Mr Hansjorg Mikl v Cape Australia Onshore Pty Ltd
[2019] FWC 8503
•17 DECEMBER 2019
| [2019] FWC 8503 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Mr Hansjorg Mikl
v
Cape Australia Onshore Pty Ltd
(U2019/1285)
DEPUTY PRESIDENT ASBURY | BRISBANE, 17 DECEMBER 2019 |
Application for an unfair dismissal remedy.
INTRODUCTION
[1] Mr Hansjorg Mikl applies to the Fair Work Commission (the Commission) for an unfair dismissal remedy under s.394 of the Fair Work Act 2009 (the Act) in respect of the termination of his employment by Cape Australia Onshore Pty Ltd (Cape/the Respondent). Mr Mikl commenced work for Cape in February 2015 although the basis on which he was originally employed is in dispute. Mr Mikl was employed from at least 25 July 2016 as a full-time employee in the capacity of Advanced Scaffolder. At all times Mr Mikl worked on the Orica site in Gladstone. Mr Mikl’s employment ceased on 18 January 2019.
[2] On 18 February 2019, Cape filed a Form F3 Employer response form in which it objected to Mr Mikl’s application on the basis that it was asserted that he was employed on a fixed term contract. The application was listed for conciliation but remained unresolved. The matter was allocated to me for hearing. At a mention of the application it became apparent that Cape also wished to raise an objection on the basis that it asserted that Mr Mikl’s dismissal was a case of genuine redundancy.
[3] Directions were issued for the filing of material in relation to both jurisdictional objections and the substantive application. The Directions were detailed and relevant legislative provisions that the parties were required to address were appended. Mr Mikl filed evidence and submissions in compliance with the Directions which addressed all of the matters required. The Respondent initially filed no witness statements and its submissions did not address any of the legislative provisions set out in the Directions. A further opportunity was provided to the Respondent to file material in support of its jurisdictional objections including any witness evidence it sought to rely on, as required by the Directions.
[4] The matter was listed for Hearing in Brisbane with videoconference facilities to Perth and Gladstone. At the hearing Cape confirmed that it was withdrawing the jurisdictional objections such that the only matters for determination were the substantive merits of Mr Mikl’s application for an unfair dismissal remedy. 1 The jurisdictional objections were withdrawn on the basis that Cape effectively conceded that:
• Mr Mikl was not employed on a fixed term contract and that its assertion in this regard was mistaken; and
• The dismissal was not effected in a manner that brought it within the meaning of “genuine redundancy” in s. 389 of the Act so that Cape did not have complete defence to Mr Mikl’s application for an unfair dismissal remedy
[5] After considering the evidence I am of the view that these concessions were appropriately made albeit late in the day. It is regrettable that Mr Mikl was put to the time and effort of responding to jurisdictional objections which could not be sustained. I find that: Mr Mikl’s application was made within the period required in s.394(2) of the Act; Mr Mikl is person protected from unfair dismissal as provided in s. 382; Cape is not a small business; and the dismissal was not a case of genuine redundancy as provided in s. 389, notwithstanding that Cape withdrew the jurisdictional objection on that basis.
[6] Mr Mikl represented himself at the hearing and gave evidence on his own behalf. 2 Evidence was also given on behalf of Mr Mikl by Mr Benjamin Maydom3 a former employee of the Respondent and former work colleague of the Applicant. The Respondent was represented by Ms Emilie Ryan, Senior Employee Relations Advisor. Evidence for the Respondent was given by Mr John Quigley, Regional Manager East.4
LEGISLATIVE PROVISIONS
[7] In deciding whether a dismissal was unfair on the grounds that it was harsh, unjust or unreasonable, the Commission is required to consider the criteria in s.387 of the Act, as follows:
“(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.”
[8] The employer bears the onus of establishing that there was a valid reason for a dismissal.5 A valid reason for dismissal is one that is “sound, defensible or well founded” and not “capricious, fanciful, spiteful or prejudiced.”6 The reason for dismissal must also be defensible or justifiable on an objective analysis of the relevant facts,7 and validity is judged by reference to an assessment of the factual circumstances as to what the employee is capable of doing or has done.8
[9] The matters in s.387 go to both substantive and procedural fairness and it is necessary to weigh each of those matters in any given case, and decide whether on balance, a dismissal is harsh, unjust or unreasonable. A dismissal may be:
Harsh - because of its consequences for the personal and economic situation of the employee, or because it is disproportionate to the gravity of the misconduct;
Unjust - because the employee was not guilty of the misconduct on which the employer acted; and/or
Unreasonable - because it was decided on inferences that could not reasonably have been drawn from the material before the employer.9
Applicant’s submissions and evidence
[10] Mr Mikl commenced work with Cape in February 2015. At this time, Mr Mikl was employed on a casual basis. In approximately October 2016, Mr Mikl was “put on a fulltime contract”. Mr Mikl states that he was perhaps the fourth or fifth person hired by Cape to service the contract with Orica. 10
[11] On Friday, 11 January 2019 all Cape employees working at Orica were called to a meeting with Henry Tas, a manager of the Respondent. At this meeting, Mr Mikl states that he was handed a “letter of completion” by Mr Tas. That letter stated:
“Dear Hans,
Orica – Completion Notice
This letter is to confirm the successful completion of your role on the Orica Project for Cape Australia in accordance with your contract of employment and letter of contract extension dated 15 November 2018.
The completion date is at the end of shift on Friday 18 January 2019.
Also attached to this letter is a current list of positions that are either currently vacant or will have upcoming vacancies. If you can please complete the form with your details, we will retain you selections in our database to advise of any upcoming work opportunities.
Thank you for your service with Cape on the Orica Project.
Yours faithfully
…
John Quigley
Regional Manager – East”
[12] Mr Mikl was told that only 6 Cape employees would be required to stay on the Orica project. Mr Mikl was ultimately not one of the 6 employees chosen to stay. On 16 January 2019, Mr Mikl was approached by Mr Tas in the change room and told that he “didn’t make the final six”. Mr Mikl’s employment subsequently ended on 18 January 2019 as advised in the ‘Completion Notice’. Mr Mikl said that the was shocked at this advice as he was fulltime employee with the required qualifications, a good work ethic, a great relationship with the client and had been employed with Cape since the commencement of the contract with Orica.
[13] Mr Mikl also tendered a form he was given by Mr Tas entitled “Employee Redundancy Consultation”. Mr Mikl said that no consultation was ever entered into and he was simply handed the form and completed it. The form asks a series of questions about alternative employment preferences and lists current projects for employees to nominate preferences. Mr Mikl agreed that he completed the form and indicated that he; was not prepared to travel or relocate for alternative employment; would not consider positions with a lesser degree of remuneration or responsibility; had no other skills or qualifications which may assist in finding alternative employment eg. a second language; and did not wish to have his CV circulated throughout the Company.
[14] Mr Mikl said that he did not want to travel because his wife is employed in Gladstone, his daughter attends school in Gladstone and he has worked in Gladstone for most of his life. Mr Mikl also said that given his age, he does not wish to leave his family for work. In relation to a form tendered by Mr Quigley that was used to assess the performance of employees for the purposes of deciding who would remain in employment, Mr Mikl said that the first time he saw that form was when the Respondent filed its material in relation to his unfair dismissal application.
[15] Following the end of his employment, Mr Mikl also states he had significant difficulties in ensuring his correct termination entitlements were paid by Cape. Mr Mikl attached to his witness statement a Centrelink Employment Separation Certificate which shows that Mr Mikl received $5,554.08 as payment in lieu of notice; $10,413,30 as a gratuity or golden handshake; and approximately $1800 in accrued entitlements. Mr Mikl pointed to the fact that the Separation Certificate indicated that the reason for separation is “End of season or contract”. Mr Mikl states that this prevented him from obtaining tax benefits to which he would have been entitled if the separation certificate had indicated the real reason for separation – Redundancy. Mr Mikl maintained that he was not consulted about the decision to terminate his employment and had no opportunity to influence the decision. Mr Mikl further states that he is sixty years of age and this has made it difficult to find employment in Gladstone in a period of economic downturn.
[16] In his witness statement in reply, Mr Mikl said that he was given a full time contract as an Advanced Scaffolder on 25 July 2016 for the Orica Project in Gladstone. Mr Mikl said that he was never a fixed term employee. Mr Mikl said he had not seen the letter tendered by Mr Quigley dated 15 November 2018, purporting to extend Mr Mikl’s fixed term contract, until the Respondent filed its material in relation to his unfair dismissal application. Mr Mikl denied that he had signed an extension offer or that it had been given to him or discussed with him by Mr Tas. Mr Mikl said that he did not need to sign an extension offer as he was at all times a full time employee. Mr Mikl disputed that there were any discussions about the downsizing of the Respondent’s workforce at the Orica site and said that the first discussion was on 11 January 2019 when employees were handed a letter headed: “Orica – Completion Notice”. Mr Mikl maintained that the only discussion after he was given this letter was when Mr Tas told him he did not make the final six selected to remain. This discussion took place in a change room at the end of Mr Mikl’s shift and was informal. Mr Mikl also said that he did not indicate that he was interested in alternative positions as he believed that as a full time employee at the Orica site, his position was safe and he stated on the form that his only desire was to maintain his full time employment at Orica.
[17] In response to questions from the Commission, Mr Mikl said that he accepted that there has been a reduction in the number of scaffolders employed on the Orica site to only six scaffolders. Mr Mikl also said that when he first started with the Company there were six scaffolders and a supervisor and that the numbers were increased during a shut down. The increase in numbers occurred by way of employees who had previously worked on another site being brought to Gladstone when Cape lost the contract on that site. Those employees were kept on and were on site when the notification of the reduction in numbers was given out on 11 January 2018. Mr Mikl said that he was one of the original six scaffolders who were hired for the contract.
[18] In relation to whether he had obtained other employment Mr Mikl had the following exchange with me during the hearing:
Okay. Have you obtained other employment since your employment ended with Cape? --- They did give me a couple of weeks on a shut down, they called me in for and since then Henry, my old boss, had contacted me about upgrading some of my tickets, so that I could come back on site, if they needed me for when people took holidays or if they just needed somebody else to stand in for someone who was sick, which was the case a little while ago. Then on the day that I was supposed to - HR got in contact with me about doing a medical, but Henry [Tas] rang me up and said that there was no need for me to do it, because the gentleman who was off - been off for a month or so, with a bad back, was getting a clearance and coming back to work. So they didn't need me to do the medical at that time. I believe that's what Mr Quigley mentions in his letter, chasing me up. I actually - when HR rang me they didn't know that Henry had actually rung me and cancelled the work that I was supposed to go and do. So I informed them of that and then they said they'd be in touch if they needed to.
Okay. Have you obtained - - - ? --- They haven't been in touch since.
Have you obtained work anywhere else, besides Cape? --- Only working for the motel that my wife manages. I do some handyman work there, fixing a few doors and a bit of painting and a bit of plumbing work, if it needs fixing.
When did you start doing that work? --- After I finished up with Cape. I had been doing the - I had been mowing the lawns for the motel, for a few years, on weekends, every second or third weekend, depending on when the people that were managing it rang me up and asked me to come in. That's how we got the contract, or my wife got the contract to look after the motel on a permanent basis. They decided to retire and asked the owners to meet with us and talk about my wife managing the motel for them.
Okay. What have you earned from that work? --- Only be a couple of thousand dollars, your Honour.
Okay? --- Hardly enough to support my family. My wife is actually supporting us at the moment, with her wage. It's about $900 a week, after tax. 11
[19] In relation to seeking other employment Mr Mikl said that he had sustained a back injury approximately 1.5 months before the hearing and he was seeking treatment and unable to work as a scaffolder at present. Mr Mikl said that he was seeking reinstatement but was not in a position to resume employment at the time of the hearing given his back injury. Mr Mikl sought compensation in the alternative.
[20] Mr Maydom was employed as a permanent full-time employee with the Respondent for approximately 3.5 years. Mr Maydom’s evidence was that on 11 January 2019, his supervisor, Mr Tas convened a meeting where all employees received a completion of employment notice and were informed that work with the Respondent would discontinue on 18 January 2019 and only 6 employees would remain employed as a result of the Respondent downsizing its operations. Mr Maydom contended that this was the first time any employee had heard of the Respondent’s plan to downsize their workforce.
[21] In addition, Mr Maydom said no employees were provided with an opportunity to discuss this issue or respond appropriately, or with means and prospects of putting a case forward to remain employed with the Respondent. Further to this, he considered that the Respondent did not provide a genuine consultation process in accordance with the enterprise agreement with respect to this issue.
[22] Despite being given an opportunity to do so the Respondent did not cross-examine Mr Mikl 12 or Mr Maydom.13
Respondent’s submissions and evidence
[23] The Respondent’s outline of submissions, in its entirety, is as follows:
“1. The Applicant was employed by the Respondent to work on the QAL Project in Gladstone on a full-time fixed term contract as an Advanced Scaffolder on 14 March 2015 (attachment 1).
2. The Applicant was provided a full-time contract as an Advanced Scaffolder on 25 July 2016 Orica Project in Gladstone (attachment 2).
3. The Applicant was incorrectly believed to be on a fixed term contract (as this is the engagement of others on the site due to the nature of the contract) and was provided an extension of contract letter on the 15th of November extending the employment until the 9th of December 2018 (attachment 3).
4. Henry Tas (Supervisor) discussed with employees that the reason for the extension was due to the extension of requirements for work at Orica for that time.
5. It was discussed with employees during this time that the work requirements would be coming to an end and this would mean that potential terminations and redundancies could be likely but the Company would discuss alternate positions.
6. Henry Tas held a meeting with all employees on 11 January 2019 to inform them that the extension of the works had now concluded.
7. Henry Tas advised employees that out of the 14 positions that were currently on site, the restructure of the contract requirements and the end of the shut down activities that had been running meant that only 6 full time positions would be available.
8. Henry Tas advised employees including the Applicant that Cape would continue to consult with employees during the notice period to source alternative work options.
9. Further to these discussions, a completion notice was provided to employees including the Applicant on the 11 January 2019 (attachment 4).
10. Attached to the completion notice was a consultation form which detailed options of alternative employment available to employees (attachment 5).
11. It was explained to the employees including the Applicant by Henry Tas that Gladstone was listed as there were six positions at Gladstone.
12. Unfortunately, all employees refused alternative employment opportunities outside of Gladstone.
13. Orica is the only contract Cape has in Gladstone.
14. The Applicant was therefore terminated due to redundancy and was paid the follows:
Four (4) weeks’ notice
Seven (7) weeks’ severance.
15. The Applicant has an outstanding payroll query relating to the tax portion of his payment which is currently under review by Cape payroll.
16. Cape did have a short term shut down (3 weeks) requiring four (4) employees in March.
17. Four (4) of the eight (8) who were terminated in January were brought back for the required works.
18. The Applicant was selected and engaged for this work.”
[24] The Respondent submitted the Applicant was employed on a full-time fixed term contract as an Advanced Scaffolder from 14 March 2015 and then later as a full time Advanced Scaffolder on 25 July 2016 at the Orica Project in Gladstone. A contract of employment dated 13 March 2015 was tendered by the Respondent in relation to Mr Mikl’s employment. 14 At item 2 the contract indicates that Mr Mikl’s employment was “Minimum Term, Full Time.” In relation to completion date, the contract at item states as follows:
“The Completion Date is the earlier of:
a) The completion of the Company’s operations on the Orica Project (the Project) as determined by the Company;
b) The successful completion of your role of Advanced Scaffolder by the Company”.
[25] The contract states that the termination date is the date on which employment is terminated in accordance with clause 22. The contract does not contain a clause 22. Item 7 of the contract provides that the term of employment is the duration of the Company’s operations on the Orica Project from the effective date (14 March 2015) to earlier of the termination date or the completion date. Regardless of the basis upon which the Applicant was initially employed, on 25 July 2016 he was given a full time contract of employment which was also tendered by the Respondent. 15
[26] The Respondent stated that the Mr Mikl was provided with an extension of contract letter on 15 November 2018, extending employment to 9 December 2018. As previously stated, Mr Mikl disputes that he was given this letter. The letter relevantly states as follows:
“Dear Hans,
LETTER OF VARIATION
I am pleased to advise the following change to your employment conditions:
In addition to the current terms of your contract of employment, the following will take effect from 17 November 2018.
Basis of Employment: Fixed Term (the earlier of the successful completion of your role as deemed by the Company or until 9 December 2018.
All other terms and conditions will remain in accordance with your current contract of employment.
Yours Sincerely,
…
John Quigley
Regional Manager – East”
[27] Mr Quigley did not give evidence about whether this letter was given to Mr Mikl and if so, how this was done. Mr Quigley said that the Respondent’s services for Orica would be reduced. As a result of the reduction in work, the Respondent required 6 full time employees as opposed to the 16 employees that were originally employed on site. Mr Quigley stated he tasked Mr Tas with developing a performance assessment of each individual employee to determine the most suitable employees to retain in the 6 available permanent positions. Mr Quigley provided Mr Tas with “performance assessment forms” to determine the most suitable employees to be retained. The selection criteria appended to Mr Quigley’s witness statement included the following:
• Quality of work;
• Productivity;
• Knowledge of work;
• Initiative;
• Disposition;
• Adaptability;
• Work Safely Approach;
• Teamwork;
• Attendance; and
• Timekeeping.
[28] The criteria also included “Disciplinary”. It was Mr Quigley’s evidence that all employees of the Respondent were treated as full time employees due to the length of fixed term contracts and that a number of these contracts had long expired, raising questions as to whether or not employees were genuinely fixed term employees. Mr Quigley states that he instructed Mr Tas to provide consultation forms to all employees on site in an effort facilitate re-deployment at other sites across the country.
[29] Mr Quigley contended that Mr Mikl indicated during the consultation phase that he did not want to accept an alternative role. Mr Quigley also said that Mr Mikl was a good employee who only just missed out on being selected as one of the six employees to be retained by the Respondent. According to Mr Quigley, it is for this reason that when any work opportunities arise, Mr Mikl is the first port of call. Mr Quigley also said that Mr Mikl has been re-engaged three times since his employment was terminated for shut down work. Mr Mikl was offered a work opportunity on 21 May 2019 which required him to be available for a drug and alcohol test on 22 May 2019. The Company was unable to contact Mr Mikl until 23 May and on that date Mr Mikl advised that he was updating some of his tickets and would not be available to undertake drug and alcohol testing until the following week. According to Mr Quigley, recruitment kept trying to contact Mr Mikl the following week and he was not able to be reached until 31 May 2019. On that date, Mr Mikl’s wife advised that he was not available.
[30] Mr Quigley was unable to confirm whether Mr Tas handed the letter dated 15 November to Mr Mikl. Mr Quigley also said in response to a question from me, that he did not have any discussion with employees about the selection criteria and asked Mr Tas to carry out the selection process. In response to a question about whether Mr Tas discussed the criteria with employees, Mr Quigley said: “I can’t confirm that. He should have.” Mr Quigley also said that he was unable to dispute the contention of Mr Mikl and Mr Maydom that the form headed “Employee Redundancy Consultation Details” was handed out at the same time as the termination letter on 11 January 2019.
[31] Ms Ryan also indicated in response to questions from me that the selection process and the ratings that employees were given were not discussed with them and said that these matters were confidential. In response to the proposition that employees were not informed that any assessment was being conducted at all, Ms Ryan said in her submissions on behalf of the Respondent that:
“MS RYAN: So Mr Tass informed them that there was going to be six employees chosen, during that week, that would be offered contracts and the company would be looking at the consultation options to, at first, assess if we could redeploy, and then we would be making an internal assessment. But the details of that internal assessment were left, at that point.” 16
[32] Ms Ryan also said that this discussion took place on 11 January 2019 after the termination letters were handed out.
Consideration
Was there a valid reason for Mr Mikl’s dismissal related to capacity or conduct?
[33] Given that there are no jurisdictional matters to consider, I will turn to the matters I am required to consider in s.387 of the Act. I accept that there was a need for the Respondent to downsize the numbers of employees at the Orica Site and that it was required to reduce the number of scaffolders it employed at that site from 14 to 6. However, it is well established that a decision to reduce the number of employees performing the same or similar work does not on its own, lead to the termination of employment of any individual. It is only after a second step of identifying which members of the group will be dismissed that by the application of selection criteria or some other process, it is possible to identify an individual person whose employment will be terminated. 17
[34] The enactment of s. 389 in relation to “genuine redundancy” essentially prevents an employee who is selected for redundancy on the basis of conduct, capacity or work performance from bringing an application for unfair dismissal in circumstances where the criteria in that section have been met. The employer has a complete defence to an unfair dismissal application in such circumstances, and the reasons for the employee’s selection cannot be considered against the criteria for deciding whether a dismissal is unfair in s. 387 of the Act.
[35] Where the requirements in s. 389 are not met, and the reasons for selection of a particular employee for redundancy include matters of conduct, capacity or work performance, the employee may make an unfair dismissal application and contend that either the reason for selection and therefore the reason for dismissal is not valid or that it was unfair for the employer to rely on that reason because of some procedural unfairness.
[36] In deciding whether there was a valid reason for Mr Mikl’s dismissal, it is first necessary to identify the actual reason for dismissal. While there was a need to reduce the number of scaffolders at the Orica site with the result being that a number of positions were redundant, the reason for Mr Mikl’s dismissal was that he was selected for redundancy based on criteria which included his conduct or capacity compared to that of other employees. Where a reason for dismissal is related to a person’s capacity or conduct, the employer bears the onus of establishing that such a reason was a valid reason. In those circumstances, the Respondent cannot discharge this onus by simply establishing that it needed to reduce the total number of employees on a particular site.
[37] Capacity relates to an employee’s ability to do the job as required by their employer. 18 Conduct can include attitude or behaviour of an employee. Other than identifying the criteria that were used to select Mr Mikl, the Respondent has placed no evidence before me about what aspects of Mr Mikl’s capacity or conduct led to his selection for redundancy and therefore his dismissal, while other employees remained in employment. Accordingly, I am unable to be satisfied that there was a valid reason for Mr Mikl’s dismissal based on his capacity or conduct.
Was Mr Mikl notified of the reason for his dismissal?
[38] Notification of ‘the reason’ for dismissal relates to the ‘valid reason’ for dismissal. 19 Notification of the valid reason must be given before the decision to terminate is made,20 given in explicit terms and in plain and clear terms21.
[39] Section 387(b) of the Act is included is part of a statutory framework by which the Commission is required to consider whether the dismissal of an employee is attended with substantive and procedural fairness. An important aspect of procedural fairness is that the reason for an employee’s dismissal is notified to the employee before the decision to dismiss the employee is taken. The plain meaning of the term “notified” is that information is provided in a formal manner. Notification of the reason for dismissal informs the subsequent matters required to be considered by the Commission in ss. 387(c) and (d) of the Act. As a Full Bench of the Commission observed in Crozier v Palazzo Corporation Pty Ltd:22
“As a matter of logic procedural fairness would require that an employee be notified of a valid reason for their termination before any decision is taken to terminate their employment in order to provide them with an opportunity to respond to the reason identified. Section 170CG(3)(b) and (c) would have very little (if any) practical effect if it was sufficient to notify the employee and give them an opportunity to respond after the decision to terminate their employment.”
[40] Sections 170CG(3)(b) and (c) of the former Workplace Relations Act were in similar terms to the present sections 387(c) and (d) of the present Act and respectively provided that for the purposes of arbitrating an application alleging that a dismissal was unfair the Commission must have regard to whether the employee was notified of a reason for termination of employment related to capacity or conduct and whether the employee was given an opportunity to respond to any such reason. As the Full Bench held in Crozier, ss. 170CG(3)(b) and (c) of the former Act were clearly related to the concept of procedural fairness.23 The same can be said in relation to sections 387(c) and (d) of the current Act.
[41] Given that I have found that there was not a valid reason for Mr Mikl’s dismissal, I am also satisfied that Mr Mikl was not notified of the reason for his dismissal.
[42] Even had I been satisfied that there was a valid reason for dismissal, I would not have been satisfied that Mr Mikl was appropriately notified of that reason prior to the decision to terminate was made, and accordingly the requirements in s. 387(b) has not been met and as a consequence other criteria in s. 387 have also not been met.
[43] No evidence has been called from Mr Tas. The only evidence that is before me is that Mr Tas spoke with employees on 11 January 2019, handed employees the ‘Completion Notice’ and told them that only 6 employees were required. The dismissal of Mr Mikl was a fait accompli and Mr Tas simply informed Mr Mikl that he did not make the final cut of 6 employees without giving reasons for this.
Was Mr Mikl given an opportunity to respond to any reason related to his capacity or conduct?
[44] It is axiomatic that an employee cannot have been given an opportunity to respond to any reason for dismissal based on capacity or conduct in circumstances where the employee is not notified of the reason. An employee must be given an opportunity to respond to the reason for dismissal before the decision to terminate is made. 24 In this matter, Cape has decided to apply a selection process including assessment of employee’s conduct and capacity (being performance and discipline).
[45] Mr Mikl’s unchallenged evidence is that he knew nothing about the process for selection to be applied by Cape. 25 Mr Maydom’s unchallenged evidence is that “[A]t no time” was he allowed any input into issues, including who would remain in Cape’s employment.26 Mr Quigley did not give any evidence to the contrary and stated there was no discussion with the scaffolders about the basis of the selection process.27 The highest Mr Quigley’s evidence got on this point is that Mr Tas “should have” discussed this with employees.28
[46] Accordingly Mr Mikl was not given an opportunity to respond to any reason related to his conduct or capacity and the requirements in s.387(c) have not been met.
Was there any unreasonable refusal by Cape to allow Mr Mikl to have a support person present to assist at any discussions relation to dismiss?
[47] There is no positive obligation on an employer to offer an employee the opportunity to have a support person. 29 Mr Mikl has not given any evidence that he did request a support person at any meetings. This is hardly surprising given that there was no advance notice that the meeting was to discuss the termination of the employment of a number of scaffolders. I consider this criterion to be irrelevant in this matter.
If the dismissal related to unsatisfactory performance – whether Mr Mikl was warned about that unsatisfactory performance before the dismissal?
[48] It is clear that the selection criteria that was used by the Respondent included matters relating to capacity and conduct. As I have indicated above, on one view, Mr Mikl’s dismissal does relate to his performance, despite the fact that Mr Quigley has given evidence that Mr Mikl was a good employee. Cape has made an overall assessment of Mr Mikl’s performance with absolutely no discussion with him and no warning whatsoever that his performance was an issue that may contribute to his dismissal. I am therefore unable to be satisfied that the requirement in s.387(e) has been met.
Did the size of the employer’s enterprise impact on the procedures followed in effecting the dismissal of Mr Mikl?
[49] There is no evidence that the size of the Respondent’s enterprise impacted on the procedures followed in effecting the dismissal of Mr Mikl. In its Form F3 response to Mr Mikl’s application, the Respondent indicates it had 900 employees at the time of dismissal. It is surprising that an employer of that size would deal with Mr Mikl in the manner that the Respondent has and it would be expected that an employer of that size would have handled the dismissal in a more appropriate manner.
Did the absence of dedicated human resource management specialists or expertise in the enterprise impact on the procedures followed in effecting Mr Mikl’s dismissal?
[50] There is no evidence that the absence of dedicated human resource management expertise had any impact on the procedures followed in effecting Mr Mikl’s dismissal. The Respondent has at least one Senior Employee Relations Advisor and Mr Quigley referred to human resource management processes in his evidence. It would be expected that an employer with such resources and expertise would have dealt more appropriately with Mr Mikl.
Are there any other relevant matters?
[51] Mr Mikl is sixty years of age and will probably face difficulty in the current economic environment, particularly in the Gladstone region, obtaining employment. I have also had regard to the fact that it took Mr Mikl considerable effort to be paid his entitlements on redundancy and the tax treatment of those entitlements was incorrect, causing him further loss which although he may recover those amounts, could only have added to the hardship caused by his dismissal.
Conclusion
[52] The dismissal of Mr Mikl was both substantively and procedurally unfair. The Respondent did not understand the basis upon which Mr Mikl was employed. The Respondent has not established that there was a valid reason for the selection of Mr Mikl over other employees. Mr Mikl was denied procedural fairness because the selection process by which he was dismissed was based on criteria relating to his capacity and conduct in circumstances where he was not aware of the matters that were to be taken into account and had no opportunity to respond. There was a total lack of consultation about a significant change in the Respondent’s workforce at Orica in circumstances where the Respondent was obligated to consult. There was no discussion about the selection process that was adopted and communication with Mr Mikl about the most basic of issues was virtually non-existent.
[53] Mr Mikl’s dismissal was harsh because of its consequences for the personal and economic situation of Mr Mikl. It was unjust because it was based on criteria which were not disclosed to Mr Mikl and which he had no ability to comment on. The dismissal was unreasonable because the Respondent has simply not provided a reason for the selection of Mr Mikl over other employees who were not selected. The Respondent had every opportunity to put its case and failed to engage in any meaningful way with the legislative provisions in relation to unfair dismissal.
Remedy
[54] Mr Mikl is a person protected from unfair dismissal and he has been unfairly dismissed. I am satisfied that Mr Mikl should have a remedy for his unfair dismissal. Mr Mikl seeks reinstatement or compensation in the alternative. Reinstatement is the primary remedy for unfair dismissal. Compensation can only be awarded where the Commission is satisfied that reinstatement is inappropriate. In the circumstances of this case I do not accept that reinstatement is appropriate for the following reasons. Notwithstanding my findings about the unfairness of Mr Mikl’s dismissal, I accept that the Respondent has downsized its workforce at the Orica Site.
[55] I have made the necessary findings that are prerequisite to awarding compensation. In relation to the assessment of compensation, s. 392 of the Act provides as follows:
“392 Remedy—compensation
Compensation
(1) An order for the payment of compensation to a person must be an order that the person’s employer at the time of the dismissal pay compensation to the person in lieu of reinstatement.
Criteria for deciding amounts
(2) In determining an amount for the purposes of an order under subsection (1), the FWC must take into account all the circumstances of the case including:
(a) the effect of the order on the viability of the employer’s enterprise; and
(b) the length of the person’s service with the employer; and
(c) the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed; and
(d) the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal; and
(e) the amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for compensation; and
(f) the amount of any income reasonably likely to be so earned by the person during the period between the making of the order for compensation and the actual compensation; and
(g) any other matter that the FWC considers relevant.
Misconduct reduces amount
(3) If the FWC is satisfied that misconduct of a person contributed to the employer’s decision to dismiss the person, the FWC must reduce the amount it would otherwise order under subsection (1) by an appropriate amount on account of the misconduct.
Shock, distress etc. disregarded
(4) The amount ordered by the FWC to be paid to a person under subsection (1) must not include a component by way of compensation for shock, distress or humiliation, or other analogous hurt, caused to the person by the manner of the person’s dismissal.
Compensation cap
(5) The amount ordered by the FWC to be paid to a person under subsection (1) must not exceed the lesser of:
(a) the amount worked out under subsection (6); and
(b) half the amount of the high income threshold immediately before the dismissal.
(6) The amount is the total of the following amounts:
(a) the total amount of remuneration:
(i) received by the person; or
(ii) to which the person was entitled;
(whichever is higher) for any period of employment with the employer during the 26 weeks immediately before the dismissal; and
(b) if the employee was on leave without pay or without full pay while so employed during any part of that period—the amount of remuneration taken to have been received by the employee for the period of leave in accordance with the regulations.”
[56] The approach to the calculation of compensation is set out in a decision of a Full Bench of the Australian Industrial Relations Commission in Sprigg v Paul’s Licensed Festival Supermarket. 30 That approach, with some refinement, has subsequently been endorsed and adopted by Full Benches of the Commission in Bowden v Ottrey Homes Cobram and District Retirement Villages inc T/A Ottrey;31 Jetstar Airways Pty Ltd v Neeteson-Lemkes32and McCulloch v Calvary Health Care (McCulloch).33
[57] In McCulloch¸ the Full Bench considered, in some detail, the question of how a contingency discount should be applied to the calculation of the remuneration the dismissed person would have received, or would have been likely to receive, if the person had not been dismissed. The Full Bench pointed out in McCulloch that a deduction for contingencies is applied to prospective losses, or losses occasioned after the date of the hearing. The Full Bench also noted that at the time of the hearing any such impact on the earning capacity of the dismissed person between the date of dismissal and hearing will be known, and a finding can be made on the basis of whether the dismissed person’s earning capacity has in fact been affected during the relevant period.
[58] I turn now to the particular criteria I am required to consider in deciding the amount of compensation to be awarded to Mr Mikl for his unfair dismissal.
The effect of the order on the viability of the Respondent – s. 392(2)(a)
[59] There is no evidence that an Order for compensation will have any impact on the viability of the Respondent.
Length of the Applicant’s service – s. 392(2)(b)
[60] Mr Mikl has been employed by the Respondent since February 2015. Since at least July 2016 (and possibly earlier given the poorly drafted contract signed by Mr Mikl in 2015) Mr Mikl has been employed on a full-time basis.
Remuneration the Applicant would have or would likely have received – s. 392(2)(c)
[61] This consideration requires an assessment of how long the Applicant would have remained in employment but for his dismissal. In the present case the exercise is not without difficulty. If the requirements for genuine redundancy were met or a fair and reasonable selection process with proper consultation was adopted by the Respondent Mr Mikl could have been selected for redundancy and dismissed in circumstances where he would not have had a remedy for his dismissal. On the other hand at the point this application was heard, there were still employees of the Respondent working at Orica, performing duties that Mr Mikl is qualified to perform.
[62] There is insufficient evidence for me to reach a conclusion in relation to this criteria. Accordingly, I intend to require the Respondent to provide further evidence as to whether there are employees working at Orica in the classification of Advanced Scaffolder and the number of such employees.
The Applicant’s efforts to mitigate loss – s. 392(2)(d)
[63] I am satisfied and find that the Applicant made reasonable attempts to mitigate his loss by accepting work when it was offered by the Respondent and undertaking casual work at the motel where his wife is also employed. I do not intend to make a deduction on this basis from the amount of compensation I ultimately determine to award.
The amount of any remuneration earned since dismissal – s. 392(2)(e)
[64] At the point this application was heard, Mr Mikl stated that he had earned an amount of approximately $2000 from this casual work at the motel. I require Mr Mikl to provide further and better particulars in relation to that income and to any other income he has earned from the date of his dismissal to the present date.
The amount of any income reasonably likely to be earned during the period between the making of the order for compensation and the actual compensation – s. 392(2)(f)
[65] I also require Mr Mikl to provide information about the income he is likely to earn in the period of time that I intend to give the parties to provide the further information that I require to properly assess compensation.
Any other matter that the FWC considers relevant – s. 392(2)(g)
[66] It is relevant that Mr Mikl was paid the following amounts on termination of his employment: four weeks in lieu of notice; seven weeks severance payment and a further three weeks pay totalling fourteen weeks. Based on the payslips and Employment Separation Certificate tendered by Mr Mikl I find that Mr Mikl was paid $15,967.38 for notice and severance. I have not had regard to the amounts paid to Mr Mikl for accrued annual leave and untaken rostered days off, as they are entitlements arising from work performed by Mr Mikl are payable regardless of any other amounts payable by way of compensation for an unfair dismissal.
[67] This amount will be taken into account in assessing compensation.
Deduction for misconduct
[68] This consideration is not relevant in the present case.
CONCLUSION
[69] In summary I find as follows:
1. An order for the payment of compensation would not affect the viability of the Respondent’s business (s.392(2)(a)).
2. The length of the Mr Mikl’s service favours the making of an order for compensation and no diminution of any amount that might otherwise be determined is warranted because of this circumstance (s.392(2)(b)).
3. I require further information to determine the remuneration that Mr Mikl would have been likely to receive, but for his dismissal (s.392(2)(c)).
4. I will further consider whether to make a deduction for contingencies when the information I require to assess compensation has been provided.
5. I will make no deduction on account of a failure to mitigate loss (s.392(2)(d)).
6. I will consider the appropriate deduction for remuneration earned since dismissal when the further information I require is provided (s.392(2)(e)).
7. I will consider whether to make a deduction for income likely to be earned during the period between the making of the order and the actual compensation when the further information I require is provided (s.392(2)(f)).
8. I will make a deduction for payment in lieu of notice and severance payments made to Mr Mikl.
9. I will make no deduction for misconduct (s.392(3)).
10. I will consider whether it is necessary to cap the amount payable to Mr Mikl when the further information I required to calculate compensation is provided.
DIRECTIONS
[70] I Direct the parties to provide the following information by 12.00 pm on Friday 20 December 2019:
• The Respondent is to provide a statement to the Commission (and serve such statement on the Applicant) made by an appropriately authorised person confirming whether it still employs persons on the Orica site in Gladstone in the capacity of Advanced Scaffolder, the number of such employees and the likely duration of their employment;
• Mr Mikl to provide a statement to the Commission (and serve such statement on the Respondent) detailing all income earned by him from other non-refundable sources from the date of his dismissal until the date of release of this decision;
• Mr Mikl is to provide a statement to the Commission (and serve such statement on the Respondent) detailing all income he is likely to earn from other non-refundable sources up until 10 January 2020.
[71] If either party wishes to be heard further in relation to the material filed in accordance with these Directions they are to advise of such request by 4.00 pm on Friday 20 December 2019 and the matter will be relisted at 12.00 midday on Tuesday 24 December 2019. Absent such advice I will calculate compensation based on the above information and issue an Order requiring the amount so calculated to be paid by 10 January 2020.
DEPUTY PRESIDENT
Appearances:
Mr H Mikl on his own behalf.
Ms E Ryan on behalf of the Respondent.
Hearing details:
8 July.
2019.
Brisbane.
Printed by authority of the Commonwealth Government Printer
<PR715329>
1 Transcript PN11 to PN12.
2 Exhibit A1 and A3.
3 Statement of Mr Ben Maydon, dated 22/4/19.
4 Exhibit R1.
5 Allied Express Transport Pty Ltd v Anderson (1998) 81 IR 410 at 5; Yew v ACI Glass Packaging Pty Ltd (1996) 71 IR 201 at 204.
6 Selverchandron v Peteron Plastics Pty Ltd (1995) 62 IR 371 at 373.
7 Rode v Burwood Mitsubishi Print R4471 at [90] per Ross VP, Polites SDP, Foggo C.
8 Miller v University of NSW [2003] FCAFC 180 at pn 13, 14 August 2003, per Gray J.
9 Stewart v University of Melbourne (U No 30073 of 1999 Print S2535) Per Ross VP citing Byrne v Australian Airlines (1995) 185 CLR 410 at 465-8 per McHugh and Gummow JJ.
10 Transcript PN57.
11 Transcript PN58 to 63.
12 Transcript PN69 to PN73.
13 Transcript PN86 to PN87.
14 Exhibit R1.
15 Exhibit R2.
16 Transcript PN231.
17 Kenefick and Ors v Australian Submarine Corporation IRCA Decision No: 103/96.
18 Walton v Mermaid Dry Cleaners Pty Limited [1996] IRCA 267 (12 June 1996), [(1996) 142 ALR 681 at p. 684].
19 Chubb Security Australia Pty Ltd v Thomas, Print S2679 (AIRCFB, McIntyre VP, Marsh SDP, Larkin C, 2 February 2000) at para. 41.
20 Crozier v Palazzo Corporation Pty Limited t/as Noble Park Storage and Transport, Print S5897 (AIRCFB, Ross VP, Acton SDP, Cribb C, 11 May 2000) at paras 70–73, [(2000) 98 IR 137].
21 Previsic v Australian Quarantine Inspection Services, Print Q3730 (AIRC, Holmes C, 6 October 1998).
22 (2000) 98 IR 151 at [73].
23 Ibid at 151 para [70].
24 Crozier v Palazzo Corporation Pty Limited t/as Noble Park Storage and Transport, Print S5897 (AIRCFB, Ross VP, Acton SDP, Cribb C, 11 May 2000) at para. 75, [(2000) 98 IR 137].
25 Transcript PN52.
26 Statement of Mr Ben Maydon, dated 22/4/19.
27 Transcript PN189.
28 Transcript PN191.
29 Explanatory Memorandum to Fair Work Bill 2008 at para. 1542.
30 (1998) 88 IR 21.
31 [2013] FWCFB 431.
32 [2014] FWCFB 8683.
33 [2015] FWCFB 2267.
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