Mr Michael Guyomar v Templetons Administrative Services Pty Limited T/A Templetons
[2012] FWA 5444
•29 JUNE 2012
[2012] FWA 5444 |
|
DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Mr Michael Guyomar
v
Templetons Administrative Services Pty Limited T/A Templetons
(U2012/5328)
SENIOR DEPUTY PRESIDENT RICHARDS | BRISBANE, 29 JUNE 2012 |
Summary: application for unfair dismissal remedy - whether genuine redundancy.
[1] This is an application under s.394 of the Act, in which Mr Guyomar (“the Applicant”) made an application for an unfair dismissal remedy against his former employer, Templetons Administrative Services Pty Ltd trading as Templetons (“the Respondent”).
[2] This decision was originally given in transcript, and has been redacted only in limited ways and largely to correct grammatical infelicities, statutory references and the like.
[3] A jurisdictional question has arisen in relation to whether or not the Applicant was protected from unfair dismissal by virtue of s.385(d) of the Fair Work Act 2009 (“the Act”). This section of the Act concerns whether the Applicant was dismissed or whether his employment was terminated for reasons of a case of genuine redundancy.
[4] The Applicant was employed between August 2010 and February 2012. He was employed by the Respondent, as I have just described it, nominally at least, as a Principal, but also as an employee, which brings the application within the jurisdiction of this tribunal. In those roles - which were effectively described as a CEO-type role - the Applicant carried out various functions in relation to finance, commercial negotiations and human resources.
[5] At the time he was made redundant, the Applicant was paid some four weeks' pay by way of redundancy, given the period of employment for which he had been employed. The Applicant, under the terms of his contract of employment, was also paid 12 weeks' notice as well. The payment of notice arose as a term of the contract of employment under which the Applicant was employed. That term vested in the employer an unfettered discretion to terminate the Applicant’s employment on the provision of three months' notice, paid or unpaid.
[6] In the current circumstances, the notice period was paid and the Applicant ceased employment on 10 February 2012. As a consequence, he was paid an aggregate amount of some 16 weeks of salary; three months comprising the notice period and one month comprising the redundancy payment.
[7] Section 389 of the Act is headed, "Meaning of genuine redundancy" and s.389(1)(a) of the Act provides relevantly that:
"A person's dismissal was a case of genuine redundancy if 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."
[8] There are other requirements and I will come to these shortly, but s.389(1)(a) of the Act makes it clear that the employer must have come to a view that the position or the person's job was no longer required to be performed because of changes in the business’ operational requirements.
[9] It is, however, most definitely the case in this matter that the Respondent took that view. The question is whether the Respondent took that view on an objective basis, and one that was free of any question or substantive doubt. Initially, therefore, I need to establish that there were circumstances that warranted the changes to the Applicant's job being performed in the manner it was.
[10] The surrounding circumstances largely are, in fact, unchallenged. There were financial issues or difficulties or problems besetting the business.
[11] There were a number of financial indicators in respect of those difficulties. They are made evident in the evidence of Mr Anthony Jones (who was the Director of the Respondent). 1 In summary, they indicate that, at the time of the Applicant's employment, there were 10 financial risk advisers employed by the business and by the time of the dismissal that number had fallen to four.
[12] There had been some nine administrative staff at the time of the commencement of the Applicant’s employment, and they had fallen to some seven administrative staff at the time of the alleged redundancy taking effect.
[13] There were general financial pressures behind these broader indicators: revenue had reduced, new business had contracted, the business had been incurring losses and had to take on additional loans to meet operational expenditures.
[14] None of these particular financial, circumstantial contexts are challenged in any substantive way.
[15] Mr Jones was the sole director of the Respondent. Mr Jones reached a decision - at his own initiative, largely, it would appear - that the Applicant's role was redundant within the business structure. The evidence does not allow me to second-guess Mr Jones in relation to this judgment. His evidence was that there were systems that the Applicant had put in place and had installed and that were now operational and required only supervision and not development and implementation.
[16] Other financial practices and systems had been stabilised which had relieved other staff and made them available for wider work, such as Ms Gilbert.
[17] There was also duplication with an associated entity, Tranzact. Mr Jones considered the duties performed by the Applicant and that the business required or warranted rationalisation. None of this evidence was seriously challenged and that evidence was taken under oath.
[18] The Applicant asked me to reach a conclusion that, on the evidence, there was no genuine redundancy. That is, that the financial circumstances that I have just outlined were not the operative reason for the decision-making and that there was another reason.
[19] The thrust of this argument was that the Respondent had an ulterior motive for his (the Applicant’s) selection for redundancy and that this was that the Respondent was motivated by malice. The malice was said to be capable of being inferred from the fact that the redundancy came at a time shortly after the Applicant had indicated that he would not be investing in the business.
[20] But such an inference is difficult to draw.
[21] The evidence was contested as to whether or not such an option call, if it occurred, might necessarily have been of any great assistance to the business in the current context and whether it would have allayed the financial decision making that led to the Applicant's redundancy in any event.
[22] The evidence does not allow me to find that Mr Jones had an ulterior motive. It is not enough to harbour a suspicion. What is needed is something more substantive, by far, of an evidentiary nature.
[23] The evidence that I have indicated earlier as to the financial circumstances of the business is direct and concrete evidence.
[24] The Applicant asks me to draw an inference. The difficulty is that there is no surrounding factual context which allows me to draw an inference reasonably and with confidence that would allow me to conclude that Mr Jones was motivated by an ulterior purpose in bringing about the termination of the Applicant’s employment. As I said earlier, the factual case, as presented to me unchallenged, is that the Respondent faced difficult financial circumstances. As is in many of these occasions, there will be a contest as to whether or not the decision-maker targeted the right course for the purposes of reducing the risks that the business faced. In this particular case, I see no evidence that allows me to conclude other than that Mr Jones acted to reduce the costs of the business (by making the Applicant redundant).
[25] He did so by rationalising the managerial stratum (where there was duplication or redundancy) in the business and that led to the termination of the Applicant's employment.
[26] There are unfortunate surrounding circumstances. And as I said before, given the close correlation in time of the Applicant's decision-making in relation to the alleged option call, some element of suspicion might be present. But I need to establish something more than ‘suspicion’ for the purposes of reaching a finding that would set aside the concrete, direct evidence provided by Mr Jones as to the circumstances and the reasons for his decision-making. That decision making, which was a matter of evidence, was no more than that Mr Jones decided to reduce the size of the managerial team owing to the financial difficulties facing the business, and that the Applicant was selected for redundancy because his skills were no longer in demand in a changed environment.
[27] Though he had been involved in discussions about the restructure, this of course came as a surprise to the Applicant, given his seniority in the business, but the evidence suggests that it was a reasonable option to conclude that this was a course that could viably reduce the demands on the business and reduce duplication across the entities and within the business itself.
[28] On that basis, then, I conclude that, for the purposes of s.389(1)(a) of the Act, the employer in this case did reach a decision that the person's job was not to be performed by anyone else.
[29] It was in this case to be partly made redundant so that it ceased to exist but it appears also, partly, to be otherwise performed by other elements of the business. That is, inside the immediate employer but also across the business structure itself, inside of Tranzact as well.
[30] I now move to the second of the requirements for whether or not a redundancy was a genuine redundancy for the purposes of the Act, and those requirements are set out at s.389(1)(b) of the Act and require that:
"The employer has complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy."
[31] In this particular case, the employment of the Applicant was regulated by a common law contract; there was no modern award in place that covered the Applicant’s employment.
[32] The Applicant performs duties at a level and a degree of responsibility and salary that is beyond a classification in any relevant modern award, and no enterprise agreement is in evidence that applies to the Applicant’s employment. As a consequence, there were no obligations placed upon the employer to meet any consultation requirements for the Act's purposes.
[33] Subsection 389(2) of the Act requires that:
“A person's 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:
(a) the employer's enterprise; or
(b) the enterprise of an associated entity of the employer.”
[34] In this particular case, the evidence is that there were discussions between the parties as to an alternative role within the organisation to which the Applicant could have been redeployed. That is, in the function of an adviser, a more junior role than that being currently performed by the Applicant. It appears from the materials before me that the Applicant conceded that was an unviable or unrealistic option and the option was refused, as it might be, understandably, given the seniority gap between the two positions.
[35] Nonetheless, the evidence of Mr Jones was that he made efforts to consider the opportunity for alternative positions within the immediate business and across the associated entities, including Tranzact, and there was only one available position and that was not considered viable by the Applicant (as indicated in the meeting of 9 February 2012).
[36] As a consequence of these findings, the Respondent has discharged the requirements of s.389(2) of the Act.
[37] Generally, therefore, having looked across the evidence at the various statutory requirements, I conclude that the Applicant was dismissed for reasons of a genuine redundancy. As a consequence of being so dismissed, the Applicant cannot be said to have been unfairly dismissed for the purposes of s.385 of the Act because he was dismissed for reasons of a genuine redundancy.
[38] Because I have so found, the application before me for an unfair dismissal remedy under s.394 of the Act itself must therefore be dismissed.
SENIOR DEPUTY PRESIDENT
Appearances:
Mr M. Guyomar, for Himself.
Mr A. Jones, for the Respondent.
Hearing details:
2012.
19 June.
Brisbane.
1 Exhibit TAS1 - Respondent’s submissions as prepared by Mr Jones at PNS 6-10.
Printed by authority of the Commonwealth Government Printer
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