Mr Stephen Stuart v Kingscote Flight Pty Ltd T/A Linden Lea Mitre 10
[2020] FWC 996
•5 MARCH 2020
| [2020] FWC 996 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
Section 394 - Application for unfair dismissal remedy
Mr Stephen Stuart
v
Kingscote Flight Pty Ltd T/A Linden Lea Mitre 10
(U2019/13060)
DEPUTY PRESIDENT ANDERSON | ADELAIDE, 5 MARCH 2020 |
Application for an unfair dismissal remedy – driver and salesman – sale of business – non-employment by purchaser – whether genuine redundancy – whether harsh, unjust or unreasonable – application dismissed
[1] On 25 November 2019 Stephen Stuart (Mr Stuart or the Applicant) applied to the Commission under section 394 of the Fair Work Act 2009 (the FW Act) for an unfair dismissal remedy in relation to his alleged dismissal on 12 November 2019.
[2] Mr Stuart had worked for approximately four years as a regularly employed casual driver and salesman in the timber yard of Linden Lea Mitre 10 at Kingscote, Kangaroo Island.
[3] Mr Stuart’s application as initially filed named the respondent to be a trading name Linden Lea Mitre 10, a business address in Kingscote and a contact name Philip Bell.
[4] The application was served on the address as stated. A first Employer Response (F1) dated 26 November 2019 was filed by a Kareen Clark on behalf of Clare Valley Hardware Pty Ltd trading as Linden Lea Mitre 10 (Clare Valley Hardware or the Purchaser).
[5] The first Employer Response took a jurisdictional issue, claiming that Clare Valley Hardware had purchased the business of Linden Lea Mitre 10 from Philip Bell effective from 12 November 2019, did not employ Mr Stuart at any time and had not dismissed him.
[6] At a first directions hearing on 13 December 2019 Clare Valley Hardware repeated this position. Mr Stuart indicated that he intended the respondent on whom his application be served to be the company trading as Linden Lea Mitre 10 as at the date he claims he was dismissed being 12 November 2019. That company was Kingscote Flight Pty Ltd of which Philip Bell was a director. I directed 1 that Mr Stuart formally confirm these details and, if he wished to do so, seek leave to amend his application by adding the corporate name of his intended respondent, for re-service of his application.
[7] I also directed that, subject to further order or direction, the Commission did not require a further response by Clare Valley Hardware. 2
[8] On 19 December 2019 Mr Stuart advised the Commission that he intended the respondent to be Kingscote Flight Pty Ltd trading as Linden Lea Mitre 10, that this was a company of three directors Philip Bell, Preston Bell and Jenifer Bell, and an address for service. 3
[9] Proceedings were then re-served on Kingscote Flight Pty Ltd trading as Linden Lea Mitre 10 (the Respondent, Kingscote Flight or the Employer). A second Employer Response (F3) was filed, this time by Philip Bell on behalf of Kingscote Flight dated 19 December 2019.
[10] The second Employer Response took a different jurisdictional issue. It contended that whilst it had employed Mr Stuart until 11 November 2019, his dismissal was a genuine redundancy.
[11] At a directions hearing on 15 January 2020 I granted Mr Stuart’s request to amend his application that the Respondent be described as ‘Kingscote Flight Pty Ltd trading as Linden Lea Mitre 10’ in lieu of the trading name ‘Linden Lea Mitre 10’.
[12] I issued directions for hearing and determination of all issues (the jurisdictional issue, merits and remedy). 4
[13] The employer declined an offer of Member Assisted Conciliation. 5
[14] I heard the matter at a telephone hearing on 13 February 2020. Mr Stuart was self-represented, as was the Employer. Philip Bell was overseas in the United Kingdom, from where he participated. Preston Bell and Jenifer Bell were also in attendance.
[15] I reserved my decision, which I now deliver.
[16] I heard evidence from these four persons.
[17] Each gave evidence conscientiously. Mr Stuart, although still upset at his alleged dismissal, gave evidence clearly but with some emotion and understandable subjectivity. Philip Bell’s evidence was considered and delivered without particular gloss. His displayed relative objectivity. Preston Bell, whose relationship with Mr Stuart was strained, gave evidence to the best of his recall albeit somewhat cautiously. Jenifer Bell’s evidence was brief, but clear.
[18] At the conclusion of proceedings I granted Mr Stuart permission to submit one further document raised in his evidence, a letter of offer dated 21 October 2019 from Clare Valley Hardware. Mr Stuart subsequently supplied the document, 6 and the Employer responded.7 This letter and the response form part of the body of evidence before me.8
[19] I make findings based on the manner in which evidence was given, its consistency with corroborating documentary evidence and inherent plausibility.
The Facts
[20] I make the following findings:
[21] Kingscote Flight is a private company which, until 12 November 2019 operated the Linden Lea Mitre 10 business at Kingscote, Kangaroo Island. The business comprised a retail hardware store and accompanying timber yard which retailed timber to the public.
[22] From 14 September 2015 to 11 November 2019 (inclusive) Mr Stuart was employed as a driver and salesman in the timber yard. He was employed and paid as a casual. He worked regular and systematic hours, usually a full working week, and occasional overtime. He was employed under the General Retail Industry Award 2010 (the Award).
[23] The business employed approximately 18 persons.
[24] Kingscote Flight is a family business of three directors Philip Bell (son), Preston Bell (father/husband) and Jenifer Bell (mother/wife). Philip Bell was the manager of the business. Preston Bell and Jenifer Bell also worked in the business, as their circumstances permitted.
[25] No major problem with Mr Stuart’s work emerged though at least over the course of 2018 and 2019 his relationship with Preston Bell became strained. In the midst of this, he received at least one positive on-line review from a customer. 9
[26] In August 2019 a new staff member was employed who, holding a truck licence, was also trained in delivery work. This added to the strained relationship between Mr Stuart and Preston Bell. 10
[27] In the second half of 2019 the Bell family decided to sell the business of Linden Lea Mitre 10. It entered into a contract of sale to Clare Valley Hardware, a private family company operated by Jon and Kareen Clark.
[28] The contract of sale between Kingscote Flight and Clare Valley Hardware was an arms-length commercial transaction. There was no corporate connection or common directorships between vendor and the Purchaser.
[29] The Bell family hoped that the Clarks would agree to keep on all staff. 11 Although this was their hope, the Bell family did not negotiate reemployment as a condition of sale. At a directors meeting of Kingscote Flight on 19 October 2019 the sale of the business was discussed by the Bell family. It was agreed that whilst the directors hoped that all staff would be kept on “we would not influence the new owners regarding reemployment of existing staff”.12 Philip Bell put it this way:
“we would not influence the new owners about any existing employee good or otherwise and allow the owners through their own staff interviews and investigations, reach their own decisions” 13
[30] In around August or September 2019 Philip Bell informed his staff, including Mr Stuart, of the intended sale 14 and that the new owners would be conducting staff interviews.
[31] Mr Clark attended the workplace in October 2019. In a walk through, Mr Stuart had a brief conversation with Mr Clark. He introduced himself and asked if anything was yet known about jobs and staff continuing. Mr Clark told Mr Stuart that his intention was to retain all staff. 15
[32] Shortly thereafter, on 16 October 2019, Mr Stuart and other staff were asked to provide updated names, addresses and bank account details for the new owners.
[33] Some days later, Mr Stuart had his interview with Mr Clark. He was one of the early staff interviewed. It was brief. He was told that offers would be sent in writing and that the new owners were considering offering permanent rather than casual contracts. Mr Stuart wanted to be kept on, but was also interested in seeing what terms would be offered by the new owner (hours, pay) as he was concerned that a drop from the casual to the part time hourly rate of pay may not be in his best interests. 16
[34] On 21 October 2019 Mr Stuart received a written offer from Clare Valley Hardware under the hand of Kareen Clark. 17 It sought a response by 1 November 2019.
[35] Mr Stuart did not immediately accept the offer as he wished to consider it and its proposed terms, and then get back to the Purchaser. 18
[36] On the evening of 5 November 2019 Mr Clark spoke to Philip Bell. Mr Clark told Mr Bell that he had decided, following interviews with staff, to withdraw the offer of employment to Mr Stuart and that he would not be employing him in the new business. This was the first Mr Bell knew of the decision. Mr Bell was surprised and disappointed. Mr Clark did not explain why. Mr Bell did not debate the point with Mr Clark or seek further details. However he told Mr Clark that it might be better that he (Mr Bell) be the first to convey this news to Mr Stuart. Mr Bell suggested that Mr Stuart should then speak to Mr Clark. Mr Clark agreed to that course.
[37] On 6 November 2019 Philip Bell spoke to Mr Stuart. He told Mr Stuart that Mr Clark had decided to withdraw the offer of employment. Mr Bell was unable to provide a reason. Mr Bell suggested that he would arrange for Mr Stuart to speak to Mr Clark. Mr Stuart was upset and shocked. Mr Bell sounded disappointed. Mr Stuart agreed to speak to Mr Clark. Mr Bell told Mr Stuart that he would pay Mr Stuart until close of business on 11 November 2019 (the last day of the business being owned and operated by the Bell family) but would not require Mr Bell to work the intervening days because it could be uncomfortable for Mr Stuart.
[38] The new owner, Mr Clark, did not immediately contact Mr Stuart. Mr Stuart followed this up with Philip Bell. Mr Clark rang Mr Stuart on about 8 November 2019. 19 The call became argumentative when Mr Stuart asked for a reason for not being kept on. Mr Clark advised that Mr Stuart was not considered suitable. When Mr Stuart asked for evidence Mr Clark indicated that the discussion was going nowhere and terminated the call.
[39] Mr Stuart did not work from 7 to 11 November 2019, but was paid as if he had worked his roster until close of business 11 November 2019.
[40] Kingscote Flight ceased ownership of the business of Linden Lea Mitre 10 on 11 November 2019. The business was thereafter owned and operated by Clare Valley Hardware.
[41] All employees other than Mr Stuart became employees of the new business from 12 November 2019. 20
[42] In the days that followed, Mr Stuart asked Mr Bell for written confirmation that his employment had ceased, in order to access Centrelink benefits. On 24 November 2019, almost two weeks after his employment had ended, Mr Bell sent Mr Stuart the following:
“Dear Steve,
As you are aware from our conversation on the 6/11/2019 the new owner of Linden Lea Mitre 10 will not be employing you from the takeover date of 12/11/2019. This is not something that I have any say over however I would like to thank you for your service to Linden Lea in the time that you were with us.
You will remain employed and paid by Linden Lea Mitre 10 until close of business 11-11-2019. I have given you the option of not coming back into work from this date 6/11/2019.
Wishing all the best for your future.
Regards
Phillip Bell – Store Manager”
[43] Mr Stuart filed these proceedings on 25 November 2019.
[44] In January 2020 Mr Stuart noticed that Linden Lea Mitre 10 (now operated by Clare Valley Hardware) had advertised on-line a position for ‘Sales and Delivery Driver’. 21
Submissions
[45] Mr Stuart believes that management of Kingscote Flight was behind the decision by Clare Valley Hardware to withdraw its offer of employment. In particular he believes that Preston Bell provided Mr Clark one-sided views about Mr Stuart including unfair views about their 2018-19 disagreements.
[46] He says that this alleged interference prevented him from being fairly considered for employment by the new owner.
[47] In making this contention, Mr Stuart refers to the following grounds stated by the Purchaser in the first Employer Response filed with the Commission: 22
“The applicant was not employed by the new owners of Linden Lea Mitre 10 and the primary decision was made for economic reasons that the position is not being replaced moving forward.
It is also our understanding that when taking over a new business, the purchasers are not legally beholden to employ all the existing employees.
Our decision to not employ this applicant was influenced by the following:
Prior to the company settlement we held initial interviews with each employee to determine whether we would offer employment. We considered all comments made and the overwhelming allegations involving the applicant regarding workplace bullying both towards other staff members and management were unacceptable to our work culture.
The applicant was the second interview we held and during this initial interview a letter of offer was made to the applicant but was later withdrawn.
Given the conversations previously had with the applicant, we deemed these allegations to have considerable merit. The language used by the applicant lacked empathy which we consider an integral part of sales and customer service.
While we like to give everyone the benefit of doubt, the decision to withdraw the letter of offer was made after careful consideration and analysis of conversations had with the applicant, even though the conversations where brief we gained a clear insight of the applicant’s attributes.
The applicant subsequently made direct comments to Jon (new owner - director) via a phone conversation, that he needs to watch his back in a threatening tone, which vindicated our decision. This is not acceptable and was clearly meant to be threatening.
We have a duty of care to provide a safe environment and protect all staff. Mental and physical abuse, bullying and threatening behaviour is not tolerated in any form in our company.”
[48] Mr Stuart says that whilst he was never employed by the new owner, he was dismissed by Kingscote Flight and that he would have been employed by the new owner when it took over the business but for the conduct of Kingscote Flight. He further says that his dismissal cannot be a case of genuine redundancy as the new owner advertised his position two months later.
[49] Mr Stuart remains deeply upset by his alleged dismissal.
[50] He does not seek a re-employment order as he does not think he could work in the business with the new owner. He seeks, but is not particularly interested in a compensation order. 23 Rather, his prime objective is to secure a finding that clears his name and reputation from a perceived stigma caused by not being kept on in the business when others were.
[51] Mr Stuart says that he has not applied for many jobs since his alleged dismissal but, at the date of hearing, had “something in the pipeline”. 24 He says that the only work he was qualified to do is driving and sales. He says that jobs in Kingscote are mainly nursing and child support roles for which he is not qualified. He says that since the destructive bushfires on Kangaroo Island in January 2020 work is even harder to find.
[52] He says that whilst he and his wife have a hobby farming business on the side, it does not provide a real source of income and is currently operating at a loss. 25
[53] Kingscote Flight says that it sold its business in an arms-length transaction effective 12 November 2019 to Clare Valley Hardware which chose not to employ Mr Stuart. It says that Mr Stuart’s employment ceased on 11 November 2019 due to Kingscote Flight no longer operating the business and the new owner not employing him. It says this was a genuine redundancy.
[54] Kingscote Flight says that it did not interfere with the decision of the Purchaser not to employ Mr Stuart or to withdraw its letter of offer. It says that whilst occasional tension existed between Preston Bell and Mr Stuart, those were tensions in the ordinary course of business and were not matters it had highlighted to Mr or Mrs Clark.
[55] It says it was disappointed the Clarks did not employ Mr Stuart, but that having resolved not to influence the Purchaser one way or the other on employment issues, it was not responsible for decisions it did not make.
[56] It says that it met all its obligations to Mr Stuart up to and until his employment ceased by reason of the business no longer being owned and operated by it.
[57] It says that a decision by a successor business not to employ one of its employees is not an unfair dismissal.
Consideration
[58] For Mr Stuart’s application to fall within the Commission’s jurisdiction it is necessary that Mr Stuart was “dismissed” within the meaning of section 386 of the FW Act and that he was a person protected from unfair dismissal (section 382).
[59] Mr Stuart was a person protected from unfair dismissal. He was employed under a modern award. He served the minimum statutory employment period (6 months). I am well satisfied his casual employment was regular and systematic within the meaning of sections 383 and 384 of the FW Act.
Was Mr Stuart dismissed and, if so, from when?
[60] Under the FW Act, a person can only be “unfairly dismissed” if they have been “dismissed” (section 385(a)). 26
[61] Section 386 of the FW Act provides that:
“(1) A person has been dismissed if:
(a) the person’s employment with his or her employer has been terminated on the employer’s initiative; or
(b) the person has resigned from his or her employment, but was forced to do so because of conduct, or a course of conduct, engaged in by his or her employer.”
[62] The following general observation by a full bench of the Commission, although decided under a former Act 27 and in the context of a forced resignation matter, is relevant to the interpretation of section 386(1)(a):28
“…there [needs] to be some action on the part of the employer which is either intended to bring the employment to an end or has the probable result of bringing the employment relationship to an end.”
[63] This is not a matter where the transfer of employment provisions of the FW Act 29 are relevant. Mr Stuart is not advancing a claim against Clare Valley Hardware. He is not claiming that he was ever employed by Clare Valley Hardware. He is not seeking a reemployment order against Clare Valley Hardware. His claim is solely advanced against Kingscote Flight. Kingscote Flight do not dispute that Mr Stuart had been its employee between 14 September 2015 and 11 November 2019 inclusive, and that he ceased being employed on 11 November 2019.
[64] There was clearly a contract of employment between Kingscote Flight and Mr Stuart as a casual employee. But for the sale of the business taking effect on 12 November 2019, Mr Stuart had a reasonable expectation of continuing employment on that basis.
[65] The contract came to an end when Philip Bell gave notice on 6 November 2019 that Mr Stuart would no longer be working after 11 November 2019 as he had not been kept on by the new owner, and that he would be paid out by Kingscote Flight until that day (but need not work the intervening period).
[66] The contract did not come to an end consequent on any decision or conduct of Mr Stuart. It came to an end as a consequence of action on the part of his employer: being the decision by Kingscote Flight to sell Linden Lea Mitre 10 to Clare Valley Hardware effective from 12 November 2019. That action had the “probable result of bringing the employment relationship to an end” because Kingscote Flight operated no other business in which it could redeploy Mr Stuart after 11 November 2019.
[67] There having been a “termination on the employer’s initiative” there was a “dismissal” within the meaning of section 386(1)(a) of the FW Act.
Was Mr Stuart’s dismissal a “genuine redundancy”?
[68] The FW Act provides that a dismissal is not “harsh, unjust or unreasonable” if it is a “genuine redundancy”. 30 Kingscote Flight raise this as a threshold issue. The employer bears the legal onus of establishing that Mr Stuart’s dismissal was a case of “genuine redundancy”.
[69] Section 389 of the FW Act provides as follows:
“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.”
[70] I have found the sale of the business of Linden Lea Mitre 10 to Clare Valley Hardware to be a genuine commercial transaction. Thus, there was an “operational requirement” that Mr Stuart’s employment cease on 11 November 2019 given that after that date his employer was neither the owner nor operator of the business. Put another way, Kingscote Flight no longer required the job of a driver and salesman to be performed for it by anyone after 11 November 2019.
[71] It matters not that the business continued to operate post-sale under the same trading name of Linden Lea Mitre 10. Commonly goodwill in a trading name forms part of a contract of sale. What is relevant for the purposes of the legal concept of “genuine redundancy” is whether a contract of employment existed with an employee working in a business that was the subject of the “operational requirement”. Absent a contract of employment with the Purchaser, the continuation of a trading name vested no rights in the hands of the redundant employee.
[72] Similarly, it matters not, for the purposes of the definition of “genuine redundancy” whether the Purchaser did or did not require a driver salesman in its business, or that it advertised months later for such a role. Where an employee is not a transferring employee, the legal concept of “genuine redundancy” is specific to the circumstances of the business in which the employee had a contract of employment, not the business of a third party or prospective employer (other than an associated employer).
[73] Paragraph (1)(a) of section 389 is made out by Kingscote Flight.
[74] I have found that as Kingscote Flight operated no other business in which it could employ Mr Stuart after 11 November 2019 then redeployment was not a reasonable option. Clare Valley Hardware was not an “associated entity”. 31 Section 389(2) does not apply in this matter.
[75] However, notwithstanding a valid operational reason existing and reasonable grounds for non-redeployment, a redundancy will not be a genuine redundancy within the meaning of the statutory definition unless the employer complied with any obligation it held under a modern award or enterprise agreement to consult about the redundancy (section 389(1)(b)).
[76] I have noted that Mr Stuart was employed under a modern award, the General Retail Industry Award 2010. That Award (clause 8) imposes an obligation on an employer to consult about major workplace change.
[77] Clause 8.1 imposes an obligation (amongst others) to give notice and commence discussions with employees once a definite decision is made to make major changes to an organisation which are likely to have significant effects on employees. Significant effects are defined (in clause 8.5) to include termination of employment.
[78] Although the evidence suggests that Kingscote Flight’s discussions with Mr Stuart about its decision to sell the business and the effect of that decision on his employment were brief, I am satisfied that in the context of this business Kingscote Flight met its minimum obligation of notification and discussion once it had made a definite decision.
[79] However, clause 8.2 of the Award required Kingscote Flight to:
“give in writing to the affected employees…all relevant information about the changes including their nature, their expected effect on employees and any other matters likely to affect employees” (other than confidential information).
[80] The decision to sell the business of Kingscote Flight was a decision by the Employer to make a major change in organisation that was likely to have a significant effect on employees, within the meaning of clause 8.1 of the Award.
[81] There is no evidence before me that Kingscote Flight gave Mr Stuart any such notification in writing whilst he was employed, let alone as soon as practicable after a definite decision was made. The only evidence of a written statement by the employer was the letter it wrote retrospectively (after dismissal) dated 24 November 2019.
[82] In these circumstances, Kingscote Flight failed to meet a technical requirement of the consultation provision in clause 8 of the Award.
[83] Whilst the redundancy was genuine in the sense of being for a valid operational reason, and whilst a minimum level of oral notification and discussion occurred, this finding precludes a conclusion that Kingscote Flight met all the elements of the definition of “genuine redundancy” in section 389 of the FW Act.
[84] The jurisdictional challenge advanced by Kingscote Flight is not made out.
Was Mr Stuart’s dismissal harsh, unjust or unreasonable?
[85] I am therefore required to consider whether the dismissal was “harsh, unjust or unreasonable” taking into account factors set out in section 387 of the FW Act.
[86] Section 387 of the FW Act provides 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.”
Valid reason
[87] I have found that Kingscote Flight terminated the employment of Mr Stuart for operational reasons arising directly from an arms-length commercial sale of its business to Clare Valley Hardware, and that no reasonable options for redeployment existed.
[88] There was a valid reason for dismissal.
Notification
[89] Mr Stuart was orally informed of the intended sale through informal discussion with Philip Bell. He was then notified by Philip Bell on 6 November 2019 that he would not be employed by the Purchaser, meaning that his last day of employment would be 11 November 2019.
Opportunity to respond
[90] Mr Stuart had the opportunity, if he wished to do so, to discuss the intended sale or its implications for him with Philip Bell. The evidence 32 is that there was no breakdown in the relationship between Mr Stuart and Philip Bell which precluded that opportunity being reasonably available to Mr Stuart.
[91] Those discussions were informal and brief, largely because Mr Stuart did not contest the proposition that the employer had the right to sell its business. Understandably, and necessarily, Mr Stuart’s concern turned quickly to whether he would be kept on by the new owner. It was not unreasonable, given that retention of staff was not made a term of sale, for Mr Bell to require those discussions to be held between Mr Stuart and the new owner.
[92] Kingscote Flight made reasonable time available for Clare Valley Hardware to interview each employee. Mr Stuart availed himself of that opportunity.
Support person
[93] Kingscote Flight did not refuse a request for a support person, as none was made.
Performance warnings
[94] Mr Stuart had no warnings or counselling on his record though, as I have found, conflict had arisen with Preston Bell in 2018 which continued into 2019. Mr Stuart had been ‘chatted to’ by Preston Bell and considered criticisms made of him to have been unwarranted. There is no evidence before me to sustain the proposition that Mr Stuart engaged in misconduct or bullied others at work, let alone was formally warned in that respect.
[95] At the hearing, Kingscote Flight suggested that Mr Stuart had taken excessive absences from work in 2018-19. 33 The evidence led was insufficient to establish a prima facie case of excessive or unauthorised absences. In light of Mr Stuart’s plausible explanations for the absences that occurred, I make no such finding.
Size of employer’s business and human resource specialists
[96] With approximately 18 employees at the time of dismissal, 34 Kingscote Flight, although not a small business within the definition in the FW Act (less than 15 employees) was a family business of relatively small scale. It had no dedicated human resource capacity and its owners, whilst experienced, performed a multitude of tasks across the business.
[97] The relatively small scale of the business and its lack of human resource capacity explains in part technical failures of process (such as the absence of written notification as part of consultation within the meaning of clause 8.2 of the Award).
Other matters: interference in offer of employment
[98] Mr Stuart contends that his dismissal was harsh because his employer allegedly sabotaged his prospects of being employed by the Purchaser, Clare Valley Hardware.
[99] This is a serious allegation and, if made out, would weigh heavily in favour of a finding of unfairness.
[100] Kingscote Flight deny the allegation.
[101] Kingscote Flight is not responsible for decisions made by the Purchaser. However, it is responsible for its own conduct, if any, with respect to the allegation.
[102] There is no doubt, on the evidence before me, that a firm offer of employment was made by the Purchaser on 21 October 2019 and yet that offer was withdrawn by decision of Mr Clark communicated to Philip Bell on 5 November 2019 and then on-communicated by Mr Bell to Mr Stuart on 6 November 2019. Clearly, something happened in those fifteen days which changed the Purchaser’s intentions with respect to Mr Stuart.
[103] I readily accept the evidence that the directors of Kingscote Flight decided not to negotiate a condition of sale that its employees be employed by Clare Valley Hardware. I consider decisions of that nature to be matters of judgment for those operating and selling businesses, and not the Commission. However, the evidence before me is also that the employer hoped that the Purchaser would in fact employ their staff. In that context it is implausible that none of the directors of Kingscote Flight had any discussion whatsoever with Mr or Mrs Clark about the potential on-hiring of their staff. Some communication was required at least to set up the logistics for staff interviews.
[104] Neither Mr or Mrs Clark were called to give evidence in this matter. The comments attributed to them in their Form F3, whilst relevant, are untested. Mr Stuart’s sworn evidence was that Mr Clark told him that he “knew that Preston Bell hated me” and that “it has nothing to do with me I never employed you, that is down to the Bells – it was their decision”. 35 I approach this evidence with some caution given the subjectivity in Mr Stuart’s evidence, the scope for misinterpretation of what was said, differences between that evidence and what is asserted in the first Employer Response, and given that Mr Clark was not called to give his version of the conversation. Preston Bell denied that he had spoken against Mr Stuart to Mr Clark,36 though I equally treat that evidence with a certain degree of caution given the finding I have made of tension between the two.
[105] Although there is some evidence to support an inference that Mr Clark was informed of adverse opinions about Mr Stuart, there is insufficient evidence for me to conclude that this was directly or indirectly the conduct of Kingscote Flight or its directors. It is equally plausible that opinions expressed to Mr Clark came from other staff he interviewed. Those interviews occurred in the fifteen days during which the letter of offer to Mr Stuart came to be withdrawn. Nor is it a natural inference, in the absence of direct evidence, to conclude that an employer selling their business would sabotage the chances of an employee being employed by a purchaser. I accept the evidence of Philip Bell that such conduct would not have been consistent with Kingscote Flight’s best interests. 37 Its consequence would have been to leave the employer with a dissatisfied employee, expose the business to litigation, and potentially drag the purchaser into a dispute. Whilst the possibility of such conduct, however illogical, cannot be discounted it is not so naturally intuitive as to allow an inference to be drawn in the absence of direct evidence.
[106] Mr Stuart claimed that Philip Bell, on 6 November 2019, told him that there had been a “witch-hunt” resulting in the offer being withdrawn. Philip Bell denied that this was said and indicated that it may have been a phrase used in the conversation by Mr Stuart when pressing him (Philip Bell) for an explanation. Whilst the evidence of both cannot be entirely discounted, I prefer Mr (Philip) Bell’s evidence on this point; it is consistent with his evidence that he was not informed by Mr Clark of a reason. It is also consistent with his conduct in suggesting and then facilitating a discussion directly between Mr Stuart and Mr Clark. If Mr (Philip) Bell had believed or said that a witch-hunt had occurred, it is less plausible that he would transparently risk that fact being exposed by suggesting a direct discussion between Mr Stuart and the decision-maker.
[107] Nor can such an inference be drawn from other conduct of Mr Stuart or Philip Bell. Mr Stuart did not, following his conversation with Mr Clark on 8 November 2019, approach Philip Bell armed with what he says Mr Clark told him about the Bell’s being responsible for changing his (Mr Clark’s) mind. Mr Stuart’s evidence was that “I didn’t think there was any point” in doing so. 38 That both Mr Stuart and Philip Bell gave evidence39 that he (Philip Bell) was and appeared genuinely disappointed that Mr Stuart was not kept on, and that Mr Bell then organised for Mr Clark to speak to Mr Stuart, is not consistent with the proposition that Kingscote Flight worked behind the scenes against Mr Stuart’s interests.
[108] To sustain the allegation I need to make a positive finding, on the balance of probabilities, that Kingscote Flight acted to damage Mr Stuart’s chances of employment with the Purchaser or to have it withdraw the letter of offer. Whilst Mr Stuart clearly holds the view that it did so, I have not reached the necessary level of satisfaction to make such a finding.
[109] Not having found that Kingscote Flight was responsible for Mr Stuart not being employed by Clare Valley Hardware, the dismissal was not unfair on that ground.
[110] There are no other relevant matters for consideration.
Conclusion on merits
[111] An employer is free to sell its business at any time it chooses. Although redundancy has harsh consequences for an employee, there is no inherent unfairness in selling a business, even where it results in redundancy. However, and without being exhaustive, unfairness has the potential to arise if inadequate notice is given to an employee, if options to help an employee mitigate the loss of their employment are not reasonably considered or are frustrated, or if the terms of a redundancy do not accord with contemporary industrial standards.
[112] Kingscote Flight did not delay giving notice to staff. Mr Stuart knew approximately two months prior to dismissal that the business was being sold.
[113] Mr Bell did not deny Mr Stuart time to engage with the Purchaser or to seek alternative work. Steps were taken to make staff available to the Purchaser for interviews. Once informed that Mr Stuart would not be kept on, Kingscote Flight did not delay informing Mr Stuart. Mr Bell did so the next day (6 November 2019) and took upon himself the burden of making that communication.
[114] Mr Bell made the decision that he would pay Mr Stuart until 11 November 2019 but not require him to work those few remaining days of his roster. This was both empathetic and fair given the potential for discomfort to Mr Stuart. Whilst until 6 November 2019 Mr Stuart was understandably focussed on the prospect of being employed by the Purchaser, the days from 6 to 11 November were in effect days of paid absence where a wider job search was able to commence, although the failure by Mr Bell to produce a written letter of termination until two weeks after dismissal impeded both Mr Stuart’s job search and claim for unemployment benefits.
[115] However, I have not found that Kingscote Flight frustrated or sabotaged the prospects of Mr Stuart being employed by the Purchaser.
[116] Nor do I consider the terms of the redundancy to have been inconsistent with contemporary industrial standards. Whilst Mr Stuart was only paid his wages until 11 November 2019, contemporary industrial standards as reflected in the National Employment Standards and the Award do not require the payment of redundancy pay to a casual employee. 40 Whilst the statutory concept of a ‘fair go all round’ is not to be assessed purely by reference to statutory entitlements, it would be wrong as a general principle to conclude that a dismissal of a casual employee on the ground of redundancy is unfair simply because they are not paid an amount to which they are not entitled.
[117] I adopt a similar view with respect to notice of termination. As a casual employee, the National Employment Standards and the Award notice provisions were not obligations the employer owed to Mr Stuart. 41 However, given the established presence of Mr Stuart in its workforce and the regularity of his roster, fairness required Kingscote Flight to give all staff (including Mr Stuart) reasonable advance notice of its intended sale and then provide space for both the Purchaser and Mr Stuart to consider whether they could agree on terms for fresh employment. Kingscote Flight did so. The Purchaser’s decision to withdraw its offer came at a very late stage. This clearly worked against Mr Stuart’s interests but was beyond the control of Mr Stuart’s employer. With limited time and options, the employer acted reasonably in response to that unwelcome news.
[118] The grievance Mr Stuart has with his dismissal is genuine and understandable. He was not kept on when others were, he was made redundant through no fault of his own, the offer to him of employment with the Purchaser was inexplicably withdrawn, a job matching that description was advertised less than two months later, and he was left to fare in an already difficult regional labour market made tighter by tragic bushfires.
[119] I weigh these factors together with the other considerations relevant to section 387 of the FW Act.
[120] I also give weight to the fact that there was a valid reason for dismissal. But for the technical failure to provide written notice as part of the consultation obligation under the Award, Mr Stuart’s dismissal would have been a case of genuine redundancy, and immune from further attack on the ground of unfairness.
[121] Counteracting this consideration is the fact that the dismissal occurred entirely as a result of his employer’s decision to sell its business. I have made no finding adverse to Mr Stuart on issues of performance or conduct in the workplace. The weight of evidence is that over four years he was regularly rostered, suggesting that he was a reliable and needed employee.
[122] Critically, I have not found that Mr Stuart’s employer was responsible for Mr Stuart not being employed by Clare Valley Hardware.
[123] This matter must be determined based on these objective findings and according to law. Whilst Mr Stuart has been on the receiving end of a bad hand, the objective facts weighed in the overall context of section 387 of the FW Act do not lead me to conclude that Mr Stuart’s dismissal was harsh, unjust or unreasonable. There was a valid operational reason for dismissal, the terms of dismissal were consistent with contemporary industrial standards and the harsh consequences of the dismissal and unemployment in a difficult regional labour market are not so unique as to transform this dismissal for a valid reason into an unfair one. 42
[124] Not having found that Mr Stuart was unfairly dismissed, an order dismissing the application will be made in conjunction with the publication of this Decision.
DEPUTY PRESIDENT
Appearances:
Stephen Stuart, on his own behalf
Philip Bell, for the Respondent
Hearing details:
2020.
Adelaide (by phone).
13 February.
Final written submissions:
Stephen Stuart – 14 February 2020
Kingscote Flight Pty Ltd T/A Linden Lea Mitre 10 – 16 February 2020
Printed by authority of the Commonwealth Government Printer
<PR716991>
1 Directions 13 December 2019 Anderson DP
2 Directions 13 December 2019 [10]
3 Email Stephen Stuart to ‘Chambers - Anderson DP’ 19 December 2019 12.06pm
4 Directions 15 January 2020 Anderson DP
5 Email Philip Bell to ‘Chambers - Anderson DP’ 15 January 2020 8.30pm
6 Email Stephen Stuart to ‘Chambers - Anderson DP’ 14 February 2020 11.18am
7 Email Philip Bell to ‘Chambers - Anderson DP’ 16 February 2020 1.08am
8 Marked as Exhibit A7
9 A6
10 Mr Stuart audio transcript 1.18.25; Mr Preston Bell 1.55.00
11 Philip Bell audio transcript 1.34.54
12 Statements of Philip Bell (R1); Preston Bell (R2) and Jenifer Bell (R3)
13 R1 page 1
14 Mr Stuart audio transcript 42.34; Philip Bell 1.21.00
15 Mr Stuart audio transcript 43.48
16 Mr Stuart audio transcript 56.06
17 A7
18 Mr Stuart audio transcript 2.12.44
19 Mr Stuart says this call occurred on 8 November 2019 (audio transcript 54.04). The F3 lodged by Clare Valley Hardware asserts it occurred on 14 November 2019. For the purposes of this decision, and in the absence of contrary evidence, the evidence of Mr Stuart is accepted on this point
20 Philip Bell audio transcript 1.37.00
21 A5. There is conflicting opinion evidence as to whether this was Mr Stuart’s position or that of another employee. It is not necessary to make a finding on that conflict
22 F3 Employer Response Clare Valley Hardware Pty Ltd 26 November 2019 (spelling corrected in quoted extract)
23 Mr Stuart audio transcript 2.19.00
24 Mr Stuart audio transcript 1.04.53
25 Mr Stuart audio transcript 1.07.30
26 Bupa Aged Care Australia Pty Ltd v Tavassoli [2017] FWCFB 3941
27 Workplace Relations Act 1996 (Cth)
28 ABB Engineering Construction Pty Ltd v Doumit cited in O’Meara v Stanley Works Pty Ltd (2006) 58 AILR 100 at [23]
29 Section 22(5), (6), (7) and (8) FW Act
30 Section 389 FW Act
31 Section 12 FW Act provides that “associated entity” has the same meaning as section 50AAA Corporations Act 2001 (Cth).
32 Mr Stuart audio transcript 50.34; Philip Bell audio transcript 1.35.00
33 Philip Bell audio transcript 1.09.00
34 F3 19 December 2019 paragraph 1.7
35 A1 Statement of Stephen Stuart 24 January 2020 page 2
36 Preston Bell 1.50.00
37 Philip Bell audio transcript 1.42.30
38 Mr Stuart audio transcript 59.10
39 Mr Stuart audio transcript 50.34; Philip Bell audio transcript 1.35.00
40 Section 123(1)(c) FW Act excludes casual employees from the operation of Division 11. Casual employees have been excluded since 1984 from comparable redundancy and notice of termination provisions first determined by the Commission in the Termination, Change and Redundancy Test Case and Supplementary Decision (Print F6230 and F7262)
41 See clause 14.1(a) of the Award
42 For example, Dawson v Qantas Airways Limited[2017] FWCFB 1712 at [48]
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