Mr Michael Raftery v Sonder Cafe

[2019] FWC 6919

[2019] FWC 6919

FAIR WORK COMMISSION

DECISION

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

Mr Michael Raftery
v
Sonder Cafe
(U2019/7202)

DEPUTY PRESIDENT CROSS SYDNEY, 21 OCTOBER 2019

Application for an unfair dismissal remedy.

[1] An application was filed on 1 July, 2019 by Mr Michael Raftery (the “Applicant”) pursuant to s.394 of the Fair Work Act 2009 (Cth) (the “Act”). Mr Raftery seeks an unfair dismissal remedy following his dismissal on 29 May, 2019.

[2] The Applicant commenced employment with Sonder Café, when it was under the ownership of another entity, on 12 January, 2016. Heng Rui Pty Ltd (the “Respondent”) purchased the business of Sonder Café on 21 May, 2018. The Applicant was dismissed on 29 May, 2019, orally by Mr Simin (Alvin) Liu of the Respondent, with his dismissal taking effect on 12 June, 2019. The Applicant claimed that the basis of his dismissal was that he was unable to work on Fridays, Saturdays and Sundays in a consistent manner as required by the Respondent. The Respondent, on the other hand, claims that the Applicant was not dismissed, but the termination of his employment was a case of genuine redundancy.

[3] The Application was listed for conciliation on 29 July, 2019, but did not settle at that conciliation. The matter was then allocated to me for hearing and determination. I issued Directions from my Chambers on 5 August, 2019, to the parties prescribing a timetable for the filing of Outline of Submissions together with any witness statements and other documentary material upon which each party intended to rely. The Directions also indicated that the matter would be listed for hearing.

[4] In accordance with my Directions, the following materials were filed:

(a) The Applicant filed a Statement, dated 26 August, 2019;

(b) Mr Liu of the Respondent filed a document that described itself as a Submission but which was in essence a Statement, dated 16 September, 2019, together with screenshots of SMS text messages between the Applicant and the Respondent; and

(c) The Applicant filed a document that described itself as a Reply Submission but which was in essence a Statement, dated 26 September, 2019.

[5] The matter was then listed for hearing on 1 October, 2019, in Sydney. At the commencement of the hearing, I proposed to the parties to hear the matter by way of a determinative conference. Each of the parties confirmed that they were content for the matter to be heard in such manner.

THE EVIDENCE

[6] There existed no significant disputes in relation to the relevant facts to be considered. In particular:

(a) The Applicant commenced employment with Sonder Café, when it was under the ownership of another entity, on 12 January, 2016, as a Chef, in a casual capacity;

(b) On 25 May, 2018, the Respondent took over the café business from the previous owner. The Respondent did not recognise the previous service of the Applicant, and the previous owner paid the Applicant whatever entitlements he was owed;

(c) The Respondent employed no more than ten employees in the Café.

(d) During the course of his employment, both with the previous owner and the Respondent, the Applicant had worked regularly on Mondays, Tuesdays, Wednesdays and Thursdays. The Applicant would work, on occasion, on Fridays, Saturdays and Sundays, provided that the Respondent gave the Applicant a minimum of 7 days notice and that the Applicant was able to make the necessary arrangements with his family to allow him to attend work;

(e) Following the resignation of their Head Chef, the Respondent attempted to employ another Head Chef to fill that position. The Respondent was not successful in filling this position. The Respondent then engaged an external consultant to conduct an assessment as to the operational requirements of the Café. The Respondent was advised by the consultant that in order for the business to remain sustainable and attract more customers, it needed to change its current food menu with more appealing food items;

(f) Following the consultant’s advice, the Respondent concluded that the Café must undergo a restructure, including staffing. As a result, the Respondent required staff to work on Fridays, Saturdays and Sundays; and

(g) On 29 May, 2019, the Applicant’s employment was terminated by Alvin Liu and the external consultant. The Applicant was provided with 2 weeks notice, and was not required to work the last two days of that notice.

CONSIDERATION

[7] The Applicant was a person protected from unfair dismissal. He had completed the minimum period of employment and his employment was covered by a modern award (s.382). The Respondent was a National System Employer.

[8] While the Respondent was clearly a small business, the dismissal was not for serious misconduct or poor performance, and so it was not a dismissal where the Respondent could rely on the Small Business Code.

Was the dismissal a case of ‘genuine redundancy’?

[9] Section 389 of the Act provides that an employee’s dismissal is a case of genuine redundancy in the following circumstances:

(a) “The 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.”

[10] There is no dispute that the Respondent was undergoing a restructure of the business, and as a result of that restructure, the Respondent required staff to work consistently on Fridays, Saturdays and Sundays. At the hearing, the Respondent submitted that it was necessary to now have staff working on Fridays, Saturdays and Sundays given that the Café would likely attract a greater number of customers on those days. As the Respondent perceived that the Applicant could only commit to working on Mondays to Thursdays, the Respondent made the Applicant redundant.

[11] Clause 8(1) of the Restaurant Industry Award 2010 (the “Award”) provides as follows:

“Consultation about major workplace change

If an employer makes a definite decision to make major changes in production, program, organisation, structure or technology that are likely to have significant effects on employees, the employer must:

(a) give notice of the changes to all employees who may be affected by them and their representatives (if any); and

(b) discuss with affected employees and their representatives (if any):

(i) the introduction of the changes; and

(ii) their likely effect on employees; and

(iii) measures to avoid or reduce the adverse effects of the changes on employees; and

(c) commence discussions as soon as practicable after a definite decision has been made.”

[12] The Applicant, in his Form F2, submitted that he was never consulted or informed that his dismissal was a case of redundancy until he was notified of such by the Respondent’s Form F3, which he received on 12 August, 2019. The Applicant, in oral submissions, stated that he knew that his employment was being terminated due to the restructure of the business, although he claimed that he was not aware that his position was being made redundant.

[13] Further, the Applicant submitted that the Respondent had “never sat me down and explained the situation of how things were going to happen, exactly.”¹

And

“Leading up to seeing a gentleman all of a sudden appear in the café, I had absolutely no idea that this was happening. The time – the short time prior to the consultant coming on to the premises, the head chef had resigned and they were looking for a new head chef, as far as I was aware. I think they chose not to go down the path of employing a head chef, and they decided to deal with a consultant instead.”2

[14] The Applicant also submitted that while the consultant had consulted with other members of the Café, the consultant had only met with the Applicant when his employment was being terminated.

[15] In reply, the Respondent conceded that given the Applicant’s inconsistency of working Fridays, Saturdays and Sundays, the Respondent had not consulted the Applicant as they had presumed the Applicant would not be able to work Fridays, Saturdays and Sundays consistently. In oral submissions, the Respondent claimed the following:

“We know the situation before we talk to him … We try to ask him to come to help on Saturdays, sometimes Friday, Saturday and Sunday, but sometimes he accept, sometimes not.”3

[16] In reply, the Applicant submitted that he had never refused to work on Fridays, Saturdays and Sundays, but rather he would have required some notice to arrange carer responsibilities before agreeing to work on those days. The Applicant submitted that, in the post restructure environment, if he could not have worked every weekend, he would have worked “some of the weekends, or when required.”⁴

[17] Vice President Watson observed in Maswan v Escada Textilvertrieb T/A ESCADA [2011] FWA 4239 (“Maswan”), at paragraph [39]:

“[39]In my view a decision to dismiss on account of redundancy will only be harsh, unjust or unreasonable if the rationale for the decision is seriously undermined or if there is a serious error in procedure such that renders the termination unfair in the circumstances. Here the decision appears open to the employer to make. The failure to consult is not a trivial matter. But as it is clear that consultation was highly unlikely to have negated the operational reasons for the dismissal or lead to any other substantive change, I do not believe that the failure to consult prior to the date of termination rendered the dismissal unfair. Given the evidence in relation to the operational need to restructure, I am of the view that it is likely that Mr Maswan would have been dismissed in any event, even if timely consultation had occurred.”

[18] There is no dispute that the Applicant had not been consulted about the restructure of the Café prior to 29 May, 2019, in the meeting where he was given notice of his termination. Other employees were consulted but the Applicant was not because the Respondent presumed that he could not fully commit to working on Fridays, Saturdays and Sundays.

[19] While it would seem that such consultation may have been unlikely to have averted the dismissal because the Applicant would have been unlikely to have indicated that he could work every weekend, the Applicant should still have been given the opportunity to agree to that work pattern in appropriate consultation. The absence of appropriate consultation pursuant to the Award results in the termination of the Applicant’s employment being not a case of genuine redundancy pursuant to s.389 of the Act.

Section 387 of the Act

[20] The question then turns to whether the Applicant’s termination of employment was harsh, unjust or unreasonable.

[21] Section 387 of the Act sets out each of the matters the Commission is required to take into account when determining whether the dismissal was harsh, unjust or unreasonable. Section 387 provides as follows:

“Criteria for considering harshness etc.

In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, FWA 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 FWA considers relevant.”

[22] I now address each of the above considerations below.

(i) Valid Reason

[23] It is clear that the Applicant’s employment was terminated due to a restructure of the Respondent’s business. The restructure was necessary for the Respondent’s business to remain viable. The Respondent’s need to maintain the operational requirements of the business would constitute as a valid reason for the termination of the Applicant’s employment.

(ii) Notification of Reason/Opportunity to Respond

[24] The Applicant only received notification of the reason for the termination of his employment in the meeting at which he was advised his employment would terminate, albeit with two weeks notice that he would work. He was not given an opportunity to respond and importantly he was not given an opportunity to consult pursuant to the provisions of the Award.

(iii) Any Unreasonable Refusal to Allow a Support Person

[25] The Applicant did not have a support person present, but there was not an unreasonable refusal by the Respondent to allow the Applicant to have a support person present. No such request was made by the Applicant at the time of termination.

(iv) Whether the Person had been Warned About Unsatisfactory Performance

[26] As the issue is genuine redundancy, unsatisfactory performance is not relevant, nor was it an issue traversed by either party.

(v) Size of the Employers Enterprise/Absence of Human Resource Management

[27] The Respondent had employed approximately 10 employees (including the Applicant) at the time of the Applicant’s dismissal. In proceedings, the Respondent submitted that the Café was their “first time … running this small business, we don’t have much experience, even like a lot of things we don’t know.”⁵ The Respondent conceded that they had gone to such lengths to consult Google to determine the appropriate steps when terminating the Applicant’s employment.

[28] I am satisfied that the clear absence of any dedicated human resource management and expertise, and the Respondent’s limited capacity to afford such expertise, was likely to have a significant impact on the procedures by which the Respondent carried out the Applicant’s dismissal.

(vi) Any Other Matters Relevant

[29] There are no other relevant matters to be considered.

CONCLUSION

[30] Having considered each of the matters specified in s.387, I find that the Applicant’s dismissal was harsh due to the absence of appropriate consultation. Unlike Maswan, I consider that the failure to consult prior to the date of termination rendered the dismissal unfair.

REMEDY

[31] I now then turn to determine the appropriate remedy to be granted to the Applicant.

[32] Section 390(3) of the Act provides the following:

“(3)  The FWC must not order the payment of compensation to the person unless:

(a)  the FWC is satisfied that reinstatement of the person is inappropriate; and

(b) the FWC considers an order for payment of compensation is appropriate in all the circumstances of the case.”

[33] The Applicant did not seek reinstatement, and in the case at hand, where there was a clear restructure of the Respondent’s business, I would not consider reinstatement appropriate.

[34] Section 392(2) of the Act outlines the manner in which compensation is to be assessed. It provides the following:

“(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.”

[35] I considerthat it is appropriate in this matter to make an order for compensation. In determining the amount of compensation, I have:

(a) Noted the effect of such an order on the viability of the Respondent’s enterprise, in particular, the Respondent’s financial circumstances and the potential for such an order would cause financial distress;

(b) Observed that the duration of the Applicant’s employment was just over one year with the Respondent;

(c) Found that the Applicant would only have remained in employment for a further two weeks had he been appropriately consulted;

(d) Made no deduction for contingencies; and

(e) Noted that the Applicant had not mitigated his loss.

[36] Taking into account all the circumstances, I consider an order of two (2) weeks ordinary pay (not including overtime) to be the appropriate order as to compensation.

DEPUTY PRESIDENT

Appearances:

Mr M Raftery, Applicant.

Mr S Liu and Mr A Zhang, of the Respondent.

Hearing details:

2019.

Sydney:

1 October.

Final written submissions:

Applicant: 26 September 2019

Respondent: 16 September 2019

Printed by authority of the Commonwealth Government Printer

<PR713098>

¹ Transcript PN91.

² Transcript PN89.

³ Transcript PN182.

⁴ Transcript PN335.

⁵ Transcript PN378.