Mr Mark Dickinson v Gravity Discovery Centre Foundation Board Inc T/A Gravity Discovery Centre

[2016] FWC 4331

[2016] FWC 4331

FAIR WORK COMMISSION

DECISION

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

Mr Mark Dickinson
v
Gravity Discovery Centre Foundation Board Inc T/A Gravity Discovery Centre
(U2016/4864)

COMMISSIONER CLOGHAN PERTH, 6 JULY 2016

Application for relief from unfair dismissal - jurisdictional objection - genuine redundancy - employer is a small business - dismissal was consistent with the Small Business Fair Dismissal Code.

[1] On 25 February 2016, Mr Mark Dickinson (Mr Dickinson or Applicant) made application to the Fair Work Commission (Commission) seeking a remedy for alleged unfair dismissal from his former employer, Gravity Discovery Centre Foundation Board Inc T/A Gravity Discovery Centre (GDC or Employer).

[2] The application was made pursuant to s.394 of the Fair Work Act 2009 (FW Act).

[3] In response to the application, the Employer asserts that the Applicant is not protected from unfair dismissal because:

• the Applicant’s dismissal was a case of genuine redundancy; and



• the Employer is a small business, and the dismissal was consistent with the Small Business Fair Dismissal Code (Code).

[4] At the hearing, the Applicant represented himself. The Employer was represented by Dr D Pridmore, Chairperson, GDC.

[5] Should I be satisfied that Mr Dickinson’s cessation of employment was a genuine redundancy or consistent with the Code, he is not protected from unfair dismissal.

[6] This is my decision and reasons for decision on whether the Applicant is protected from unfair dismissal.

RELEVANT BACKGROUND

[7] Mr Dickinson commenced employment with GDC on 29 July 2014 as a 0.8 Full Time Equivalent (FTE) Exhibitions Manager.

[8] Mr Dickinson’s contract of employment specified that termination of employment would occur on 31 January 2015.

[9] On or about 27 January 2015, the parties agreed to renew Mr Dickinson’s contract of employment until 31 December 2015.

[10] Mr Dickinson agrees that his contract expired on 31 December 2015. However, it was extended until 5 February 2016.

[11] In June 2015, the Western Australian State Government advised the GDC, that funding of approximately $200 000 per annum would cease.

[12] The GDC incurred a “trading cash loss” for the first half of the 2015/16 financial year of approximately $67 000. The forecast loss for the second half of the 2015/16 financial year is approximately $94 000.

[13] During the 2015/16 financial year, GDC received a grant of $63 000 from the Western Australian Department of Education.

[14] The forecast cash loss for 2015/16 is projected to be approximately $100 000.

[15] In view of the loss of approximately $200 000 funding, GDC reviewed its financial circumstances.

[16] Following a GDC Board meeting, which included an in-camera session, Dr Pridmore confirmed, by email to Board members on 2 February 2016, the Board’s resolution to make the position of Exhibitions Manager [Mr Dickinson] and the Presentation and Exhibition officer redundant, “as part of restructuring the GDC to bring operating costs in line with revenue in the post Premier’s department funding environment”. 1

[17] Dr Pridmore sets out, in his email, GDC’s financial position and that the two (2) positions to be made redundant, account for 28% of the total wages bill.

[18] Dr Pridmore indicated, in his email, that he intended to meet with the occupants of both positions on 4 February 2016 and, in the absence of any other workable solution, both employees would cease on 5 February 2016.

[19] In Dr Pridmore’s email, he expresses the view that Mr Dickinson will be considered for “contracting services in the right situation”. 2

[20] Dr Pridmore met with Mr Dickinson on 4 February. On 5 February 2016 Dr Pridmore sent to the Applicant correspondence, which informed Mr Dickinson that the position of Exhibitions Manger had been made redundant, effective immediately and his employment ceases on the same day.

RELEVANT STATUTORY FRAMEWORK

[21] As unfair dismissal is set out in s.385 of the FW Act and is as follows:

“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.”

[22] There is no dispute that Mr Dickinson was dismissed on 5 February 2016.

[23] The GDC is a small business employer as defined in s.23 of the FW Act.

[24] I now turn to whether Mr Dickinson’s dismissal was a case of genuine redundancy.

[25] Genuine redundancy is defined in the FW Act as follows:

“389 Meaning of genuine redundancy

(1) A person’s dismissal was a case of genuine redundancy if:

(a) the person’s employer no longer required the person’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise; and

(b) the employer has complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy.

(2) A person’s dismissal was not a case of genuine redundancy if it would have been reasonable in all the circumstances for the person to be redeployed within:

(a) the employer’s enterprise; or

(b) the enterprise of an associated entity of the employer.”

[26] I now turn to the criteria in s.389 of the FW Act.

s.389(1)(a) - The Employer no longer required the position occupied by Mr Dickinson to be performed by anyone because of changes in operational requirements of the Employer’s enterprise.

[27] The GDC set out its financial situation which was not contested by Mr Dickinson except to say that its, “scholarship account could be used to support the GDC through times of low income [and the GDC] could have investigated many alternative options other than making redundant two very loyal, dedicated, passionate and conscientious employees”. 3

[28] Notwithstanding Mr Dickinson’s view of cost savings, I am satisfied that the GDC had experienced losses and expected those losses to continue. Accordingly, the Employer had to give effect to cost saving measures, which led to the termination of the services of two employees.

[29] At this point, it is useful to refer to the Fair Work Bill 2008 Explanatory Memorandum which states at paragraphs 1548 and 1549 as follows:

“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.”

[30] Having considered the guidance provided in the Explanatory Memorandum and the evidence, I find that the conditions required in paragraph 389(1)(a) have been met. The Employer no longer required the job performed by Mr Dickinson to be performed by a discrete person because of changes in the operational requirements of the business due to a reduction in its revenue.

s.389(1)(b) - Has the Employer complied with any obligation in a modern award or enterprise agreement to consult about the redundancy?

[31] Mr Dickinson’s contract of employment refers to the Amusement, Events and Recreation Award 2010 (Modern Award). Whether Clause 8 Consultation in the Modern Award is applicable or not of Mr Dickinson’s dismissal, there is no dispute that after the GDC Board meeting, Dr Pridmore discussed with the Applicant on 4 February 2016 the abolition of the position of Exhibitions Manager.

[32] Mr Dickinson’s evidence is that “the consultation process was poorly executed. Although I was asked if I had any suggestions towards an alternative solution to redundancy, I was not in any mood to offer such suggestions towards an alternative solution to redundancy as it was clearly apparent that the decision had been made and the question was a mere formality to be compliant with FWC guidelines”. 4

[33] Subsequent to his dismissal, Mr Dickinson suggests he should have been given a different classification and lower rate of pay instead of being offered contract work in the future.

[34] I am satisfied that the Employer consulted with Mr Dickinson. The immediate history of the GDC, prior to Mr Dickinson’s dismissal, appears to be beset by various difficulties, however, they are not “on point” with respect to consultation.

[35] At the time of Mr Dickinson’s cessation of employment, there were the following employees:

• 2 Managers, including Mr Dickinson;



• 1 Presentations and Exhibitions Officer, whose position was also abolished and the occupant made redundant;



• 1 Receptionist;



• 2 Tour Guides; and



• 4 Café Staff.

[36] Mr Dickinson gave evidence that he attended all GDC Board meetings so it can be presumed that he was aware of GDC’s financial situation. However, he states, “I was never involved in discussions recommending restructuring or possible redundancies in order to reduce operating costs”. 5

[37] While it appears that positions to be abolished were made in camera by the GDC Board; that is a matter for itself. It is not the role of the Commission to override the decision of the Board and substitute its view of which positions should be abolished. Whether the Commission would have come to another view is irrelevant.

[38] Consultation does not take place in a vacuum but within a set of circumstances; it is those circumstances which I must consider.

[39] I am satisfied that Dr Pridmore did consult with Mr Dickinson. GDC was faced with a cash loss of approximately $100 000 in the 2015/16 financial year. I am satisfied that Mr Dickinson would have known of the projected loss as a result of attending the Board meetings. I am also satisfied that it was for the Board to determine whether it would utilise monies in the “scholarship account”. Finally, to continue to employ Mr Dickinson at a lesser rate of pay may minimise but not address, the underlying cash trading deficit.

[40] In conclusion, having considered the circumstances in which the abolition of the positions occurred, I am satisfied that the GDC complied, if it is required to comply, with the provisions in the Modern Award.

[41] In such a small organisation facing significant reduced revenue, it is not surprising that Mr Dickinson could not “think of alternative solutions”. It was a 10 employee organisation being reduced to eight (8) employees. Both parties are “handicapped” by alternatives to mitigate the adverse consequences of reduced revenue.

[42] I am satisfied that DGC complied with s.389(1)(b) of the FW Act.

s.389(2) - Was it reasonable in all the circumstances for Mr Dickinson to be redeployed within the employer’s enterprise or associated entities (if any)?

[43] Having considered the circumstances which led to the position of Exhibitions Manager being abolished because of a significant reduction in revenue and the small number of employees, I am satisfied that there were no reasonable opportunities to redeploy Mr Dickinson within GDC.

CONCLUSION

[44] The termination of Mr Dickinson’s employment was a case of genuine redundancy. Consequently, the Applicant’s dismissal does not meet the definition of unfair dismissal pursuant to s.385 of the FW Act. Accordingly, the application must be dismissed. An Order to this effect is issued with this Decision.

[45] Having come to this conclusion, it is not necessary to address GDC’s other jurisdictional objection that the dismissal was effected in accordance with the Code.

COMMISSIONER

Appearances:

M Dickinson, the Applicant on his own behalf.

D Pridmore, on behalf of GDC.

Hearing details:

2016:

Perth,

30 June.

<Price code C, PR582260>

 1   Exhibit R3

 2   Exhibit R3

 3   Exhibit A2

 4   Exhibit A2

 5   Exhibit A2

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