Mr Stephen Dowrick v We Can Transport Pty Ltd

[2013] FWC 8949

[2013] FWC 8949

FAIR WORK COMMISSION

DECISION

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

Mr Stephen Dowrick
v
We Can Transport Pty Ltd
(U2013/367)

SENIOR DEPUTY PRESIDENT RICHARDS BRISBANE, 19 NOVEMBER 2013

Summary: whether harsh, unjust or unreasonable - dismissal for operational reason reasonable and defensible - small business - notice.

[1] This is an application made under s.394 of the Fair Work Act 2009 (“the Act”) by Mr Stephen Dowrick (“the Applicant”) who is seeking an unfair dismissal remedy in relation to his alleged dismissal by We Can Transport Pty Ltd (“the Respondent”).

[2] The Applicant claims that he had been a full time HR driver with the Respondent since 2006.

[3] On the day prior to returning from a period of annual leave, the Applicant states that he contacted (on Friday 25 January 2013) his employer, Mr Shane Carullo, who was the company director for the Respondent.

[4] The Applicant claims that he was informed by Mr Carullo at this time that the Respondent had lost a contract with a transport company known as Wettenhalls Transport Group, because that company had gone into administration.

[5] Mr Carullo was said to have informed the Applicant that there would be no work for to him to do as a consequence, and that he would contact him again in a few days to advise him what was happening with his work.

[6] Wettenhalls Transport Group appears to have ceased operating shortly thereafter to reduce further losses to the business. The circumstances besetting that company were a matter of public note at the time.

[7] On 29 January 2013 (the day the Applicant was due back from annual leave) the Applicant claims that he contacted Mr Carullo to enquire as to when he would be returning to work. The Applicant was again told that there was still no work and that Mr Carullo was “trying to work something out”.

[8] The following day the Applicant received a phone call from Mr Carullo, during which the Applicant claims that he was dismissed from the Respondent’s employment. Mr Carullo was said to have indicated to the Applicant that he was dismissed.

[9] The Applicant put it this way in his evidence:

So you rang him then. Then you say you received a telephone call from Mr Carullo on 30 January?---The 30th, yes.

Which is the Wednesday?---Wednesday?

Do you recall that?---Yes.

Do you recall what he said in that conversation to you when he called you?---Just that there was a separation certificate to pick up and there was no work, type of thing.

So on the 30th, you say he told you that there was a separation certificate available?---Yes.

Did he say anything else to you? Did he just say, “Look, yes, there’s a separation certificate available”? Did he say why or what is happening or anything else to you?---There was no work available at that time, to pick up my separation certificate basically, yes.

Did he say why he was giving you the separation certificate?---Because he didn’t have any work for me.

Let me be a bit more specific. You say here, “Then he told me I was being terminated”?---Yes.

Is that what he said to you?---Yes, I was terminated; that the job was terminated, yes.

Are they the words he used, that your job is terminated?---That’s correct, yes.

Did you ask anything of Mr Carullo at that time?---Yes. I asked him about my pay and, like, severance pay, redundancy pay.

So you asked for redundancy pay, did you?---Yes. I did, yes.

What did Mr Carullo say then?---He said I wasn’t going to get any. I would be lucky to get my holiday pay. 1

[10] The Applicant says he was not paid notice in lieu.

[11] The Applicant claims that Mr Carullo made no attempt to redeploy him to any other work the Company had available, such as contracts with Hi-Trans Express, WA Freightlines and Total Transport and Logistics.

[12] The Applicant also claims that he was given an opportunity to work out his notice period so that he could seek alternative employment. But Mr Carullo did not pay him wages in lieu of notice.

[13] Mr Carullo argues somewhat differently than the Applicant. He states that he attempted to contact the Applicant on 25 January 2013 but could not reach him on his mobile telephone. The Applicant subsequently contacted him that evening. At that time Mr Carullo advised the Applicant that the company (Wettenhalls Transport Group) with which it had held a contract in respect of which the Applicant had provided services had gone into administration and administrators had been appointed.

[14] Mr Carullo also stated that he informed the Applicant (and others it would appear) that there was a prospect a buyer might step in and purchase Wettenhalls Transport Group (but he was uncertain).

[15] He also claims that he informed the Applicant that he would try his hardest to redeploy his drivers once he knew what was happening as there may be a potential buyer for Wettenhalls Transport.

[16] Mr Carullo further claims that he informed the Applicant that there would be no work on 29 January 2013 and that he would be trying to chase a new contract. He also indicated in his evidence that he was not able to pay the Applicant his ordinary weekly wage as a result. The Applicant was not invited to take annual leave, which may have been an avenue of keeping the employment relationship alive for an interim period.

[17] Mr Carullo therefore denies ever having intended to indicate to the Applicant (by providing the separation certificate, which eventually appears to have been directed to Centrelink on Friday 8 February 2013, when the Applicant attended at its local office) that he had been dismissed. Mr Carullo was of the view that in informing the Applicant on 29 January 2013 of the availability of the separation certificate, he was doing no more than assisting the Applicant in accessing his social welfare entitlements during a period in which work may not be available immediately.

[18] Mr Carullo admitted having asked the Applicant for the gate keys at or about this same time.

[19] Mr Carullo also admitted to having discussed with the Applicant the status of his entitlements to notice and holiday pay. Mr Carullo gave evidence that:

Mr Dowrick was told that his holiday pay would be paid as he was told this was the best We Can Transport can do due to the substantial losses we received.

[20] Mr Carullo suggested the business was in an uncertain position owing to the loss of the contract with Wettenhalls (the result of which caused a financial loss of some $100,000, owing to the fact the business was an unsecured creditor).

[21] Mr Carullo also suggested the Applicant should contact the Fair Work Ombudsman if he “was not happy in relation to employment”.

[22] This evidence is reflective of a deal of the evidence led by the Applicant, albeit from a different perspective.

[23] According to Mr Carullo, the Respondent employed up to 10 or 11 employees altogether (accounting for a small number of permanent employees and a number of casual employees.

[24] His evidence was that he had five drivers sub contracting to Wettenhalls Transport Group. Four of these drivers were permanent employees and one was a permanent casual.

[25] Mr Carullo also stated that it was not possible to redeploy the Applicant to any of the other companies cited above, because other employees were employed to perform services in relation to those contracts. Mr Carullo also stated that he does not sub contract for Total Transport and Logistics (despite the Applicant’s allegation to this effect).

[26] Mr Carullo said that as a consequence of the loss of the contract he had five trucks parked up because of the lack of work. Mr Carullo therefore held that he would never have offered the Applicant to work out his notice period because there was no work for him to perform. In any event, Mr Carullo stated that the Applicant did not request to work out a notice period at all.

[27] Mr Carullo stated that he (and another senior driver by the name of Mr Shane Boyd) attempted to contact the Applicant shortly after 29 January 2013 for the purposes of re-employment but received no return calls. Mr Carullo was eventually contacted by Centrelink and asked to provide a certificate of separation. He did so, and dated the date of separation as being 25 January 2013.

[28] The Applicant was eventually paid out his holiday accrual.

Legislative provisions

[29] In order to determine whether in all the circumstances the Applicant was dismissed harshly unjustly or unreasonably I must take into account the various matters set out at s.387 of the Act.

[30] Section 387 of the Act provides as follows.

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.

Consideration of statutory matters under s.387 of the Act

[31] Section 387(a) of the Act requires the Commission to take into account whether the Respondent had a valid reason for the dismissal of the Applicant related to his capacity or conduct (including its effect on the safety and welfare of other employees).

[32] Mr Carullo claimed persistently that he had never dismissed the Applicant at his initiative. I am inclined to believe Mr Carullo. I think the evidence supports a conclusion that the Applicant presumed Mr Carullo had terminated him as a consequence of the circumstances that were communicated to him.

[33] It is perhaps more the case to say that Mr Carullo never intended to dismiss the Applicant. I have no doubt Mr Carullo considered the Applicant a competent driver whom he wished to keep in his employ if at all possible.

[34] But circumstances took matters in a different course.

[35] The Applicant was informed the contract which he serviced had been lost. His employer was in a parlous financial situation as a consequence. There was no work for him. His employer agreed that he would not to be paid (until new work was sourced, if it could be). In the interim, a separation certificate was available to assist him accessing Centrelink benefits.

[36] Mr Carullo may not have intended it, and he may have hoped he could keep the contract of employment alive whilst he sourced new work, if he could, but operational circumstances had brought the Applicant’s employment to an end. At 29 January 2013, as it had been since 25 January 2013, there was no work to perform (for those employees who serviced the Wettenhalls contract). The Applicant could not be redeployed. And there was no pay to be earned.

[37] As at 29 January 2013 (this being the date the Applicant was due to resume work from annual leave), the Applicant was correct in his mind, as a reasonable person facing the same circumstances might also be, that his employment relationship with his employer had come to an end.

[38] There were wider circumstances that convinced him further, but these had a subjective impact upon the Applicant - the request for the gate keys, the discussion about entitlements, the availability of the separation certificate, there being no offer to take annual leave for a short period etc.

[39] After 29 January 2013, there was no longer any need for the Applicant to retain contact with his employer. He may have done so if he was inclined and willing, but he was not. There was no obligation on the Applicant to keep in regular communication with the Respondent after 29 January 2013.

[40] The Applicant therefore was made redundant on 29 January 2013 for operational reasons arising from the loss of the Wettenhalls contract.

[41] That all said, a redundancy for an operational reason is not a valid reason for the purposes of s.387(a) of the Act. This has been held to be so in the majority decision in UES (Int’l) Pty Ltd v Harvey - [2012] FWAFB 5241.

[42] A redundancy for an operational reason is nonetheless a reason for a dismissal which is sound, defensible and well-founded. This is a relevant consideration for purposes of s.387(h) of the Act.

[43] The Applicant was not afforded procedural fairness under s.387(b) of the Act in so far as he was not notified of the reason for his termination in advance. But this is because of the redundancy situation that arose with the sudden loss of the contract and other presumed revenues (which resulted in the redundancy).

[44] This was not a matter, then, in which an employer was able to plan a re-organisation. Consequently, this matter is of neutral bearing in respect of my consideration as to whether as a whole the Applicant’s dismissal was harsh, unjust or unreasonable.

[45] Section 387(c) of the Act requires a consideration of whether the Applicant was given an opportunity to respond to any reason related to the capacity or conduct of the person. This matter is not germane to a redundancy situation and is of neutral bearing in respect of my consideration as to whether as a whole the Applicant’s dismissal was harsh, unjust or unreasonable.

[46] Section 387(d) of the Act concerns any unreasonable refusal by the Respondent to allow the Applicant to have a support person present to assist at any discussions relating to dismissal. These are not circumstances relevant to this application.

[47] Section 387(e) of the Act requires the Commission to take into account if the dismissal related to unsatisfactory performance by the person, whether the person had been warned about that unsatisfactory performance before the dismissal. There are no circumstances relevant to this matter arising in the application.

[48] Section 387(f) of the Act concerns whether the degree to which the size of the Respondent’s enterprise would be likely to impact on the procedures followed in effecting the Applicant’s dismissal.

[49] Section 387(g) of the Act concerns 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 Applicant’s dismissal.

[50] Both the size of the business and the absence of human resource expertise affected the manner in which the redundancy was given effect. The availability of such resources might have assisted the parties in having a better understanding of the implications of the contract loss, and how those implications were communicated (or consulted) and managed.

[51] The result may have been no different in the end, however. The contract had been lost and there was no work at hand for the Applicant on 29 January 2013 and there was no scope for him to be paid in the circumstances.

[52] Section 387(h) of the Act concerns any other matters that the Commission considers relevant. I have made comments in this regard above. That is, the reason for the dismissal was because of operational circumstances arising from the loss of a transport contract, for which the Applicant was employed to serve. That is a reason that is sound, defensible and well-founded (even if it was unintended and Mr Carullo sought to preserve the employment relationship).

[53] Future work did become available after 29 January 2013. But that in essence was too late. The employment relationship had ceased on 29 January 2013, as I explain above, and the Applicant had ceased to be engaged by his former place of work or willing to continue his prior relationships. There was no obligation at 29 January 2013, after his discussion with Mr Carullo, for him to do otherwise.

[54] It may have been in the Applicant’s interests to have retained contact with his workplace, given new contracts were found subsequently. Efforts were made to contact the Applicant and to offer new employment. But the Applicant could not be found. That work, in any event, would have been new work based on a new employment relationship (and would not have set aside the dismissal for operational reasons given effect on 29 January 2013).

Conclusion

[55] The Applicant was not dismissed unfairly, or in circumstances that were harsh, unjust or unreasonable. He was effectively terminated for reasons of an unanticipated and sudden operational change. The loss of the contract with Wettenhalls Transport Group meant several employees were without work.

[56] Mr Carullo acted as a practical man operating a small business might and sought to keep the Applicant as part of the workforce whilst he sourced new work. But on 29 January 2013 there was no work to be had, no work had been sourced, and there was no pay; the employment relationship had ceased, and the Applicant was right to so conclude.

[57] The suddenness of the collapse of the Wettenhalls Transport Group left little opportunity for Mr Carullo to engage in a rich procedural exercise with the Applicant. As an unsecured creditor the business had lost $100,000 in unpaid contractual payments. Mr Carullo’s business is also a small business in size, and he had no human resource practitioners to whom he could turn at the time.

[58] Considering both the circumstances of the Applicant and the Respondent objectively it cannot be concluded that the Applicant was harshly, unjustly or unreasonably dismissed. But I have no doubt that the Applicant felt as though the sudden change in his fortunes must evidence harshness in the manner of the dismissal. Sometimes it does, but not on this occasion.

[59] The Respondent, on the evidence before me, is a small business employer for the purposes of s.23 of the Act. There was no challenge to that fact. As a consequence the Respondent has no obligation to pay redundancy pay under s.121(1)(b) of the Act. The Respondent, however, is not excluded from the requirement to pay notice pursuant to s.117 of the Act. This is a matter the Applicant may agitate in a different place as the Commission has no power to so order.

[60] The application for relief under s.394 of the Act, however, is dismissed.

SENIOR DEPUTY PRESIDENT

Appearances:

Mr S. Dowrick, Applicant

Mr S. Carullo, for the Respondent

Hearing details:

Brisbane

2013

1 and 12 November

 1   Transcript of proceedings dated 1 November at PNS 72-86.

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