Mr Richard Bassanese v HPS Transport Pty Ltd

[2015] FWC 1222

[2015] FWC 1222

FAIR WORK COMMISSION

DECISION

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

Mr Richard Bassanese
v
HPS Transport Pty Ltd
(U2014/12955)

DEPUTY PRESIDENT BARTEL ADELAIDE, 20 FEBRUARY 2015

Termination of employment - whether dismissal a case of genuine redundancy.

Introduction

[1] Mr Richard Bassanese (the applicant) was dismissed by his employer, HPS Transport Pty Ltd (the respondent or the employer) on 29 September 2014. He has made application for an unfair dismissal remedy pursuant to s.394 of the Fair Work Act 2009 (the Act). The employer contends that the dismissal was a case of genuine redundancy.

[2] Section 185 of the Act sets out the criteria to determine whether a person has been unfairly dismissed:

“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.”

[3] Section 396 of the Act identifies four matters to be determined by the Fair Work Commission (the Commission) before considering the merits of the application.

[4] In relation to these matters, the application was made within the prescribed period (s.396(a)); the applicant is a person protected from unfair dismissal (s.396(b)); and the Small Business Fair Dismissal Code is not relevant in this case (s.396(c)). The final matter to be considered is whether the dismissal was a case of genuine redundancy (s.396(d)). If so, then the application must be dismissed. If not, then the merits of the application are to be considered.

[5] The matter proceeded by way of a determinative conference on 13 January 2015. The applicant was self represented and the respondent was represented by Mr Geoff Moore, General Manager and Mr Antonio Graziano, Director. 1 All three were sworn in at the commencement of the proceedings.

[6] The applicant appeared agitated at times and had difficulty focussing on any given topic. He expressed a range of grievances arising from his employment, including alleged poor health and safety practices, sub-standard workmanship of other employees and poor management. He was often indirect and at times belligerent in his response to questions from the Commission, insisting that he had valuable information to present but unable to establish its relevance.

[7] At the conclusion of the proceedings the applicant indicated that he wished to address a range of documents that he had brought with him. These documents comprised pay slips, a red exercise book containing a handwritten narrative of his employment with the employer and with some reference to his previous employment, over 30 handwritten notebooks and one page of a doctor’s report dated 28 August 2014 setting out the notes from a consultation which took place in 2012. The applicant was unable to explain how the documents were relevant to the issues before the Commission. Nonetheless I indicated that I would examine the documents and take them into account where relevant. The employer was given the opportunity to, and did view the documents and make submissions, which in turn were provided to the applicant for reply.

[8] The pay slips are evidence of the applicant’s earnings whilst employed, and are relevant should the issue of compensation arise. The entries in the notebooks are copious and confusing. The entries are not in chronological order and the same dates appear in several of the note books. More concerning however is that there are numerous entries for work undertaken on dates after the dismissal or during the period of annual leave immediately preceding the dismissal. There is one entry which records that the applicant was abused and told to “f... off” on the 12th of November 2014, some 6 weeks after the dismissal.

[9] These matters cast doubt on the credibility of the applicant’s evidence in relation to the events that occurred during the course of his employment and also on the veracity of the contents of the red exercise book. I have not taken this material into account on the basis of reliability and relevance.

The cases presented

[10] The respondent operates interstate transport services, with some intrastate transport work picking up goods for delivery interstate. As at the date of the applicant’s dismissal it employed 121 employees including truck drivers, maintenance personnel, forklift drivers and administration staff.

[11] The applicant was employed on 5 March 2010 as a full time dolly mechanic. His role included servicing, maintaining and repairing the employer’s fleet of (non-powered) dollies. At the time of dismissal the applicant worked with another employee who undertook similar work.

[12] In 2012 the employer decided to replace its ageing fleet of converter dollies because of increasing maintenance requirements. The introduction of the new converter dollies was completed in 2013. According to Mr Moore, this reduced the amount of maintenance and servicing required. The applicant disagrees, and stated that ill advised modifications had been made to the new converter dollies which created problems that in turn required additional maintenance and servicing work to be undertaken. I accept that there was a reduction in maintenance and servicing work to be undertaken on the converter dollies, but possibly not to the extent identified by the employer.

[13] In late 2013 and during 2014 the employer lost freight contracts which impacted on its revenue. Correspondence from the employer’s chartered accountant 2 stated that the loss of one customer represented a loss of $3.5m per year or 10% of total revenue. This was supported by a transaction report relating to this customer, which showed the decreasing revenue from February 2014 to November 2014.3

[14] The respondent decided that it could no longer support a full time dolly mechanic in view of the decreased maintenance requirements coupled with the loss of revenue.

[15] The applicant was directed to take a period of annual leave from 25 August to 28 September 2014, inclusive. He had a substantial amount of accrued annual leave, and according to Mr Moore, the applicant’s absence provided an opportunity to assess whether his position was required. 4

[16] The applicant stated that he suffered injuries to his right leg when working with an air hose on 25 July 2014 and also suffered burnt lips as a result of exposure to toxic fumes at work on or around 10 June 2014. The applicant provided four WorkCover Medical Certificates and a general medical certificate 5 all of which post-dated his dismissal. Certain of these certificates refer to the applicant being examined in relation to his burnt lips on 1 July 2014 and on 10 August 2014 in relation to his leg injury.

[17] I accept that the applicant made his supervisor aware of his injuries when they occurred and that it was raised again when he was directed to take annual leave.

[18] The first formal notification of injury was provided to the employer when the applicant arrived at work on 29 September 2014 on his return from annual leave. Neither party could provide a copy of the certificate presented on that day but both agree that it stated that the applicant was fit for light duties. The restrictions related to prolonged standing, walking and lifting heavy objects and the applicant was to avoid frequent squatting. 6 The applicant was provided with light duties to perform on that day.

[19] Later in the day on 29 September 2014, the applicant was called to a meeting and dismissed on the basis of redundancy. He received redundancy pay and pay in lieu of notice on termination in accordance with the National Employment Standards. In answer to a question from the Commission concerning the apparent absence of any consultation with the applicant, Mr Moore stated that there were limited light duties available so the applicant would be unable to be employed over the period when the consultation would have otherwise taken place. He also stated that the employer was concerned not to aggravate the applicant’s injury. 7

[20] The applicant complained about the manner of his dismissal and stated that “... they just put me out like a dog”. 8 He said that his selection as the person to be made redundant was unfair on the basis that he has over 40 years experience as a mechanic, his work is of high quality and has been recognised as such by management referring work to him that others had been unable to complete. In contrast, he stated that his co-worker has less experience, no qualifications and his work is sub-standard. The applicant did not identify any alternative positions to which he could have been redeployed, only that he was competent and qualified to perform a range of duties. He did not challenge the evidence concerning the employer’s loss of revenue.

[21] Mr Moore stated that the consultation provisions in the relevant modern award did not apply because the changes implemented by the employer did not constitute “major changes” and only applied to one employee. It was the employer’s position that the applicant was covered by the Road Transport and Distribution Award 2010 9. I have some doubt that this is correct and consider that the relevant modern award is the Vehicle Manufacturing, Repair, Service and Retail Award 2010, (the VSR Award)10 but little turns on this for present purposes as the consultation provision is the same in each award.

[22] I questioned Mr Moore in relation to the selection of the applicant as the person to be made redundant. Mr Moore refuted the applicant’s contention that his work was of a higher quality than his co-worker and stated that the nature of the work performed on the converter dollies did not require a trade qualification. As I understand Mr Moore’s evidence, the co-worker was deemed to provide more flexibility to the employer as he could be utilised in other areas involving heavy lifting and work in difficult environments. It was the employer’s view that the applicant did not have the physical ability to undertake some of these tasks. As at the date of the hearing, the co-worker had performed no work other than servicing the converter dollies and this situation was expected to continue. 11

Was the dismissal a case of genuine redundancy?

[23] Section 389 of the Act provides that:

“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.”

[24] I am satisfied that the employer no longer required the job performed by the applicant to be performed by anyone. There was a change in the operational requirements of the employer due to a combination of the introduction of the new fleet of dollies and the downturn in revenue. While the work performed by the applicant was not eliminated, it was redistributed to his co-worker and this circumstance satisfies the definition of redundancy. 12

[25] I am not satisfied that the employer has met the requirements in s.389(1)(b) of the Act. The Consultation provision in the VSR Award provides:

“8. Consultation

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.

8.2 ...”

[26] A range of decisions of the Commission have applied the consultation provisions of awards, which are in similar or identical terms to the clause in the VSR Award, above, to the termination of one employee on the grounds of redundancy. 13

[27] “Major changes in production, program, organisation, structure or technology” is not defined, other than by a reference to the likelihood that these changes will have “significant effects” on “employees”. “Significant effects” includes termination of employment. The use of the plural form “employees” is to be taken to be inclusive rather than exclusive of the singular form, “employee”.

[28] To read the consultation provision as only having application where more than one employee suffers a significant effect as defined, is to import a meaning that is not consistent with the meaning and intent of the clause as a whole and would be counter to a line of authorities, as referred to above.

[29] In this case the function affected by the operational change, being the repair servicing and maintenance of converter dollies, was performed by two employees including the applicant. Both of the employees were affected by the change - the applicant lost his job and the co-worker assumed the applicant’s duties. 14

[30] Having determined that the employer did not comply with the Consultation provisions of the VSR Award, the dismissal was not a case of genuine redundancy.

[31] The only evidence concerning the possibility of redeployment for the applicant is contained in the letter of termination, 15 which states that the employer considered redeployment but that no positions were available that were suited to the applicant’s skills and abilities.

Was the dismissal harsh, unjust or unreasonable?

[31] The matters that the Commission must take into account in considering the merits of an application for an unfair dismissal remedy is set out in s.387 of the Act as follows:

“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.”

Sections 387(a) to (c)

[32] In UES (Int’l) Pty Ltd v Harvey, a Full Bench held that consideration of whether there was a valid reason for dismissal connected to the capacity or conduct of a person, does not include consideration of the person’s selection for redundancy. The rationale for this conclusion was that the process of selection for redundancy is not a matter considered in the criteria for determining whether a dismissal is a case of genuine redundancy under s.389 of the Act and that any unmet criteria in s.389 can be taken into account under s.387(h) of the Act. 16

[33] In accordance with the reasoning in UES, where the employer has established genuine operational reasons for the redundancy, ss.387(a) to (c) of the Act are to be regarded as neutral matters.

Section 387(d)

[34] I conclude that the applicant was denied the opportunity to have a support person present to assist him in discussions relating to his dismissal. The dismissal was perfunctory with no opportunity for the applicant to obtain advice, assistance or support. This is a matter that weighs in favour of a determination that the dismissal was harsh, unjust or unreasonable.

Section 387(e)

[35] The applicant’s termination did not relate to unsatisfactory performance, nor is there any evidence that his performance was an issue considered by the respondent in the decision to make him redundant. I regard this as a neutral matter.

Section 387(f) and (g)

[36] The respondent employs over 120 employees but there was no dedicated human resource function within the business. Given the size of the employer I regard this as a choice rather than an economic necessity and a lack of resources is not a legitimate reason for any deficiencies in the process it adopted. There is evidence from Mr Moore that the employer obtained some advice on its requirement to consult the applicant under the terms of the consultation provision in the modern award, which is dealt with below. I regard ss.387(f) and (g) of the Act as neutral matters in this case.

Section 387(h) - Other matters

[37] The employer failed to consult with the applicant in accordance with the requirements of the consultation provisions in the relevant award. This is not a mere technicality. A Full Bench of the Commission, when considering modifications to the consultation term in modern awards to include a requirement to consult on changes to rosters and hours of work, stated: 17

[31]The right to be consulted is a substantive right, it is not to be treated perfunctorily or as a mere formality.  Inherent in the obligation to consult is the requirement to provide a genuine opportunity for the affected party to express a view about a proposed change in order to seek to persuade the decision maker to adopt a different course of action. As Logan J observed in Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v QR Limited (QR):

“... A key element of that content [of an obligation to consult] is that the party to be consulted be given notice of the subject upon which that party’s views are being sought before any final decision is made or course of action embarked upon. Another is that while the word always carries with it a consequential requirement for the affording of a meaningful opportunity to that party to present those views. What will constitute such an opportunity will vary according the nature and circumstances of the case. In other words, what will amount to “consultation” has about it an inherent flexibility. Finally, a right to be consulted, though a valuable right, is not a right of veto.

To elaborate further on the ordinary meaning and import of a requirement to “consult” may be to create an impression that it admits of difficulties of interpretation and understanding. It does not. Everything that it carries with it might be summed up in this way. There is a difference between saying to someone who may be affected by a proposed decision or course of action, even, perhaps, with detailed elaboration, “this is what is going to be done” and saying to that person “I’m thinking of doing this; what have you got to say about that ?”. Only in the latter case is there “consultation. ...”

[38] Mr Moore stated that he took advice on the application of the consultation provision in the relevant modern award and was told it had no application. This is a relevant matter in terms of the characterisation of the employer’s failure to consult, but is of little if any consequence to the applicant who has been denied the opportunity to obtain advice and present any alternative options to the employer.

[39] Regardless of the employer’s understanding of the consultation requirements of the relevant award, it is difficult to understand how, in the circumstances that existed, the employer could be of the view that the immediate dismissal of the applicant was appropriate. He had 4 years’ service, a sound performance record and was being terminated for reasons outside of his control. The applicant is of mature years, was apparently suffering injuries at the time of dismissal and will not find it easy to obtain alternative employment. It follows that I do not accept the employer’s stated reasons for dismissing the applicant on the day. The course of events on 29 September 2014 suggests that the applicant’s injury was a factor in the decision to make him redundant.

[40] For the above reasons I determine that the dismissal was harsh, unjust or unreasonable.

Remedy

[41] I am satisfied that re-employment is not an appropriate remedy in the circumstances and that compensation is appropriate in this case. However, as the parties did not address the issue of remedy, directions are issued with this decision to conclude the proceedings.

DEPUTY PRESIDENT

Appearances:

Mr R Bassanese in person

Mr G Moore and Mr A Graziano for the respondent

Hearing details:

2015:

Adelaide

13 January

 1   An application for the employer to be legally represented was declined. See [2014] FWC 8639

 2   Ex R2

 3   Ex R1

 4   At PN58

 5   Ex A1-A5

 6   The parties agreed that the restrictions identified in the certificate provided to the employer on 29 September 2014 were the same or similar to that contained in later certificates presented to the Commission.

 7   At PN82

 8   At PN430

 9   MA000038

 10   MA000089

 11   PN621-634

 12   This matter was discussed in Urigwe v TAFE NSW, Sydney Institute[2014] FWC 9168, where SDP Drake canvasses various decisions in concluding that a redistribution of existing duties can constitute a redundancy, at [4] - [6]. See also the Explanatory Memorandum to the Fair Work Bill 2008 at para 1548

 13   See for example Urigwe v TAFE NSW, Sydney Institute, as above; Jack v Urban Climb Pty Ltd[2013] FWA 9616. In each case the consultation provisions in the relevant modern award included reference to “major changes in production, program ...” and were applied.

 14   See also the Termination, Change and Redundancy Case, PR6230, which is the genesis of the phrase “major changes in production, program ...” and see also the discussion on the requirement to consult in cases of redundancy.

 15   Attached to the Form F2

 16   [2012] FWAFB 5241 at [28], [29]

 17   Consultation Clause in Modern Awards, [2013] FWCFB 10165

Printed by authority of the Commonwealth Government Printer

<Price code C, PR561252>