Mr Dylan Stonehouse, Mr James Kane, Mr Jim Canty, Mr Jozeph Vaserfal v Della Precast (Vic) Pty Ltd

[2020] FWC 6071

[2020] FWC 6071

FAIR WORK COMMISSION

DECISION

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

Mr Dylan Stonehouse, Mr James Kane, Mr Jim Canty, Mr Jozeph Vaserfal
v
Della Precast (Vic) Pty Ltd
(U2020/10440, U2020/10445, U2020/10446, U2020/10449)

DEPUTY PRESIDENT MASSON MELBOURNE, 23 NOVEMBER 2020

Applications for unfair dismissal remedies - jurisdictional objections – genuine redundancy – objections dismissed – consideration of merits- dismissals found to have been unfair.

[1] On 31 July 2020, the Construction, Forestry, Maritime, Mining, Energy Union (CFMMEU), made applications to the Fair Work Commission (the Commission) under s.394 of the Fair Work Act 2009 (Cth) (the Act) for remedies, on behalf of Mr Dylan Stonehouse (Mr Stonehouse), Mr James Kane (Mr Kane), Mr Jim Canty (Mr Canty) and Mr Jozeph Vaserfal (Mr Vaserfal) (the Applicants), alleging that they had been unfairly dismissed from their employment with Della Precast (Vic) Pty Ltd (the Respondent). The Applicants seek compensation.

[2] The Respondent raised a jurisdictional objection to each of the applications on the grounds that the terminations were genuine redundancies. Conciliation of the matters before the Commission were unsuccessful and the matters were subsequently allocated to my Chambers. Correspondence was sent to the parties on 16 September 2020 seeking their views as to the matters being joined and dealt with concurrently. As no objections were received, I determined to hear the matters jointly.

[3] The matters were listed for hearing before me in respect of both the Respondent’s jurisdictional objections and merits on 16 November 2020. The Applicants filed material in advance of the hearing/conference in accordance with the directions issued while the Respondent failed to file materials in support of either their jurisdictional objections or in respect of the merits other than the Form F3s that were filed on the 26 August 2020.

[4] At the hearing on 16 November 2020 the Applicants were represented by Mr David Vroland, Senior Industrial Officer for the CFMMEU Construction & General Division, Victorian Branch. The following witnesses were called by Mr Vroland to give evidence;

•  Mr Dylan Stonehouse

•  Mr James Kane

•  Mr Jim Canty

•  Mr Jozeph Vaserfal

•  Mr Andrew De Bono – Organiser with CFMMEU

[5] The Respondent failed to attend the hearing on 16 November 2020. Nor did it attend an earlier mention hearing conducted on 24 September 2020 or respond to multiple attempts by my Associate to contact it via telephone and email, in relation to either programming of the matter or in respect of its failure to file material in accordance with directions. Mr McMurray who is the General Manager of the Respondent, wrote to my Chambers on 13 November 2020 requesting a 2-week adjournment of the hearing on the grounds of having to self-isolate after having come into contact with a Covid positive family member. That request was declined on the basis that the hearing was listed to be heard online via Microsoft teams and in those circumstances self-isolation was not an impediment to participation.

Background and Evidence

[6] The Respondent operates a pre-cast concrete manufacturing facility located at 11-13 Westpool Drive, Hallam Victoria. The Form F3s filed by the Respondent indicate that at the time of the dismissal of Messrs Stonehouse, Vaserfal and Canty on 14 July 2020 there were 16 employees engaged by the Respondent and on the date of Mr Kane’s dismissal on 17 July 2020 there were 13 staff employed by the Respondent.

[7] Mr De Bono gave evidence that at the time of the dismissal of the Applicants, an enterprise agreement was in place, 1 that being the Della Precast (Aust) Pty Ltd and the CFMEU (Victorian Construction and General Division) Precast Panel Enterprise Agreement 2016-20182 (the Agreement). The CFMMEU were covered by the Agreement which includes provisions dealing with both consultation and redundancy.

[8] Clause 11 Consultation relevantly provides as follows;

“11 Consultation

11.1 Effective consultation is essential for continuous workplace reform and such consultation can take place at any time during the life of a Project.

11.2 Consultative Committees may be set up for this purpose.

11.3 If the Employer has made a decision to introduce a major workplace change that is likely to have a Significant Effect on a number of Employees, the Employer must notify the Employee(s) who will be affected by the decision.

11.4 As soon as practicable and prior to implementation, the Employer must discuss with the relevant Employees and/or their nominated representative/s (e.g. Union or other representative) the introduction of the change; and the effect the change is likely to have on the Employees. The Employer must discuss measures to avert or mitigate the adverse effect of the change on the Employees.

11.5 For the purposes of the discussion the Employer will provide the relevant

Employees and/or their nominated representative/s in writing:

(a) All relevant information about the change including the nature of the change proposed;

(b) Information about the expected effects of the change on the Employees; and

(c) Any other matters likely to affect the Employees.

11.6 However, the Employer is not required to disclose confidential or commercially sensitive information.

11.7 The Employer must give prompt and genuine consideration to matters raised about the major change by the relevant Employees.

11.8 "Significant Effects" under this clause 11 include termination of employment (including redundancy), major changes in the composition, operation or size of the Employer's workforce or in the skills required, the elimination or diminution of job opportunities, promotion opportunities or job tenure; the. alteration of hours of work; the need for retraining or transfer of Employees to other work areas or locations and the restructuring of jobs.

………………….”

[9] Clause 19 of the Agreement deals with redundancy and provides as follows;

“19 Redundancy

19.1 Subject to the following procedure, it is agreed that it is the Employer's prerogative to determine the order of selection of Employees for employment or retrenchment.

19.2 All relevant legislation governing unfair dismissal, discrimination etc. will be observed.

19.3 Voluntary terminations will be encouraged as a first step.

19.4 The seniority of employees- within classifications, experience or skills held will be observed by the Employer in selecting employees for retrenchment.

19.5 The dispute settlement procedures set out in Part 2 will apply in the event of any concerns arising regarding retrenchments.

19.6 An Employee is entitled to access his/her redundancy payments when they cease to be employed by the Employer. The amount of the redundancy payment shall be whichever is the greater of the entitlement due under the Award or the entitlement of the Employee under the lncolink Number 1 Fund Trust deed (or under the constituting documents of any fund nominated by lncolink under this clause).”

[10] Mr Stonehouse originally commenced employment with the Respondent in 2014, although the employing entity appears to have been a predecessor company owned and managed by Mr Andrew Della Bosca and which was known as Della Precast (Australia) Pty Ltd (DPA). Mr Stonehouse says that he had several separate periods of employment with the Respondent (or the predecessor company), the most recent being from mid to late 2017 up to the date of his dismissal on 14 July 2020. Mr Stonehouse commenced with the Respondent as a Level 1 Concrete Labourer but at the time of his dismissal Mr Stonehouse was classified at Level 2 under the Agreement. 3

[11] Mr Vaserfal commenced employment with the Respondent (or the predecessor company) in or around January 2012. Mr Vaserfal says he was classified as a Tradesman at Level 4 when he commenced employment. 4 He was however reclassified from Level 4 to Level 2 in November 2019 when the business ownership transferred from Mr Della Bosca to Ms Ly Cheng Tran with Mr McMurray acting as General Manager, the circumstances of which transfer of business I will return to shortly. Mr Vaserfal remained classified at Level 2 at the date of his dismissal on 14 July 2020.5

[12] Mr Canty commenced employment on or around 3 April 2017 with the Respondent although at that time it was with the predecessor company DPA. He commenced at Level 3 and worked as a crane operator and concrete labourer. Mr Canty was also reclassified to Level 2 in November 2019 at which level he remained classified up to the date of his dismissal on 14 July 2020. 6

[13] Mr Kane commenced employment with the Respondent in or around January 2004 although at the time it was with the predecessor company DPA. Mr Kane worked as a concrete steel fixer and welder and was classified at level 3 up until November 2019 at which point, he was reclassified to level 2 at which level he remained until his dismissal on 17 July 2020. 7

[14] Each of the Applicants gave evidence of rumours having emerged during 2019 regarding the intended sale of the business by its former owner Mr Della Bosca to one of its then managers Mr Brett McMurray. The change of ownership was confirmed in correspondence to employees dated 14 November 2019 and relevantly stated as follows;

“Re Workers level adjustment

Dear employee

The purpose of this letter is to notify you of changes to pay rates

From Friday 8^th November, ted officially closed the doors to Della Precast (Aust)

On Monday Brett officially took over, opening a new company called Della Precast (VIC)

With Brett going out on his own without Ted’s support, the bank has insisted in a stable Salary and Wages Monthly budget

Brett has negotiated with the bank a flat Construction Worker 2 (Level 2) payrate throughout the business permanently

This structure moving forward is paramount to cover the commercial reality we’re faced with to ensure we can service the monthly loan repayments

………..

Regards

Brett McMurray
General Manager
Della Precast (VIC) Pty Ltd” 8

[15] ASIC Company Extracts provided by Mr De Bono in his evidence reveals that an application was made on 6 Nov 2020 to wind up DPA, in which company Mr Della Bosca owned all of the issued shares. ASIC records also reveal that an application was made on 28 June 2020 for registration of the Respondent, in which Company a Ms Ly Cheng Tran held all of the issued shares. 9

[16] Each of the Applicants gave evidence that following notification of the change in ownership from DPA to the Respondent, their payrates were all set at Level 2 under the Agreement which in the case of Messrs Canty, Kane and Vaserfal resulted in payrate reductions. The Applicants also gave evidence that annual leave accrued while working for DPA had not been transferred to the Respondent nor been properly calculated and paid out on termination by the Respondent. The Applicants each stated that there were estimated annual leave accrual shortfalls on termination ranging from 148 hours in Mr Vaserfal’s case 10 to 820 hours in the case of Mr Kane.11 Concerns regarding payrates and annual leave were raised with CFMMEU Organiser Mr De Bono12 but were unable to be resolved by Mr De Bono with the Respondent or Mr Della Bosca prior to the Applicants’ termination of employment by the Respondent.13

[17] On 18 May 2020 Mr McMurray wrote to employees in which he foreshadowed upcoming redundancies “as a result of business overheads not being sustainable in the current economic climate” (the Upcoming Redundancy Notice). He further indicated that he was considering reducing employee numbers and encouraged voluntary redundancies. 14 Mr De Bono says that the CFMMEU were not contacted by the Respondent regarding voluntary redundancies and at no subsequent stage did the CFMMEU receive any formal notice or contact from the Respondent regarding planned redundancies.15 None of the Applicants indicated an interest in taking a voluntary redundancy.

[18] On Friday 10 July 2020 Messrs Stonehouse, Canty and Vaserfal received correspondence from the Respondent titled “Upcoming redundancy notice” (the Redundancy Notice). Mr Kane received similar correspondence on 16 July 2020. The letter to Mr Stonehouse which was sent in a similar form to each of the Applicants relevantly stated as follows;

“Dear Dylan Stonehouse

The purpose of this letter is to notify you of upcoming redundancies as a result of Della Precast (VIC) Pty Ltd having insufficient work. Regretfully, in effort to reduce costs, we have to consider a reduced need for employees performing certain roles within our business premises at 11-13 Westpool Drive, Hallam, Vic 3803.

As a result, I am sorry to tell you that it is proposed that your role as a labourer will cease to exist.

I stress that this is only a proposal and no final decision will be made until the matter has been discussed entirely with you and you have had the opportunity to provide feedback and seek additional support. In addition, Della Precast will continue to attempt to identify ways in which your redundancy may be avoided and throughout the redundancy process will continue to identify suitable alternative employment with Della Precast.

I am sorry to have to address this letter to you and I appreciate that this news will have a serious impact. If you have any questions or comments about the situation or the process that is being followed then please address these with me in your upcoming meeting.

Proposed Meeting: Monday 13^th July @ 1.00pm

……………” 16

[19] The other Applicants were also advised of proposed meeting dates and times of; 2pm Monday 13 July 2020 in the case of Mr Canty, 17 3pm Monday 13 July 2020 in the case of Mr Vaserfal18 and 11am Friday 17 July 2020 in the case of Mr Kane.19

[20] Following receipt of the above-referred Redundancy Notice letters, each of the Applicants contacted Mr De Bono and asked him to represent them in the proposed meetings with the Respondent. 20 Following contact from Messrs Stonehouse, Canty and Vaserfal over the weekend of 11-12 July 2020 Mr De Bono sent an email to Mr McMurray at 11.07am on 13 July 2020 advising Mr McMurray that the Applicants had requested that Mr De Bono attend the proposed meetings with them. Mr De Bono requested advice as to what time Mr McMurray wished to meet and discuss the foreshadowed redundancies.21 Mr McMurray responded at 12.24pm that same day in the following terms;

“Andrew

Firstly, “Further to this Dylan Stonehouse received a threatening phone call from Lee telling him his “fucking useless” and “why don’t you fuck off.” Is completely fabricated and untrue.

Secondly, the invitations to attend were sent out last week for today. The positions that are redundant are due to insufficient work, we have invited the employees to bring a person of support. It is entirely up to them

………….” 22

[21] Following receipt of Mr McMurray’s response Mr De Bono sent a further email to Mr McMurray at 3.06pm on Monday 13 July 2020 which stated as follows;

“Brett and Lee

As the workers have made contact with myself with their concerns, I’m letting you know that I will be in attendance regarding this matter as some of the employees are feeling threatened. If you could please indicate what time you are wanting to hold meeting and I will consult and confirm with members to establish a time, much appreciated” 23

[22] Having not received a response to his email sent at 3.06pm on Monday 13 July 2020 Mr De Bono sent a further email to Mr McMurray at 3.46pm on Tuesday 14 July 2020 which stated as follows;

“Brett and Lee

Could you please respond to my request for a meeting with members regarding them being made redundant, if you could propose a time and location for the meeting to take place. As there is a discrepancy with the employees annual leave and missing entitlements, It is important that we resolve the matter, if we don’t get a response from yourselves it will be lodged immediately with the Panel, A prompt response would be much appreciated, Thanks Andrew debono (CFMEU organiser)” 24

[23] Messrs Stonehouse, Canty and Vaserfal did not attend the proposed meetings with Mr McMurray on 13 July 2020 and subsequently each received a letter titled “Termination of your employment by reason of redundancy” (the Letter of Termination) on 14 July 2020 confirming the termination of their employment. 25 The letters detailed their respective notice periods, redundancy, leave and other entitlements that would be paid out.

[24] As stated above, Mr Kane also received a Redundancy Notice letter although his was received on 16 July 2020. 26 Following receipt of that letter, which proposed a meeting time of 11.00am on Friday 17 July 2020, Mr Kane also contacted Mr De Bono. Mr De Bono did not however attempt to contact Mr McMurray to arrange a meeting time as he (Mr De Bono) had formed a view that the Respondent’s management were not prepared to consult in relation to the proposed redundancies. Mr Kane did not attend the meeting on 17 July 2020 and was terminated that same day.

[25] Each of the Applicants state that they were aware of the Respondent having engaged newer employees with less seniority that were not made redundant at the time of the Applicants’ dismissal. This was, according to the Applicants, contrary to the seniority of selection provisions that operated with respect to redundancy at clause 19.4 of the Agreement. 27

[26] Each of the Applicant’s state that they and their representative Mr De Bono were not afforded a meaningful opportunity to engage in consultation regarding their redundancies. Mr De Bono identified a number of matters that he would have raised on behalf of the Applicants had he been able to meet with the Respondent. Those matters included;

•  Retention of the Applicants on JobKeeper payments as an alternative to being made redundant;

•  Why the Applicants were made redundant when less senior employees were retained, having regard to Clause 19.4 of the Agreement which provides for consideration of seniority in redundancy decisions;

•  Incorrect leave accruals;

•  Pay and classification levels not in accordance with the Agreement; and

•  Whether Incolink, CBUS and CoInvest payments were up to date. 28

[27] Mr De Bono further states that following the Applicants’ dismissal it became apparent to him on 25 July 2020 that production at the Respondent’s operations had “ground to a halt” and that at the time of his witness statement preparation no production was occurring. He was unaware of whether the Respondent had formally ceased operations. 29

Have the Applicants been dismissed?

[28] A threshold issue to determine is whether the Applicants have been dismissed from their employment. Section 386(1) of the Act provides that the Applicants have been dismissed if:

(a) Their employment with the Respondent has been terminated on the Respondent’s initiative; or

(b) They have resigned from their employment but were forced to do so because of conduct, or a course of conduct, engaged in by the Respondent.

[29] Section 386(2) of the Act sets out circumstances where an employee has not been dismissed, none of which are presently relevant. There was no dispute and I find that the Applicants’ employment with the Respondent was terminated at the initiative of the Respondent.

Initial matters

[30] Under section 396 of the Act, the Commission is obliged to decide the following matters before considering the merits of the application:

(a) whether the applications were made within the period required in subsection 394(2);

(b) whether the persons were protected from unfair dismissal;

(c) whether the dismissals were consistent with the Small Business Fair Dismissal Code; and

(d) whether the dismissals were cases of genuine redundancy.

Were the applications made within the period required?

[31] Section 394(2) requires an application to be made within 21 days after the dismissal took effect. It is not contested that the Applicants were dismissed from their employment with effect from 14 July 2020 in the case of Messrs Canty, Stonehouse and Vaserfal and on 17 July 2020 in the case of Mr Kane. Applications in respect of all four of the Applicants were filed by the CFMMEU on 31 July 2020. I am therefore satisfied that the applications were each made within the period required in subsection 394(2).

Were the Applicants protected from unfair dismissal at the time of their dismissal?

[32] Section 382 of the Act provides that a person is protected from unfair dismissal if, at the time of being dismissed:

(a) the person is an employee who has completed a period of employment with his or her employer of at least the minimum employment period; and

(b) one or more of the following apply:

(i) a modern award covers the person;

(ii) an enterprise agreement applies to the person in relation to the employment

(iii) the sum of the person’s annual rate of earnings, and such other amounts (if any) worked out in relation to the person in accordance with the regulations, is less than the high income threshold.

Minimum employment period

[33] It was not in dispute and I find that the Respondent is not a small business employer, employing 16 staff at the time of the Applicants’ dismissal. Further, the Applicants’ commencement of employment and periods of service with the Respondent (or its predecessor) were as follows;

•  Mr Stonehouse commenced his most recent period of employment with the Respondent (or its predecessor) in late 2017 and was terminated on 14 July 2020, that being a period of employment in excess of 2 years and six months.

•  Mr Canty commenced his employment with the Respondent (or its predecessor) on 3 April 2017 and was terminated on 14 July 2020, that being a period of employment of approximately 3 years and 3 months.

•  Mr Vaserfal commenced employment with the Respondent (or its predecessor) in January 2012 and was dismissed on 14 July 2020, that being a period of employment of approximately 8 years and 6 months.

•  Mr Kane commenced employment with the Respondent (or its predecessor) in January 2004 and was dismissed on 17 July 2020, that being a period of employment of approximately 16 years and 6 months.

[34] On the basis of the above I am satisfied that each of the Applicants were employed by the Respondent or its predecessor for a period of employment in excess of 6 months. I note however that there appears to have been a transfer of business in November 2019, that having been communicated to employees on 14 November 2019, although it is unclear on what basis that transfer of business occurred in the absence of any evidence from the Respondent. If it is the case that continuity of employment was not maintained between the former business (DPA) and the Respondent, it is still the case that the Applicants’ periods of employment were in excess of 6 months.

[35] I am therefore satisfied that, at the time of dismissal, each of the Applicants had completed a period of employment with the Respondent of at least the minimum employment period of 6 months which applies.

Applicant’s covered by an enterprise agreement

[36] It was not contested that the Applicants were covered by an enterprise agreement in their employment with the Respondent.

[37] It follows from the above and I am satisfied that, at the time of dismissal, the Applicants were protected from unfair dismissal.

Did the Respondent comply with the Small Business Fair Dismissal Code in relation to the dismissal?

[38] Section 388 of the Act provides that 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.

[39] As mentioned above, I find that the Respondent was not a small business employer within the meaning of s.23 of the FW Act at the relevant time, having in excess of 14 employees (including casual employees employed on a regular and systematic basis). I am therefore satisfied that the Small Business Fair Dismissal Code does not apply, as the Respondent is not a small business employer within the meaning of the Act.

Were the dismissals cases of genuine redundancy?

[40] Section 389 of the Act, defines a genuine redundancy in the following terms:

“(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.”

[41] I turn firstly to consider whether the Respondent no longer required the Applicants’ jobs to be performed by anyone because of the operational requirements of the Respondent (s 389(1)(a)).

[42] The direct evidence as to the operational and business circumstances of the Respondent at or around the time of the Applicant’s dismissal was confined to the Upcoming Redundancy Notice, the Redundancy Notice and Letter of Termination sent to each of the Applicants. The absence of any further direct evidence or material from the Respondent imposes some difficulty in reaching a state of satisfaction as to whether the Applicants’ roles were no longer required to be performed by any person. Nevertheless, it is clear on the Applicants’ own evidence and that of Mr De Bono that the business was facing challenges. This can be seen in the above-referred correspondence sent to the Applicants in May 2020 and in July 2020.

[43] That picture as to the state of the business is reinforced by Mr De Bono’s evidence that it become apparent to him on 25 July 2020 that production at the Respondent’s operations had ground to a halt and that as at 23 October 2020 no production was underway. There is no material before me that indicates whether this cessation of production is of a short duration, longer term or permanent.

[44] I am prepared to accept on the limited material before me that there was and remains insufficient work to sustain production at the Respondent’s operations at previous levels. This is evident from the correspondence sent to the Applicants in May and July 2020 as well as Mr De Bono’s evidence as to the cessation of production on or about 25 July 2020. While further direct evidence from the Respondent may have shed light on the prospects and timing of any future resumption of production (if at all), it is clear enough that at the time of the Applicant’s dismissal the Respondent no longer required the roles performed by the Applicants to be performed by anyone.

[45] Having been satisfied that the Respondent no longer required the Applicants’ jobs to be performed by anyone I turn to consider whether the Respondent complied with any consultation obligations (s 389(1)(b)).

[46] I am satisfied that the Applicants were covered by the Agreement during their employment with the Respondent. The Agreement contains consultation provisions at clause 11 which I have set out above at [8]. Clause 11 contains what may be described as standard consultation obligations that arise in circumstances of “major changes” that have “significant effects” on employees. There can be no doubt in the present matters before me that the foreshadowed loss of employment by the Applicants due to redundancy fell into that category of “major change” requiring compliance with the clause 11 consultation obligations. Those obligations relevantly include;

•  notification of employees affected by the Respondent’s decision, that being a reduction in workforce numbers (clause 11.3);

•  as soon as practicable and prior to implementation, the Respondent was required to discuss with the affected employees and/or their nominated representative the change, its effect on the relevant employees and measures to avert or mitigate the adverse effects (clause 11.4);

•  for the purpose of the discussion the Respondent was required to provide to affected employees and/or their representatives all relevant information in writing as to the change, the likely effects of the change and measures to mitigate the adverse effects of the change (clause 11.5); and

•  the Respondent was required to give prompt consideration to matters raised about the change by the affected employees (clause 11.7)

[47] Each of the Applicants received advice of their potential redundancy in the Redundancy Notice correspondence sent by the Respondent. In the case of Messrs Stonehouse, Canty and Vaserfal the correspondence was received on 10 July 2020 whereas Mr Kane received his on 16 July 2020. The correspondence to each of the Applicants was almost identical in both form and substance. The only areas of difference were in the specifics of each Applicant’s role and the timing of the proposed consultation meeting.

[48] I am satisfied that the Notice of Redundancy sent to each of the Applicants constituted notification of the change, thus meeting the requirements of clause 11.3 of the Agreement.

[49] The Notice of Redundancy made clear that the Respondent had not yet made a final decision and that no final decision would be made “until the matter has been discussed entirely with you and you have had the opportunity to provide feedback and seek additional support.” The letters further stated that the Respondent would “continue to identify suitable alternative employment” with the Respondent. A “Proposed Meeting” time and date was included in the correspondence, which in each case provided only one working days’ notice. For example, in the case of Messrs Stonehouse, Canty and Vaserfal, they each received their Notice of Redundancy correspondence on Friday 10 July 2020 advising of proposed meeting times for Monday 13 July 2020.

[50] On receipt of the Notice of Redundancy correspondence, each of the Applicants then sought support and representation by Mr De Bono, a step specifically provided for in clauses 11.4 and 11.5 of the Agreement, and also envisaged in the Notice of Redundancy correspondence in which the Applicants were advised that they had an opportunity to “seek additional support”. Mr De Bono contacted Mr McMurray on the morning of 13 July 2020 to arrange a suitable meeting time to discuss the foreshadowed redundancies of Messrs Stonehouse, Canty and Vaserfal. That approach was rebuffed with McMurray declining to alter the proposed times of meetings that day. Follow-up emails from Mr De Bono to Mr McMurray on 13 & 14 July 2020 were not responded to by Mr McMurray.

[51] Clause 11.4 compelled the Respondent to engage with the Applicants’ nominated representative. So much is clear by the words “must discuss with the relevant Employees and/or their nominated representative”. Mr De Bono advised Mr McMurray that he was the Applicants’ nominated representative on the morning of 13 July 2020. At that point it was in my view incumbent on Mr McMurray under the terms of the Agreement to engage with the Applicants and Mr De Bono. An inflexibility on Mr McMurray’s part to find a mutually suitable meeting time was unreasonable in the circumstances of the short notice of the meeting having been provided to the Applicants. Moreover, the meeting time was described as merely “proposed” in the Notice of Redundancy which would reasonably suggest that the meeting time was not ‘fixed in stone’ and may be moved subject to agreement and availability of the parties.

[52] I am satisfied that despite the statements in the Notice of Redundancy letters, the “Proposed Meeting” times and dates were in fact fixed and immoveable and that no reasonable accommodation of the Applicants’ representative availability would be made. In my view this was unreasonable in circumstances where the Applicants only received one working days’ notice of the consultation meeting times and where Mr De Bono contacted Mr McMurray on the first working day after he was contacted by the Applicants in respect of the Notice of Redundancy letters.

[53] By failing to reasonably accommodate the Applicants’ representative’s availability to meet to discuss the foreshadowed redundancy of the Applicants, I am satisfied that the Respondent failed to comply with clause 11.4 of the Agreement. Furthermore, the Respondent failed to provide in writing to the Applicants’ nominated representative (Mr De Bono) the information specified in clause 11.5 of the Agreement.

[54] The conduct of the Respondent in declining to reschedule the meetings to discuss the proposed redundancies would lead to a reasonable inference, which I draw, that it was not interested in discussing those matters referred to in clause 11.4 of the Agreement with the Applicants’ nominated representative, including measures to mitigate the adverse effects of the proposed change. This is despite the statements in the Notice of Redundancy that the Respondent would continue to explore ways in which the redundancies may be avoided. In circumstances where only 2 working days elapsed between the Notice of Redundancy and the Letter of Termination and where the Applicants’ representative was not afforded a reasonable opportunity to meet and discuss the redundancies, I am of the view that the Notice of Redundancy correspondence constituted a triumph of style over substance. That is, it was a superficial attempt by the Respondent to comply with its consultation obligations under clause 11 of the Agreement. In these circumstances Mr De Bono made a reasonable assumption that there would be no utility in seeking a meeting with Mr McMurray in respect of Mr Kane when he received his Notice of Redundancy on 16 July 2020.

[55] It follows from the above that the Respondent failed to comply with its consultation obligations under clause 11 of the Agreement in respect of the Applicants’ proposed redundancy and ultimate termination of employment.

Summary

[56] For all the reasons set out above I am comfortably satisfied that the Applicants’ dismissals were not cases of genuine redundancy. I am satisfied that the Respondent no longer required the Applicants’ jobs to be performed by anyone because of changes in the operational requirements of its enterprise. However, the Applicants were covered in their employment by an enterprise agreement which contained consultation obligations with which the Respondent failed to comply.

[57] In this case, having found that the Applicants’ dismissals were not cases of genuine redundancy, and having considered each of the other preliminary matters set out at s. 396 of the Act, I am now required to consider whether the dismissals of the Applicants were harsh, unjust or unreasonable.

Were the dismissals harsh, unjust or unreasonable?

[58] Section 387 of the Act provides that, in considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the Commission must take into account:

(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); and

(b) whether the person was notified of that reason; and

(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and

(d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and

(e) if the dismissal related to unsatisfactory performance by the person – whether the person had been warned about that unsatisfactory performance before the dismissal; and

(f) the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(h) any other matters that the FWC considers relevant.

[59] I am required to consider each of these criteria, to the extent they are relevant to the factual circumstances before me.³⁰ I set out my consideration of each below.

Was there a valid reason for the dismissals related to the Applicants’ capacity or conduct – s 387(a)?

[60] A valid reason for the dismissal of the Applicants need not be the reason given to the Applicants at the time of the dismissal.³¹ The reasons should be “…sound, defensible and well founded”³² and should not be “…capricious, fanciful, spiteful or prejudiced.”³³

[61] I am satisfied that the Applicants’ dismissals were due to redundancy, albeit as I have already found, they were not genuine redundancies. The Applicants were not dismissed for reasons related to their capacity or conduct.

[62] In the circumstances of the cases before me the absence of a valid reason related to capacity or conduct is a neutral consideration.

Notification of the valid reason - s.38 7(b)

[63] While the Applicants was notified of the reasons for their dismissal, that of redundancy, it was not a “valid reason” related to their capacity or conduct. It follows that they were not notified of a “valid reason”. In the circumstances of the present cases, however, where the dismissals were due to redundancy, it is a neutral consideration.

Opportunity to respond to any reason related to capacity or conduct - s.387(c)

[64] An employee protected from unfair dismissal must be provided with an opportunity to respond to any reason for dismissal relating to the conduct or capacity of the person. This criterion is to be applied in a common-sense way to ensure the employee is treated fairly and should not be burdened with formality.³⁴

[65] The Applicants were self-evidently not given an opportunity to respond to the reasons for dismissal relating to conduct or capacity. In the circumstances of the present case, however, where the dismissals were due to redundancy, it is a neutral consideration.

Support person – s. 387(d)

[66] As I have found above, the Respondent unreasonably refused to accommodate the Applicants’ nominated representative’s availability to meet to discuss the proposed redundancies. This was despite Mr De Bono contacting Mr McMurray on the morning of 13 July 2020 in relation to the Respondent’s proposed meetings with Messrs Stonehouse, Canty and Vaserfal that day. In the circumstances I find that the Respondent’s conduct amounted to a refusal to allow a support person. This weighs in favour of a finding that the dismissals of the Applicants were unfair.

Warnings regarding unsatisfactory performance - s.387(e)

[67] The Applicants were not dismissed for performance shortcomings as they were made redundant. Consequently, this factor is a neutral consideration in my decision.

Impact of the size of the Respondent on procedures followed - s.387(f)

[68] The Respondent’s Form F3 - Employer Responses indicates that at the time of the Applicants’ dismissal it had 16 employees. No submissions or material was advanced by the Respondent that would lead me to conclude that the size of the Respondent’s business impacted on the procedures followed. This factor is therefore a neutral consideration in my decision.

Impact of absence of dedicated human resources management specialist/expertise on procedures followed - s.387(g)

[69] There was no material before me that would allow a finding in respect of whether there was an absence of dedicated human resources management specialist/expertise and if so whether that impacted on the procedures followed. In these circumstances I will treat this factor as a neutral consideration in my decision.

Other relevant matters – s.387(h)

[70] Section 387(h) requires the Commission to take into account any other matters that the Commission considers relevant. The Applicants submit that the following additional matters should be taken into account;

•  The personal circumstances of each Applicant;

•  The additional uncertainty created by the Covid-19 pandemic and the consequent prospects of finding alternative employment; and

•  The large number of outstanding issues identified by the Applicants and Mr De Bono that stood to have been canvassed had proper consultation occurred.

[71] Turning firstly to the personal circumstances of each of the Applicants.

[72] Mr Stonehouse who is 27 years old and had over 2 years’ service with the Respondent states that he has two young children, one of whom Mr Stonehouse is the primary carer of. The other child lives with her mother however Mr Stonehouse pays child support for her. Mr Stonehouse further states that his partner is financially dependent on him and is also currently unemployed. His efforts to secure employment since his dismissal have so far proven unsuccessful, this situation negatively impacted by a back injury he sustained while working for the Respondent. Mr Stonehouse also states that he has made a workers compensation claim in respect of that injury, the claim has been accepted and he is currently waiting for the claim including weekly payments and back pay to be fully resolved. 35

[73] Mr Canty who is 61 years old and also had 3 years’ service with the Respondent states that he has been successful in securing alternate employment with Titan Precast although it is at a lower rate of pay than he received while working for the Respondent. 36

[74] Mr Vaserfal who is 66 years old and had over 8 years’ service with the Respondent states that he wishes to continue working but has been unable to find new employment since his dismissal and remains unemployed. He attributes this to his age and the Covid-19 pandemic. He says his wife is also unemployed and that the loss of his job has placed a severe financial strain upon the household finances. 37

[75] Mr Kane who is 50 years old and had 16 years’ service with the Respondent states that he has one dependent child and that he has been successful in securing alternate employment with Titan Precast albeit his employment is on a casual basis and at lower rate of pay than he enjoyed while working for the Respondent. 38

[76] I note that Mr Kane is 50 years of age and both Mr Canty and Mr Vaserfal are over 60 years of age and are consequently more likely to confront difficulties in securing long term employment on comparable rates and conditions to those enjoyed with the Respondent. Mr Stonehouse remains affected by a back injury sustained in his employment with the Respondent and it may be reasonably assumed he will, as a consequence, also face difficulty in the job market. These challenges confronting the Applicants are obviously aggravated by the economic downturn arising from the Covid-19 pandemic. In these circumstances, the consequences of the termination of their employment for the Applicants was harsh and weighs in favour of a finding that the dismissals were unfair.

[77] I now turn to consider other relevant matters starting with the claimed discrepancies in annual leave entitlements on termination. Each of the Applicants gave unchallenged evidence that on the apparent transfer of the business from DPA to the Respondent in November 2019, there was a shortfall in accrued annual leave entitlements which was not corrected either prior to or on termination of their employment by the Respondent. As previously stated, these claimed annual leave shortfalls ranged between 148 and 820 hours.

[78] While recovery of claimed unpaid leave entitlements can be pursued by the Applicants in the courts, that process presents a slow and uncertain path given the apparent transfer of business in November 2019. Other issues including the unilateral reclassification of Messrs Kane, Canty and Vaserfal in November 2019 to Level 2 also remained outstanding at the date of their dismissals. I accept that leave entitlements and their classifications are matters that the Applicants would have sought to discuss and resolve with the Respondent with Mr De Bono’s assistance, had the Respondent undertaken a proper consultation process. While it cannot be assumed that such discussions would have necessarily resolved the Applicants’ concerns over their pay rates and leave entitlements, the fact that the dismissals were implemented without affording the Applicants a proper opportunity to consult over their dismissals including their entitlements, weighs in favour of a finding that the dismissals were unreasonable.

[79] A further matter that is relevant to my consideration is that of clause 16 of the Agreement which details the process to be followed in respect of redundancy. That process which deals with the order of selection relevantly includes the following elements;

•  Voluntary redundancies are to be encouraged as a first step (clause 19.3);

•  The “seniority of employees – within classifications, experience or skills held” will be observed by the Respondent in respect of redundancy decisions (clause 19.4); and

•  The dispute settlement procedure found at clause 2 of the Agreement will apply in the event of any concerns regarding retrenchments (clause 19.5).

[80] The Applicants each claimed that at the dates of their dismissals, other employees with less seniority remained employed by the Respondent. However, there was no evidence before me that would allow findings to be made in respect of those claims. Nevertheless, the speed with which the Respondent implemented the redundancies, that being 2 working days from the date the Applicants were given notice of their potential redundancy to the date of confirmation of the termination of their employment, effectively denied the Applicants and Mr De Bono an opportunity to raise concerns they held regarding compliance with clause 19 of the Agreement. This weighs in favour of a finding that the dismissals were unjust.

[81] Finally, I have already found that the Applicants were made redundant as a result of reduced operational requirements of the Respondent. That is apparent on the evidence of Mr De Bono who states that the operations ground to a halt on 25 July 2020 and remained shut down as at 23 October 2020. Regrettably, the Respondent failed to file any material (beyond the Form F3s) that would shed any light on whether the observed cessation of operations was temporary or permanent, whether there were any remaining employees, whether the Respondent was in receipt of JobKeeper payments and whether re-commencement of operations was likely and if so when. These matters may have been relevant to my consideration of whether the Applicants’ dismissals were unfair. Absent probative evidence from the Respondent I am unwilling to place weight in my consideration as to the unfairness of the dismissals, on the state of the Respondent’s operations. It is therefore a neutral consideration.

[82] It follows from above that there a number of additional matters that are relevant to my consideration of whether the dismissals were unfair. The personal circumstances of each of the Applicants and the current job market means that the consequences of dismissal for the Applicants were likely to be harsh. The denial of an opportunity for the Applicants and their representative Mr De Bono to attempt to resolve entitlement concerns prior to the terminations taking effect means that the manner of dismissal was unreasonable. Finally, compliance of the Respondent with its obligations under clause 19 of the Agreement in relation to consideration of seniority in redundancy selection decisions was unable to be addressed prior to the dismissals taking effect. This rendered the manner of the dismissals unjust.

[83] Each of the above matters weigh in favour of a finding that the Applicants’ dismissals were unfair.

Conclusion

[84] Having weighed each of the criteria above, to the extent that they are relevant, I have concluded that the termination of the Applicants’ employment was harsh unjust and unreasonable. I have reached this conclusion having particular regard to the matters considered under ss 387(d) & (h) of the Act. All other criteria under s 387 are neutral considerations in the circumstances of the cases before me.

[85] As a consequence of my findings above, I am satisfied that the Applicants were unfairly dismissed.

[86] Having reached the above finding, I am now required to turn my mind to remedy. As I stated at the outset, the Applicants seek compensation. There is however insufficient material before me at this stage to determine the question of remedy. I intend therefore to shortly issue directions to the Applicants and the Respondent in relation to the filing of submissions and materials going to the question of remedy.

DEPUTY PRESIDENT

Appearances:

Mr D Vroland for the Applicants

Hearing details:

2020
Monday
16 November
Melbourne

Printed by authority of the Commonwealth Government Printer

<PR724484>

 1   Exhibit A5, Witness Statement of Mr Andrew De Bono, dated 23 October 2020 at [12]

 2   AE421333

 3   Exhibit A4, Witness Statement of Mr Dylan Stonehouse dated 22 October 2020 at [5]-[7]

 4   Exhibit A3, Witness Statement of Mr Jozeph Vaserfal dated 22 October 2020 at [4]-[6]

 5   Ibid at [11]

 6   Exhibit A1, Witness Statement of Mr James Canty dated 22 October 2020 at [4]-[11]

 7   Exhibit A2, Witness Statement of Mr James Kane dated 13 November 2020 at [6]-[7]

 8   Exhibit A2, Attachment JK-2

 9   Exhibit A5, Attachment ADB-1

 10   Exhibit A3 at [15]-[16]

 11   Exhibit A2 at [13]-[15]

 12   Exhibit A1 at [12]-[14], Exhibit A2 at [13]-[15], Exhibit A3 at [13]-[16], Exhibit A4 at [15]-[18]

 13   Exhibit A5 at [18]-[21]

 14   Exhibit A2. Attachment JK-3.

 15   Exhibit A5 at [25]

 16   Exhibit A4, Attachment DS-3

 17   Exhibit A1, Attachment JC-3

 18   Exhibit A3, Attachment JV-4

 19   Exhibit A2, Attachment JK-4

 20   Exhibit A4 at [26], Exhibit A1 at [23], Exhibit A3 at [25] & Exhibit [25]

 21   ExhibitA5, ADB-4

 22   Ibid

 23   Ibid

 24   Ibid

 25   Exhibit A3, Attachment JV-5, Exhibit A4, Attachment DS-4, Exhibit A1, Attachment JC-4

 26   Exhibit A4, Attachment JK-4

 27   Exhibit A2 at [28], Exhibit A3 at [28], Exhibit A1 at [26], Exhibit A4 at [29]

 28   Exhibit A5 at [37]

 29   Ibid at [39]

30 Sayer v Melsteel Pty Ltd[2011] FWAFB 7498, [14]; Smith and others v Moore Paragon Australia Ltd PR915674 (AIRCFB, Ross VP, Lacy SDP, Simmonds C, 21 March 2002), [69].

31 Shepherd v Felt & Textiles of Australia Ltd (1931) 45 CLR 359 at 373, 377–378.

32 Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371, 373.

33 Ibid

34 RMIT v Asher (2010) 194 IR 1, 14-15.

 35   Exhibit A4 at [3]-[4], [31]-[33]

 36   Exhibit A1 at [28]-[29]

 37   Exhibit A3 at [1], [29]-[32]

 38   Exhibit A2 at [1], [29]-[30]