at the time of termination, Mr Neville, and those matters were resolved today by the material being provided voluntarily by the respondent in relation to the production application and by Mr Neville agreeing to attend to give evidence today.

[7] In terms of considering the application section 396 of the Fair Work Act requires – I will read the provision. It says:

“Initial matters to be considered before merits.

The Fair Work Commission must decide the following matters relating to an application for an order under Division 4 before considering the merits of the application... "

[8] Further, section 396(d) says, "whether the dismissal was a case of genuine redundancy".

[9] Section 389 provides the meaning of "genuine redundancy". It provides as follows:

“(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 do not intend to deal with all of the evidence in great detail tonight.

[11] In short, there was significant disagreement between the parties about whether the employer had complied with the consultation requirements in the modern award, that being in this case the Real Estate Industry Award. On this point the respondent's primary argument has been that the Fair Work Commission does not need to concern itself with the consultation requirements under the Real Estate Industry Award as the award does not apply to the work of Ms Magri. However, in the alternate the employer has argued that, in the event that I did form the view that the Real Estate Industry Award did apply, it has complied with the consultation requirements in clause 8 of the award in any event.

[12] While there has been much evidence that is centred on that issue today, ultimately the evidence does not need to be considered should I form the view that the Real Estate Industry Award does not apply to Ms Magri's employment with the respondent. In any event, I intend to deal with the tests under section 389 in chronological order.

[13] There are three elements to the section and I will deal with each in turn. The first of those is whether Ms Magri's employer no longer required Ms Magri's job to be performed by anyone because of changes in the operational requirements of the employer's enterprise.

[14] I can say that the evidence I have heard today does satisfy me that in this case a decision was taken some time either on the afternoon or evening of Friday, 26 July or over the following weekend by Mr Sheehan in consultation with Mr Nezmah that Ms Magri's role as a full-time facilities manager was no longer required to be done by anyone because of changes in the operational requirements of the employer's enterprises. I am satisfied on the basis of the evidence that those changes were made in direct connection with the loss of one of the respondent's contracts as a facility manager with the Watkins Medical Centre which I understand was valued at some $40,000.

[15] There was some considerable evidence led concerning the nature of the changes in employment that occurred within Star BMS both before and after the termination of Ms Magri. I do not intend to repeat in detail all of the evidence. However, I am satisfied that that evidence is compelling to indicate that Ms Magri was not simply replaced by another employee doing the same job or almost the same job as she was doing after she was terminated.

[16] The evidence does indicate – and when I refer to this evidence, I refer to each of the statements that have been provided today by the respondent going to the history of the performance of Star BMS following its purchase and also the evidence going to meetings with staff in the organisation for a period of time before the decision to terminate about the performance of that business within the group of companies. I particularly look at the evidence which was largely ultimately uncontested in Mr Sheehan's statement going to the financial performance of Star BMS.

[17] I did put to Ms Magri during closing submissions my views about the fact that while certainly there was an additional employee employed following her termination, that employee was employed on a casual basis. That employee did not replace all of the duties that she performed. They were working, I think, on the basis of about 15 hours a week and I am satisfied that the changes that were introduced were of a nature that satisfies the meaning of section 389(a) such that the employer has not offended that provision.

[18] I also think it is pertinent that, while there has been some evidence led on the question of the selection of Ms Magri over other alternative potential courses the employer could have gone to, I did make the point, and I think it was generally understood by the parties, that whether a dismissal is a genuine redundancy does not go to the process of selecting individual employees for redundancy that is followed by the employer. I do note though, however, if a reason a person is selected for redundancy is a prohibited one or an unlawful one, then that would leave an employer open to being pursued for a breach of the general protections provisions under the legislation but that is a different issue, for example, if the selection was made on grounds that were discrimination.

[19] In terms of the second test under section 389, that is, 389(b), it is that the employer has complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy. This has been vigorously contested today. It is central to this matter because the question of the application of the Real Estate Industry Award goes to all of the evidence and the contest in the case over the requirements for consultation.

[20] I have considered all of the evidence and the submissions today. Just turning to the award, I have considered the submissions by both parties. The employer has provided reasonably fulsome written submissions and Ms Magri has also gone through at some length in her written submissions and also orally why she says the nature of the functions that she performed do fall within the meaning of the award. In reference to clause 4 of the award, “Coverage”, the award reads as follows:

“This award covers employers in Australia engaged in the real estate industry in respect to their employees engaged in classifications in clause 14. Minimum weekly wage is to the exclusion of any other modern award.”

[21] The award at clause 3 provides a definition of the “real estate industry” and that reads as follows:

“The real estate industry means the provision of services associated with sales, acquisitions, leasing and/or management and/or management of residential, commercial, retail, industrial, recreational, hotel, retirement and any leasehold or real property and/or businesses. Such services include a real estate agency, business and hotel broking, strata and community title management (or similar service, however described), stock and station agency, buyer's agency, real estate valuation.”

[22] There are two criteria that one needs to consider when determining whether or not coverage for an employee is affected by the award. The first element is whether or not the award applies to the employer and the second element is whether or not the employee falls within a classification described in the award. In that respect it is important to have reference to the descriptions for the classifications in clause 14 of the award set out in schedule B of the award.

[23] To assist me in dealing with this issue I have had reference to relevant authorities that deal with the question of award application. Particularly I have had reference to the decisions in R. Brand v APIR Systems Ltd. 1 That decision in turn cited a decision of the Full Bench of the Australian Industrial Relations Commission in Carpenter v Corona Manufacturing Pty Ltd.2 In that decision it was stated relevantly as follows:

“In our view, in determining whether or not a particular award applies to identified employment, more is required than a mere quantitative assessment of the time spent in carrying out various duties. An examination must be made of the nature of the work and the circumstances in which the employee is employed to do the work with a view to ascertaining the principal purpose for which the employee is employed.”

[24] In that case the examination demonstrated that the principal purpose for which the employee was employed was that of a manager and therefore they were not covered by the relevant award in that case. In dealing with this matter I have come to the conclusion that while the evidence would indicate that there is no question that some employees of the respondent would be covered by the Real Estate Industry Award as they were employed in roles covered by, for example, the third stream of employment described in schedule B of the award, it is my view that Ms Magri is not covered by the award.

[25] Ms Magri's argument has been that she was covered by the second stream in schedule B. Schedule B provides for three separate streams. The first of those deals with property sales classifications, the second deals with property management classifications and the third deals with strata and community title management classifications. Ms Magri's argument has essentially been that she was covered by the second-stream the property management classification stream.

[26] There is no question in my mind and there was some considerable evidence going to the various indicative tasks described within the classifications within that stream to consider the role descriptors and there is no question that a range of those indicative tasks are indicative tasks that would describe duties that Ms Magri performed. However, in considering these matters the full bench authority in Carpenter v Corona particularly focuses on the fact that it is not merely a question of a quantitative assessment of those indicative tasks. Even if one approached it that way, (a quantitative assessment of indicative tasks)it would appear to me that the majority of indicative tasks in the relevant classification descriptors in that stream would be more akin to someone in connection with a real estate business in the true sense of the word rather than a facilities management business.

[27] Certainly though, the more important question is looking at the principal purpose of the nature of the work and the circumstances in which it is performed. When one looks at the principal purpose of the role that was performed by Ms Magri for the Star entity, it is my view that that role as a facilities manager, as provided in the evidence today, does not fall within the classifications because the principal purpose of her role in the facilities management business was not the same or essentially aligned to the second stream of the classification descriptors in the award. The principal purpose of the facilities management business is more aligned to the repairing, the maintenance and compliance requirements for buildings or structures rather than the management of the real estate as set out in the descriptors in the award.

[28] On that basis I formed the view that the employer was not bound to comply with the consultation provisions under the award. I do want to make some comments though in relation to the submissions that have been made by Ms Magri on the issue, that is, in the event that she had been covered by the award, and I only say these things not because they will ultimately affect the outcome but I think it is important when someone brings a case like this before the tribunal that some attention is paid to the fact that, in my view, having considered all of the evidence that was given regarding the consultation, had the employer been covered by clause 8 of the award, I think it would be right to say the employer would not have complied with the consultation requirements in the award.

[29] I say those things because I am not satisfied that, even were I to accept the evidence going to discussions that occurred at meetings prior to the date of termination on 29 July, those discussions did not occur in circumstances where a decision had been made to terminate Ms Magri. On that basis, had the award applied, the employer could not rely on those discussions.

[30] I do not necessarily criticise the employer. Obviously the best endeavours were being made to try and make the business run as effectively as it could, but for the purposes of the requirements of clause 8 of the award the requirement under clause 8(2), particularly in clause 8(2)(c) is fairly clear in terms of what an employer is required to do to consult with the employee in the event that they do decide to make major change which the termination of employee does fall within the meaning of and the steps that were followed by the employer, had the award applied, would not have met those consultation requirements.

[31] Effectively what occurred, as I understood from the evidence, was a decision was taken either on the Friday night or over the weekend to make the position redundant and Ms Magri was told the position would be made redundant and did not get an opportunity to have any real or meaningful input into what steps could have been taken to mitigate the effects on her, potentially have an impact on the ultimate decision, change the decision. So in the event that the applicant's submission had been right on award coverage the employer would not have been able to rely on section 389 which then would have meant that the matter would turn to section 387.

[32] Ultimately I do not need to consider those things but I will also say these things, Ms Magri, for your benefit because I think it is also useful for your information. My view would be had I had to do that, then on the basis of the evidence that has been provided in the matter today the employer would have been unable, in my view, to establish there was a valid reason for termination. There is a series of tests under section 387 which no doubt you are familiar with because you have talked about them in your submissions, but I think, in my view, had the matter gone down that path, then there is a provision under section 387(h) of the Act which allows the tribunal to consider other matters in deciding whether or not ultimately a dismissal is unfair.

[33] I think in the circumstances, considering all of the evidence that has been given about the state of the business, particularly the loss of the contract with Watkins Medical Centre, I would have been inclined to form a view that because of the failure to consult properly and the inability to say there was a valid reason for termination, then there would have been difficulties for the employer and it would have been more likely that a finding may have been made against the employer.

[34] At the same time, because of the fact that the decision itself was based on a rational assessment, there were sound, defensible and well-founded reason for the termination based on a restructuring that was required, being that the job that you were performing was no longer required to be performed by anyone because of changes in the operational requirements of Star and it was not reasonable in all the circumstances, as I am about to talk about, to look at redeployment. There is no evidence to suggest that there was a position that you could be redeployed into so on that basis these would have been considerations that told against a finding that the dismissal was harsh, unjust or unreasonable.

[35] In any event, however, the failure to consult would have more likely led to an ultimate conclusion that it was unreasonable conduct to fail to do those things and on that basis if a finding was made the dismissal was harsh, unjust or unreasonable, it would have impacted on the question of remedy which meant that even were you to succeed or had you been successful on the award-coverage argument, the evidence on the first test under section 389 would have more than likely led, had you succeeded on the 387 test, to mean that the sort of compensation that you might have been awarded would have been perhaps two weeks which would have been probably the amount of time it would have taken for the employer to comply with the clause. That is my view.

[36] I say those things because if might be of some comfort to you to know that had the matter gone the other way, then the difference in the outcome would not have been a significant one in my view. Closing off the issue in relation to section 389, the evidence is that there is no evidence to suggest that there was a position that you could have been readily redeployed into. On that basis I cannot say that the employer has offended that provision. So for all of the reasons that I have gone through I am satisfied that this was a case of genuine redundancy. On that basis the Act does not give me jurisdiction to go on to consider the substantive matter even though I have expressed some views about what might have happened had I been able to. That is my decision. The Application is dismissed.

COMMISSIONER

Appearances:

Ms Magri the Applicant.

Mr T Sheenhan for the Respondent.

Hearing details:

2014.

Brisbane:

23 January

 1   [2003] AIRC 1161

 2   PR925731.

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