Mr Charles Balchin v Aussie Professional Pest Control Services
[2021] FWC 791
•15 FEBRUARY 2021
| [2021] FWC 791 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Mr Charles Balchin
v
Aussie Professional Pest Control Services
(U2020/6266)
COMMISSIONER HUNT | BRISBANE, 15 FEBRUARY 2021 |
Application for an unfair dismissal remedy – jurisdictional objection – genuine redundancy – position no longer required to be performed by anyone – whether dismissal complied with the Small Business Fair Dismissal Code – casual Employee – ex gratia payment made on termination exceeds amount that would otherwise be ordered – no order of compensation
[1] On 6 May 2020, Mr Charles Balchin made an application under s.394 of the Fair Work Act 2009 (the Act) alleging that his dismissal from Aussie Professional Pest Control Services (the Respondent) was harsh, unjust or unreasonable.
[2] In his Form F2 – Unfair Dismissal Application, Mr Balchin stated that the reasons given for his dismissal were due to a downturn in business due to COVID-19 and a recent review of operational requirements, as well as the Respondent not having sufficient workload or financial means to support his role.
[3] Mr Balchin stated that the review of the Respondent’s operation requirements was not explained to him; he was able to perform his role as well as other staff and has more experience and hours in pest control than some of his former colleagues. Further, Mr Balchin believed that the hours of work from the Respondent could have been shared between himself and other employees instead of his employment ending. He considered that he had been singled out unfairly.
[4] Mr Balchin also stated that he was told that the downturn in business the Respondent experienced was not enough to entitle it to JobKeeper payments for its employees.
[5] On 19 May 2020, the Respondent filed a Form F3 – Employer response to the application. In the Form F3, although the Respondent indicated there were no jurisdictional objections to the application, the Respondent stated that Mr Balchin’s employment as a casual employee was terminated as Mr Balchin’s role was no longer required due to a loss of business as a result of COVID-19.
[6] Mr Clinton Taylor, owner/operator stated that he was taking up part or all the pest control technician roles within the business. Further, the Respondent stated that the JobKeeper scheme was not a compulsory scheme to enrol into. The Respondent stated that all employees’ roles were being assessed on a weekly basis.
Legislation
[7] Section 385 of the Act provides that a person has been unfairly dismissed if the Commission 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.
[8] Section 396 of the Act sets out the following:
“The FWC must decide the following matters relating to an application for an order under Division 4 before considering the merits of the application:
(a) whether the application was made within the period required in subsection 394(2);
(b) whether the person was protected from unfair dismissal;
(c) whether the dismissal was consistent with the Small Business Fair Dismissal Code;
(d) whether the dismissal was a case of genuine redundancy.”
[9] As set out above in s.396 of the Act, a consideration as to whether the dismissal was harsh, unjust or unreasonable cannot occur if the dismissal was a case of genuine redundancy. If the Commission determines that the dismissal was a case of genuine redundancy, the application will be dismissed.
[10] If the Commission determines that the dismissal was not a case of genuine redundancy, it will be necessary to determine if the dismissal was consistent with the Small Business Fair Dismissal Code pursuant to s.388 of the Act. It is uncontested that the Respondent employed only four employees at the time of Mr Balchin’s dismissal, making it a small busines employing less than 15 employees.
[11] Taking the first jurisdictional objection of genuine redundancy, s.389 of the Act provides the meaning of genuine redundancy 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.”
[12] It is not disputed that Mr Balchin was employed pursuant to the Pest Control Industry Award 2020 (the Award). The Award contains the following consultation clause:
“29. Consultation about major workplace change
29.1 If an employer makes a definite decision to make major changes in production, program, organisation, structure or technology that are likely to have significant effects on employees, the employer must:
(a) give notice of the changes to all employees who may be affected by them and their representatives (if any); and
(b) discuss with affected employees and their representatives (if any):
(i) the introduction of the changes; and
(ii) their likely effect on employees; and
(iii) measures to avoid or reduce the adverse effects of the changes on employees; and
(c) commence discussions as soon as practicable after a definite decision has been made.
29.2 For the purposes of the discussion under clause 29.1(b), the employer must give in writing to the affected employees and their representatives (if any) all relevant information about the changes including:
(a) their nature; and
(b) their expected effect on employees; and
(c) any other matters likely to affect employees.
29.3 Clause 29.2 does not require an employer to disclose any confidential information if its disclosure would be contrary to the employer’s interests.
29.4 The employer must promptly consider any matters raised by the employees or their representatives about the changes in the course of the discussion under clause 29.1(b).
29.5 In clause 29 significant effects, on employees, includes any of the following:
(a) termination of employment; or
(b) major changes in the composition, operation or size of the employer’s workforce or in the skills required; or
(c) loss of, or reduction in, job or promotion opportunities; or
(d) loss of, or reduction in, job tenure; or
(e) alteration of hours of work; or
(f) the need for employees to be retrained or transferred to other work or locations; or
(g) job restructuring.
29.6 Where this award makes provision for alteration of any of the matters defined at clause 29.5, such alteration is taken not to have significant effect.
Background
[13] Mr Balchin commenced employment with the Respondent on 19 November 2013 as a trainee pest control technician. He was employed to work two to three days per week as a casual employee. Mr Balchin’s hours of worked varied daily, as did the number of hours he worked each week. During Mr Balchin’s employment, he trained to become a pest control technician and passed his pest control license and termite inspections license, although he did not carry out termite inspections during the duration of his employment with the Respondent. He worked in this position until 16 April 2020 upon being informed the role was made redundant.
[14] On 16 April 2020, Mr Balchin attended a meeting with Mr Taylor and Ms Gabrielle Firth-Taylor, co-owner of the business. Mr Balchin was advised that he was being “let go” due to the downturn in business because of COVID-19 and the operational requirements of the business had changed so that his role was going to now be performed by Mr Taylor. The following written termination letter was issued to him at the meeting:
“16th April 2020
Charles Balchin
[redacted]
Dear Charlie,
Cessation of Casual Employment
We refer to the meeting held on Thursday 16th of April 2020 during which you were informed that as a result of a downturn in business due to Covid-19 and recent review of our operational requirements, your role as a casual Pest Control Technician is no longer required. The business does not have sufficient workload or financial means to continue to support your current role. As a result, your role will no longer be required by the company, with effect from Thursday 16th April 2020.
Due to your length of service, you will be paid until 3.00pm on Thursday 16th of April 2020 plus we will provide you with a final payment of $2,000.00.
We will also provide you with a separation certificate for Centrelink purposes.
You must ensure that you return all company equipment in your possession to Aussie Professional Pest Control.
If there is any further information you require please do not hesitate to contact us.
We would like to take this opportunity to thank you for the work you have performed for Aussie Professional Pest Control and we wish you well in the next stage of your career. Please do not hesitate to contact us if you wish to obtain a reference in the future.
Your sincerely,
Aussie Professional Pest Control
Clinton Taylor & Gabrielle Firth-Taylor
Director”
Hearing of the application
[15] I listed the matter for a telephone hearing of the parties on 24 August 2020. After seeking the views of the parties, I decided to conduct the matter as a determinative conference. Mr Balchin appeared and gave evidence on his own behalf. Ms Maria Balchin attended as Mr Balchin’s support person. Mr Taylor and Ms Firth-Taylor, co-owners and operators, appeared for the Respondent and gave evidence.
[16] Mr Balchin filed witness statements of the following individuals:
• Ms Maria Balchin;
• Mr Ryan Fitzpatrick, former colleague at the Respondent; and
• Ms Jan Warmington, neighbour.
[17] I did not admit into evidence the witness statement of Ms Balchin as it was solely opinion and hearsay evidence. The Respondent advised that it did not require Mr Fitzpatrick or Ms Warmington for cross-examination. I have had regard to their evidence however it is not necessary to reproduce it in this decision.
[18] The Respondent filed witness statements of the following individuals, not required for cross-examination:
• Ms Teija Jensen, Administration Assistant;
• Mr Ben Davies, Pest Control Technician; and
• Mr Greg George, former colleague at the Respondent.
Evidence and submissions of the Respondent
Evidence of Ms Gabrielle Firth-Taylor
[19] Ms Firth-Taylor provided a witness statement and appeared and gave evidence at the determinative conference in support of the Respondent’s case. Ms Firth-Taylor has been the co-owner of the Respondent since March 2009.
[20] Ms Firth-Taylor stated that when she and Mr Taylor purchased the business, it required Mr Taylor to work three to four days a week as a termite and pest control technician, while she worked one day per week in the office. As the operational needs of the business increased, the Respondent employed one trainee pest control technician and one qualified termite and pest control technician. During this time, Mr Taylor’s role was changed to a managerial role as the bulk of the workload was carried out by the technicians.
[21] From 19 November 2013, Mr Balchin was employed as a casual trainee pest control technician, working two to three days a week. In April 2014, Mr Balchin obtained his general pest control technician license.
[22] Ms Firth-Taylor gave evidence that in July 2016, Mr Balchin enrolled in a termite inspection course. Her evidence is that Mr Balchin struggled with the theory and practical components of the course and at one stage he deleted the theory component from his computer in frustration. She stated that Mr Balchin had to start the theory component again.
[23] Ms Firth-Taylor stated that on 2 September 2016, while conducting a termite inspection with Mr Taylor, Mr Balchin became frustrated and said he could not proceed with the inspection. Ms Firth-Taylor gave evidence that as a result of thorough training from Mr Clinton, Mr Balchin obtained his termite inspection licence in September 2017.
[24] Ms Firth-Taylor stated that while Mr Balchin had been provided ample time and support to complete the termite inspections, he was not competent at termite inspections, nor did he want to complete them. According to Ms Firth-Taylor, numerous past and present employees informed her that Mr Balchin had said he did not want to complete termite inspections and was unhappy with his employment.
[25] In September 2017, Mr Balchin was offered a permanent role, working 30 hours a week, based on the average number of hours he had worked over the preceding 12 months. Mr Balchin declined this role and remained as a causal employee.
[26] In December 2017, Ms Firth-Taylor and Mr Taylor assessed the operational needs of the business. At that time, Mr Balchin was employed as a casual on light duties due to the exacerbation of a pre-existing condition. Mr Balchin worked every second day and carried out baiting runs only. Due to the operational needs of the business, in February 2018, a trainee pest control technician was employed.
[27] In March 2019, Mr Balchin applied for a permanent position with the Respondent, but was informed that due to the work decline during the approaching winter season, the Respondent was unable to guarantee him a set number of hours. As such, Mr Balchin remained as a casual employee.
[28] Ms Firth-Taylor gave evidence that the Respondent’s workload is determined by many different factors. These include:
“Engagement for one off services:
• these drop significantly in our winter period (due to a reduction in Pest Activity) which is when Charles applied for Permanent Employment.
Engagement for reoccurring services:
• these drop off significantly in our winter period (due to a reduction in Pest Activity) which is when Charles applied for Permanent Employment.
Engagement of contracts:
• These can be cancelled or reduced at any time and are usually cancelled or reduced in our winter period (due to a reduction in Pest Activity). Which is when Charles applied for Permanent Employment”
[29] Ms Firth-Taylor stated that between 16 and 20 March 2020, customers started to cancel their appointments and the Respondent was not engaging new clients as a result of COVID-19. She stated that one of the employed technicians was completing a course and the Respondent was finding it difficult to supply reduced work to the two remaining technicians.
[30] Ms Firth-Taylor stated that on 23 March 2020, Mr Taylor had a meeting with all of the technicians where he explained that the business had started to receive cancellations and customers were not engaging their services. According to Ms Firth-Taylor, Mr Taylor explained that he hoped he would not dismiss anyone, but he did not know how much work was to be engaged going forward.
[31] Over the following weeks the Respondent continued to receive cancellations. She stated that a large number of the hospitality contracts they normally serviced called to cancel their services as they were no long operating. Several large complexes also reduced their services due to no guests, and baiting customers had cancelled their appointments. She stated that a number of overdue invoices had not been paid.
[32] On 2 April 2020, she and Mr Taylor became concerned about the downturn in business, and after assessing the operational needs of the business, decided that one or more of the technician roles would need to be dissolved. It was determined that Mr Taylor would step into one or more of these roles.
[33] Ms Firth-Taylor stated that on the same day, the Respondent’s accountant was contacted regarding the Respondent’s eligibility for JobKeeper. It had, of course, been just days since the JobKeeper scheme was announced. It became apparent that one of the three technicians was eligible for JobKeeper payments, together with the Administration Assistant. However, the Respondent was not experiencing a revenue drop of 30% or more. She stated that if the unpaid invoices from January to February were to be paid in the following months, it would skew a true reflection of the Respondent’s revenue.
[34] Again, on 2 April 2020, the Respondent sought legal advice on the process required to dissolve one or more of the Respondent’s employees. According to Ms Firth-Taylor, and in giving evidence waiving legal professional privilege, the employment lawyer informed the Respondent that a skills matrix should be used to determine which employees were to be dismissed. The employment lawyer advised that since all of the employees were casual employees, only one hour’s notice was required to be given.
[35] According to Ms Firth-Taylor, the employment lawyer advised that the two casuals who had been employed for less than 12 months were only required one hour’s notice, but since Mr Balchin had been employed for 6.5 years, it may be different as he had been employed over 12 months. The employment lawyer asked questions regarding Mr Balchin’s employment. Ms Firth-Taylor responded that Mr Balchin’s hours changed every week depending on what work there was available and so did his weekly earnings, and Mr Balchin has never been paid for sick, personal or annual leave.
[36] On 6 April 2020, Ms Firth-Taylor and Mr Taylor completed the skills matrix, determining that Mr Balchin was the least skilled of the casual employees. It was decided that his role would be dissolved first, followed by other employees based on their experience. Ms Firth-Taylor submitted that the major skill Mr Balchin lacked was the ability to competently carry out termite inspections.
[37] Following a teleconference with the employment lawyer on 7 April 2020, Ms Firth-Taylor stated that the lawyer informed her that consultation was not required since Mr Balchin was a casual employee.
[38] On 16 April 2020, at 9:35am, a meeting was held between Ms Firth-Taylor, Mr Taylor and Mr Balchin where it was explained to Mr Balchin that regrettably, he was being terminated. Mr Taylor informed Mr Balchin that he would be stepping into the role and taking on the workload. Mr Taylor explained the downturn in business as a result of COVID-19, including that baiting customers had cancelled, major contracts had been cancelled or reduced, and hospitality industry contracts had been cancelled.
[39] Mr Balchin asked about JobKeeper, to which Mr Taylor explained that the revenue had not decreased by 30% or more and therefore the Respondent was not eligible.
[40] Ms Firth-Taylor explained that the termination letter issued to him would be enough for him to claim JobSeeker payments, and he would be issued with an employment separation certificate on 21 April 2020 with the pay run. Mr Taylor explained that he would be paid up until 3:00pm that day, and a further $2,000 would be paid to him until he received JobSeeker payments.
[41] Mr Balchin asked what was happening with other employees. Mr Taylor responded that meetings were scheduled with other employees over the next few weeks, but he could not discuss with Mr Balchin the circumstances of other employees, nor did he know what was going to happen in the future. Mr Taylor stated that he might give Mr Balchin a call in coming months to see if he had found work or not, however he did not wish to give him assurances, and if he found other work he should accept it.
[42] Ms Firth-Taylor inquired how Ms Balchin’s employment had been affected by COVID-19. Mr Balchin replied that it had been an incredibly stressful time, however thankfully, Ms Balchin’s employment was secure.
[43] Mr Balchin was afforded an opportunity to farewell Ms Jensen and retrieved all Respondent material. Mr Taylor drove Mr Balchin to his home and bid farewell.
Evidence of Mr Clinton Taylor
[44] Mr Taylor provided a witness statement and appeared and gave evidence at the determinative conference in support of the Respondent’s case. Mr Taylor has been the co-owner of the Respondent business since March 2009.
[45] Mr Taylor stated that as a result of COVID-19, on 16 March 2020 the Respondent had evidenced a reduction in phone activity. There was little work to do for the employed technicians. Mr Taylor found that he had little to do after passing all available work on for Mr Balchin and Mr Davies to perform.
[46] On 23 March 2020 he held a breakfast meeting with the three technicians. They discussed best practice hygiene use when visiting customers including gloves, washing hands and wearing masks. He informed the technicians that while the Respondent will try to provide work, it cannot guarantee what will happen.
[47] Mr Taylor’s evidence is that over the coming weeks most of the commercial kitchen customers stopped requiring the Respondent’s service, and some of the large accommodation clients stopped or reduced their patronage. As an example, Novotel Twin Waters reduced their request from a typical 15 hours per week to around four hours per month for the kitchen service only. This work is a middle-of-the-night service which is performed by Mr Taylor.
[48] A valuable customer, Sebel Twin Waters requested the Respondent carry out no general pest control work to all accommodation units. This was a loss of around 20 hours per week, largely performed by Mr Taylor while doing termite inspections to the site at the same time.
[49] On 2 April 2020, Mr Taylor and Ms Firth-Taylor discussed between themselves that all available work was being performed by the technicians, with very little for Mr Taylor to perform. They decided that it would be necessary for Mr Taylor to perform some of the technician work and to keep funds in-house in case the situation deteriorated.
[50] Advice was sought from a HR Consultant, recommending the compilation of a skills matrix of employees. The HR Consultant informed the Respondent that casual employees need only be given one hours’ notice of termination. An employment solicitor confirmed that advice.
[51] The skills matrix was completed, nominating Mr Balchin as having difficulties in the following areas:
• Pest control treatments – “Can Complete. Prefers not to complete larger properties or complexes”
• Bee services – “Prefers not to complete”
• Termite inspections – “Qualified. Is not competent in completing. Does not want to complete.”
• Pre-purchase inspections – “Qualified. Not trained in (cannot due to not wanting to complete Termite inspections).”
• Commercial termite inspection services – “Is not competent in completing. Does not want to complete.”
• Accommodation complex pest control services – Qualified. Has expressed reservations about completing.”
• Accommodation complex termite inspections – “Qualified. Is not competent in completing. Does not want to complete.”
[52] Having compiled the skills matrix, the decision was made for Mr Balchin to be dismissed, given that Mr Davies and Mr Malpass were able to carry out termite inspections, and termite inspections would be expected to be carried out nearly every day. Mr Taylor considered that while Mr Balchin had been trained to complete termite inspections, he was not a competent inspector. Mr Taylor considered that Mr Balchin was unable to grasp the reporting and practical side of termite inspections.
[53] Mr Davies was not considered for dismissal as Mr Taylor considered he is an extremely experienced termite technician, capable of performing all technical issues within the role. Mr Malpass had been considered for termination, however the Respondent was waiting to see what might happen with the economy in September 2020 when JobKeeper was expected, at that time, to have been stopped or reduced.
[54] The employment lawyer sought information from the Respondent relevant to Mr Balchin’s usual hours of work, together with his casual rate of pay. The Respondent explained the downturn in business activity, noting that Mr Taylor would be performing more work on the tools, with the phone being answered by the office staff during business hours, and by Mr Taylor outside of business hours. The lawyer advised the Respondent that one hours’ notice of termination was required to be given Mr Balchin as he was a casual employee.
[55] On 16 April 2020, a meeting was convened with Mr Balchin. Mr Taylor offered him a drink and they sat on the sofa. Mr Balchin said, “This isn’t a good meeting, is it?” Mr Taylor replied, “It’s not ideal for anyone.”
[56] Mr Taylor and Ms Firth-Taylor explained to Mr Balchin the reduction in business activity, explaining that Mr Taylor would be stepping back on the tools, and unfortunately Mr Balchin would be dismissed. Mr Balchin replied that he completely understands and would hate to have the stress that the Respondent has, as he has seen the stress that his wife was going through running the day care where she works. Mr Taylor stated that it’s pretty stressful for everybody at the moment.
[57] Mr Taylor informed Mr Balchin that he will be paid until the end of the day, plus an additional $2,000 to help him out. Mr Balchin inquired about the other technicians to which Ms Firth-Taylor stated that would not be discussed, and they had not had a meeting with them yet. Mr Balchin responded that he would be disappointed if he was the only employee to be let go. Mr Taylor stated that Mr Balchin is not the only one who will be having a meeting.
[58] Mr Balchin inquired about JobKeeper. Mr Taylor informed him that the Respondent did not qualify for JobKeeper and did not know if it would in the future, due to a large number of unpaid invoices. Mr Taylor said to him that he should receive JobSeeker at the rate of $550 per week, which is better than being stood down without pay.
[59] Mr Balchin asked if he could be re-employed in a few months if work picked up again. Mr Taylor responded that would be assessed. Mr Taylor’s evidence is that Mr Balchin was appreciative of the $2,000 payment made to him.
[60] Mr Taylor drove Mr Balchin home. Mr Balchin stated he had recently been offered a role elsewhere which he had declined due to his preference for the Respondent’s business and the products used by it. Mr Taylor thanked him for the feedback. Pleasantries were exchanged at Mr Balchin’s home and Mr Taylor gave permission for Mr Balchin to retain a shovel he had been using.
[61] The following week, Mr Balchin called Mr Taylor, requesting a reference. Mr Taylor said it would be sent to him. He also inquired about JobSeeker and Mr Taylor suggested he google it or apply online.
[62] On 6 May 2020, Mr Balchin sent a text to Mr Taylor asking how work was going and if he will be back at work soon. Mr Taylor said he was busy, but it is “hit and miss” at the moment. Mr Balchin replied with a thumb’s up emoticon.
[63] Mr Taylor stated that Mr Balchin called and left a message, asking him to call him, as he did not think the Respondent could do to him what it had done. Mr Taylor sent him a text advising him that he would call him in the morning, and if he thinks the Respondent has done something wrong, he would like the opportunity to clarify it. Mr Balchin sent a text at around 5:00am the next morning saying not to call as all is good. Mr Taylor replied, “are you sure if you think we have done the wrong thing I would prefer to clarify it, but no worries if all good.”
[64] On 11 May 2020, Mr Taylor messaged Mr Balchin that a customer wanted to contact him to purchase honey from him. Mr Balchin replied, “no worries”.
[65] Mr Taylor stated that since Mr Balchin’s dismissal, he has been “on the tools” approximately 15–30 hours per week and is performing approximately 5-10 hours of paperwork. He stated that the Respondent has adjusted the business process and operational requirements so that it does not require a third technician. The two technicians can perform all technical operational duties on an as required basis.
[66] During the determinative conference, Mr Taylor stated that while Mr Balchin had more experience than the other two technicians, he was the least skilled. He stated that skill does not equate to experience.
[67] Mr Taylor stated that it was his pest control licence “on the line” and he was troubled when Mr Balchin stated he did not wish to do difficult jobs. Mr Taylor stated that it’s not possible to know when a telephone call is received if the job is difficult or easy. Where Mr Balchin gave evidence that he was qualified a lot longer than Mr Malpass, Mr Taylor responded that Mr Malpass came from a trade background and was picking up the knowledge of the work quickly; “He was running with it.”
[68] Mr Balchin denied during the determinative conference that he had stated that he did not wish to do housing complexes. He denied that he had ever stated that he did not like killing bees. He is an apiest, and it is his preference not to kill bees. He stated that yes, he would kill bees, however he would rather somebody else do it.
[69] He considered the skills matrix a joke and stated that he did not agree with it.
[70] At the determinative conference Mr Taylor stated that Mr Davies and Mr Malpass were working approximately 20-40 hours per week. He stated that between the three of them they were working approximately 100 hours per week. He stated that he needed to try and give Mr Davies and Mr Malpass enough hours of work. Mr Davies requested to be made permanent and this was agreed by the Respondent. Mr Malpass was, at the time of the determinative conference, a casual employee. Mr Taylor stated that in boom time the business operated at around 180-200 hours per week.
Evidence of Ms Teija Jensen
[71] Ms Jensen provided a witness statement in support of the Respondent’s case. She was not required for cross-examination. Ms Jensen has been employed by the Respondent as an Administration Assistant, working four days a week since October 2016.
[72] Ms Jensen gave evidence that from approximately 16 March 2020, the Respondent started to receive a large number of cancellations that were predominately from the elderly who were concerned about their health. She stated that in the following weeks, baiting customers cancelled their appointments as they were no longer able to afford to pay for the Respondent’s services. The Respondent’s largest contracts at the Novotel Twin Waters, the Sebel Apartment Twin Waters and Aussie Word reduced their services from the Respondent to the bare minimum.
[73] Ms Jensen stated that the Respondent’s phone has been extremely quiet, with the majority of phone calls cancelling appointments.
Evidence of Mr Ben Davies
[74] Mr Davies provided a witness statement in support of the Respondent’s case. He was not required for cross-examination. Mr Davies is employed by the Respondent as a termite and pest control technician.
[75] Mr Davies gave evidence that on 11 October 2019, he had a conversation with Mr Balchin regarding termite inspections. According to Mr Davies, Mr Balchin expressed his apprehension in completing termite inspections, as he feared that he may miss termites, and he lacked the confidence to competently complete termite inspections.
[76] Mr Davies stated that on 12 December 2019, Mr Balchin expressed his displeasure with his current employment with the Respondent. According to Mr Davies, Mr Balchin stated that when he returned from his next holiday he intended to resign. I have had no regard to this evidence.
Evidence of Mr Greg George
[77] Mr George provided a witness statement in support of the Respondent’s case. He was not required for cross-examination. Mr George is a former employee of the Respondent.
[78] Mr George stated that when he worked with Mr Balchin, he regularly discussed with him his intention to be employed elsewhere in the same industry or to work in another industry. I have had no regard to this evidence.
[79] Mr George stated that Mr Balchin did not wish to complete termite inspection-related tasks as he did not like the pressure of it, and he was not confident to complete the requirements. Mr George stated that Mr Balchin had expressed his discomfort in completing termite inspections as he was not confident relaying the findings to the customer. Further, Mr Balchin wasn’t keen on crawling in subfloors.
Respondent’s submissions
[80] The Respondent submitted that the downturn of business that resulted in the dismissal of Mr Balchin, was a result of:
“• cancellations of one-off appointments
• cancellations of reoccurring appointments
• cancellations of contracts and contract work
• a significant reduction in contract work
• a significantly reduced number of phone calls to engage services
• a significant amount of invoices not being paid.
[81] The Respondent submitted that baiting contracts had been cancelled, major contracts had been cancelled or reduced, hospitality industry contracts had been cancelled and that bookings were no longer being made.
[82] The Respondent submitted according to the Respondent’s skills matrix, Mr Balchin was the least skilled of the technicians employed by the Respondent. It was submitted that due to the restructure, as Mr Taylor now performs Mr Balchin’s role, Mr Balchin would not have earnt an income as there would be no work for him.
[83] The Respondent submitted that Mr Balchin’s casual employment had not been regular or systematic. It was submitted that Mr Balchin’s hours of work changed daily, including different start and finishing times, as well as different days that were worked which were dependent on the demands of the business. The Respondent submitted that as Mr Balchin was a casual employee, the Respondent was only required to give to him one hours’ notice.
[84] It was submitted by the Respondent that in order to attempt to alleviate the financial stress for Mr Balchin, he was paid for the rest of the day of his dismissal, as well as an additional $2,000. The Respondent submitted that no compensation should be awarded as Mr Balchin has already been paid above what is legally required.
[85] The Respondent stated that at Mr Balchin’s employment termination meeting on 16 April 2020, Mr Balchin had inquired regrading JobKeeper and JobSeeker payments. The Respondent did not qualify for the Job Keeper Scheme as the Respondent’s income had not dropped below 30%.
[86] The Respondent submitted that if it is determined that the consultation obligations within the Award apply, it would have been a difficult thing to do, to consult with Mr Balchin and the other technicians. It was submitted that to do so would have caused significant unrest with and between the employees.
[87] The Respondent submitted that Mr Balchin did not ask to have a support person present at his meeting relating to his dismissal. Mr Balchin was not advised prior to his termination date and effect, that his employment was to be terminated.
Evidence and submissions of Mr Balchin
Evidence of Mr Balchin
[88] Mr Balchin gave evidence that he worked for the Respondent for a period of approximately 6.5 years, working approximately 20-30 hours per week. His casual rate of pay was $28.64 per hour.
[89] In early 2016 he requested to be allowed to do a certificate course in termite management/inspections. He was enrolled in the course in July 2016. He stated that he was given one year to complete the course in his own time. He completed the course within 10 months. He denied that he had issues completing the qualification and denies that he deleted his theory work from the computer.
[90] He stated that in September 2016, only two months into the course, he conducted a termite inspection with Mr Taylor. He suggested that he would like more assistance on the reporting obligations. He denies stating that he cannot do the inspections. The Respondent’s best employee, Ryan was dismissed immediately at this time, and Mr Balchin considered that he then came under pressure to perform termite inspections, even though he wasn’t qualified at that time.
[91] Mr Balchin stated that he had not performed many reports to the termite inspections as the Respondent was showing more interest in another employee performing these type of inspections. Mr Balchin then starting to complete inspections and reports which he said he did competently and independently.
[92] In September 2017 he was offered permanent work, however he declined the offer as he could not afford to have his hourly rate reduced by the casual loading.
[93] The last date he did a termite inspection independently was the day of a workplace injury suffered by him on 10 September 2017. He stated that he was never given termite inspections to perform after this time, even though he repeatedly requested to do so. He then performed light duties. He stated that he requested to get back to normal duties, however he was never given the termite inspections to perform. He said that he gave up asking for termite inspections.
[94] Mr Balchin stated that on 12 December 2019, he and Mr Davies had a discussion about the new reporting system that he was using, which Mr Balchin knew nothing about. Mr Davies said it was much easier than the old system. Mr Balchin stated that following that discussion he requested numerous times to do termite inspections but was not given any to perform. On one occasion he asked Mr Taylor about the new system of reporting, and if he was to be trained in it. Mr Taylor informed him he was too busy teaching Mr Malpass.
[95] Mr Balchin stated that on 31 March 2019 he requested he be made a permanent employee as his financial position had improved and he could afford to be paid a lower hourly rate, while having the security of a permanent position. The Respondent denied the request.
[96] Mr Balchin stated that the witness statement from Mr Davies and Mr George contain hearsay, however he did not require them for cross-examination. Regarding Mr Balchin’s unwillingness to going into roof space and under subfloors, he stated that both Mr Davies and Mr George have admitted to him that they hate doing that part of the role, and sometimes don’t even do that part of the property.
[97] Mr Balchin stated that at the termination meeting on 16 April 2020 he inquired if he would be asked to return to work if the situation improves. He stated that Ms Firth-Taylor abruptly and aggressively said, “Six months minimum, until we even think about having you back.”
[98] He said that the meeting was very brief, and he had hoped for the opportunity to discuss a reduction in hours, but he was not given that opportunity. He felt that as a long-term casual employee there should have been discussions around options, and perhaps putting all employees on reduced hours so that everybody could keep their jobs in uncertain times.
[99] Mr Taylor drove Mr Balchin home. Mr Balchin stated to him that he would be upset if he was the only one let go, to which Mr Taylor replied, “I can assure you, you are not the only one.”
[100] Mr Taylor stated that it was not put to him that he was not competent to perform parts of the role, and he had repeatedly requested to do termite inspections.
[101] Mr Balchin submitted that all three technicians performed the same role, and it was unfair to have terminated only him. He considered that he particularly had more experience than at least one other technician who had only just qualified. He considered that the Respondent used COVID-19 as a perfect excuse to sack him.
[102] He submitted that he had always been a competent, reliable and consistent employee. He submitted that the first time the Respondent raised the skills matrix was in its material for hearing, and not beforehand.
[103] Mr Balchin submitted that the Respondent’s attitude towards him changed as a result of his workers compensation injury in November 2017. He stated that only one weeks’ wages were paid to him and he could have claimed six wages but instead he worked through. He stated that “WHS policies, procedures and forms suddenly appeared after my injury claim.”
[104] Mr Balchin submitted that the Respondent had put him on edge, and he felt that the Respondent was looking for an opportunity to dismiss him. He had to ask numerous times for PPE.
[105] He considered that he was given the jobs that no one else wanted to do, including jobs with dangerous dogs. He heard that other employees received commission, however he did not. He considered it inappropriate to be told not to wear masks in private homes and holiday accommodation complexes (pre COVID-19) as it might “scare” people, and he held concerns for his health given the chemicals used.
[106] He considered that his jobs were often cancelled at last minute, with other technicians given his hours of work because they needed more hours. In December 2019 he was disappointed to learn that the other two technicians had been asked to do overtime, and he had not.
[107] Mr Balchin stated that since the dismissal he had applied for approximately 30 positions but had not been interviewed for any. In closing submissions, Mr Balchin stated, “Win or lose, this will make the employer think.”
Consideration
Genuine Redundancy
[108] I turn now to a consideration of the criteria set out in s.389 of the Act. For Mr Balchin’s dismissal to be a case of genuine redundancy, the Respondent must meet each of the criteria set out in s.389 of the Act, where relevant.
s.389(1)(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
[109] The test to be considered when considering whether there has been a reorganisation or redistribution of duties is whether the employee has any duties left to discharge. 1 Where there is no longer any function or duty to be performed by an employee, his or her position becomes redundant even where aspects of that employee’s duties are still being performed by other employees.2
[110] The decision in Kekeris v A. Hartrodt Australia Pty Ltd T/A a.hartrodt 3 considered this point and established that the test is whether the previous job has survived the restructure or downsizing, rather than a question as to whether the duties have survived in some form. The Full Bench in Ulan Coal Mines Limited v Howarth and others [2010] FWAFB 3488 considered and applied the decision of Ryan J in Jones v Department of Energy and Minerals (1995) 60 IR 304 and said:
“[17] It is noted that the reference in the statutory expression is to a person’s “job” no longer being required to be performed. As Ryan J observed in Jones v Department of Energy and Minerals (1995) 60 IR 304 a job involves “a collection of functions, duties and responsibilities entrusted, as part of the scheme of the employees’ organisation, to a particular employee” (at p. 308). His Honour in that case considered a set of circumstances where an employer might rearrange the organisational structure by breaking up the collection of functions, duties and responsibilities attached to a single position and distributing them among the holders of other positions, including newly-created positions. In these circumstances, it was said that:
“What is critical for the purpose of identifying a redundancy is whether the holder of the former position has, after the re-organisation, any duties left to discharge. If there is no longer any function or duty to be performed by that person, his or her position becomes redundant…” (at p.308)”
This does not mean that if any aspect of the employee’s duties is still to be performed by somebody, he or she cannot be redundant (see Dibb v Commissioner of Taxation (2004) FCR 388 at 404-405). The examples given in the Explanatory Memorandum illustrate circumstances where tasks and duties of a particular employee continue to be performed by other employees but nevertheless the “job” of that employee no longer exists.”
[111] In early April 2020, the Respondent was faced with the scenario of employing three casual technicians for approximately 20-30 hours per week, a significantly reduced client base and hours of work to be performed, and Mr Taylor, as owner of the business, with very little work to perform. Naturally, he would be entitled to reduce the workers in the business that he and his wife own and operate and perform some of those duties.
[112] Operational requirements is a broad term, involving present performance of the business, the state of the market in which the business operates, steps that may be taken to improve efficiency by installing new processes, equipment or skills, or by arranging labour to be used more productively, and the application of good management to the business.
[113] I accept the Respondent’s evidence that it no longer required three casually employed technicians to perform the reduced work, and Mr Taylor absorbed some of the hours of work into his own daily and weekly hours. He was entitled to do so.
[114] Where Mr Balchin proposed in these proceedings that the reduced hours of work could or should have been shared between the three technicians, including himself, that is not a consideration in determining if s.389(1)(a) has been satisfied. In determining this limb of the jurisdictional objection, notions of fairness do not come into play, nor does any analysis of a person’s skills or abilities against one’s colleagues.
[115] I am satisfied that following the changes in the operational requirements of the Respondent’s enterprise, the Respondent no longer required Mr Balchin’s job to be performed by anyone else. The criterion in s 389(1)(a) of the Act is satisfied.
s.389(1)(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
[116] The obligation on an employer to consult about redundancy only arises when a modern award or enterprise agreement applies to an employee and that modern award or enterprise agreement contains requirements to consult about redundancy.
[117] It is not disputed that Mr Balchin was employed under the Award; the consultation clause is produced at [12]. The consultation obligations within the Award do not sate that there is no application of that particular clause to casual employees, or conversely, that the consultation obligations apply only to permanent employees.
[118] The Respondent was provided with HR consultancy advice and legal advice that Mr Balchin’s employment as a casual employee could be ended by the giving of one hours’ notice. This is correct, pursuant to clause 11.3 of the Award:
“An employer or casual employee may terminate the employment relationship with one hour’s notice by either party.”
[119] Whether the cessation of one casual employee from a pool of four employees (including the Administration Assistant) constitutes significant effects on employees for the purposes of clause 29 of the Award, including major change, and therefore an obligation to consult in accordance with the provisions of the Award must be determined.
[120] In Port Kembla Coal Terminal Ltd v CFMEU (Port Kembla) 4, Jessup J observed that “the forced redundancy of three employees out of a workforce of about 98 did not of itself constitute a major change within the meaning of cl 7.1.”5 However, as White J noted in Port Kembla, a simple comparison between the number of employees to be dismissed and the number of employees in the workforce overall is not conclusive of whether there are major changes.6 Much depends upon the circumstances of a case.
[121] Paragraph 1548 of the Fair Work Bill 2008 (Cth) Explanatory Memorandum to the Act sets out as follows:
“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 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.”
[122] The Respondent made a definite decision to make a major change to the business, reducing its technicians from three to two, with Mr Taylor performing more operational work. Further, Mr Taylor would cease taking phone calls during the day, with those phone calls being answered by the office, allowing Mr Taylor more time “on the tools”. The Respondent’s decision had a significant effect on employees, including by the elimination of a position.
[123] It follows that the Respondent was required to comply with the consultation obligations in clause 29 of the Award. Having reached this conclusion, I turn to consider whether the Respondent complied with its consultation obligations within the Award.
[124] In April 2020, the Respondent made a definite decision to reduce the number of technicians from three to two, completing a skills matrix to assist in the determination of which technician to dismiss. It is clear that the breakfast meeting held on 23 March 2020 did not satisfy the consultation obligations of the Award for a number of reasons. At that stage the Respondent was faced with reduced phone calls and the cancellation of orders. It was navigating the nation-wide COVID-19 restrictions announced by the Prime Minister the night earlier. Discussions were held at the breakfast meeting as to necessary precautions for technicians to take. I accept Mr Taylor’s evidence that he said there might be some shortage of work, but the Respondent would have to wait to see what would eventuate.
[125] The meeting occurred prior to a definite decision was made, whereas the Award consultation requirements require consultation to occur as soon as practicable after a definite decision is made.
[126] There is no evidence before the Commission of the Respondent having engaged in consultation with Mr Balchin after the definite decision was made. There was no opportunity afforded to Mr Balchin to consult with the Respondent about the definite decision, and therefore the Respondent was not in a position to consider any matters raised by Mr Balchin in compliance with clause 29.4 of the Award. So much is clear from the content of the termination letter, which refers to the immediate cessation of employment.
[127] Further, the Award consultation obligations require communication to the relevant employee in writing, which of course did not occur. The written notification is an express term of clause 29.2.
[128] Having regard to these findings, I am not satisfied that the Respondent complied with the consultation obligations prescribed by the Award. Accordingly, I am not satisfied that the cessation of Mr Balchin’s employment was a genuine redundancy within the meaning of s.389 of the Act.
[129] In light of the conclusion reached, it is unnecessary to consider s.389(2), being whether it would have been reasonable in all the circumstances for Mr Balchin to have been redeployed within the Respondent, or an associated entity. However, for completeness, and in case I am incorrect about the consultation obligations above, I have determined the issue below.
s.389(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.
[130] In Hallam v Sodexo Remote Sites Australia Pty Ltd 7a Full Bench of the Commission stated the following:
“…..Subsection 389(2) states that 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. Subsection 389(2) places no obligation on an employer to redeploy, or to do everything possible to achieve a redeployment outcome. The exception is applied at the time of dismissal. It operates so that a dismissal that would otherwise be a case of genuine redundancy under subsection 389(1) will not be so if it would have been reasonable in all the circumstances for the person to be redeployed within the employer’s enterprise, or with an enterprise of an associated entity of the employer.” [references omitted]
[131] As the Full Bench observed in TAFE NSW v Pykett, 8 to show that it would have been reasonable for the Respondent to redeploy Mr Balchin, it is not necessary to identify a particular job or position in which Mr Balchin could have been redeployed. However, the Commission must be satisfied on the balance of probabilities, and based on the evidence, that there was a ‘job or a position or other work’ to which it would have been reasonable to redeploy Mr Balchin.
[132] Whether redeployment of an employee is considered reasonable will depend on the circumstances that exist at the time of the dismissal. 9
[133] The material before the Commission does not support Mr Balchin’s contention that redeployment would have been reasonable in all the circumstances. Mr Balchin effectively contended that the work performed by himself and two other technicians be shared between them, even allowing for Mr Taylor’s operational work. He effectively called for a dilution of hours of work and spreading it out. That is not the test before the Commission; it is whether there was an alternative job, position or work which clearly is not the case. There was no ability for redeployment in the small operation. In fact, other casual employees were being considered for either a reduction in hours of work or dismissal.
Small Business Fair Dismissal Code
[134] Section 388 of the Act provides:
“388 The Small Business Fair Dismissal Code
(1) The Minister may, by legislative instrument, declare a Small Business Fair Dismissal Code.
(2) A person’s dismissal was consistent with the Small Business Fair Dismissal Code if:
(a) immediately before the time of the dismissal or at the time the person was given notice of the dismissal (whichever happened first), the person’s employer was a small business employer; and
(b) the employer complied with the Small Business Fair Dismissal Code in relation to the dismissal.”
[135] It was not in dispute and I find that the Respondent is a small business employer, within the meaning of s.23 of the Act. It is necessary to determine whether the Respondent is able to rely on the provisions of the Small Business Fair Dismissal Code (the Code) as an alternative basis for contending that Mr Balchin was not unfairly dismissed and it is therefore necessary to consider whether Mr Balchin’s dismissal was consistent with the Code. The Small Business Fair Dismissal Code provides as follows:
“Small Business Fair Dismissal Code
Commencement
The Small Business Fair Dismissal Code comes into operation on 1 July 2009.
Summary Dismissal
It is fair for an employer to dismiss an employee without notice or warning when the employer believes on reasonable grounds that the employee’s conduct is sufficiently serious to justify immediate dismissal. Serious misconduct includes theft, fraud, violence and serious breaches of occupational health and safety procedures. For a dismissal to be deemed fair it is sufficient, though not essential, that an allegation of theft, fraud or violence be reported to the police. Of course, the employer must have reasonable grounds for making the report.
Other Dismissal
In other cases, the small business employer must give the employee a reason why he or she is at risk of being dismissed. The reason must be a valid reason based on the employee’s conduct or capacity to do the job.
The employee must be warned verbally or preferably in writing, that he or she risks being dismissed if there is no improvement.
The small business employer must provide the employee with an opportunity to respond to the warning and give the employee a reasonable chance to rectify the problem, having regard to the employee’s response. Rectifying the problem might involve the employer providing additional training and ensuring the employee knows the employer’s job expectations.
Procedural Matters
In discussions with an employee in circumstances where dismissal is possible, the employee can have another person present to assist. However, the other person cannot be a lawyer acting in a professional capacity.
A small business employer will be required to provide evidence of compliance with the Code if the employee makes a claim for unfair dismissal to Fair Work Australia, including evidence that a warning has been given (except in cases of summary dismissal). Evidence may include a completed checklist, copies of written warning(s), a statement of termination or signed witness statements.”
[136] The effect of s.385(d) of the Act is that when a dismissal is consistent with the Code, it is not an unfair dismissal and the application must then be dismissed. If the dismissal is not consistent with the Code, the Commission must then consider whether the dismissal is unfair on the basis of the general criteria in s.387 of the Act. The Code deals with “summary dismissal” on the ground of serious misconduct and “other dismissal” on the basis of the employee’s conduct or capacity to do the job.
[137] In the decision of Groszek v Toyvision International Pty Ltd[2015] FWC 697, Deputy President Asbury conveniently summarised the difficulties of the application of the Code where the employer dismissed an employee in a redundancy-type scenario:
[34] In circumstances where a small business employer dismisses an employee on the basis of the employee’s conduct or capacity, the small business employer must give the employee a reason why he or she is at risk of dismissal, and that reason must be a valid reason based on the employee’s conduct or capacity to do the job.
[35] The terms of the Small Business Fair Dismissal Code make it clear that to effect a dismissal that is consistent with the Code, the small business employer must nominate the reason for the dismissal in advance of the dismissal and give that reason to the employee. The employee must be warned verbally or preferably in writing, that he or she is at risk of being dismissed if there is no improvement, and be given an opportunity to respond to the warning and rectify the problem.
[36] In short, the small business employer seeking to establish consistency with Code is stuck with the reason given to the employee. Validity and the other procedural requirements are assessed in the context of the reason given by the employer. The employer cannot rely on a reason not given to the employee at the point the dismissal is put in train. This can be contrasted with the provisions in s. 387(a) where the employer can rely on facts in existence at the time of the dismissal to establish a valid reason, notwithstanding that that reason was not the reason given to the employee at the time the dismissal was effected.
[37] In Iannello v Motor Solutions Australia Pty Ltd Vice President Watson held that the Small Business Fair Dismissal Code does not deal with termination on the ground of redundancy. In the present case, the reason given for Ms Grozsek’s dismissal was that her position was no longer required. The dismissal letter refers to reduced sales but does not indicate that this reduction is because of Ms Grozsek’s conduct or capacity to do the job. There is also a reference to higher freight costs as a reason for ceasing operations in Queensland.
[38] Toyvision has not lead any evidence of specific compliance with the Code; there is no evidence that Toyvision was aware that the Code existed at the time of the dismissal. The evidence given on behalf of Toyvision about compliance with the Code is also essentially the same evidence the Company relies upon to establish that the dismissal was a case of genuine redundancy. The Respondent’s evidence is that they held several discussions with the Applicant over an extended period about the level of sales being achieved in Queensland. On the one hand the Respondent relies upon these discussions as consultation with Ms Groszek in relation to impending redundancy of her position, and on the other, as evidence of discussions in relation to unsatisfactory performance.
[39] On balance I am not satisfied that the reason for Ms Grozsek’s dismissal related to her conduct or capacity and accordingly, the Small Business Fair Dismissal Code does not apply to the dismissal. I dismiss the objection of Toyvision to Ms Grozsek’s dismissal on this ground and turn to consideration of whether the dismissal was unfair by reference to the criteria in s. 387 of the Act.”
[138] In the matter before me, I do not find that the Respondent changed its mind as to the reasons given for the termination. The Respondent was aware of the Code and completed a checklist on 16 April 2020. The Respondent answered the checklist as follows:
“3. Did you dismiss the employee because you didn’t require the person’s job to be done by anyone because of changes in the operational requirements of the business?
Yes
a. Did you comply with any requirements to consult about the redundancy in the modern award, enterprise agreement or other industrial instrument that applied to the employment?
Yes
b. Did you consider if the employee could have been redeployed in your business or the business of an associated entity?
Yes”
[139] Disappointingly, these questions in the checklist do not have any application to the Code; they apply to the provisions relevant to genuine redundancy. It is curious that the questions are within the Code checklist. The Respondent’s other answers within the checklist demonstrate that Mr Balchin’s employment ended for reasons other than serious misconduct or poor performance.
[140] In Hall v The Whole Box ‘n Dice Pty Ltd[2018] FWC 3521, Commissioner Cambridge stated the following:
[30] As can be seen from the text of the Code, it endeavours to codify particular dismissal circumstances involving an employee’s conduct or capacity to perform the job for which they are engaged. The Code is silent in respect to circumstances involving a dismissal which was made because of the employer’s financial circumstances and which was not connected with the employee’s conduct, capacity, or performance of their work.
[31] In this instance, there was no suggestion that the dismissal of the applicant was connected with any unsatisfactory conduct, capacity or performance of his work. The dismissal of the applicant was made entirely because of the financial circumstances of the business operation of the employer, and the identification of a redistribution of the work that the applicant performed.
[32] Consequently, although the respondent employer is a small business employer as defined in the Act, the Code has no particular relevant operation in regards to the circumstances of the dismissal of the applicant. However, in a general sense, the procedural requirements that can be identified in various parts of the text of the Code, reflect a broad requirement to provide employees with a process that ensures that any dismissal includes reasonable consultation, and an opportunity for discussion prior to finalisation and implementation of the dismissal.
[141] In the matter before me, the Respondent did not dismiss Mr Balchin for reasons of serious misconduct or unsatisfactory conduct, capacity or performance of his work. The dismissal was because of the shortage of work available at a time of a global pandemic, and the decision by Mr Taylor to perform more operational work.
[142] Given the reason for the dismissal has no application relevant to the Code, I cannot find that the dismissal was consistent with the Code.
Was the dismissal harsh, unjust or unreasonable?
[143] A dismissal may be unfair, when examining if it is ‘harsh, unjust or unreasonable’ by having regard to the following reasoning of McHugh and Gummow JJ in Byrne v Australian Airlines Ltd:10
“It may be that the termination is harsh but not unjust or unreasonable, unjust but not harsh or unreasonable, or unreasonable but not harsh or unjust. In many cases the concepts will overlap. Thus, the one termination of employment may be unjust because the employee was not guilty of the misconduct on which the employer acted, may be unreasonable because it was decided upon inferences which could not reasonably have been drawn from the material before the employer, and may be harsh in its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct in respect of which the employer acted.”
[144] I am duty-bound to consider each of the criteria set out in s.387 of the Act in determining this matter.11
s.387(a) - whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees)
[145] When considering whether there is a valid reason for termination, the decision of North J in Selvachandran v Peterson Plastics Pty Ltd (1995) 62 IR 371 at 373 provides guidance as to what the Commission must consider:
“In its context in s.170DE(1), the adjective “valid” should be given the meaning of sound, defensible or well founded. A reason which is capricious, fanciful, spiteful or prejudiced could never be a valid reason for the purposes of s.170DE(1). At the same time the reasons must be valid in the context of the employee’s capacity or conduct or based upon the operational requirements of the employer’s business. Further, in considering whether a reason is valid, it must be remembered that the requirement applies in the practical sphere of the relationship between an employer and an employee where each has rights and privileges and duties and obligations conferred and imposed on them. The provisions must “be applied in a practical, common-sense way to ensure that the employer and employee are treated fairly.”
[146] However, the Commission will not stand in the shoes of the employer and determine what the Commission would do if it was in the position of the employer.12
[147] I am satisfied that the Respondent no longer required Mr Balchin’s job to be performed by anyone because of changes in the operational requirements of the enterprise. The reason for Mr Balchin’s dismissal was not related to his capacity or conduct. 13 As such, this is a neutral factor with respect to whether Mr Balchin’s dismissal was harsh, unjust or unreasonable.
s.387(b) - Whether the person was notified of that reason
[148] As Mr Balchin’s termination of employment did not relate to capacity or conduct, this is a neutral factor. I note, however, Mr Balchin was notified of the reasons for the dismissal in the termination letter dated 16 April 2020.
s.387(c) - Whether there was an opportunity to respond to any reason related to the capacity or conduct of the person
[149] This criterion deals with procedural fairness in respect of a reason for dismissal related to an employee’s capacity or conduct. As Mr Balchin’s employment ended by way of redundancy this is a neutral factor.
s.387(d) - Any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to the dismissal
[150] Where an employee protected from unfair dismissal has requested a support person be present to assist in discussions relating to the dismissal, an employer should not unreasonably refuse that person being present.
[151] There is no positive obligation on an employer to offer an employee the opportunity to have a support person. The Explanatory Memorandum, Fair Work Bill 2008 (Cth) at [1542] states the following:
“This factor will only be a relevant consideration when an employee asks to have a support person present in a discussion relating to dismissal and the employer unreasonably refuses. It does not impose a positive obligation on employers to offer an employee the opportunity to have a support person present when they are considering dismissing them.”
[152] In the circumstances, I find that the respondent did not unreasonably refuse to allow Mr Balchin to have a support person present at discussions relating to the dismissal on 16 April 2020. However, I note that Mr Balchin was not on notice of the meeting’s purpose such that he was not afforded the opportunity to request a support person. This matter is appropriately considered under s.387(h).
s.387(e) - Was there a warning of unsatisfactory work performance before dismissal
[153] Mr Balchin’s dismissal did not relate to unsatisfactory performance. This is a neutral factor.
s.387(f) - Whether the respondent’s size impacted on the procedures followed and s.387(g) - Whether the absence of a dedicated human resource management specialist impacted on the procedures followed
[154] The Respondent is a small business and sought external legal advice when deciding to let go one of its casual employees. It did not have any internal human resource management expertise. I consider that the size of the business and its lack of internal expertise impacted on the procedures followed.
s.387(h) Other matters
[155] I am satisfied that the Respondent had a valid reason to dismiss Mr Balchin having regard to its operational requirements. The valid reason was not related to Mr Balchin’s capacity or conduct; it was nonetheless a bona fide reason. It is a consideration that tells against a finding that the dismissal was unfair.
[156] I consider that the Respondent did all that it could do to satisfy itself that it was appropriately ending Mr Balchin’s employment in accordance with the law. The Respondent obtained advice from a HR Consultant and an employment lawyer. Particular focus, it seems, was on the issue of Mr Balchin’s casual employment status, and the right of the Respondent to dismiss him with one hours’ notice.
[157] Regrettably, little to no focus was placed on the Respondent’s obligation to consult with Mr Balchin relevant to its definite decision to introduce major change to the business. I accept that this is understandable; the Respondent considered that a casual employee can be dismissed at short notice, so it didn’t appreciate that it had an obligation under the Award to consult in the extensive manner required by the Award, particularly in writing.
[158] It would have been appropriate for the Respondent to conduct a meeting with Mr Balchin, explain the scenario and inform him in writing that it was considering ending his casual employment which had been in place for 6.5 years. It is at that time the Respondent could have held discussions relevant to how it was going about its decision making in reducing three technicians to two. Mr Balchin would have had an opportunity at that time to discredit any concerns the Respondent held about his reluctance or unwillingness to perform termite inspections or to do complexes and pre-inspections. Simply having the opportunity to influence the Respondent would have been sufficient to render the discussion fair; the Respondent may still have decided that Mr Balchin was the correct employee to choose to make redundant.
[159] I have had regard to the skills matrix completed by the Respondent. It is not a relevant consideration in any analysis in s.389, although many applicants present before the Commission in such a scenario, hurt and insulted that it is they who have been chosen to be made redundant when they consider that some other employee should have been let go before them. It is a very common scenario.
[160] I do consider that I may have regard to the skills matrix in considering s.387(h). It is a document relied upon by the Respondent, and one not seen by Mr Balchin until the Respondent filed its material.
[161] I understand the unfairness in not providing the skills matrix to Mr Balchin prior to the dismissal. The Respondent’s evidence is that it did not wish to drive a wedge between its small number of employees. Effectively, if a skills matrix is shared among employees competing for jobs, I accept that it can lead to finger-pointing, resentment and competition. Where an employer conducts a skills matrix and can satisfy the Commission that a dismissal is a genuine redundancy, the contents of the skills matrix need not ever have been shared with those it is comparing.
[162] Having had the benefit of the parties’ evidence at the determinative conference, I am satisfied that even if Mr Balchin had been provided with the skills matrix and made the same objections to the Respondent’s consideration on the matters before it, the Respondent would still have selected Mr Balchin to be let go. On the evidence before the Commission, in retaining Mr Davies and Mr Malpass, it had a sufficiently trained group of workers, overseen by Mr Taylor, with a willingness and competency to perform all available work. While Mr Malpass had only recently received competency for termite inspections, I accept Mr Taylor’s evidence that he was comfortable with him performing that kind of work, and Mr Malpass was “good to go out on his own.”
[163] I accept the Respondent’s findings that Mr Balchin was not competent in some areas of work. I consider that Mr Balchin’s reluctance and incompetence at performing some of the types of work would not have been overcome in a reasonable period of time. Accordingly, I consider that it was an appropriate decision for the Respondent to make to select Mr Balchin to be dismissed and retain Mr Davies and Mr Malpass.
[164] Mr Balchin submitted that the Respondent should have shared the reduced work between the three technicians and Mr Taylor. On the evidence before the Commission, the work was sitting at around half of the work available in good times. With only around 100 or so hours per week, there is no obligation on the Respondent to share its reduced work with all workers, particularly so when Mr Taylor was now available to perform operational work. While it is a worthwhile suggestion for Mr Balchin to make, I am not satisfied that the Respondent would have agreed to it, nor is there any expectation or requirement for it to agree with Mr Balchin’s suggestion.
[165] I have had regard for Mr Balchin’s length of service of 6.5 years, noting it is a reasonably long period of time, and he would have had a reasonable expectation to reach seven years’ service and become eligible for pro rata long service leave in the near future.
[166] I have also had regard for the fact that the dismissal was conducted in breach of the consultation provisions of the Award and that issue weighs heavily for a finding that the dismissal was harsh, unjust or unreasonable.
Conclusion
[167] The jurisdictional objection that the dismissal was a case of genuine redundancy requires two affirmative elements and one negatory element which must be satisfied so as to establish whether a dismissal was or was not a case of genuine redundancy.
[168] I have determined that the second affirmative element was not satisfied in this case. Specifically, the Respondent has not complied with an obligation in the Award that applied to Mr Balchin’s employment to consult about his redundancy. Therefore, the dismissal did not satisfy the meaning of genuine redundancy as contained within s.389(1)(b) of the Act.
[169] It is necessary for the Commission to determine if the dismissal was consistent with the Code. As stated, the Code does not provide any relevant application in the instance of dismissal for redundancy, where the dismissal is not connected with any conduct, capacity or performance issues but instead arose from a financial imperative.
[170] Consequently, the jurisdictional objections have been determined and rejected, and consideration has turned to the substantive merits of the application. Having appropriate regard for the various factors contained within s.387 of the Act, I determine that Mr Balchin’s dismissal on 16 April 2020 was unjust. The primary reason for this is the failure to consult with Mr Balchin regarding a proposed dismissal as required by the terms of the Award.
[171] I have formed a view that had the Respondent consulted with Mr Balchin over a few days, the decision to dismiss him on the grounds of redundancy would have been made, and in those circumstances the dismissal would not have been harsh, unjust or unreasonable, and therefore not unfair.
Remedy
[172] Section 390 of the Act reads as follows:
“390 When the FWC may order remedy for unfair dismissal
(1) Subject to subsection (3), the FWC may order a person’s reinstatement, or the payment of compensation to a person, if:
(a) the FWC is satisfied that the person was protected from unfair dismissal (see Division 2) at the time of being dismissed; and
(b) the person has been unfairly dismissed (see Division 3).
(2) The FWC may make the order only if the person has made an application under section 394.
(3) The FWC must not order the payment of compensation to the person unless:
(a) the FWC is satisfied that reinstatement of the person is inappropriate; and
(b) the FWC considers an order for payment of compensation is appropriate in all the circumstances of the case.
Note: Division 5 deals with procedural matters such as applications for remedies.”
[173] Mr Balchin is a person protected from unfair dismissal for the Act’s purposes and is a person who has been unfairly dismissed. Accordingly, I am empowered to exercise discretion as to whether he can be reinstated.
[174] I am satisfied that it is inappropriate to order reinstatement due to the size of the business and the work available to the small number of employees still employed.
[175] I now turn to consideration of compensation.
Compensation
[176] Section 392 of the Act provides:
“392 Remedy—compensation
Compensation
(1) An order for the payment of compensation to a person must be an order that the person’s employer at the time of the dismissal pay compensation to the person in lieu of reinstatement.
Criteria for deciding amounts
(2) In determining an amount for the purposes of an order under subsection (1), the FWC must take into account all the circumstances of the case including:
(a) the effect of the order on the viability of the employer’s enterprise; and
(b) the length of the person’s service with the employer; and
(c) the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed; and
(d) the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal; and
(e) the amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for compensation; and
(f) the amount of any income reasonably likely to be so earned by the person during the period between the making of the order for compensation and the actual compensation; and
(g) any other matter that the FWC considers relevant.
Misconduct reduces amount
(3) If the FWC is satisfied that misconduct of a person contributed to the employer’s decision to dismiss the person, the FWC must reduce the amount it would otherwise order under subsection (1) by an appropriate amount on account of the misconduct.
Shock, distress etc. disregarded
(4) The amount ordered by the FWC to be paid to a person under subsection (1) must not include a component by way of compensation for shock, distress or humiliation, or other analogous hurt, caused to the person by the manner of the person’s dismissal.
Compensation cap
(5) The amount ordered by the FWC to be paid to a person under subsection (1) must not exceed the lesser of:
(a) the amount worked out under subsection (6); and
(b) half the amount of the high income threshold immediately before the dismissal.
(6) The amount is the total of the following amounts:
(a) the total amount of remuneration:
(i) received by the person; or
(ii) to which the person was entitled;
(whichever is higher) for any period of employment with the employer during the 26 weeks immediately before the dismissal; and
(b) if the employee was on leave without pay or without full pay while so employed during any part of that period—the amount of remuneration taken to have been received by the employee for the period of leave in accordance with the regulations.”
Authorities
[177] The approach to the calculation of compensation is set out in a decision of a Full Bench of the Australian Industrial Relations Commission in Sprigg v Paul’s Licensed Festival Supermarket.14 That approach, with some refinement, has subsequently been endorsed and adopted by Full Benches of the Commission in Bowden v Ottrey Homes Cobram and District Retirement Villages inc T/A Ottrey;15 Jetstar Airways Pty Ltd v Neeteson-Lemkes16 and McCulloch v Calvary Health Care (McCulloch).17
[178] I have had regard to the above authorities, and I have considered the submission of each party.
The effect of the order on the viability of the respondent
[179] No submissions were made relevant to this issue. There is no evidence to suggest that an award of compensation would affect the viability of the Respondent’s enterprise.
The length of Mr Balchin’s service
[180] Mr Balchin had approximately 6.5 years’ service as a casual employee. This is a long period of time.
The remuneration that Mr Balchin would have received, or would have been likely to receive, if he had not been dismissed
[181] I am satisfied that had the Respondent consulted with Mr Balchin as required by the Award, it would have determined to dismiss Mr Balchin. I have already stated that I consider that this would have been fair.
[182] In all of the circumstances, noting the significant loss in work of the Respondent at the time, I consider that it would have been appropriate to consult with Mr Balchin over a period of one week. I have determined that one week would have been the appropriate amount of time to consult with Mr Balchin given the size of the Respondent and few employees it had to choose between to meet its operational requirements, reduced workload of approximately 50%, while still providing a minimum of approximately 20 hours of work per week for the remaining two employees.
[183] The amount of work performed in that one week would have seen Mr Balchin receive approximately 20 hours x $28.64 per hour = $572.80. The Respondent paid to Mr Balchin an amount of $2,000 gross as an ex gratia payment on termination.
The efforts of Mr Balchin (if any) to mitigate the loss suffered because of the dismissal
[184] Having decided Mr Balchin’s employment would have continued for an additional one week, I need only consider the efforts of Mr Balchin to mitigate his loss in that week. I am satisfied that he made relevant attempts to do so.
The amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for compensation
[185] Mr Balchin did not earn any remuneration from employment or other work in the one week following the dismissal, other than the payment of $2,000 referred to above.
The amount of any income reasonably likely to be so earned by Mr Balchin during the period between the making of the order for compensation and the actual compensation
[186] This factor is not relevant in the circumstances of this matter.
Other relevant matters
[187] I do not consider that there are any other relevant matters to consider that I have not already addressed above.
Misconduct reduces amount
[188] Section 392(3) of the Act requires that if the Commission is satisfied that the misconduct of a person contributed to the employer’s decision to dismiss the person then the Commission must reduce the amount it would otherwise order by an appropriate amount on account of the misconduct.
[189] The section requires that consideration be given by the Commission, amongst other things, as to whether a person’s misconduct contributed to the decision to dismiss an employee even if the Commission has found that there was no valid reason for the person’s dismissal. However, if there was no valid reason for the dismissal that may be relevant to the Commission’s decision as to the appropriate amount by which the amount of compensation should be reduced.18
[190] I do not find that Mr Balchin engaged in any misconduct that would reduce the amount to be awarded to him.
Shock, distress etc. disregarded
[191] I confirm that any amount ordered does not include a component by way of compensation for shock, distress or humiliation, or other analogous hurt caused to Mr Balchin by the manner of the dismissal.
Compensation Cap
[192] I must reduce the amount of compensation to be ordered if it exceeds the lesser of the total amount of remuneration received by the applicant, or to which the applicant was entitled, for any period of employment with the employer during the 26 weeks immediately before the dismissal, or the high income threshold immediately prior to the dismissal.
[193] The high income threshold immediately prior to the dismissal was $148,700, and the amount for 26 weeks was $74,350. The amount of compensation the Commission will order does not exceed the compensation cap.
Payment by instalments
[194] This is not a relevant consideration.
No order of compensation
[195] I have determined that the amount of $2,000 paid to Mr Balchin as an ex gratia payment by the Respondent exceeds the amount I would order be paid to Mr Balchin. Accordingly, I decline to make an order of compensation to Mr Balchin.
COMMISSIONER
Appearances:
Balchin C, the Applicant
Balchin M, support person.
Taylor C, owner/operator of the Respondent
Firth-Taylor G, co-owner of the Respondent
Hearing details:
24 August 2020, Brisbane (By Telephone).
Printed by authority of the Commonwealth Government Printer
<PR726989>
1 Jones v Department of Energy and Minerals [1995] IRCA 292 (16 June 1995), [(1995) 60 IR 304 at p. 308 (Ryan J)]; cited with approval in Ulan Coal Mines Limited v Howarth and others [2010] FWAFB 3488 (Boulton J, Drake SDP, McKenna C, 10 May 2010) at para. 17, [(2010) 196 IR 32]
2 Ibid
3 [2010] FWA 674.
4 [2016] FCAFC 99
5 Ibid at [186]. See also Australian Nursing and Midwifery Federation v Bupa Aged Care Australia Pty Ltd [2017] FCA 1246at [22]-[31]
6 Ibid at [499].
7 Hallam v Sodexo Remote Sites Australia Pty Ltd [2017] FWCFB 6847 at [20].
8 [2014] FWCFB 714, (2014) 240 IR 130 at [36].
9 Ulan Coal Mines Limited v Honeysett (2010) 199 IR 363 at [28].
10 (1995) 185 CLR 410, [465].
11 Sayer v Melsteel[2011] FWAFB 7498 at [20].
12 Walton v Mermaid Dry Cleaners Pty Ltd(1996) 142 ALR 681, 685.
13 UES (Int’L) Pty Ltd v Harvey[2012] FWAFB 5241 at [42].
14 (1998) 88 IR 21.
15 [2013] FWCFB 431.
16 [2014] FWCFB 8683.
17 [2015] FWCFB 2267.
18 Crawford v BHP Coal Pty Ltd [2017] FWC 154, [345] – [346]; Read v Gordon Square Child Care Centre Inc. [2013] FWCFB 762, [83].
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