Mr Richard Pankratz v Regional Housing Limited

[2013] FWC 1260

[2013] FWC 1260

FAIR WORK COMMISSION

DECISION

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

Mr Richard Pankratz
v
Regional Housing Limited
(U2012/13759)

SENIOR DEPUTY PRESIDENT RICHARDS BRISBANE, 28 FEBRUARY 2013

Summary - whether dismissal harsh unjust or unreasonable - redundancy - s.389 - small employer and no HR expertise - dismissal for operational reasons sound and reasonable - application dismissed.

[1] Mr Richard Pankratz (“the Applicant”) on 2 October 2012 made application under section 394 of the Fair Work Act 2009 (“the Act”) seeking an unfair dismissal remedy in relation to his dismissal by Regional Housing Limited (“the Respondent”). The Respondent is incorporated and a registered public benevolent institution. That is, it is a not-for-profit organisation. Its principal function is to source or facilitate access to low cost accommodation for those in need in the Bundaberg region. The Respondent is a smaller employer, employing some 20 to 25 employees. The Applicant’s position appeared to involve property maintenance-related duties, and was claimed by the Respondent to be titled ‘Asset Maintenance Officer’.

[2] This decision must be read in conjunction to my decision in [2013] FWC 1259 (“the prior decision”). In this prior decision I dismissed a jurisdictional objection by the Respondent that the application was incompetent for reason that the Applicant was made genuinely redundant for purposes of s.389 of the Act.

[3] I did so because the Respondent, in effecting the Applicant’s redundancy, had not conformed to the consultation requirements under the applicable modern award.

[4] In the course of making that finding, I also found that the Applicant’s employment was terminated for a reason of operational necessity and that his position had become redundant as a consequence. The evidentiary case in this regard was set out in the prior decision cited above.

[5] The application for an unfair dismissal remedy remained on foot nonetheless, and it is to that application (relying on that prior evidentiary case) that I now turn.

[6] In order to determine whether the Applicant was dismissed harshly unjustly and unreasonably I must have regard to all the various matters set out at s.387 of the Act. Section 387 of the Act provides as follows:

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.

Consideration

Section 387(a): whether there was a valid reason for the dismissal related to the person’s capacity or conduct

[7] The reason for the dismissal was for redundancy. The reason for the dismissal advanced by the Respondent therefore is unrelated to whether or not there was a valid reason for the dismissal for the purposes of section 387(a) of the Act. The Applicant’s employment was terminated for reasons other than his capacity or conduct; the reasons related to the operational circumstances of the employer and do not reflect on the Applicant personally. But for the operational circumstances, the Applicant would have remained in the Respondents employ.

[8] The reason for the dismissal, as it was, is a matter I will take into account in respect of the wider discretionary judgement the Act vests in me, but it is not relevant to s.387(a) of the Act.

Section 387(b) of the Act: whether the person was notified of that reason

[9] The decision to dismiss the Applicant for operational reasons had been taken in advance by the Respondent. The notice was not given to the Applicant in advance of the decision to dismiss the Applicant or in advance of the meeting at which he attended and was dismissed.

[10] The earlier, collective meetings that raised the prospect of redundancies was no substitute for the provision of personal notice in advance of the dismissal communication.

[11] That is, the Applicant was notified of the reason for his dismissal at the time of the dismissal taking effect. The fact that the Applicant may have demonstrated a relaxed and understanding perspective on the decision to dismiss him for operational reasons does not in some manner modify the statutory consideration under the subsection.

Section 387(c) of the Act: whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person

[12] As mentioned above, the decision to dismiss the Applicant had been taken in advance of the meeting at which he was informed of his dismissal. There was, further, no opportunity during the dismissal meeting to discuss alternatives or in some other manner to respond to the operational reasons for the dismissal. I have set out these circumstances in the prior decision.

Section 387(d) of the Act: any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal

[13] The circumstances of this matter did not generate an opportunity for the Applicant to consider the role of a support person. There was therefore no point in time at which the Respondent can be said to have refused to allow a support person to assist the Applicant in the discussions (as they were) in relation to the dismissal. The evidence as led indicated that the Respondent did advise the opportunity for a support person and that it otherwise had no objection to any support person assisting the Applicant in the dismissal meeting.

Section 387(e) of the Act: if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal

[14] As mentioned above, the Applicant’s employment was terminated for reasons arising from the operational circumstances of the Respondent. No issue of the Applicant’s performance arose for the purposes of the reason for the dismissal.

Section 387(f) of the Act: the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal

[15] The Respondent is a smaller business in the not-for-profit stream. At the time of the redundancies, the Respondent employed (prior to the redundancies) some 25 or so employees under various modes of employment and in a range of designated functions. The evidence in this matter shows that the size of the Respondent’s operation meant that it had few resources to devote to managing staff relationships in the context of the financial circumstances in which it found itself.

[16] Mr Hanna for his part effectively was a stand-in chief executive officer the purposes of effecting the redundancy process.

[17] Mr Hanna’s position was as general manager, but he was required to give effect to the workforce restructuring at what appears to have been short notice and without any demonstrated training or support. In this latter regard, Mr Hanna had little demonstrated experience in this field and was assisted largely only by a person whose skills are relevant to the financial affairs of the business. The former CEO had conducted all HR functions (though she had no qualifications in this field).

[18] I add that the evidence before me was that the size of the Respondent’s business, and its budgetary arrangements and operational focus left little opportunity for resources to be directed to people management functions.

Section 387(g) of the Act: 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

[19] As mentioned immediately above, the Respondent had limited resources and no dedicated HR expertise at its disposal. In my view the absence of detailed understanding of the operation of s.389 of the Act in the context of the consultation provisions of the modern award affected the procedures adopted by the Respondent in relation to the dismissal process.Mr Hanna was thrust into the role of managing the workforce restructure process and he himself had no (or limited) experience or training in such matters, let alone award interpretation skills or familiarity with the statute.

Section 387(h) of the Act: any other matters

[20] The Applicant states that he had a depressive condition. But the Respondent was unaware of this condition at the time of the decision-making in relation to the operational exigencies it faced. The Applicant’s mental health issues are not relevant to these proceedings.

[21] The Applicant also alleged that the various approaches of the Respondent to him after such time as he had been dismissed had impacted negatively upon his mental health and his social relationships.

[22] I cannot find that these concerns are particularly relevant to the jurisdiction under s.387 of the Act. They are matters that occurred subsequent to the termination, and in any event the evidence as adduced is not supportive of a conclusion that the Respondent in some way set out to cause an injury to the Applicant or acted maliciously. Indeed, it would be surprising if this were to be the case given that the Applicant was not dismissed for any reason related to his conduct, capacity or performance, and had been offered opportunities for providing continuing services to the Respondent.

Conclusion

[23] In my view, the Respondent had a reason for the dismissal of the Applicant which was reasonably founded, was not capricious in any manner and did not manifest a mischief. The Respondent dismissed the Applicant for reasons of compelling and demonstrated operational reasons that were unrelated to his capacity, performance or conduct.

[24] There was an element of harshness (or however else construed) in the way in which the Applicant was dismissed without any opportunity to argue his case or to persuade his employer to adopt a different approach or strategy. But as it was on the evidence before me the Applicant himself demonstrated no desire to challenge the Respondent’s decision making at the dismissal meeting.

[25] Even if this were not the case, given the demonstrated seriousness of the operational circumstances facing the Respondent and its small size, a richer consultative process leading up to the dismissal is most unlikely to have yielded a different result.

[26] Indeed, in the wider context, any element of harshness (or otherwise) in the dismissal process must be construed within the particular circumstances in which the Respondent found itself at the relevant time. That is, being a smaller not-for-profit organisation, Mr Hanna found himself in a situation in which he had not been trained and was required to give effect to a workforce restructuring program within a compacted time frame. There was no dedicated human resource professional available to assist him in this regard. I add to this that Mr Hanna was working within the confines of a smaller business where there were few employees, a limited number of functional roles and scarce financial resources. There was therefore little that could be done other than to reduce the salary and wages budget line.

[27] Taking all these matters into consideration I am satisfied that the Applicant’s dismissal by the Respondent was neither harsh, unjust nor unreasonable. The failure to consult, which I have highlighted above, therefore does not inexorably lead me to conclude that the dismissal was harsh, unjust or unreasonable, noting as I have that the Respondent had a sound reason for the dismissal, and was working with constrained resources and limited practical options.

[28] The application under s.394 of the Act therefore is dismissed.

SENIOR DEPUTY PRESIDENT

Appearances:

Mr R. Pankratz, Applicant

Mr T. Halls, for the Respondent

Hearing details:

2013

22 February

Bundaberg

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