Mr Craig Pike v Solveco Pty Limited

[2019] FWC 6537

[2019] FWC 6537

FAIR WORK COMMISSION

DECISION

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

Mr Craig Pike
v
Solveco Pty Limited
(U2019/4929)

DEPUTY PRESIDENT BULL SYDNEY, 26 SEPTEMBER 2019

Application for an unfair dismissal remedy. Issue whether genuine redundancy defence is made out by employer.

[1] In this matter, which was heard before me on 12 September 2019, I advised the parties that I would hand my decision down orally on 13 September 2019 and provide the parties with a written copy in due course, reserving the right to make any necessary changes to make the decision read more fluidly. This is the published version of the decision in transcript edited for style and clarity.    1

[2] Mr Pike was employed as a salesperson with Solveco Pty Ltd (Solveco), an industrial waste recycling business operating at St Marys in Sydney. Mr Pike claims that he was unfairly dismissed when terminated on 12 April 2019 on the basis of a redundancy. Despite the employer's assertion on the day of the hearing that Mr Pike resigned, I find that he was terminated pursuant to his letter of termination provided to him on 12 April 2019 and dated 11 April 2019.

[3] The letter of termination was signed by the General Manager of the parent company known as Concrete Recyclers (Group) Pty Ltd (Concrete Recyclers), not his immediate employer. The General Manager of the business was Mr Craig Long and the letter of termination states that Mr Pike and other staff were advised in late 2017 that the company had commenced a review of its structure, including reducing the salesperson positions. This was due to Solveco no longer performing product destruction using a shredder following a fire on its work site. At this time, one operations team position was made redundant and a number of casuals were let go.

[4] The termination letter goes on to say that at the same time in late 2017, redeployment was discussed with Mr Pike and a position of salesperson with the parent company Concrete Recyclers located elsewhere was discussed. A meeting was further arranged with the Sales Manager at Concrete Recyclers, which is a demolition waste recycling business with its head office in Camellia, New South Wales. The position was to include the same salary and conditions, including a company motor vehicle.

[5] The termination letter states that this position was not accepted by Mr Pike, who preferred to stay at Solveco and see what happened when the company was sold. At the time, Solveco was on the market and a prospective buyer was considering the purchase of the company which, unfortunately, eventually fell through. The letter states that Solveco continued to suffer financial losses and, in March 2019, more structural changes were necessary. This was confirmed in a staff meeting in March 2019 which Mr Pike attended. Following this meeting, approximately 30 per cent of all staff were made redundant, including seven full-time positions. In addition to the redundancies, weekend shift work and overtime was cancelled.

[6] In April 2019, it was decided that sales staff needed to be reduced at Solveco, and Mr Pike was written to on 5 April 2019 requesting that he attend work at Concrete Recyclers on the following Monday, 8 April 2019, to commence sales work. However, on 8 April Mr Pike commenced a three day period of sick leave, returning to work on Thursday 11 April 2019. The termination letter noted an email from Mr Pike declining to work at Concrete Recyclers and reiterating that such a proposal was also declined in December 2017. The letter noted his sales position was no longer available at Solveco.

[7] Mr Pike was advised by Mr Long in the correspondence that Solveco was disappointed that he was not willing to move to Concrete Recyclers and would have provided him with further product training, and he would have kept all his employment conditions including his motor vehicle. The letter finally concludes stating he will be paid out his accrued entitlements and paid in lieu of working out his notice period, and that his position is redundant.

[8] In this matter Solveco raises a jurisdictional objection to the claim of unfair dismissal, relying on s.385 of the Fair Work Act 2009 (the Act) where an employee cannot make a claim of unfair dismissal in the case of a genuine redundancy.

[9] "Genuine redundancy" is defined at s.389(1) of the Act as follows:

“389 Meaning of genuine redundancy

(1) A person’s dismissal was a case of genuine redundancy if:

(a) the person’s employer no longer required the person’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise; and

(b) the employer has complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy.

[10] Section 389(2) of the Act states as follows:

(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.”

[11] Dealing with s.389 of the Act, in respect to the definition of a genuine redundancy, I first turn to s.389(1)(a) of the Act. In respect to this section of the Act, it is not in contest by either party that the job was no longer required due to operational requirements. The evidence from Mr Craig Long, the General Manager of Concrete Recyclers, being the parent company, was that there had been a downturn in work and significant financial losses.

[12] Mr Brent Lawson, Managing Director of Solveco, who also gave evidence, stated that Solveco had lost in the financial year 2016-2017 some $460,000 and in 2017-2018 an amount of $700,000. As noted earlier, the company remains on the market for sale.

[13] In addition, Mr Pike at paragraph (29) of his witness statement, which was marked as Exhibit A, states that his role had ‘genuinely’ been made redundant. Presumably, he is not referring to the definition of "genuine redundancy" under the section of the Act I am now referring to. However, based on the submissions of both parties I am satisfied that s.389(1)(a) of the Act, that is that the position of salesperson is no longer required to be performed because of operational changes, has been met.

[14] I then now need to turn to s.389(1)(b) of the Act where the employer is required to comply with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy. Again, it is not in dispute that the Commercial Sales Award 2010 (the Award) covered Mr Pike's employment, there being no obvious enterprise agreement that covered Mr Pike's work or the workplace in general. Clause 8 of that Award refers to "Consultation about major workplace change".

[15] In particular the Award states at 8.1:

“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; and

(b) discuss with affected employees and their representatives:

(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.”

[16] The clause goes on further to talk about what a significant effect is, which includes termination of employment. The major change that makes this section of the Award applicable is said by the employer to be the change and reduction in production that resulted from an on-site fire.

[17] Having said that, the employer submits to the Commission that it has complied with clause 8.1 of the Award on the basis of a number of factors. It states that on 12 October 2017, all employees were put on notice of potential redundancy, including Mr Pike, as his main duties were involving products that were no longer being processed at Solveco due to the fire.

[18] At the same time in October 2017, potential redeployment was discussed between Mr Long and Mr Pike. Mr Pike expressed his preference to remain at Solveco despite being advised his position was unlikely to remain into the future. 2. Mr Pike, also at around that same time, attended the premises of Concrete Recyclers and met with the Sales Manager, which ultimately led to an offer for him to be redeployed to Concrete Recyclers on the same conditions that he enjoyed at Solveco. However, Mr Pike declined that offer.

[19] On 28 March 2019, a staff meeting was held where all employees were told that redundancies were inevitable. Mr Long says he also met with Mr Pike shortly thereafter, where he advised Mr Pike that a full-time role at Solveco could no longer be guaranteed and that Mr Pike stated he would wait and see if the business was sold. Mr Pike, in his evidence, said this meeting never took place.

[20] Following this, Mr Long met with Mr Lawson about reducing costs; two casual roles were let go and four permanent positions were made redundant. Mr Long states, which I accept, that all remaining employees were aware that more changes were being considered to reduce costs. On 5 April 2019, it was decided in a discussion between Mr Long and Mr Lawson that Mr Pike's position of salesperson at Solveco was to be made redundant.

[21] As a consequence, an email was sent to Mr Pike from Mr Long on 5 April 2019 requiring that he attend the Concrete Recyclers office on Monday 8 April 2019. As stated earlier, Mr Pike did not attend on that day as he was off work due to illness. On Mr Pike's return to work on 11 April 2019 at Solveco, he then sent Mr Long an email which stated:

“Hi Craig, I decline your request to attend Concrete Recyclers' office at 14 Thackeray Street, Camellia, to undertake sales work. I declined your similar request in December 2017. I intend to continue my employment at Solveco.”

[22] That was sent at 9.23am on Thursday, 11 April 2019, when Mr Pike returned to work. On the same day, Mr Long states he telephoned Mr Pike and advised him he was coming out to hold a discussion with him. He states that the redeployment offer was raised during the telephone conversation, by Mr Long, and he was told that there was no longer a role for him at Solveco.

[23] Mr Long states that Mr Pike asked if he could continue to work at Solveco on reduced hours and whether he could purchase the company motor vehicle. Mr Long said he would discuss these issues with the Managing Director, Mr Lawson, and revert to him the following morning, 12 April 2019, at a meeting. On 12 April 2019 a meeting took place between Mr Long and Mr Pike in Mr Pike's office at the Solveco work premises where he was advised that the part-time role he had enquired about was not feasible as there was not enough work for a part-time position.

[24] Mr Pike confirmed that he did not wish to be employed at Concrete Recyclers and it was agreed between the parties that he could purchase his company motor vehicle at a discounted rate.

[25] In view of all the circumstances that I have elaborated upon, I am satisfied that the consultation obligations regarding redundancy under the Award were met by the employer.

[26] Moving on to s.389(2) of the Act, it states that a redundancy is not genuine if it would have been reasonable to redeploy the employee within the business or that of an associated entity. It is clear that no other sales role existed within the business at Solveco. However, a sales position did exist at an associated entity and parent company Concrete Recyclers. However, this position was not suitable for Mr Pike. Mr Pike has not identified any other suitable redeployment position when putting his case.

[27] I find it was reasonable in all the circumstances that Mr Pike be redeployed to a sales role within Concrete Recyclers on the same terms and conditions that existed at Solveco. On the basis that Mr Pike declined this offer, I find that the requirements of s.389(2) have been met by the employer.

[28] Mr Pike states that he never received a written job offer or position description and was unclear about the redeployment offer. While it is correct that he did not receive anything in writing detailing the terms of the redeployment position or offer, there can be no question in my view that he understood what was being offered in regard to the redeployment position.

[29] Mr Pike's email of 11 April is telling as he refers to declining a similar request in December 2017 after meeting with the Concrete Recyclers Sales Manager. If Mr Pike was unclear about the details of the redeployment offer, he had an opportunity to have it clarified when he was asked to attend Concrete Recyclers in the 5 April email or where he had a face-to-face meeting with Mr Long on 12 April or during the telephone conversation on 11 April 2019.

[30] Having said that, it appears that the true grievance of Mr Pike is that his employer, relying upon s.122 of the Act, did not pay him any redundancy and, further, did not pay him any pro rata long service leave. Mr Pike states at paragraph [29] of his witness statement:

“I was at the time and still am aggrieved and appalled that my employment was not terminated by way of redundancy. In my view my role has genuinely been made redundant and I am entitled to the associated redundancy payment and long service leave entitlement on a pro rata basis.”

[31] Further, the application filed to initiate these proceedings by Mr Pike states under the heading ‘Remedy’ at 2.1 that what he was seeking was for his entitlements to be paid out in full; (1) redundancy and (2) pro rata long service leave.

[32] An unfair dismissal, unfortunately, cannot provide these remedies, although when questioned at the start of the hearing in respect to his remedy and the inability of the Commission to make orders for redundancy pay or pro rata long service leave, Mr Pike stated that he wanted his lost wages since he was made redundant.

[33] Mr Pike can pursue any of his claims in respect to redundancy or pro rata long service leave. In respect to redundancy, by making an application for breach of s.120 of the Act in a court of competent jurisdiction. Section 120 of the Act provides the statutory entitlements of redundancy. If Mr Pike believes that they have not been paid according to the Act, then he has a remedy at law and presumably, the employer in its defence would plead s.122 of the Act, which it has raised in its unfair dismissal defence.

[34] He could also , in my view, make an application to the Commission for an order under s.122(4) of the Act, which reads as follows:

“(4) If the Fair Work Commission is satisfied that subsection (3) operates unfairly to the employee, the Fair Work Commission may order the first employer to pay the employee a specified amount of redundancy pay (not exceeding the amount that would be payable but for subsection (3)) that Fair Work Commission considers appropriate.  The first employer must pay the employee that amount of redundancy pay.”

[35] What is before the Commission in this application is an unfair dismissal application, not an application pursuant to s.122 of the Act.

[36] In regard to pro rata long service leave, Mr Pike would need again to take any action in a court of competent jurisdiction for enforcement of the New South Wales Long Service Leave Act 1955. The Fair Work Commission is not a court of competent jurisdiction for this purpose.

[37] On its face I cannot see how, under the Long Service Leave Act 1955, pro rata long service leave can be withheld and his employer should advise Mr Pike under what section of the Long Service Leave Act a pro rata payment has not been made.

[38] However, in respect of this matter before me I am satisfied that the respondent employer, Solveco Pty Ltd, has made out its defence of the claim that under s.389 of the Act the dismissal of Mr Pike was a genuine redundancy. On this basis, the application is therefore dismissed.

DEPUTY PRESIDENT

Appearances:

Mr Pike on his own behalf

Mr Long on behalf of the respondent

Hearing details:

SYDNEY

2019

12 September

Printed by authority of the Commonwealth Government Printer

<PR712565>

 1   See extra curial publication (1997) 9 Judicial Officers’ Bulletin Gleeson CJ at 25

 2   M  Long's evidence at paragraph9 of his witness statement