Mr Stephen Powell v Bus & RV Modifications Pty Ltd
[2010] FWA 9505
•20 DECEMBER 2010
[2010] FWA 9505 |
|
DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Mr Stephen Powell
v
Bus & RV Modifications Pty Ltd
(U2010/1026)
COMMISSIONER SPENCER | BRISBANE, 20 DECEMBER 2010 |
Termination of employment - redundancy.
Introduction
[1] This determination concerns the application made by Mr Stephen Powell (the Applicant) pursuant to s.394 of the Fair Work Act 2009 (Cth) (the Act), in which he claimed his dismissal from Bus & RV Modifications Pty Ltd t/a Classic Ridz (the Respondent) was harsh, unjust and unreasonable. He sought compensation as the appropriate remedy.
[2] The Applicant was self-represented. Mr Daryl Wells, as Director, appeared for the Respondent.
[3] All of the submissions and evidence have not been referred to in this decision; however, all of such have been considered in making this determination.
Background
[4] The Applicant was provided with an Employment Separation Certificate on 24 June 2010. It stated as the reason for separation, ‘Business ceased trading’.
[5] The application was listed for conciliation before a FWA conciliator, and it was identified at the conciliation that the company was going into liquidation. At that time, the name of the Administrator was not known to the Respondent.
[6] The matter was then listed before the tribunal as presently constituted for Directions, but the Respondent did not appear at this time. The matter was re-listed and I issued an Order, pursuant to s.590(2)(a) of the Act, requiring Mr Wells to attend. He did not attend.
[7] Directions were issued for the filing of submissions and evidence, and again an Order pursuant to s.590(2)(a) of the Act was issued. The Applicant promptly returned submissions, however the Respondent did not. The matter was then listed for hearing in Maroochydore. I was confident that the Respondent had been receiving the Directions in this matter; therefore further correspondence was forwarded to the Respondent indicating that if he failed to attend the hearing the matter may be determined in the absence of his submissions. The matter proceeded to hearing, and Mr Wells did attend this hearing.
Legislation
[8] The unfair dismissal application was made pursuant to s.394 of the Act. It is set out, relevantly, as follows:
394 Application for unfair dismissal remedy
(1) A person who has been dismissed may apply to FWA for an order under Division 4 granting a remedy.
...
[9] In determining whether a dismissal was harsh, unjust or unreasonable (and therefore unfair), FWA is required to consider certain matters set out in s.387 of the Act. It is set out, as follows:
387 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.
Evidence
[10] The submissions provided in this matter did not assist the determination. Accordingly a series of questions were asked of each party at the hearing and they provided evidence in response. The matter is determined as a result of hearing the evidence as follows.
[11] The Respondent operated two corporate entities “Bus & RV Modifications” and “Classic Ridz”. Both companies shared the same address with a divide in the premises delineating the businesses. The business “Bus & RV Modifications” made frames for buses. The business of “Classic Ridz” undertook restorations and modifications to motor vehicles.
[12] The Applicant claimed he was unfairly dismissed by the Respondent (from Bus & RV Modifications) due to a complaint made by another employee over a “personality clash”. The Applicant acknowledged the Respondent’s business “Bus & RV Modifications” had ceased trading. However the Applicant considered (whilst his duties had moved to office work in the business) he had been employed by “Classic Ridz” and thought he should still be employed. He was also under the impression that some other employees had maintained their employment by moving to the Classic Ridz side of the business.
[13] The Respondent however was able to point to a tax file number declaration that indicated that the Applicant was employed by Bus & RV Modifications, the company that had ceased trading.
[14] Mr Wells stated that he did not effect the Applicant’s termination, and he had no information regarding a complaint about him as was communicated to him. He stated the termination occurred due to the closure of that business, as it had ceased trading, and no alternative employment was available.
[15] There was no obligation on the part of the Respondent to make a redundancy severance payment due to the number of employees being less than the threshold pursuant to s.121(1)(b) of the Act.
[16] The Applicant stated he was seeking compensation. He was seeking three months compensation less the amount received from Centrelink. The Applicant acknowledged that the Respondent had paid him an ex gratia lump sum payment of $1,500.00.
Consideration
[17] As previously set out, FWA is required to consider certain factors in s.387 of the Act in determining whether a dismissal was harsh, unjust or unreasonable.
(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);
[18] The Applicant stated it was communicated to him that his employment was terminated after a complaint was received about him from another staff member. However it was later confirmed that his employer’s business had ceased trading. It was also confirmed that he had been employed by the particular business that had ceased trading and that alternative work was not available within the other corporate entity operated by the Respondent.
[19] On his evidence, the reason for his employment ceasing was not recorded with him. However, the separation certificate provided later did indicate that the business had ceased training; accordingly a valid reason existed for the termination of his employment. In line with the business ceasing to operate; his position had become redundant.
(b) whether the person was notified of that reason;
[20] On the information provided by the Applicant, it does not seem that he was appropriately notified of the reason for his dismissal.
(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person;
[21] Based on the evidence, the Applicant was not given an appropriate opportunity to respond, as a clear conversation on the circumstances of the business was not undertaken with him. However it was apparent that the Applicant was aware that the business had ceased trading.
(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;
[22] The Applicant was not afforded an appropriate meeting to discuss the circumstances of his position becoming redundant, nor a support person.
(e) if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal;
[23] There was no evidence that the dismissal related to his unsatisfactory performance.
(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
[24] The Applicant was a small business without dedicated human resources personnel and accordingly the process afforded to the Applicant was examined on this basis.
(h) any other matters that FWA considers relevant.
[25] The Respondent maintained the Applicant was aware of the Respondent’s business trading difficulties. The Applicant was not entitled to a severance payment associated with the redundancy due to the size of the business. This was not objected to by the Applicant.
[26] It emerged that there had been discussions between the Applicant and the Respondent after his employment had ceased. The Applicant was not seeking reinstatement but compensation. The Respondent had paid a $1500.00 lump sum payment to the Applicant. The Applicant was entitled to wages in lieu of notice.
Conclusion
[27] On the basis of the material before me, the Applicant was made redundant. There was no obligation for a severance payment to be made by the Respondent as it was a “small business”. The termination was a redundancy.
[28] However, in circumstances where there were no appropriate discussions with the Applicant in relation to the position of the business and the consequent redundancy, and further that he was led to believe that a complaint in some way contributed to his employment it is considered the procedure effecting the termination was flawed and was unfair.
[29] As a separate matter, the Applicant had a statutory entitlement to four weeks wages in lieu of notice. On the basis that it was agreed that the Applicant was receiving $816.00 (gross) per week, four weeks wages equates to $3,264.00 less the $1,500.00 (lump sum payment) that the Respondent paid to the Applicant. The Applicant is entitled to wages in lieu of notice; the remaining amount of $1,764.00 on the basis of the manner in which the redundancy was effected without consultation and that the circumstances were initially represented to him as a dismissal. The amount is awarded as compensation to be paid by the Respondent to the Applicant pursuant to s.392(1) of the Act in relation to the s.394 application. A separate Order (PR505289) has been issued.
COMMISSIONER
Appearances:
Mr S. Powell on his own behalf.
Mr D. Wells on behalf of the Respondent.
Printed by authority of the Commonwealth Government Printer
<Price code C, PR504865>
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