Mr Gim Pheng Ho v A.P. Eagers Limited
[2010] FWA 5897
•27 AUGUST 2010
[2010] FWA 5897 |
|
DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Mr Gim Pheng Ho
v
A.P. Eagers Limited
(U2009/13208)
COMMISSIONER SIMPSON | BRISBANE, 27 AUGUST 2010 |
Termination of employment- Jurisdiction - Not a Genuine Redundancy-Harsh, Unjust and Unreasonable- Reinstatement inappropriate - Compensation Ordered
INTRODUCTION
[1] This matter concerns an application under s 394 of the Fair Work Act 2009 (“the Act”) by Mr Gim Pheng Ho (“the Applicant”) who alleges that the termination of his employment with A.P Eagers Limited (“the Respondent”) was unfair in accordance with the definition contained within s 385 of the Act.
[2] The application was filed on the 23 October 2009 and a conciliation conference was conducted on 13 November 2009 which was not successful in resolving the matter. The respondent subsequently raised a jurisdictional objection based upon the applicant being the subject of a genuine redundancy however the respondent advised that this issue could be dealt with as part of the arbitration hearing for the matter generally.
[3] Following a directions conference with the parties before Commissioner Spencer on 8 February 2010 the matter was listed for hearing on Wednesday 2 June 2010 and Thursday 3 June 2010 in Brisbane. At the hearing the Applicant was represented by Mr Daniel Pratt as Counsel instructed by Mr Ethan Emery of Milner Lawyers and the Respondent was represented by Mr John Merrill as Counsel who was instructed by Mr Joseph Ryan of Lander & Rogers Lawyers.
THE LEGISLATION
[4] Section 385 of the Act provides that a person has been unfairly dismissed if Fair Work Australia is satisfied that:
(a) the person has been dismissed; and
(b) the dismissal was harsh, unjust and 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.
[5] It is common ground that the Applicant was dismissed on the 9 October 2009, that the Respondent was not subject to the Small Business Fair Dismissal Code, and that no modern award or enterprise agreement applied to the Applicant at the time his employment was terminated.
[6] The principle issues in contention between the parties are whether Fair Work Australia (FWA) has jurisdiction to hear and determine the application as the Respondent contended that the termination was a case of genuine redundancy and if the dismissal was not a case of genuine redundancy, whether the dismissal was harsh, unjust and unreasonable within the meaning of the Act.
[7] The Applicant contended that the dismissal was not a case of genuine redundancy for the following reasons. That the changes in the operational requirements of the Respondent’s enterprise did not result in the Applicant’s job no longer being required to be performed by anyone; and/or in the alternative it was reasonable in all of the circumstances for the Applicant to be re-deployed within the Respondent’s enterprise or the enterprise of an associated entity of the Respondent.
[8] The Applicant has argued that except for a name change, the Applicant’s Corporate Accountant position is being done by the new Assistant Accountant position which is a new position created out of a restructure of the corporate office finance department. It is agreed between the parties that the position of Assistant Accountant was never offered to the Applicant, nor was the Applicant offered any other position within the Company.
[9] The Respondent argued that it had reasonably explored redeployment opportunities within the Respondent and its associated entities and that no suitable opportunities existed and in the circumstances it would not have been reasonable to redeploy the Applicant to any vacant position. In the alternative the Respondent contended that the dismissal was not harsh, unjust or unreasonable.
[10] Section 396 requires that I must decide the jurisdictional objection before considering the merits of the application. The meaning of genuine redundancy is set out in s.389 as follows:
“Section 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.”
[11] The Explanatory Memorandum states as follows:
“1546. This clause sets out what will and will not constitute a genuine redundancy. If a dismissal is a genuine redundancy it will not be an unfair dismissal.
1547. Paragraph 389(1)(a) provides that a person’s dismissal will be a case of genuine redundancy if his or her job was no longer required to be performed by anyone because of changes in the operational requirements of the employer’s enterprise. Enterprise is defined in clause 12 to mean a business, activity, project or undertaking.
1548. 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 or duty 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.
1549. It is intended that a dismissal will be a case of genuine redundancy even if the changes in the employer’s operational requirements relate only to a part of the employer’s enterprise, as this will still constitute a change to the employer’s enterprise.
1550. Paragraph 389(1)(b) provides that it will not be case of genuine redundancy if an employer does not comply with any relevant obligation in a modern award or enterprise agreement to consult about the redundancy. This does not impose an absolute obligation on an employer to consult about the redundancy but requires the employer to fulfil obligations under an award or agreement if the dismissal is to be considered a genuine redundancy.
1551. Subclause 389(2) provides that a dismissal is not a case of genuine redundancy if it would have been reasonable in all the circumstances for the person to be redeployed within the employer’s enterprise, or within the enterprise of an associated entity of the employer (as defined in clause 12).
1552. There may be many reasons why it would not be reasonable for a person to be redeployed. For instance, the employer could be a small business employer where there is no opportunity for redeployment or there may be no positions available for which the employee has suitable qualifications or experience.
1553. Whether a dismissal is a genuine redundancy does not go to the process for selecting individual employees for redundancy. However, if the reason a person is selected for redundancy is one of the prohibited reasons covered by the general protections in Part 3-1 then the person will be able to bring an action under that Part in relation to the dismissal.”
EVIDENCE
[12] The Applicant provided himself as a witness. FWA pursuant to s.590(2) ordered Mr Bradley Jones and Mr Ron Emery to attend for the hearing, which they subsequently did following the filing of applications for such orders by the Applicant’s legal representatives.
[13] The respondent provided four witnesses who were Mr Michael Raywood, the Group Human Resources Manager, Mr Stephen Best, the Chief Financial Officer, Mr Babulal ‘Denish” Khagram, the Group Accountant and Mr David Rowbotham, the Group Management Accountant.
THE RELEVANT FACTUAL BACKGROUND
[14] Mr Ho is 62 years of age and commenced employment with the Respondent in 1985. At the time of his termination he had worked for the Respondent for 24 years and 2 months. Mr Ho is a qualified accountant having studied in the United Kingdom. On the 26 March 1984 he was admitted as an Associate of the Australian Society of Certified Practicing Accountants in recognition of his oversees training and experience.
[15] A chart 1 visually representing the corporate structure of the A P Eagers Limited Group was tendered by the Respondent which was used to demonstrate that A.P Eagers Limited is a holding company which owned shares in a number of subsidiary companies that operated the Eagers business.
[16] Mr Ho’s first position with the Respondent was in a full-time Accountant position at the Eagers – Newstead Dealership. In that position he was responsible for the reconciliation of banking, accounts receivable and payable, past return clearing accounts and preparation of financial reports both for use of the Dealerships and as information required by the Corporate Office.
[17] During his time of employment at the Eagers Newstead Dealership he also performed accounting duties for other dealerships including Townsville, Kedron and Windsor. In 2004 the Applicant commenced in a new role of Internal Auditor/Corporate Accountant located in the Corporate office. From February 2008 the Applicant performed the duties of Corporate Accountant.
[18] Mr Stephen Best commenced employment with Eagers in October 2007 as the Chief Financial Officer. In April of 2008 Mr Best developed and put forward a proposal for a new financial consolidation tool for Eagers. Mr Best sought, and had approved almost $100,000 for the new system to be introduced.
[19] On 2 January 2009 Mr Best forwarded Mr Ho an email proposing a discussion about some changes to his role. A revised position description was attached to this email. 2 Mr Ho’s discretionary bonus objectives for 2008 were also attached. Mr Ho and Mr Best agree that some time later they had a conversation about this proposal of adding some management accounting responsibility to Mr Ho’s role. Mr Best proposed that Mr Ho’s existing role as the Corporate Accountant be expanded to include monthly management reporting, maintenance of the corporate fixed asset register and Group GST and BAS returns from around April 2008.
[20] It was Mr Ho’s evidence 3 that he had advised Mr Best that he was prepared to take on the additional duties but due to his existing workload some other duties would have to be removed from his role. Mr Best confirmed in cross examination that Mr Ho had contended that he was fully occupied at the time.
“ Did he complain about his workload at the time?
He did contend that he was fully occupied at the time. I guess that wasn’t something I agreed with or shared that view, but that was I think his, the reasons stated for not taking on that additional work, yes.” 4
[21] And further in his evidence:
“So you asked him to do these additional duties and his response was, if I can paraphrase your evidence, his response was effectively a complaint that he was already too busy. Is that a fair assessment?
I wouldn’t call it a complaint that he was too busy. As I said he gave the reason as to why he couldn’t do it was that he was fully occupied. I didn’t take that as a complaint that he was overworked or anything like that.” 5
[22] Following this conversation it appears from the evidence that Mr Best did not follow up or challenge Mr Ho’s claim that he was too busy to take on extra work any further. It was Mr Ho’s evidence that he understood Mr Best would come back and discuss the matter and it seems clear from the evidence this did not happen. 6 Mr Ho received a discretionary bonus payment for that period in line with that received by other staff.
[23] In June 2009 the Respondent introduced the new computerised consolidation and reporting system (“CMRS”). The new system was said to eliminate significant previously manual accounting duties and prompted the restructuring of the Corporate Finance Department. The Respondent said that the record keeping duties previously performed were being automated, and replaced with duties focussed on analysing and controlling. A new position of Group Management Accountant was established in August 2008 to develop and implement the new system and this position was filled by Mr David Rowbotham.
[24] The Applicant maintained that following the introduction of the CMRS, only a small proportion of his duties had been transferred to other positions. Mr Best said in his witness statement that he chose to redistribute some of the Corporate Accountant’s tasks to the Group Accountant Mr Khagram. 7 These were banking arrangements, ANZ online administration, managing corporate credit cards, completing statutory returns (e.g. (BAS/GST); and authorising transactions such as payroll.
[25] Mr Best went on to say that Mr Rowbotham in the new Group Management Accountant position had taken on the additional roles such as income statement. Some of the more mundane data entry tasks were to be given to Ms Kaitlyn Scott the receptionist.
[26] In or around early September 2009 Mr Best produced a confidential document setting out the corporate finance function. The document proposed a restructure that distributed the tasks performed by Mr Ho as the Corporate Accountant to three other positions being the Group Accountant, the Receptionist/Administrator and a new Assistant Accountant role.
[27] The new Assistant Accountant role would report to the Group Management Accountant. Mr Raywood, the Human Resources Manager said that it was late August or early September when Mr Best produced the paper on the impact of the CMRS and a proposed restructure that would see Mr Ho’s position become redundant. 8
[28] Mr Raywood said that it was in discussions between himself, Mr Best and Mr Ward the Chief Executive Officer that the two main criteria as to why Mr Ho was not offered redeployment were his computer skills, and that there were no roles of a similar nature available at the time. 9
[29] The Respondent was also concerned that had it offered the Assistant Accountant role to Mr Ho it could have been viewed as a constructive dismissal. The following exchange occurred between Mr Pratt and Mr Raywood in cross examination;
“Was your opinion or advice sought as to whether or not Mr Ho would be suitable or capable of performing that position, the assistant accountant's position?
---Yes. We talked about that in the meeting between the three of us and it was determined that that would be effectively constructive dismissal if we were to offer Gim that role that was assistant accountant. It was a much diluted role and it was in a far lesser package so we felt that that would probably be deemed constructive dismissal if we just offered him that because the role was going to disappear.
The alternative was a redundancy?---Yes.
Which is in itself a dismissal?---Yes.
Is that correct?---It is, yes.
Do you agree that some job is better than no job?---We didn't have another position to offer him.
You had already effectively resigned yourselves to filling that position with someone else, hadn't you?---Yes.
You did that because you had predetermined that Mr Ho wasn't suitable for it?
---Yes.
You never consulted with him about that, did you?---No.”
[30] Mr Raywood agreed with the proposition that the new proposed Assistant Accountant would take the “lions share” of Mr Ho’s job when they were discussing the restructure. 10 It was apparent from Mr Raywood’s evidence that he had no direct knowledge of Mr Ho’s capacity to perform the role of either the Assistant Accountant or the role in the Dealership.
[31] It was put to Mr Raywood that the new Assistant Accountant role was very similar to the former position of Corporate Accountant occupied by Mr Ho. Mr Raywood responded he did not really know but they were looking for a lower level of skill in the recruitment process. When it was put to Mr Raywood that Mr Ho could do the job he responded that based on Mr Best’s recommendations about Mr Ho’s computing skills he doubted it. However as far as Mr Raywood was aware there was never any attempt to assess whether there was or was not a deficiency in Mr Ho’s computer skills.
[32] Mr Raywood said in evidence that another person commenced in the newly created Assistant Accountant position on the 19 October 2009 ten days after Mr Ho was terminated.
[33] On the 8 October 2009 at about 4pm the Applicant was approached by Mr Best and asked to attend a meeting to be held immediately in the Corporate Office Meeting Room.
[34] At the meeting were Mr Best and Mr Raywood. At the meeting Mr Best handed Mr Ho a termination letter, which stated that the position of Corporate Accountant was to be made redundant effective from 9 October 2010. The third paragraph of the letter read as follows:
“ ..As discussed with you, we are restructuring in the Finance Department within the Corporate office and the role of Corporate Accountant is no longer required. The implementation of the new consolidated management reporting system will mean a change in the focus within the corporate office and the creation of a new role as an Assistant Accountant level. We have explored redeployment opportunities within the Group but due to the current economic conditions we are unable to provide you with an offer of employment which matches your skills, experience and employment package.” 11
[35] It was the Applicant’s submission that given his professional skill, capability and competency; and continual 24 years of service and knowledge of the Company it is reasonable to have been re-deployed to either of two positions;
(a) Dealership Accountant/Financial Controller at Eagers Holden at Windsor (“the Dealership role”); or
(b) The new Assistant Management Accountant at Corporate Office (“the Assistant Accountant’s role”). 12
[36] It is common ground that the Respondent never offered Mr Gim either the Dealership Role or the Assistant Accountant role. 13 It was the Respondent’s evidence that it was not reasonable to redeploy the Applicant to either role.
[37] The Assistant Accountant position attracts a salary, terms and conditions significantly different from the Corporate Accountant position filled by Mr Ho in that the Corporate Accountant role has a base salary of $74,160 per annum, 9% superannuation and a 10% bonus allowance, a company car to a cost of $35,000 and a provision for a mobile phone.
[38] By comparison the Assistant Accountant position has a base salary of $55,000, 9% superannuation and no other benefits. The Assistant Accountant position has a lesser level of authority vested in it, for example, the Assistant Accountant position cannot authorise payroll, electronic funds transfer, cheques and access to confidential information relating to executive salary packaging, and the Assistant Accountant position only required two years post graduate accounting experience. The Dealership Role also involved a pay reduction. 14
JURISDICTIONAL OBJECTION
[39] It is my view that the evidence supports the proposition that all of the duties of the former position have been reallocated to other positions within the Respondent, including the Group Accountant, the Receptionist/Administrative Assistant and the newly created position of Assistant Accountant. While it is clear that a significant proportion of the duties of the Applicant are still required to be performed, the duties have been transferred to other positions.
[40] While under cross examination it became apparent that Mr Ho was not sure what proportion of his former role had been reallocated to different employees in the restructure. It was put to Mr Ho in cross examination that his former functions of payroll reports, payroll tax return, finance and insurance information were now performed by Mr Rowbotham and he conceded he did not know. 15 Mr Rowbotham later confirmed in his evidence that he was performing these tasks.16
[41] Later under cross examination Mr Ho agreed with some qualification that Mr Khagram had now taken over functions he had previously performed in the areas of changes in bank signatories, opening and closing bank accounts, dealing with the electronic ANZ transactions, writing correspondence about properties rented by the group, administering the corporate credit cards and handling the credit card transactions. 17
[42] Mr Ho also accepted while giving evidence that the introduction of the CMRS would mean Mr Denish Khagram would require less time to consolidate reports. 18
[43] The evidence of Mr Best, Mr Raywood, Mr Rowbotham and Mr Khagram regarding how the restructure was eventually given effect is fairly consistent with the confidential report prepared by Mr Best regarding the proposed restructure 19 before it occurred.
[44] The Applicant went to considerable effort to produce a number of documents attached to his statement that were an attempt to show the introduction of the CMRS did not have a significant impact on his role.
[45] It was conceded by the Applicant that these documents had no official status within the Respondents organisation. One of these documents was an analysis of work Mr Ho said he did from July 2009 to October 2009 based on the number of minutes he spent performing the various duties in his position description. I did not find these documents particularly helpful in determining how the functions of the Corporate Accountant role had been redistributed to other staff.
[46] The evidence of the witnesses for the Respondent when combined with concessions made by Mr Ho during his evidence on the reallocation of duties that he was aware of have satisfied me that the Respondent no longer required the Corporate Accountant role to be performed.
[47] On that basis I accept that the first limb of the meaning of genuine redundancy as set out in s.389(1)(a) has been met in that Mr Ho’s role as the Corporate Accountant was no longer required to be performed by anyone because of changes to the operational requirements of the employer’s enterprise.
[48] No requirement exists for the Respondent to comply with s.389(1)(b) as it was common ground that no modern award or enterprise agreement applied to the employment of Mr Ho.
[49] Section 389(2) states:
“A person’s dismissal was not a case of genuine redundancy if it would have been reasonable in all of 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.”
[50] The Explanatory memorandum says as follows with regard to Subclause 389(2) of the Act:
“1551. Subclause 389(2) provides that a dismissal is not a case of genuine redundancy if it would have been reasonable in all the circumstances for the person to be redeployed within the employer’s enterprise, or within the enterprise of an associated entity of the employer (as defined in clause 12).
1552. There may be many reasons why it would not be reasonable for a person to be redeployed. For instance, the employer could be a small business employer where there is no opportunity for redeployment or there may be no positions available for which the employee has suitable qualifications or experience.”
[51] I intend firstly to address the proposition of whether it would have been reasonable in all of the circumstances for Mr Ho to be redeployed to the Assistant Accountant position.
[52] The Respondent is a large employer and has been achieving record profits in recent years. It is apparent that while Mr Best as the Chief Financial Officer had to confer with the Chief Executive Officer to get authority to terminate Mr Ho it was clear he was the principle engineer of the decision which is logical as he was also the principle driver behind the introduction of the CMRS and also the subsequent restructure of the corporate finance department.
[53] The Respondent had a considerable period of time to consider its intentions regarding Mr Ho. The Respondent was aware from late August or early September that it was intending to make Mr Ho’s job redundant. This coincided with the time that the Assistant Accountant position was being developed.
[54] The Respondent offered a range of reasons as to why it would not have been reasonable in all of the circumstances for Mr Ho to be redeployed into the Assistant Accountant position.
Communication and Interpersonal Skills
[55] During evidence in re-examination Mr Best said the following:
“Mr Merrell: “You were asked some questions about, again on the same topic, why you did not redeploy Mr Ho to either of those positions, and again it was put to you that your reasoning included that he couldn’t do the work and he didn’t have the computer skills and you said, “They weren’t the substantial reasons.”. Do you recall giving that evidence?
Mr Best: Yes.
Mr Merrell: What was the substantial reasons why?
Mr Best: It was really the communication, interpersonal and staff supervision issues that concerned me most.” 20
[56] The Respondent cannot point to any occasion where Mr Ho in 24 years of employment was ever counselled, or had any grievance against him on the basis of his communication, interpersonal or staff supervision skills.
[57] Mr Best in his evidence stated that the Applicant did not have the necessary communication and interpersonal skills to associate with dealerships and use the information gathered effectively.
[58] Mr Brad Jones who was directly responsible for Mr Ho’s supervision during many of his years working at the Newstead Dealership until his move to the corporate office gave a very favourable account of Mr Ho’s capacity to work in the dealership over those years. 21
[59] Mr Emery a former work colleague, also gave evidence 22 that he worked in the adjoining office to Mr Ho while in the dealership and described Mr Ho as diligent in his duties. He described Mr Ho as reserved in nature however, he never witnessed Mr Ho involved in any arguments or disputes with other staff in the several years they worked alongside each other.
[60] It was suggested that Mr Ho was abrupt with staff in his internal audit role however if this was ever a genuine concern of the Respondent during Mr Ho’s employment there is no evidence that it was ever raised with Mr Ho.
[61] Mr Best expressed particular concern about Mr Ho being re-deployed into the dealership role in that it required supervision of five or six administrative staff and Mr Ho did not have any responsibility for staff supervision in the role that he was in. Mr Best expressed concern about how Mr Ho would perform in a staff supervision role based on his demeanour and his approach. He also referred to Mr Ho’s abruptness at times and how he communicated at times in meetings and interpersonally between people. 23 The concern of Mr Best regarding supervision of staff was apparently confined to the dealership role rather than the Assistant Accountant role. The Assistant Accountant role does not involve supervision of staff.
[62] Mr Best may hold such views about the limitations of Mr Ho’s communication and interpersonal skills, however Mr Best’s stated concerns about Mr Ho are not supported by evidence that anyone within the Respondent’s organisation made any effort to address any of those alleged concerns. It seems clear enough that there was never an effort made on the part of the Respondent to test these alleged limitations of the Applicant. To seek to rely on those views or perceptions about Mr Ho as a defence for a decision to terminate him, rather than consider him for redeployment into a roll he would otherwise appear to have had the experience and qualifications to fulfil I find hard to regard as anything else but harsh treatment.
[63] Mr Ho is a qualified accountant with experience in both an accounting role in the car dealership environment for 19 years, and experience in the Corporate Accountant role in the Eagers Corporate Office for 6 years. His formal record is unblemished despite the criticism levelled at him during the course of the evidence in this matter, particularly by Mr Best and to some extent by Mr Khagram.
[64] Mr Khagram provided Mr Ho with a reference 24 in 1991 when Mr Ho faced redundancy at that time. The reference said among other things that “he got along well with other staff.” Mr Khagram did not contradict this in his witness statement. In cross examination when the reference Mr Khagram had written for Mr Ho in 1991 was put to him he confirmed that Mr Ho had got along quite well with other staff at that time25 however in re-examination clarified this by expressing the view that since he came to the corporate area he was having difficulty with members of the staff within the group.26
[65] I have not attributed significant weight to this evidence for similar reasons that I have not attributed significant weight to Mr Best’s evidence with regard to Mr Ho’s computer, communications and interpersonal skills. Mr Khagram gave no specific evidence to support this statement, and there is no evidence of this issue ever being raised with the Applicant.
[66] Mr David Rowbotham who commenced employment in the Group Management Accountant role in August 2008 gave the following evidence about Mr Ho:
“ In your experience with Mr Ho’s work would you describe him as efficient?---I would describe it as meticulous in detail.
He takes his job seriously?---Yes
If he was reinstated do you think you could work with him?---Yes..” 27
Use of Excel
[67] The Respondent relied on the claim that Mr Ho had poor excel skills. Mr Brad Jones worked with Mr Ho in the Newstead Dealership from 1991 to 2004 and was Mr Ho’s former supervisor. He gave complimentary evidence regarding Mr Ho’s work ethic and demeanour at work. Mr Jones also gave evidence that Mr Ho worked with excel when he worked under his supervision at the dealership. 28
[68] It was also Mr Jones evidence that the reason Mr Ho moved from the dealership role to the role of Corporate Accountant was because the Chief Financial Officer at the time had been looking for a candidate who would improve internal auditing and Mr Ho was seen as a good candidate for that role. Mr Ho in his evidence explained that this move was a promotion for him as it was an $8,000 wage increase at the time.
[69] Mr Khagram who was Mr Ho’s immediate supervisor at the time of his termination gave evidence that Mr Ho used Excel a lot 29 did most of his work on Excel and was capable of using Excel.30
[70] In my view the Respondent did not provide a solid basis for supporting the proposition that Mr Ho’s ability to use excel or other Microsoft office programs were such that he could not perform the role of the Assistant Accountant. Mr Best certainly had a perception that Mr Ho was not proficient in his computer skills, however this was never satisfactorily demonstrated because the issue was never raised with Mr Ho directly before the decision to terminate him. The conclusion Mr Best had drawn about Mr Ho’s ability to operate Excel if genuinely held could have been addressed by readily available software training.
[71] The Respondent never sought to test or assess in any way whether Mr Ho did or did not have those skills despite the fact that this was a factor the Respondent now relies upon as a basis to terminate an employee of 24 years standing. 31 The weakness of this argument, in my view, is highlighted by the fact that the use of excel had been a part of Mr Ho’s role both in his former dealership role and as Corporate Accountant and it had never been brought into question by the Respondent before his termination.
[72] Mr Best complained that Mr Ho was in the habit of converting Excel documents into a PDF format before emailing them however this does not demonstrate Mr Ho could not use Excel. Mr Best never asked Mr Ho not to convert excel documents into a PDF format. Mr Best also stated that he was aware Mr Ho still used a manual calculator, however he could provide no evidence on what he used it for. Mr Best never asked Mr Ho why he had a manual calculator.
Did not want to take on new roles
[73] Mr Best raised the issue against the Applicant that he was reluctant to take on new work roles. This was principally based on the events surrounding a conversation that occurred between Mr Best and Mr Ho in early 2008 regarding some proposed additional responsibilities Mr Best wanted Mr Ho to undertake, and some proposed modifications to Mr Ho’s position description.
[74] While there are differing versions about what both Mr Best and Mr Ho understood was the outcome of this conversation, the fact remains that the Respondent never followed up this issue after Mr Ho claimed that his existing workload meant that he could not take on extra work unless certain roles were removed. In my view it was not unreasonable for the Applicant to have assumed in the circumstances as he did, that the Respondent had accepted what he had said and that the matter was left on that basis.
[75] The Applicant had certainly demonstrated a willingness to take on new work when he accepted a new and quite different role in moving from the dealership position to the corporate office position in 2004.
Difference in remuneration
[76] Mr Best said in his statement that the lower base salary was one of the main reasons it was decided it would be unsuitable to offer Mr Ho the Assistant Accountant position. “We considered that if we transferred Gim into this role it would effectively be a demotion and he would protest..” 32The fact is that the respondent could not have known what the response of Mr Ho would have been had they offered him the newly created position of Assistant Accountant rather than advertising the position.
[77] Mr Ho being 62 years of age may have been quite prepared to accept the reduced remuneration package with a corresponding decrease in the level of responsibility as a preferred alternative to unemployment. It was certainly his evidence that he would have accepted an offer of redeployment had it been made and I am inclined to believe Mr Ho.
[78] Mr Ho gave uncontested evidence that on a previous occasion during his employment with the Respondent he had faced the prospect of redundancy and accepted redeployment and with that the loss of a company car as part of his employment package. Mr Khagram gave evidence that he recalled this episode. 33 Had the respondent looked more closely into Mr Ho’s history of employment then they would have been aware that Mr Ho had demonstrated on a previous occasion a preparedness to accept a loss of entitlements in order to retain employment.
[79] The termination letter provided to Mr Ho on 8 October 2009 stated that “we have nothing to offer you which matches your skills, experience and your employment package”. However the language in the explanatory memorandum at 1552 refers to “...positions available for which the employee has suitable qualifications and experience...” 34The explanatory memorandum makes no reference to the “employment package” as the termination letter has. I believe this is an important point as in the circumstances of this case I do not accept that the lower employment package was a reasonable basis for the Respondent to exclude Mr Ho from consideration for redeployment into the newly created Assistant Accountant position.
The duties
[80] In relation to the Assistant Accountant position the Respondent has argued that the role now only encompasses approximately 40% of Mr Ho’s former Corporate Accountant position. In the Applicant’s closing submissions it did not seek to nominate a percentage however did make the statement that “the shape and form of that job (or those duties) would have an uncanny resemblance to that performed prior to his dismissal.” 35
[81] I do not agree that s.389(2) should be read as narrowly as suggested by the Respondent in their closing written submissions 36 where it is argued that the objective test is focussed upon whether it would have been reasonable for the employer, as a matter of discretion, to have redeployed the person. The Respondent argued further that redeployment, in the purposive context of s.389(2) must mean the employer unilaterally transferring the employee to a position which was the same as the one that the employee occupied at the date of redundancy. I do not believe that the words in s.389(2) are intended to confine redeployment options only to roles that are the same as the position that the employee occupied at the date of redundancy.
[82] A copy of the job description for the Assistant Accountant role was attached to the witness statement of Mr Best. 37 It lists a series of five dot points under the heading ‘Skills, Experience and Attitude’. It lists a further four dot points under the heading ‘Specific Duties’. It was the evidence of Mr Best that the Assistant Accountant role had less responsibility than the role occupied by Mr Ho.38 It was the evidence of Mr Raywood that they were looking for a lower level of skill in the recruitment process.
[83] It is my view that the new Assistant Accountant position would generally sit at the lower range of abilities that a person of Mr Ho’s skills, experience and background possessed and therefore was well within his capacity to perform. The lower level of skills and experience required for the position is the justification provided by the Respondent for the reduced salary package.
[84] The position description for Mr Ho’s role from September 2004 until 2006 as the Accountant/Internal Auditor was attached to his statement. 39 Mr Ho relinquished the internal auditing part of his role and worked in the Corporate Accountant role from 2007. A contract setting out the remuneration package attached to that position was also attached to his statement.40 The duties he performed in this role can be broadly understood from the draft position description Mr Best provided in January 2008.41 In that position description those functions which Mr Ho did not subsequently take on have been crossed out.
[85] Having considered the skills and responsibilities required in his previous roles when compared to the requirements of the job description for the Assistant Accountant role attached to Mr Best’s statement 42 it is reasonable to believe Mr Ho was capable of fulfilling that role. While the Respondent has made the claim that Mr Ho was unsuitable on the basis of his communication, interpersonal and computer skills I do not accept that the Respondent has successfully supported this claim with evidence but has instead relied more on opinion. In the circumstances of this case the Respondent should have been able to provide some evidence rather than just opinion to establish the basis for its decision that Mr Ho was unsuitable for the role.
[86] Mr Best said in his evidence he did not confer with Mr Khagram who was Mr Ho’s immediate supervisor about whether Mr Ho would be suitable for redeployment, which is odd considering Mr Khagram was his direct reporting relationship. 43 Mr Khagram confirmed in his own evidence that he was not consulted about Mr Ho being made redundant.44 Mr Khagram agreed that Mr Ho took his job very seriously.45
Other matters
[87] During the course of the hearing a number of other issues came to light which were not raised before the hearing in witness statements or submissions.
[88] Under cross examination the Applicant stated that he believed the restructure had been constructed to get him dismissed. 46 Mr Ho related a story47 where he raised a concern that senior staff had taken leave and that it had not been recorded. He believed this may have contributed to his being made redundant.
[89] During cross examination Mr Ho also raised the issue of a dispute he had with Mr Best about his entitlement to a company car in approximately March 2009. The dispute according to Mr Ho occurred because he was entitled to a company car to the value of $35,000 and Mr Best told him he should take a car worth $31,700. 48 This matter was subsequently resolved.
[90] In Mr Ho’s evidence he also alluded to the possibility that his redundancy may have been linked to his age. 49
[91] On what I have heard in evidence I do not accept the proposition that the employer concocted a restructure in order to create a basis to terminate Mr Ho. To the contrary, as I have said, the evidence supports the conclusion that the introduction of the CMRS created efficiencies that supported the decision to restructure the job functions as the employer ultimately did.
[92] I am prepared to allow some latitude to Mr Ho when giving consideration as to why he may have considered these issues contributed to his termination. It is my impression that he is still having significant difficulty in coming to terms with the circumstances of being terminated without notice following 24 years of continuous service where his work performance had never been an issue with the Respondent as far as he was aware.
Conclusion on Jurisdictional Objection
[93] In reaching my conclusion on the jurisdictional objection I have had regard to all of the evidence. On the basis of the evidence and the reasons outlined above it is my view that it would have been reasonable in all the circumstances for the Applicant to be redeployed into the Assistant Accountant role.
[94] The Applicants age and the fact that he spent so many years working as an accountant in one industry and with the one employer has no doubt contributed to his difficulty in finding alternative employment. What is known from the material 50 is that Mr Ho has made numerous attempts to gain employment since his termination on 9 October 2009 without success. I believe it would have been reasonable on the part of the Respondent in all of the circumstances to have made the offer of redeployment and by not doing so the Respondent has treated the Applicant harshly.
[95] Had the Respondent been able to point to some attempt on its part to raise any concerns regarding Mr Ho’s performance with him, or in the alternative some attempt to assess in some objective way why the Respondent believed Mr Ho could not perform the Assistant Accountant role my view may have been different. However the Respondents failure to do either of these things is not reasonable in the circumstances of this case.
[96] The Respondent was not obliged to consult the Applicant about the proposed redundancy. However the Respondents actions were unreasonable because they did not take appropriate steps to satisfy themselves that the Applicant could not perform the available roll when his skills, qualifications and experience would suggest otherwise. Twenty four years of service warranted a closer inspection of the matter by the Respondent.
[97] I find that the dismissal was not a genuine redundancy and therefore the jurisdictional objection has not been made out. As I have arrived at this view with regard to the Assistant Accountant position I do not intend to address the question of the Dealership role.
HARSH, UNJUST OR UNREASONABLE
[98] Having decided that the termination was not a genuine redundancy I now turn to the question of whether the termination was harsh, unjust and unreasonable.
Legislation
s.387 Criteria for considering harshness etc.
In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, FWA 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 FWA considers relevant.
Consideration
(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)
In determining whether the Respondent had a valid reason to dismiss the Applicant I have had regard to all of the facts of the case. It is clear from the evidence that the Respondent held a perception about the Applicants capacity and conduct specifically regarding his computer, communication and interpersonal skills. These issues were never the subject of counselling and there is insufficient evidence to support the Respondents opinion that these issues warranted the concern expressed. I find that there was not a valid reason for the dismissal.
(b) whether the person was notified of that reason
Mr Ho was notified of his termination at a meeting at about 4pm on the 8 October 2009 and handed a termination letter to have effect from the following day advising that he had been made redundant.
(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person
The Applicant was not provided an opportunity to respond to any reason related to capacity or performance at the time of his termination, presumably because the Respondent believed that it was a case of redundancy and they were not required to provide such an opportunity.
(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
The Applicant was not provided an opportunity to have a support person presumably for the same reasons set out in (c) above.
(e) if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal
The Applicant had not been warned about any unsatisfactory performance issues before dismissal.
(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
The Respondent conceded in their opening written submissions that its size or human resource expertise did not have any detrimental impact on the procedures relating to the Applicant’s dismissal.
Finding on Harsh, Unjust and Unreasonable
[99] I have taken into account the actions of the Respondent in regard to section 387(a) to (f) as set out above. On the basis of those actions I find the dismissal was harsh, unjust and unreasonable.
REMEDY
Reinstatement
[100] The applicant has sought reinstatement as the primary remedy from his application made under s 394 of the Act. I find in this matter that reinstatement is inappropriate and I do so for the following reasons.
[101] Firstly, the position in which the Applicant was employed immediately before his dismissal no longer exists in that the duties have been restructured and now reside in roles filled by other employees. Any other positions that exist that I have been made aware of in the course of the proceedings are filled by other employees, and/or are not paid terms and conditions of employment that are no less favourable then the Applicant was paid at the time of dismissal.
[102] Secondly, it is my view that there is a mutual loss of trust and confidence between the Applicant and Respondent. On the part of the Applicant this is principally directed toward Mr Best who is the Respondent’s Chief Financial Officer. This was highlighted above where I referred to the reasons Mr Ho had raised during cross examination as to why he believed he was dismissed. These reasons included his questioning of the motivation for the introduction of the CMRS itself and his raising of sick leave discrepancies, 51 the dispute over his company car,52 his raising of concerns regarding outstanding debtors53 and finally his age.54 Mr Ho indicated he did not trust Mr Best55 and if Mr Ho was reinstated he will ultimately report to Mr Best as the Chief Financial Officer.
[103] For his part Mr Best went to some length to say he felt it would be a very difficult environment to work in if FWA ordered Mr Ho’s reinstatement, 56 and Mr Best’s perception about Mr Ho’s computer interpersonal and communication skills have been dealt with exhaustively above.
Compensation
[104] Section 392 of the Act prescribes certain matters that deal with compensation as a remedy for unfair dismissal. I have had regard to the Full Bench Decision in Sprigg v Paul’s Licensed Festival Supermarket 57 and the subsequent Full Bench Decision in Smith and Ors v Moore Paragon Australia Ltd58.
[105] An order for the payment of compensation to the applicant will be made against the employer in lieu of reinstatement of the applicant. In determining the amount of compensation that I order, I have taken into account all of the circumstances of the matter including the factors set out in paragraphs (a) to (g) of subsection 392 (2) of the Act.
[106] There is no argument from the Respondent that an order of compensation would have an impact on the viability of the employer's enterprise. The Respondents is a large employer whose financial position is strong. The Respondent has recorded record profits in recent years. 59 The applicant had made serious efforts to mitigate his loss which is evidenced by extensive records of positions applied for since his termination which had been unsuccessful.
[107] The applicant had worked in an accountancy role for the respondent for 24 years and has indicated an intention to continue working. The nominal retirement age of 65 years at the time of his termination was still several years away. However I have taken into account the contingency that the Applicant may have decided to retire prior to age 65. There is some prospect that the Applicant may have been influenced by the reduction in his status from being the Corporate Accountant to the Assistant Accountant at this stage in his career as a motivating factor to bring forward retirement to an earlier date.
[108] There was also some evidence of pre-existing tension between the Applicant and Mr Best before the decision was taken to make the Corporate Accountant role redundant. As the Applicant would have remained answerable to Mr Best as Chief Financial Officer had he not been made redundant this relationship may have eventually impacted on his views about remaining with the Respondent until his retirement age. The financial and accounting section in the corporate office had undergone restructuring before and since the Applicants termination and it is possible further restructuring may occur again in the future which could potentially impact on the Assistant Accountant role. On the evidence I find that the Applicant would have remained in employment with the Respondent for at least another year.
[109] The evidence was that the Assistant Accountant position is paid an annual salary of $55,000 dollars. This is the position I have determined it would have been reasonable in all of the circumstances for the employer to have redeployed the Applicant into, and it is the salary the Applicant would have earned had they remained in the employment of the Respondent for at least another year following such redeployment.
[110] The Respondent paid the equivalent of 16 weeks redundancy pay and 5 weeks pay in lieu of notice following the Applicants termination at the rate he was receiving in the Corporate Account role. In dollar terms these payments amount to $22,818.56 and $7,131.46 respectively, and $29,950.02 in total. This sum paid to Mr Ho should be deducted from the compensation to be paid.
[111] The amount of compensation ordered cannot exceed the lesser of the total remuneration of the applicant for the period of his employment during the 26 weeks immediately before the dismissal, and half the amount of the high income threshold immediately before the dismissal. This cap does not apply in this case.
[112] I have deducted the payments already made by the Respondent from the salary the Applicant would have earned in the Assistant Accountant role in the year immediately following his termination. That is the basis on which I have decided that a gross amount of $25,050.00 should be ordered as compensation to the applicant to be taxed according to law. Accordingly separate orders providing for a remedy in these terms will be issued.
COMMISSIONER
Appearances:
Mr D Pratt Counsel for the Applicant.
Mr J Merrill Counsel for the Respondent.
Hearing details:
2010.
Brisbane:
2 June;
3 June.
1 Exhibit 6 Corporate Structure of A P Eagers Limited Group
2 Witness statement of Mr Ho attachment GPH5
3 Transcript of proceedings dated 2 June 2010 at PN179-206
4 Transcript of proceedings dated 3 June 2010 at PN1083
5 Transcript of proceedings dated 3 June 2010 at PN1092
6 Transcript of proceedings dated 2 June 2010 at PN192-193
7 Witness statement of Mr Stephen Best dated 14 May 2010 at PN12
8 Transcript of proceedings dated 2 June 2010 at PN838-844
9 Transcript of proceedings dated 2 June 2010 at PN855
10 Transcript of proceedings dated 2 June 2010 at PN859
11 Witness statement of Mr Gim Pheng Ho dated 19 April 2010 at Attachment GPH 7
12 Witness statement of Mr Gim Pheng Ho dated 19 April 2010 at PNS 54-60
13 Transcript of proceedings dated 3 June 2010 at PN1197
14 Witness statement Steven Best Exhibit 5 para 20
15 Transcript of proceedings dated 2 June 2010 at PN366
16 Transcript of proceedings dated 3 June 2010 at PN1487-1492
17 Transcript of proceedings dated 2 June 2010 at PN395
18 Transcript of proceedings dated 2 June 2010 at PN560-563
19 Witness statement Steven Best Exhibit 5 SB3
20 Transcript of proceedings dated 3 June 2010 at PN1291-1292
21 Transcript of proceedings dated 2 June 2010 at PN498-500
22 Transcript of proceedings dated 2 June 2010 at PN768-776
23 Transcript of proceedings dated 3 June 2010 at PN1287-1289
24 Reference for Mr G Ho authorised by Denish Khagram Exhibit 8
25 Transcript of proceedings dated 3 June 2010 at PN1345
26 Transcript of proceedings dated 3 June 2010 at PN1423-1425
27 Transcript of proceedings dated 3 June 2010 at PN1477-1478
28 Transcript of proceedings dated 2 June 2010 at PN509-518
29 Transcript of proceedings dated 3 June 2010 at PN1353
30 Transcript of proceedings dated 3 June 2010 at PN1396
31 Transcript of proceedings dated 3 June 2010 at PN1150
32 Witness statement of Mr Stephen Best dated 14 May 2010 at PN 17
33 Transcript of proceedings dated 3 June 2010 at PN1371
34 Explanatory Memorandum to the Fair Work Bill 2008 at PN1552
35 Applicant’s final written submission dated 9 July 2010 at PN11
36 Respondent’s final written submission dated 2 July 2010 at PN40 and 41
37 Witness statement of Mr Stephen Best dated 14 May 2010 at Attachment SB-5
38 Transcript of proceedings dated 3 June 2010 at PN1120
39 Witness statement of Mr Gim Pheng Ho dated 19 April 2010 at Attachment GPH 1
40 Witness statement of Mr Gim Pheng Ho dated 19 April 2010 at Attachment GPH4
41 Witness statement of Mr Gim Pheng Ho dated 19 April 2010 at Attachment GPH 5
42 Witness statement of Mr Best dated 14 May 2010 SB5
43 Transcript of proceedings dated 3 June 2010 at PN1214
44 Transcript of proceedings dated 3 June 2010 at PN1350
45 Transcript of proceedings dated 3 June 2010 at PN1405
46 Transcript of proceedings dated 2 June 2010 at PN410 and 416-419
47 Transcript of proceedings dated 2 June 2010 at PN433-438
48 Transcript of proceedings dated 2 June 2010 at PN445-449
49 Transcript of proceedings date 2 June 2010 at PN624
50 Witness statement of Mr Gim Pheng Ho dated 19 April 2010 at Attachment GPH 12
51 Transcript of proceedings dated 2 June 2010 at PN430-439
52 Transcript of proceedings dated 2 June 2010 at PN444-448
53 Transcript of proceedings dated 2 June 2010 at PN641-649
54 Transcript of proceedings dated 2 June 2010 at PN620-621
55 Transcript of proceedings dated 2 June 2010 at PN686-693
56 Transcript of proceedings dated 3 June 2010 at PN1278-1279
57 Appeal by Sprigg against decision of Watson SDP on 10 July 1998 [Print Q3468]; Re: Paul’s Licensed Festival Supermarket, Munro J, Duncan DP, Jones C, 24 December 1998 [Print R0235] at PN26
58 Appeal by Smith and Kimball against decision of Lacy SDP of 23 January 2003 [PR926979] Re: Moore Paragon Australia Ltd., Lawler VP, Kaufman SDP, Mansfield C, 20 January 2004 [PR942856]
59 Transcript of proceedings dated 2 June 2010 at PN904-908 and Transcript of proceedings dated 3 June 2010 at PN1259-1267
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