Mr Keith Luckins v Northrose Holdings Pty Ltd T/A Shinju Motor group

[2012] FWA 3522

Note: An appeal pursuant to s.604 (C2012/3855) was lodged against this decision.

[2012] FWA 3522

FAIR WORK AUSTRALIA

DECISION

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

Mr Keith Luckins
v
Northrose Holdings Pty Ltd T/A Shinju Motor group
(U2011/2022)

DEPUTY PRESIDENT MCCARTHY PERTH, 30 APRIL 2012

Termination of employment - genuine redundancy.

Background

[1] This matter concerns an application lodged by Mr Keith Luckins (the Applicant) claiming an unfair dismissal remedy from Northrose Holdings Pty Ltd T/A Shinju Motor Group (the Respondent). The Applicant was employed as the Service Manager at the Respondent’s motor vehicle workshop in Broome. His employment was terminated on 19 September 2011.

[2] The Respondent asserts that the position of ‘Service Manager’ was made redundant.

[3] The Fair Work Act 2009 (the FW Act) precludes a person dismissed by reason of genuine redundancy from protection from the unfair dismissal provision of the FW Act. Section 389 defines genuine redundancy as follows:

“(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.”

[4] The Applicant asserts that the Respondent is bound by the Vehicle Manufacturing, Repair, Services and Retail Award 2010 (the Vehicle Award) or the Clerks - Private Sector Award 2010 (the Clerks’ Award). They argue that the Applicant was covered by the Vehicle Award and he was employed within classification level C.13, V13 of that award. They argue that as a consequence, the Respondent was obliged to comply with Clause 8 of the Vehicle Award viz; consultation regarding major workplace change. They say that requirement was not met and thus the Respondent cannot rely on the exclusion provisions of s.385(d).

[5] The Respondent asserts that a decision was made that the Applicant’s job was no longer required to be performed by anyone. They assert that the role was split between four existing employees.

[6] They argue thatthere was no need to comply with the consultation obligation of s.389(1)(b) as the Vehicle Award did not apply to the Applicant as he was a Manager. They argue that the Vehicle Award applies to the Technicians employed in the Service Department but does not apply to positions at Foreman or Manager level.

[7] The Applicant also asserts that it was not feasible for the Applicant to have been re-deployed elsewhere within the company and that there was no associated entity for him to be employed by.

[8] The issues requiring to be determined at this initial stage in ascertaining whether the dismissal was one of a genuine redundancy are:

(i) Was the Applicant’s job to be performed by anyone?

(ii) If yes, was that because of changes in the operational requirements of the employer’s enterprise?

(iii) Did a modern award apply to the Applicant?

(iv) If it did, did the Respondent consult in conformity with obligations under that award?

(v) Would it have been reasonable to redeploy the Applicant with the employer’s enterprise?

(vi) Was there an associated entity?

(vii) If there was an associated entity, would it have been reasonable to redeploy the Applicant in that entity?

Consideration

Was the Applicant’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise?

[9] Mr Brodie Taylor (Taylor), the Managing Director of the Respondent, gave evidence of the Respondent’s financial performance and outlook from mid 2011. He concluded that the whole business was under stress and, in particular, the workshop was heading for a loss.

[10] He stated that the company had a turnover of about $7m and it made a profit of about $60,000, before taking into consideration a rental income not directly part of the operations of about $6,000 per month. It had become increasingly clear that the business was not able to remain viable on its own, i.e. without taking into account rental income.

[11] He said that:

“Faced with this financial position, it became essential to reduce costs or close the business. I was very reluctant to close the business bearing in mind that the livelihoods of 12 employees were dependent upon the business continuing. I considered a range of options, and consulted with the Dealer Principal over those options, to ensure that they were all fully considered. I also consulted with the Applicant to explore whether he had any suggestions, but his advice was simply that we needed extra staff. This obviously was not a relevant option.” 1

[12] Taylor decided that the duties and responsibilities, which had been performed by the Applicant, would be undertaken by four existing employees.

[13] The receival of customer’s vehicles for servicing could be undertaken by the reception staff and major clients who would deal directly with the Workshop Foreman. The Workshop Foreman would also deal with customer liaison work at a technical level. Issues concerning parts would be dealt with by the Parts Manager and any matters which were not adequately resolved would be dealt with by the Dealer Principal.

[14] The Applicant gave evidence and had a different view about what decisions and organisational changes could be undertaken. His evidence, however, was unconvincing. This may have been due to the lack of in depth knowledge he had about the finances of the Respondent or for some other reason, suffice to say that the Respondent gave a quite thorough outline of the need for the operational changes and the consequence of a decision in relation to that need. Indeed, the Applicant’s representative conceded that the Applicant was made redundant and there was a restructuring of the business.

Did a modern award apply to the Applicant?

[15] Taylor’s evidence was that the Applicant was in charge of the department that ran everything except sales. He described the Applicant as being “the man on the ground” and “the man in charge of everything”. 2

[16] The Applicant’s representative described the role as “to organise bookings, to arrange for payment, liaise with the clients, organise any issues in what repairs are required and what they mean”. He asserted that the function fitted the description of service person and/or checker in the Vehicle Award or, alternatively, an employee engaged wholly or principally in clerical work, including administrative duties of a clerical nature under the Clerks’ Award.

[17] The Respondent’s representative submitted that the Vehicle Award did cover supervisory level positions but only in respect of the Manufacturing sector of the vehicle industry. It was the repair, services and retail sector of the Vehicle Award that is relevant here and that the classification that was asserted by the Applicant as the appropriate one was automotive service person and/or checker. That classification, he stated, deals with the non-trade service person, including a person involved in preparing a vehicle for pre-delivery purposes, which was not the role the Applicant was performing. The Respondent’s representative added that the Clerks’ Award did not apply to employees involved in supervisory or managerial positions.

[18] Clearly, on the evidence, the Applicant had a managerial role function and responsibilities. The position and functions he performed may have had included some of the duties and had some of the attributes that classifications in both awards relied upon have but his duties extended well beyond the scope of those classifications. In my view, the Applicant was award free.

[19] Given my finding regarding the application of an award, it is not necessary to address whether the Respondent consulted in conformity with obligations under that award.

Would it have been reasonable to redeploy the Applicant with the employer’s enterprise?

[20] Taylor gave a thorough and reasoned account of his consideration of redeploying the Applicant in the Respondent’s business. He stated that there was no position available, unless he dismissed another employee. He decided against that course for sound reasons.

[21] The Respondent should have directly approached the Applicant in regard to at least one of those positions and not presumed that he would not be interested in other positions carrying substantially less salaries, however, that does not detract from the essence of his decision that the current employees performing the work in other positions were carrying out those functions, or in his view, had better capacity to carry out the additional functions resulting from the Applicant’s dismissal than the Applicant.

[22] In particular, Taylor made it clear that he “wanted to get our staff more interested in their work. I wanted them to perform better, and I needed to do this quickly to save 11 people’s other jobs.” 3

[23] The evidence presented to counter Taylor’s evidence did not convince me that his judgment in this regard was flawed or unsound. I therefore find that it would not have been reasonable to redeploy the Applicant within the employer’s enterprise.

Was there an associated entity?

[24] Mr Taylor gave evidence that the Respondent’s company was not considered as an associated company to the company known as Raising Shinju Pty Ltd, as asserted by the Applicant. I requested, and was provided with, a statutory declaration by the accountancy firm that usually performs the accountancy function for the Respondent confirming that evidence. I find that there was no associated entity.

Conclusion

[25] I therefore find and determine that the dismissal of the Applicant was a genuine redundancy. The application is dismissed.

DEPUTY PRESIDENT

Appearances:

Mr S White on behalf of the Applicant.

Mr R Gifford on behalf of the Respondent.

Hearing details:

2012.
Perth:
February, 24.

 1   Paragraph 12 of witness statement

 2   PN99

 3   PN126

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