Mr Steven Blake v Ideal Steel (Qld) Pty Ltd

[2020] FWC 269

[2020] FWC 269

FAIR WORK COMMISSION

DECISION

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

Mr Steven Blake
v
Ideal Steel (QLD) Pty Ltd
(U2019/9588)

DEPUTY PRESIDENT LAKE BRISBANE, 17 JANUARY 2020

Application for unfair dismissal remedy – jurisdictional objection – genuine redundancy – application dismissed.

INTRODUCTION

[1] Mr Steven Blake applies to the Fair Work Commission (the Commission) for an unfair dismissal remedy under s.394 of the Fair Work Act 2009 (the Act) in respect of the termination of his employment by Ideal Steel (QLD) Pty Ltd (Ideal/the Respondent).

[2] Mr Blake’s Form F2 – Unfair dismissal application (the Application) states that Mr Blake commenced work for Ideal on 17 November 2017, he was notified of his dismissal on 7 August 2019 and the dismissal also took effect on 7 August 2019. The Application indicates that Mr Blake is represented by Mr Brian Newman of Workers First Pty Ltd.

[3] By the Applicant, the Applicant has sought the following remedies:

“1. Resignation;

2. Comprehensive statement of Service;

3. Mutual undertakings of confidentiality regarding terms of settlement;

4. Mutual undertakings of non-disparaging remarks;

5. Payment of compensation equal to twenty-six (26) weeks ordinary earnings; and

6. Any other remedy the Commission deems appropriate and agreed to between the parties.”

[4] On 3 September 2019, Ideal filed a Form F3 Employer response form (the Response). The Respondent stated that Mr Blake commenced employment on 8 November 2017, was notified of his dismissal on 9 August 2019 with the dismissal also taking effect on this date. Amongst other things, the Response asserted that Mr Blake’s dismissal was a case of genuine redundancy and objected to the Application on that basis (the Objection).

[5] A conciliation conference occurred on 27 September 2019, but that matter was not resolved. Directions were issued to the parties on 2 October 2019 in relation to the Objection and the substantive merits of the Application. The matter was set down for Arbitration, to occur in early December 2019.

[6] Even though Directions were issued on 2 October 2019, it was not until 22 October 2019 that the Applicant’s representative corresponded with the Commission, without copying in the Respondent, as follows:

“Dear Sir/Madam

We refer to the above matter.

We kindly request an adjournment for the conciliation conference of the above matter to early 2020 due to our only available advocate, Mr Brian Newman, being overseas from Saturday, 23 November 2019 and will be returning to the office on Wednesday, 11 December 2019 then from that date onwards other conferences and hearings have already been scheduled with the Fair Work Commission.

Please see attached Mr Newman's travel itinerary. We kindly request this travel itinerary is not provided to the respondent as it contains Mr Newman's personal details. 

Our office will be closed from Monday, 23 December 2019 and will be re-opening on Tuesday, 7 January 2019”

[7] Attached to the correspondence was a “Ticket & receipt” that appears to have been issued by Emirates. This document indicates that it was issued on 6 August 2019. Deputy President Mansini, Acting Practice Leader for Unfair Dismissal Matters, refused the adjournment request and correspondence to this effect was sent to the Applicant’s representative by email on 23 October 2019.

[8] The Directions of 2 October 2019 required the Applicant to file material and evidence by “no later than noon on Monday, 28 October 2019”. After correspondence from the Commission, the Applicant’s material was filed, by email, at 3:42pm on Monday, 28 October 2019. That email indicated that the delay was as a result of “technical difficulties” experienced by the Applicant’s representative.

[9] This matter was then allocated to my Chambers on 7 November 2019.

PERMISSION TO REPRESENT

[10] The hearing in this matter proceeded on 2 December 2019. At hearing the Applicant sought to be represented by Mr Wayne Hampton. Mr Hampton is a solicitor otherwise engaged in his own practice and therefore is a lawyer for the purposes of the Act. 1 Mr Hampton made clear at the hearing, he was engaged to consult with Workers First, the Applicant’s representative, whilst Mr Brian Newman from Workers First, was absent overseas.

[11] Mr Hampton sought permission to represent Mr Blake on two bases; that the matter will involve complexity in that it will involve submissions and evidence concerning the financial statements of the Respondent; and Mr Blake had at the time recently had surgery and was taking medication. I take it that by that second ground, Mr Hampton was submitting that it would be unfair not to allow Mr Blake to be represented because he would be unable, in the circumstances, to represent himself effectively. The Respondent did not object to the Applicant being granted permission to be represented. 2

[12] I determined to grant permission to the Applicant to be represented having accepted Mr Hampton’s submission that the matter did involve some complexity and, taking that complexity into account, it would enable the matter to be dealt with more efficiently. The crux of the Applicant’s case appeared at the time to be that the Respondent was not in financial difficulty and therefore had not genuinely (or perhaps reasonably) changed its operations with the effect that the Applicant’s position was no longer required. To determine this had the potential to require consideration of financial accounts of the Respondent over an extended period leading up to the Applicant’s dismissal.

LEGISLATIVE PROVISIONS

[13] Section 396 of the Act requires that the Commission “must” decide certain matters in relation to an application for unfair dismissal remedy before considering the merits of such an application. Whether a dismissal is a case of a genuine redundancy is one of these matters. Accordingly, I will determine the Objection as a preliminary matter and, if necessary, return to the substantive merits of the Application.

[14] Section 389(1) of the Act provides that 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.

[15] Section 389(2) of the Act states a dismissal will not be 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.”

[16] Deputy President Asbury has recently provided a summary of the law surrounding what constitutes a genuine redundancy, which I gratefully adopt. 3

RESPONDENT’S SUBMISSIONS AND EVIDENCE

[17] Because the matters relevant to this objection are generally within the knowledge of the employer seeking to establish the exclusion, it is convenient to commence by considering the Respondent’s submissions and evidence as it relates to the Objection.

[18] The Respondent submits that it no longer needs someone to do the job that Mr Blake was performing because “[O]ne of [the] Director’s (sic) Dennis Giacomantonio is accessing (sic: assessing) the financial position and viability of the Company moving forward”. There have not been changes in the operational requirements of the business and, consequently, no discussions were held with Mr Blake concerning operational requirements. The Respondent submits that Mr Blake was not covered by an enterprise agreement or modern award.

[19] The Respondent states that it did consider redeployment within its business or that or an associated entity in that “[A]ll Directors consulted over whether the employee would be suited to another position but it was determined that there was no other positions available.”

[20] Mr Dennis Giacomantonio, a Director of the Respondent, gave evidence in support of the Objection. Mr Giacomantonio’s statement of evidence, in its entirety, is as follows:

“I will be giving evidence that

•  The Applicant was made redundant on the 8^th August 2019

•  He was asked to leave that same day, and told that his notice would be paid out.

•  The Business employed 15 Full Time employees and One Casual employee at the time.

•  This decision was made after several consultations between Directors reviewing the business as a whole over its’ 6 year existence. It was determined in these consultations that the Business was not profitable and that in order to keep the business going changes had to be made. This is how the decision of this redundancy was formed. After continual ongoing investigations into the financials of the company a further four more redundancy have taken place.

•  I will be giving evidence of the financial position of the Company as a whole in order to substantiate our decisions.” (errors in original)

[21] The Respondent has tendered to the Commission a number of documents including payroll summaries for the weeks ending 3/7/2019 to 8/8/2019; final payslip for Mr Blake; the termination letter sent to Mr Blake; and company records, being financial reports, of the company.

[22] Mrs Judith Giacomantonio, Financial Administrator of the Respondent, has also given evidence in support of the Objection. Mrs Giacomantonio’s witness statement relevantly provides:

“Mr Giacomantonio asked two staff members to leave the office, I assume as a courtesy to Mr Blake. I remained in the office at the request of Mr Giacomantonio for the duration of the meeting. Mr Blake neither asked for, nor was refused a support person.

At no time during the discussion with Mr Blake do I recall Mr Giacomantonio saying to Mr Blake that he did not have to give a reason because “he owned the business” and “he could do whatever he liked”.

Mr Blake did enquire if the reason for his dismissal was because of his knee operation and the response was no. Mr Blake has let it be known on numerous occasions with most of the employees that the reason for the required surgery to both knees was due to many years of standing on concrete floors. No workplace incident with Mr Blake had occurred, or is on record as occurring during his employment at [the Respondent], as being the Administration Office I would have been aware of it.

When the meeting took place, Mr Blake had already returned to work part-time for a couple of weeks from his knee operation and was walking independently and unassisted.

Mr Giacomantonio asked me to organise and pay for a taxi for Mr Blake, so he could return home as he travelled to work using the company vehicle.

During the meeting between Mr Giacomantonio and Mr Blake there was never any mention of claiming Workers’ Compensation.

To this date, no-on has taken up the role of Operations Manager in the company. Mr Giacomantonio is currently reviewing the financial and future viability of the company.”

[23] Mrs Giacomantonio concedes that she wasn’t close enough to hear the actual words used but was able to observe what occurred in the meeting. 4

APPLICANT’S SUBMISSIONS AND EVIDENCE

[24] The Applicant was employed as the Operations Manager of the Respondent, having commenced that employment on 17 November 2017. On 7 August 2019, the Applicant attended a meeting with Mr Giacomantonio. The Applicant’s version of events concerning that meeting is as follows:

“5. I asked Mr Giacomantonio if I was going to need a support person.

6. Mr Giacomantonio replied ‘you do not need anyone’.

7. When everyone had left the office Mr Giacomantonio gave the termination letter and simply stated ‘we no longer need you’. Please see attached and marked “A” termination letter.

8. I attempted to enquire about the reasons why they no longer needed me.

9. Mr Giacomantonio replied ‘I do not have to give you an answer as I own the business’.

10. I mentioned to the respondent he really cannot do this because it was not warranted.

11. Mr Giacomantonio replied ‘I can do anything I like, I own the business’

12. I asked Mr Giacomantonio whether the reason for my dismissal was because of my knee injury which I sustained in the workplace.

13. Mr Giacomantonio replied ‘I do not have to give you a reason please leave the premises’.

14. I stated to Mr Giacomantonio it was difficult for me to leave as I could not work.

15. Mr Giacomantonio replied ‘I have called a taxi for you’

16. I explained to Mr Giacomantonio I had no written or verbal warnings about my work performance or conduct.

17. Mr Giacomantonio replied ‘I do not have to give you an answer’.

18. I said to Mr Giacomantonio if the dismissal was because of my knee I could have gone on worker’s compensation to be covered but we had agreed I would not do that.

19. Mr Giacomantonio refused to answer my questions and said, ‘Stop arguing with me Steve, it is my decision and I do not have to give you any explanation at all’.”

[25] For some reason, the Applicant’s representative has filed two outlines of submissions in response to the Objection. These are outlines are similar, but not exactly the same.

[26] The Applicant does not accept that the Respondent no longer requires his job to be done by anyone. Rather, the Applicant submits that Mr Giacomantonio “has taken over the role of operations manager”. It is the Applicant’s position that the Respondent was going through a period of “significant financial growth” at the time of the Applicant’s purported redundancy and that the Respondent was in a viable financial position. The Applicant considers that his position was necessary to enable that financial growth to continue.

[27] The Applicant accepts that he was not covered by a modern award or enterprise agreement.

[28] The Applicant submits that it would have been reasonable for the Applicant to have been redeployed. In the first outline of argument, and despite accepting that he was not covered by a modern award or enterprise agreement, the Applicant submitted:

“If the respondent had followed the proper redundancy process and consulted the applicant about another position he could have been moved to a different position within the same business or associated business or at least been made aware of what positions were available so he could make a fully informed decision to accept or reject the redundancy.”

[29] In the second outline of argument, the Applicant submits:

“If there were genuine financial difficulties, my position could have been temporarily reduced to part time until further profitability was established.

If there were genuine financial difficulties, my position could have been changed to a sales and marketing or business development role to enable more solid growth.

If there were genuine financial difficulties, my role or a similar role could have been transferred to the related entity, Ideal Stairs.”

CONSIDERATION

Was Mr Blake’s dismissal a case of genuine redundancy?

[30] Ultimately, the Applicant’s case came down to this: there was no need for redundancies because the Respondent’s business was going well. 5 Unfortunately for the Applicant, that submission entirely misses the point and ignores the law.

[31] The Respondent is a small business. The reality is, while the business may generate significant trading income, it also has significant expenses. The graphs the Applicant himself tendered into evidence 6 show that for the 2019 year, the Respondent had a total profit of $15,200.007.

[32] It is correct to say that during the Applicant’s employment the Respondent’s trading income increased significantly, but so too did the Respondent’s expenses. Mrs Giacomantonio’s evidence includes that she raised concerns with the Applicant about this. 8 The Respondent owes more to its creditors than income it has coming in.9

[33] I am satisfied that the Respondent no longer required the Applicant’s job to be performed by anyone because of changes in the Respondent’s operational requirements. The Respondent has in its submission denied that there were changes to its operational requirements, but the fact is, on the evidence before this Commission, the Respondent decided to make changes to its operating structure. The Applicant’s duties have been taken over by Mr Giacomantonio, one of the Directors. The Applicant accepts this. The Applicant has not been replaced.

[34] The Applicant’s case has been run as an opportunity to review the decision-making process of the Respondent in deciding for itself to reduce costs and ultimately make the Applicant’s position redundant. It is not this Commission’s function to place itself in the shoes of the Respondent and ask itself whether it would have made that decision if it was the business owner. That is entirely a decision for the Respondent. The Respondent’s evidence is that it did make that decision and made the Applicant, and several others, redundant. The Respondent has focussed itself on the reduction of its overheads and it is wholly entitled to do so. The Applicant does not even necessarily quibble with this but considers it was the wrong business decision to make. That may be the case, but it doesn’t change the fact that it is the decision that the Respondent has made. In order to make a position redundant, the law does not require an employer to establish that they are in dire (or some other adjective) financial difficulties.

[35] The Applicant accepts that there is no modern award or enterprise agreement that applied to his employment. I accept that this is the case. Therefore, there are no consultation obligations that arise under s.389(1)(b) of the Act and for the Objection to succeed it is not necessary for the Respondent to establish that it did consult. The Applicant’s submissions concerning the manner in which the redundancy was effected would have been relevant to whether the dismissal was harsh, unjust or unreasonable, had it been necessary to determine that, but in the absence of an obligation to consult are irrelevant.

[36] I am not satisfied that it would have been reasonable in all the circumstances for the Applicant to have been redeployed either within the Respondent’s enterprise or an associated entity of the Respondent.

[37] Firstly, I have accepted that on the evidence the Respondent was downsizing and reducing costs. In that circumstances it would not have been reasonable to redeploy as it would have defeated the whole purpose of the exercise.

[38] Secondly, there is no evidence before the Commission that there was a job or role available for the Applicant to be redeployed into. I am conscious that the authorities are clear that it isn’t necessary for this to be established for redeployment to become relevant but in the circumstances of this case it is a factor that I take into account in assessing whether in the circumstances as they prevailed at the time of dismissal it would have been reasonable to redeploy.

[39] Thirdly, the Respondent is a small enterprise such that the opportunity for redeployment is limited.

BANKRUPTCY

[40] The Applicant, through his representative has submitted as part of his evidence in this matter, a letter from the Australian Financial Security Authority. That letter commences:

“Your bankrupt estate [redacted]

You became a bankrupt on 2 October 2019 and the Official Trustee in Bankruptcy, represented by AFSA is the trustee of your bankrupt estate.”

[41] The Applicant was declared an undischarged bankrupt on 2 October 2019. The Bankruptcy Act 1966 (Cth) contain provisions that may have the effect of preventing an undischarged bankrupt from commencing or continuing litigation. 10 The issue that this creates in the present matter is obvious and it is most unfortunate that the issue has not been given appropriate attention by the Applicant’s representative.

[42] The effect of personal bankruptcy on an application for unfair dismissal was considered by a Full Bench of this Commission in Millington v Traders International Pty Ltd 11 - it is acknowledged that the factual scenarios differ, but I find the case insightful. The Full Bench stated:

“We would also observe that had Ms Millington’s bankruptcy post-dated the making of her application, it is highly likely that her application would have been stayed by operation of s.60(2) [of the Bankruptcy Act 1966]; but again that is not a matter we need to determine to finality.”

[43] There is no evidence before me that the Applicant has sought an election from his trustee about the continued prosecution or discontinuance of this action.

[44] The Applicant has never, since the filing of the Application, sought the remedy of reinstatement to his position. This was made explicit by the Applicant’s submissions in relation to the merits of his application, where the Applicant submitted:

“The applicant does not wish to be reinstated because he believes the employment relationship between him and the respondent has broken down beyond repair.”

[45] Given my conclusions concerning the Objection it is not necessary for me to consider the issue fully, other than to note that it is “highly likely” that Mr Blake’s application has been stayed as a result of his bankruptcy.

CONCLUSION

[46] The Applicant’s dismissal was very clearly a case of genuine redundancy within the meaning of the Act.

[47] The application is dismissed.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

<PR716013>

 1   PN4.

 2   PN27.

 3   Dale v Marky Industries Pty Ltd[2019] FWC 8446, [63]-[79].

 4   PN212.

 5   PN39.

 6   Exhibits B1, B2 and B3.

 7   Exhibit B3.

 8   PN240.

 9   PN324 to PN328.

 10   Millington v Traders International Pty Ltd [2014] FWCFB 888.

 11   Ibid.