Mr Isaac Leef v Riordan Group Pty Ltd trading as Riordan Grain Services
[2015] FWC 1209
•20 FEBRUARY 2015
| [2015] FWC 1209 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394—Application for unfair dismissal remedy
Mr Isaac Leef
v
Riordan Group Pty Ltd trading as Riordan Grain Services
(U2014/11785)
DEPUTY PRESIDENT SMITH | MELBOURNE, 20 FEBRUARY 2015 |
Jurisdiction argument dismissed; conduct of the employer in threatened employment; finding of harsh, unjust and unreasonable.
Introduction
[1] Mr Isaac Leef was employed by Riordan Group Pty Ltd trading as Riordan Grain Services (Riordan) as a full time driver from October 2009 until the termination of his employment on 1 August 2014. It is submitted by Riordan that the termination of employment was as a result of a genuine redundancy.
[2] Mr Leef filed an application pursuant to s.394 of the Fair Work Act 2009 (the Act) seeking relief in relation to the termination of his employment. Riordan argued that the application of s.385 of the Act meant that Mr Leef did not invoke the unfair dismissal provisions of the Act.
[3] Section 385 provides:
385 What is an unfair dismissal
A person has been unfairly dismissed if the FWC is satisfied that:
(a) the person has been dismissed; and
(b) the dismissal was harsh, unjust or 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.
Note: For the definition of consistent with the Small Business Fair Dismissal Code: see section 388.
- 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.
(a) the employer’s enterprise; or
(b) the enterprise of an associated entity of the employer.
[5] Given this is a challenge to the jurisdiction of the Commission in relation to whether or not this is a case of genuine redundancy, I am required by s.396 of the Act to decide this matter before considering the merits.
[6] Mr Leef represented himself and Riordan was represented by Mr C. Burrell of counsel (with permission).
Submissions
[7] I turn firstly to a consideration of s.389(1)(a) of the Act.
[8] Riordan is bound by the terms of the Road Transport (Long Distance Operations) Award 2010 [MA000039] (the Award). Riordan is a fully integrated grain business that stores, packs, transports and trades in grain, fertilisers, malt and other bulk commodities.
[9] The award contains a clause dealing with consultation and provides inter alia:
8.1 Consultation regarding major workplace change
(a) Employer to notify
(i) Where an employer has made a definite decision to introduce major changes in production, program, organisation, structure or technology that are likely to have significant effects on employees, the employer must notify the employees who may be affected by the proposed changes and their representatives, if any.
(ii) Significant effects include termination of employment; major changes in the composition, operation or size of the employer’s workforce or in the skills required; the elimination or diminution of job opportunities, promotion opportunities or job tenure; the alteration of hours of work; the need for retraining or transfer of employees to other work or locations; and the restructuring of jobs. Provided that where this award makes provision for alteration of any of these matters an alteration is deemed not to have significant effect.
(b) Employer to discuss change
(i) The employer must discuss with the employees affected and their representatives, if any, the introduction of the changes referred to in clause 8.1(a), the effects the changes are likely to have on employees and measures to avert or mitigate the adverse effects of such changes on employees and must give prompt consideration to matters raised by the employees and/or their representatives in relation to the changes.
(ii) The discussions must commence as early as practicable after a definite decision has been made by the employer to make the changes referred to in clause 8.1(a).
(iii) For the purposes of such discussion, the employer must provide in writing to the employees concerned and their representatives, if any, all relevant information about the changes including the nature of the changes proposed, the expected effects of the changes on employees and any other matters likely to affect employees provided that no employer is required to disclose confidential information the disclosure of which would be contrary to the employer’s interests.
[10] In dealing with this issue, Riordan relied upon a decision of Commissioner Cloghan in Bhalla v Welltech Total Water Management. 1 In that decision, the Commissioner found that under the Water Industry Award 2010 [MA000113] (the Water Award) the abolition of one position did not constitute major workplace change.
[11] The clause in the Water Award is in identical terms as the one contained in the Award which covers Riordan. I regret that I am unable to agree with Commissioner Cloghan. His reasons are brief but appear to turn on the plural “employees”. If this is right it would have the effect of removing from the jurisdiction all single employee redundancies. It would also require evidence as to whether or not the loss of one job impacted upon other jobs by way of workload distribution or content. Further, the clause operates, not just in relation to termination but also in circumstances where there has been significant change. The evidence of Mr Riordan was that there was significant change in the business environment. This by itself activated the consultation clause when it impacted upon employees. This is however fortified by the fact that the significant change led, in the view of the employer, to a termination of employment.
[12] This is beneficial legislation 2 and should not be read narrowly. I am satisfied that clause 8 applies to the present circumstances. It is submitted by Riordan that it consulted with Mr Leef. Whilst there was some discussion with Mr Leef about taking leave because a decision had been taken to sell the truck he was driving, I find that consultation do not occur in accordance with Clause 8 of the Award. This was not a circumstance which Mr Leef was engaged about his future, given particular circumstances.
[13] It follows from this conclusion that there was not a genuine redundancy as defined by the Act.
[14] During the proceedings the following exchange took place:
THE DEPUTY PRESIDENT: - - - the consultation, and it might be appropriate as well as a matter of convenience, unless you have a contrary view, to deal with the full matter in case the redundancy jurisdictional matter does not succeed.
MR BURRELL: I'm in your hands, Commissioner. I'm happy - - -
THE DEPUTY PRESIDENT: I think - - -
MR BURRELL: However you wish to proceed for the efficiency of the hearing, I'm happy to knock it all off - - -
THE DEPUTY PRESIDENT: That would be preferable, I think.
MR BURRELL: - - - in one fell swoop if you prefer.
THE DEPUTY PRESIDENT: Thank you. Yes, all right. 3
[15] I now turn to whether or not the termination of Mr Leef’s employment was harsh, unjust or unreasonable. To this end I turn to s.387 of the Act, which provides:
387 Criteria for considering harshness etc.
In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the FWC must take into account:
(a) whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees); and
(b) whether the person was notified of that reason; and
(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and
(d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and
(e) if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal; and
(f) the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal; and
(g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and
(h) any other matters that the FWC considers relevant.
[16] I state that s.388 of the Act does not apply.
[17] I now turn to consider whether or not there was a valid reason to terminate the employment of Mr Leef. In this connection, evidence was given by Mr J. Riordan the Managing Director of the company. It was his evidence that:
● In May and June of 2103 he held a number of internal and external meetings to discuss the impact of workload on the El Nino effect of key industries in which the company serviced.
● It was decided to reduce operating costs and free up working capital to cope with the anticipated downturn in business.
● In June 2013 he came to the conclusion that there would not be enough work to maintain the current size of the Riordan Grain Services (RGS) truck fleet. There was an anticipated 50% drop in the grain volume they were transporting.
● Arising from this consideration he decided to sell two ‘truck and dog’ units and one ‘RG908’ to meet the balance between removing aging vehicles and getting an economical return on investment.
● The applicant’s truck was one of those sold and he was advised to take six weeks leave and if another truck was purchased then he could return to work.
● After reviewing the business and with the sale of the applicant’s truck he decided to make the applicant redundant.
[18] Some attention was given to the use of contractors and the ratio of contractors to full-time employees. It was the evidence of Mr Riordan that he uses a 30/70 model with 70% being contractors to service short-time need at harvest time compared to the normal year round work which is covered by full-time employees. In answer to a question about retaining the truck identified for sale and reducing the number of contractors, Mr Riordan stated that it was to the economic benefit of the company to reduce the full-time workforce by selling one aging truck.
[19] Mr Riordan subsequently produced material showing the use of casuals/contractors and full-time employees. From that material it can be seen that casuals have been reduced and the use of sub-contractors spikes with demand.
[20] In Mr Leef’s evidence he stated that he had been forced to take annual leave and that he considered his enquires about his rights under an award was a reason why he was terminated. He submitted that raising award matters and occupational health and safety issues were the real reason for his termination of employment. In particular his evidence stated the following: “Danny went ahead and lodged the paperwork with the Fairwork Ombudsman, 1 week before the hearing Jim (Riordan) rang Danny and said if the hearing goes ahead your future with Riordan’s is over” [Exhibit A2]. His evidence was that he decided to contact the union and after that Mr Riordan rang him and stated that he proposed to sell the truck and put him on 6 weeks leave immediately.
[21] Mr Leef was not cross-examined on this evidence, therefore I accept that the exchange took place and further that Mr Leef was forced to take leave against his wishes. This aspect highlights the lack of proper consultation.
Conclusion
[22] In this matter I have found that the jurisdictional objection cannot be sustained because of the lack of consultation in accordance with the Award. I now turn to the merit or otherwise of the case presented by Mr Leef.
[23] There are two elements which need consideration in this matter. The first is that I am satisfied that Riordan’s faced commercial considerations which warranted the selling of a prime mover and as a consequence of this, creating a reduction in the workforce. I am also satisfied that the reduction in labour requirements could not be achieved though a reduction in the contractor group. It appears to me that the peaks and troughs of the business is dealt with by the flexible use of contractors. This is a specific and largely unpredictable business which is dependent upon, among other things, weather.
[24] The second element in this matter is the clear irritation of Mr Riordan at Mr Leef seeking to understand his employment rights. Although it must also be said that Mr Riordan did take this view acting on advice about his individual employment arrangements. However, what is of clear concern is the unchallenged statement that his future with Riordan was over if a matter preceded to the Fair Work Ombudsman.
[25] In examining the criteria in s.387 of the Act, attention is first directed to s.387(a). This is clearly not a case of the conduct of Mr Leef being a reason for his termination. Nothing to that end is alleged. If capacity relates only to do the job then, it appears that Mr Leef has the capacity to drive any relevant prime mover. If the capacity of the employee is relative capacity in the context of examining the skills and attributes of various employees when deciding who to select for redundancy, then this was not done as the redundancy arose on the simple basis that Mr Leef drove the relevant truck. Insofar as s.387(b) is concerned, Mr Leef was advised that he was being made redundant. Indeed whilst he was on leave, he was contacted and told that if another truck became available it may be possible to keep him on. Whilst this was advice as to the intention of the employer I am not satisfied that it was consultation in relation a possible redundancy. In this connection I find he was not given the opportunity to respond [see s.387(c)].
[26] Section 387(d) and (e) don’t arise and in relation to (f) and (g) I find that Mr Riordan consulted with persons with relevant expertise.
[27] Finally, any other matter which FWC considers relevant. Under this heading I propose to consider more closely “a fair go all round”. 4 The following factors are relevant:
● There was a business need to reduce the size of the fleet at the time Mr Riordan did.
● Mr Leef had been an employee for 5 years and there is no evidence that his performance was poor.
● It is uncontested that Mr Riordan was unhappy about Mr Leef raising his wages and occupational health and safety matters.
● There is no acceptable evidence that Mr Riordan consulted with Mr Leef about alternatives to redundancy. I accept that he was sent on 6 weeks leave to see if other options were available, but that was Mr Riordan’s view and whilst he may have considered this an effort to mitigate against the redundancy, he did not engage Mr Leef. Mr Leef understood why he was directed to go on leave.
[28] Against this background I find that Mr Leef’s termination of employment was harsh, unjust and unreasonable.
[29] I have considered whether or not to decide remedy at this stage. Given that a remedy may include reinstatement, I have decided to again hear from the parties. If reinstatement was ordered with continuity of employment, then Riordan would have the opportunity to select a person for redundancy without consideration of Mr Leef’s concerns about his wages. It appears that Mr Riordan now appreciates the correct award and his obligations under that award.
[30] The other alternative is compensation and in this regard material will have to be presented as to Mr Leef’s earnings since the termination of his employment. Further, it will be necessary to consider how long Mr Leef would have worked if the termination of his employment was not infected by apparent impermissible considerations. Mr Leef sought costs in this matter. In relation to one item this related directly to a letter send by Riordan’s legal advisors that Mr Leef would be liable for substantial costs if the matter went ahead. Whilst it was couched in terms that costs would be pursued, Mr Leef appears to have missed the subtly of the correspondence and regarded it as intimidation requiring him to pay costs. His experience with his complaint about wages appears to have conditioned his understanding of the letter sent to him in relation to the proceedings. Given my findings, it is clear that Mr Leef will not be subject to any costs order.
[31] To further hear from the parties this matter will be listed at 2.30 pm on 5 March 2015. Of course if Mr Leef receives a settlement offer and is content to accept that offer, the matter need not continue further.
DEPUTY PRESIDENT
Appearances:
I. Leef the applicant.
C. Burrell on behalf of Riordan Group Pty Ltd trading as Riordan Grain Services.
Hearing details:
2014.
Melbourne:
December, 3.
Final written submissions:
Mr J. J. Riordan, the respondent, 12 December 2014.
Mr I. Leef, the applicant, 7 January 2015.
1 ([2014] FWC 7565) at paragraph 24.
2 Maxwell v Acacia Resources, [Print P6396] 31 October 1997 per Ross VP, Drake DP and Lawson C; Rose v Department of Social Security (1990) 21 FCR 241 at 244; Mann v State Rail Authority [1999] FCA 273.
3 Transcript PN83—89.
4 See s.381(2). The procedures and remedies referred to in paragraphs (1)(b) and (c), and the manner of deciding on and working out such remedies, are intended to ensure that a “fair go all round” is accorded to both the employer and employee concerned.
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