Mr Fakava Finau v Free Enterprise Delivery Service

[2014] FWC 955

[2014] FWC 955

FAIR WORK COMMISSION

DECISION

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

Mr Fakava Finau
v
Free Enterprise Delivery Service
(U2013/12748)

COMMISSIONER WILSON MELBOURNE, 6 FEBRUARY 2014

Application for relief from unfair dismissal.

[1] Mr Fakava Finau was employed by Free Enterprise Delivery Service Pty Ltd (“FEDS” or “the company”) as a Freight Sorter/Forklift Driver from September 2011 until 30 July 2013.

[2] While there is a small factual difference between the parties as to when employment commenced, it is not a great difference and is not a material issue insofar as these proceedings are concerned. Mr Finau believes employment may have commenced in August 2011, whereas FEDS submits that employment commenced in the week ending 24 September 2011. After consideration of the material before me, I am satisfied that the weight of material indicates employment commenced, as the employer suggests, in the week ending 24 September 2011.

[3] While it is accepted that Mr Finau was dismissed from employment and is a person protected from unfair dismissal, within the meaning of s.382 of the Fair Work Act 2009 (“the Act”), FEDS submits that Mr Finau has not been unfairly dismissed because his dismissal was not a case of genuine redundancy.

[4] In addition, FEDS submits that while the company and the group within which it is formed are small, the group comprises associated entities (which include FEDS) and the group employed more than 15 employees at the time of Mr Finau’s dismissal. As a result, FEDS do not rely upon their status as a small enterprise in order for the Commission to find that Mr Finau’s dismissal was not harsh, unjust or unreasonable.

[5] Instead it is submitted by FEDS that because the dismissal was a case of genuine redundancy, there has been no unfair dismissal of Mr Finau.

[6] Relevant to the consideration of these matters are the Act’s provisions in s.396 , which requires certain matters relating to an application to be determined before considering the merits of the application (which includes assertions of genuine redundancy) and s.389 which defines what is to be regarded as a genuine redundancy. These sections provide 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.

(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.

396 Initial matters to be considered before merits

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.

[7] The following matters were agreed by the parties either in the course of the hearing or in their submissions filed prior to the hearing;

• Mr Finau signed an employment agreement with FEDS in September 2012 which set out the basic arrangements between the parties.



• While the agreement indicates that his appointment was effective from 6 August 2012, the parties agreed that Mr Finau’s employment as a full-time worker was continuous from at least the end of September 2011. The employment agreement indicates that Mr Finau was, a full-time employee, employed in a permanent full-time position as an “afternoon shift, freight Sorter and forklift driver”;



• The employment arrangement between the parties was subject to the Road Transport And Distribution Award 2010 1;



• Until at least May 2013 Mr Finau worked full time for the company on the afternoon shift on days between Monday and Friday;



• As a full-time employee he was remunerated at a rate of pay which did not include a casual allowance, but which did include an afternoon shift penalty.



• Mr Finau was dismissed from employment on 30 July 2013.

[8] The parties also agree that there was a meeting between them on 21 May 2013 2 and that in the course of the meeting Mr Finau was told that his position as a full-time worker on the afternoon shift was going to change. The parties then differ as to the precise nature of matters that were discussed in that meeting and then subsequently until the time Mr Finau was dismissed on 30 July 2013.

[9] The evidence and submissions before the commission comprises the parties’ written outline of submissions; their oral submissions; certain documentary material; together with the evidence of the applicant, Mr Finau, and Mr T Sutherland (FEDS general manager and owner). The parties were not represented, other than by themselves, and the matter proceeded by way of a determinative conference held before me.

[10] Where there is a conflict in the evidence between Mr Finau and Mr Sutherland, I prefer Mr Sutherland’s evidence.

[11] Mr Sutherland’s recollection of key events and conversations was stronger than Mr Finau’s; generally consistent with the documentary material that was before me and did not appear to be embellished. On the other hand, Mr Finau’s recollection of key events and conversations was sometimes not clear and precise; he frequently required prompting to remember particular things; and certain aspects of his poor recollection of some matters appeared to be self-serving.

[12] In particular I prefer Mr Sutherland’s evidence in respect of the discussion that occurred on 21 May 2013.

[13] The company’s evidence includes that it had lost money in the 2011/12 financial year and had also made losses in the 2012/13 financial year.

[14] Mr Sutherland gave evidence to the effect that on 21 May 2013 he asked Mr Finau and his supervisor to come to his office and that he explained to Mr Finau that he needed to reduce the number of staff on the afternoon shift. His evidence includes that at the time of the conversation there were three people working on the afternoon shift, namely the supervisor and two support people, one of whom was Mr Finau.

[15] Mr Sutherland’s evidence about the meeting, which I accept, is that he believes he very definitely told Mr Finau that the job Mr Finau was doing on the afternoon shift would not be there anymore. Mr Sutherland says that he believed Mr Finau had difficulty in understanding this point and as a result Mr Sutherland had to say things that would allow Mr Finau to understand that his afternoon job would not be there anymore.

[16] While I take into account that a part of Mr Finau’s understanding of this point can be attributed to English being his second language, I accept that Mr Sutherland said these things to Mr Finau.

[17] Mr Sutherland says that he still wanted Mr Finau to work with FEDS; that Mr Finau asked Mr Sutherland about what would be his ongoing rate of pay and that he said he did not wish to take a reduction in his rates (which would come about because he would no longer receive the afternoon shift penalty). Mr Sutherland says that Mr Finau asked whether there was a way to make the rate higher and Mr Sutherland said that this could only be done if Mr Finau was made a casual employee. Mr Sutherland says that he explained to Mr Finau that if he was fairly paid as a casual employee he would be otherwise treated as a casual employee and that Mr Finau responded that he did not wish to be a casual employee but he wanted to casual rate of pay.

[18] Mr Finau disagrees that these matters were put to him in the meeting in May. However he accepts that in the course of the meeting “Tony told me that my permanency was terminated and I would become casual in two weeks time”. 3

[19] The evidence, including that from Mr Finau, indicates that subsequently Mr Finau’s employment arrangements changed, including by him being transferred from the afternoon to the morning shift and moved to a variable hours arrangement. Mr Finau’s estimation is that he moved from a 38 hour week prior to the discussion in May 2013 to about 20 hours per week in early June 2013.

[20] After this change in Mr Finau’s employment status and working paterns, there was considerable exchange between Mr Finau and Mr Sutherland. These exchanges included the provision of two letters of complaint to Mr Sutherland.

[21] The first of these, dated 22 May 2013, states that Mr Finau was not happy and disagreed with the new arrangement that had been implemented and that while he is prepared to move his shift arrangements he wished to remain a permanent employee. 4 The second of the letters is dated 7 June 2013 and reiterates Mr Finau’s disagreement with the arrangements and indicates his preference to remain on a permanent position.5

[22] In the materials provided in Mr Finau’s submissions there were also two employment contracts in draft form that, in Mr Finau’s outline of submissions, were said to have been provided to him by Mr Sutherland, but which were not ever signed by Mr Finau. The first, dated 1 June 2013, refers to a casual employment arrangement, and the second, dated two July 2013 similarly refers to a casual employment arrangement. 6

[23] The evidence and submissions of both parties indicates a rising level of concern, on the part of Mr Finau, and frustration on the part of Mr Sutherland, over the course of June 2013. It is apparent the parties both saw their ongoing relationship as unresolved. In the case of Mr Finau, he wanted to secure ongoing employment with FEDS. In Mr Sutherland’s case, he wanted to have finality about what he regarded as an uncertain relationship between the two.

[24] Mr Sutherland endeavoured to resolve the uncertainty by putting a further draft employment agreement to Mr Finau. This document, dated 1 July 2013 refers to an appointment being effective from 8 July 2013 and refers to employment “in a permanent full-time position as an (sic) Day Shift, Freight Sorter and Forklift Driver” for FEDS. 7 The document refers to the position being a day shift employee; therefore not attracting either casual or shift penalty loadings.

[25] Mr Sutherland’s evidence, which I accept, is that this was put forward as a means to both resolve the impasse between the two as well as to address Mr Finau’s wish to be an ongoing, or permanent, employee.

[26] Mr Sutherland evidence is that there were multiple occasions on which he asked Mr Finau to consider and sign the document, but that Mr Finau did not do so.

[27] The matter began to come to a head at a discussion that both parties agree took place on Friday 26 July 2013.

[28] Mr Finau agrees that in this meeting, Mr Sutherland asked him why the contract form had not been signed and returned to him. Mr Sutherland’s evidence is that he asked Mr Finau to consider the agreement over the course of the weekend and to either sign it or to come to him with questions on the following Monday, 29 July 2013. Mr Sutherland’s submissions about this meeting, which I accept, are as follows;

“12. On Friday the 26th July 2013 I again spoke to [Mr Finau] and asked for the return of the signed document. He again said that he had not read it. I asked again was it a question of not being able to read or understand the document and he said no he was capable of reading it and that he had not had time over the preceding three weeks to read the document. I asked did he need to have some assistance or advice in regard to the understanding of the document. He replied he didn't think so as he had just not had time to read the document.” 8

[29] Mr Finau says about this discussion that he felt humiliated or bullied.

[30] A discussion between the two did not take place on Monday 29 July, however one did take place the following day, on Tuesday 30 July.

[31] The conversation that took place between the two on 29 July included Mr Sutherland asking Mr Finau whether he had signed the agreement, to which Mr Finau said that he had not. Mr Sutherland’s submissions about this meeting, which I accept, are as follows;

“18. On the Tuesday 30th July 2013, I called him into my office as the commencement of his shift and asked the for document (sic). He said he did not have it. I asked was he prepared to sign and return it. He said that he still had not read the document. I then told him that I was withdrawing the offer, I was reverting back to the previous document that he had signed, and that I was terminating his employment as his position had been made redundant”. 9

[32] FEDS then confirmed Mr Finau’s dismissal by asking Mr Finau to leave the premises.

[33] The statutory definition of genuine redundancy, referred to above, in s.389 of the Act requires consideration of three elements.

[34] The first of these is whether 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.

[35] I am satisfied that this element has been met by FEDS.

[36] The evidence and submissions of the parties indicates that FEDS was indeed, as claimed, in the process of “cut back mode”. It was responding to losses that had been made within the company over a period of some time and a desire by the company’s owners to restructure its operations to reduce costs. Whereas about a year ago the group of companies employed about 40 to 45 employees and 23 or so contractors, it now employs about 30 employees and 35 contractors. The evidence is that the company took steps to reduce its afternoon shift employment and that it took a decision to reduce the three staff on the afternoon shift by two.

[37] One of the people who was affected by this decision (but not the only one) was Mr Finau.

[38] I am satisfied that FEDS considered and sought to negotiate alternative employment arrangements with Mr Finau. These negotiations ran from late May 2013 until late July 2013 and were ultimately unsuccessful. When the company formed the view that the negotiations were not likely to result in a mutually agreeable position FEDS returned to the position it had articulated to Mr Finau in May, namely that his position as an employee on the afternoon shift would no longer exist. It follows that in the absence of a mutually agreeable alternative, the company had little choice other than to terminate Mr Finau services.

[39] The second of the criteria in s.389 of the Act that requires consideration is whether FEDS has complied with any obligation in a modern award or enterprise agreement that applied to Mr Finau’s employment to consult about the redundancy.

[40] The evidence before me is that the Road Transport and Distribution Award 2010 10 (“the Award”) applied to Mr Finau’s employment. The Award includes clause 9 (Consultation) which read as follows in May 2013 (which is the time consultation would have been required to have commenced)11;

“9. Consultation regarding major workplace change

9.1 Employer to notify

(a) Where an employer has made a definite decision to introduce major changes in production, program, organisation, structure or technology that are likely to have significant effects on employees, the employer must notify the employees who may be affected by the proposed changes and their representatives, if any.

(b) Significant effects include termination of employment; 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 or locations; and the restructuring of jobs. Provided that where this award makes provision for alteration of any of these matters an alteration is deemed not to have significant effect.

9.2 Employer to discuss change

(a) The employer must discuss with the employees affected and their representatives, if any, the introduction of the changes referred to in clause 9.1, the effects the changes are likely to have on employees and measures to avert or mitigate the adverse effects of such changes on employees and must give prompt consideration to matters raised by the employees and/or their representatives in relation to the changes.

(b) The discussions must commence as early as practicable after a definite decision has been made by the employer to make the changes referred to in clause 9.1.

(c) For the purposes of such discussion, the employer must provide in writing to the employees concerned and their representatives, if any, all relevant information about the changes including the nature of the changes proposed, the expected effects of the changes on employees and any other matters likely to affect employees provided that no employer is required to disclose confidential information the disclosure of which would be contrary to the employer's interests”.

[41] After consideration of the Award clause and the evidence and submissions before me in this matter I am satisfied of the following;

• That FEDS notified Mr Finau it had made a definite decision to introduce major change that was likely to have a significant effects on him (in satisfaction of clause 9.1(a) of the Award).



• That FEDS discussed the change with Mr Finau and that he had an opportunity to suggest measures to avert or mitigate the adverse effects of the change on him which was given prompt consideration to by FEDS (in satisfaction of clause 9.2 of the Award). This is evidenced not only by the two letters provided by Mr Finau to Mr Sutherland, 12 but also the subsequent discussions between them, as well as the several draft employment agreements provided to the Applicant which set out alternative arrangements for Mr Finau to consider.13

[42] The third of the genuine redundancy criteria requiring consideration is that within s.389(2) of the Act which requires consideration of whether it would have been reasonable in all the circumstances for a person to be redeployed within the employer’s enterprise or the enterprise of an associated entity of the employer.

[43] The evidence before me is that consideration was given by FEDS to the redeployment of Mr Finau firstly to a day shift within FEDS (albeit as a casual employee) and secondly, in July 2013 to a full time dayshift position with FEDS.

[44] While it was not put by Mr Finau that there was the possibility of redeployment elsewhere within the group of which FEDS is a part, the evidence before me leads to the view that this possibility was unlikely, given the financial strictures faced by the group and the decisions taken by Mr Sutherland to reduce costs and the number of employees. As a result I am satisfied that, on the date that he was terminated from employment, it would not have been reasonable in all the circumstances for Mr Finau to be redeployed either within the FEDS or an enterprise associated with FEDS.

[45] As a result of the foregoing considerations, I am of the view that Mr Finau’s dismissal was a case of genuine redundancy within the meaning of the Act and s.389 in particular.

[46] It follows therefore that Mr Finau is not a person who has been unfairly dismissed within the meaning of s.385 of the Act.

[47] As a result I must now dismiss Mr Finau’s application and an Order to that effect will be issued with this decision.

COMMISSIONER

Appearances:

Mr F Finau on his own behalf

Mr T Sutherland for Free Enterprise Delivery Service Pty Ltd

Hearing details:

2014.

Melbourne:

February, 6

 1   MA000038

 2   Mr Finau’s submissions refer to it being on 20 May (see Exhibit MF1, p1), whereas Mr Sutherland referred to it being on 21 May 2013

 3   Exhibit MFI1, p1

 4   Exhibit A2

 5   Exhibit A1

 6   Exhibit MFI1, attachment

 7   Exhibit R1

 8   Exhibit MFI5

 9   Exhibit MFI5

 10   MA000038

 11   In effect from 21 December 2012

 12   Exhibits A1 and A2

 13   Exhibit MFI1 and MFI2

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