Mrs Jennifer Broughton v Gold Buyers Qld Pty Ltd
[2012] FWA 4477
•30 MAY 2012
[2012] FWA 4477 |
|
DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Mrs Jennifer Broughton
v
Gold Buyers Qld Pty Ltd
(U2012/4817)
COMMISSIONER CARGILL | SYDNEY, 30 MAY 2012 |
Termination of employment - Jurisdiction (Genuine Redundancy) and Arbitration.
[1] This decision relates to an application for an unfair dismissal remedy by Ms J Broughton (the applicant) arising from the termination of her employment by Gold Buyers Qld Pty Ltd (the respondent). The application is made under section 394 of the Fair Work Act 2009 (the Act) and was lodged on 6 February 2012.
[2] The matter was the subject of a conciliation conference by a Fair Work Australia Conciliator, however it did not resolve. It was heard by me in Brisbane on 15 May 2012. At that hearing the applicant was represented by Mr Robinson, solicitor and the respondent by Mr Byrne of counsel. Both appeared with permission. The matter proceeded by way of hearing as I considered it was appropriate to do so having taken into account the factors set out in section 399 of the Act.
[3] The applicant gave sworn evidence and her witness statement was marked as Exhibit Applicant 1. Her oral testimony is at PN 48-491 of Transcript.
[4] Three witnesses gave evidence in the respondent’s case:
Mr D Scott Regional Manager of the respondent. His witness statement was marked as Exhibit Respondent 1 and his oral testimony is at PN 509-846 of Transcript;
Mr B Bailey Chief Operating Officer of Gold Buyers Australia Pty Ltd. His witness statement was marked as Exhibit Respondent 3 and his oral testimony is at PN 848-986 of Transcript;
Ms S Aziz Employee of the respondent. Her witness statement was marked as Exhibit Respondent 4 and her oral testimony is at PN 1007-1064 of Transcript.
FACTS AND EVIDENCE
[5] Gold Buyers Australia Pty Ltd (GBA) operates its business in various states of Australia through licensing arrangements with different corporate entities which operate under the “Gold Buyers” brand and livery. Each of these entities employees people and operates the business in its particular state or territory or area thereof.
[6] As at January 2012 those entities included Gold Buyers Victoria, Gold Buyers New South Wales, Gold Buyers New South Wales Central, Gold Buyers Western Australia, Gold Buyers South Australia and the respondent. Entities which used to operate in the Australian Capital Territory, Tasmania, Northern Territory and Far North Queensland were closed between January and May 2011.
[7] It is Mr Bailey’s evidence that the share structure for each entity is different. Although GBA has a shareholding in each, there are also other shareholders. Attachment B to Exhibit Respondent 3 is an extract from the ASIC database. It shows that GBA holds 59 of the 100 fully paid ordinary shares in the respondent. GBA holds those shares beneficially.
[8] It is Mr Bailey’s evidence that each of the corporate entities is responsible for its own costs, expenses and profits. It is his evidence that GBA supports each of the entities by providing services including template documentation such as employment contracts. It also acts as the overall brand ambassador. GBA has no employees in Queensland.
[9] The business of the respondent, and presumably of the other state entities, involves buying jewellery and other items containing precious metal from members of the public. These items are then on-sold for refining. The business is conducted through kiosk outlets in shopping centres or malls. These kiosks are usually set up in the pedestrian thoroughfares of the centres.
[10] The applicant commenced her employment with the respondent in September 2009. She was employed as a District Manager. The position description for the applicant’s role is part of Attachment B to Exhibit Applicant 1. The applicant’s area of responsibility covered the Gold Coast, Brisbane and Toowoomba. There were no issues with the applicant’s performance during the period of her employment.
[11] It is Mr Bailey’s evidence that, at its peak, the respondent operated 70 kiosks and employed 210 staff including eight District Managers. By August 2010 it had 56 kiosks and 168 staff including five District Managers. During 2010/2011 the business incurred losses of $1.2 million. Although it is not entirely clear, it appears that most, if not all of the debt arose from areas of the business outside of the applicant’s control.
[12] It is the evidence of Mr Bailey and Mr Scott that the directors of the respondent had decided that the business in Queensland should possibly close. Mr Scott, who was previously employed by Gold Buyers New South Wales, approached the directors with a plan to save the business and reduce the debt. Mr Scott described his plan as being one of “consolidation” which involved closing kiosks and reducing staff. Mr Scott’s evidence is that the structure was top heavy with management.
[13] Mr Scott’s evidence is that when he began as Regional Manager in around November 2010 there were 27 kiosks. There are presently 15 although the number briefly rose to 17. When he commenced there were seven District Managers. He made five of these redundant not long afterwards. In July 2011 he made the sixth redundant and then in January 2012 the applicant was made redundant. She was the only remaining District Manager in the respondent’s business although a number of the other state entities still have one or more District Managers.
[14] During the period of consolidation the roles of the other Regional Manager and the Operations Manager were also made redundant.
[15] It is Mr Scott’s evidence that the staffing profile in Queensland now consists of one Regional Manager (himself), two Sales Support Officers (SSOs) and 37 kiosk employees. The SSOs are new positions which were created after the applicant’s departure. However it is Mr Scott’s evidence that he had considered them as a concept prior to the time at which he had decided to make the applicant’s position redundant.
[16] Mr Scott provided an analysis of the differences and similarities between the roles of District Managers and SSOs. This was marked Exhibit Respondent 2. In the analysis Mr Scott says that the SSOs do four tasks previously carried out by the District Managers: staff training and role play; replenishment of supplies; marketing; and kiosk audits.
[17] Mr Scott identifies the differences as being: less travel and more time in the kiosks; and, no responsibility for rosters, payroll adjustments and reports, coordinating kiosk openings/closings, cash variations or management, recruitment, legislative compliance, OH&S reporting, counselling or termination, ordering of supplies or liaising with police. It is Mr Scott’s evidence that he has absorbed all of these responsibilities.
[18] It is the applicant’s evidence that she has been told by a number of her former colleagues who are still employees of the respondent that, since her dismissal, her role of District Manager has been carried out by a Ms Lam. She testified that during a telephone conversation with Ms Lam shortly after the dismissal, Ms Lam informed her of several of the duties she was undertaking including interviewing, recruitment and training.
[19] It is also the applicant’s evidence that a Ms Daley is managing the kiosks on the Gold Coast.
[20] Mr Scott’s evidence is that Ms Lam and Ms Daley are employed in the SSO positions. He denies that they carry out any of the District Managers’ role other than the four tasks identified in paragraph 16 above.
[21] The applicant’s salary was $60,000 per year. She also received a car allowance based on a monthly amount of $250 for each shopping centre for which she was responsible. The applicant agreed that, at the peak, this amounted to $24,000 per year. She also received a commission of 2.5% from the net profit of all of the kiosks in her assigned area after adjusting for any net loss.
[22] It is Mr Scott’s evidence that the SSOs’ salary is $40,400 per year. They receive a car allowance of $9,000 and 1.5% commission.
[23] Mr Scott’s evidence is that he made a definite decision to make the applicant’s position redundant about five or six weeks prior to the dismissal. He did not discuss the matter with her before the dismissal. Mr Scott agreed that the applicant could have undertaken the role of an SSO however his evidence is that he felt it was beneath her. He noted that it involved reduced duties and salary. Mr Scott disagreed that the applicant could have carried out both SSO roles. This was because, between them, they cover 15 kiosks whilst the most the applicant covered was 11.
[24] It is the applicant’s evidence that, if she had been offered the position of SSO, she would have definitely considered it. It is also the applicant’s evidence that she was not offered a job at any of the interstate operations. She testified that she would move if she could take her children.
[25] The evidence of Mr Bailey and Mr Scott is that employees are not able to just transfer between the different entities. Any such move, as with Mr Scott going to Queensland, involves applying for the interstate position and resigning from the previous position.
[26] On the day of the dismissal, Mr Scott telephoned the applicant and arranged to meet at the Donut King outlet which was adjacent to the respondent’s kiosk in the particular shopping centre. Ms Aziz was present during part of the meeting though not at the beginning or the end. Mr Scott’s reason for the location was his lack of access to an office or board room. The applicant’s evidence is that she found the public location and the presence of Ms Aziz to be humiliating. She also felt embarrassed and intimidated.
[27] There are differing accounts of the meeting including exactly what was said by Mr Scott and the tone in which he said it, whether he threw documents onto the table so that they fanned out or whether they were in one pile, whether Ms Aziz could read what was in the documents, the number of phone calls made during the meeting and whether Mr Scott demanded that the applicant sign a Deed of Release.
[28] The documents provided to the applicant by Mr Scott are at Attachment C to Exhibit Applicant 1. They include a letter of termination, a pay advice and a Deed of Release. Mr Scott informed the applicant that her position was being made redundant. The applicant’s evidence is that she had no forewarning of this and had no opportunity to discuss the situation during the meeting.
[29] It is the evidence of Ms Aziz that the applicant signed some papers as did Mr Scott and then she witnessed them. She is clearly mistaken about the applicant in this regard as the parties agree that the applicant did not sign the Deed either at the meeting or at any later time. However in paragraph 69 of Exhibit Applicant 1 the applicant states that Ms Aziz signed two copies of the Deed and Mr Scott one copy. Indeed the copy of the Deed which is part of Attachment C to the Exhibit is signed by Ms Aziz and Mr Scott, but not the applicant.
[30] The applicant’s evidence is that she did not want to sign the Deed as she felt intimidated and wanted to check the amount she was being paid. This was very wise as the amount of notice did not include the extra week’s pay due as a result of the applicant’s age nor did it include the current week’s car allowance. These amounts were corrected within a day or two.
[31] The applicant’s evidence is that she has applied for more than 50 jobs since her dismissal. She relocated to Capella to look for work but was unsuccessful and has since relocated back to the Gold Coast. She is also looking for jobs in Brisbane.
SUBMISSIONS ON BEHALF OF THE APPLICANT
[32] A written outline of submissions on behalf of the applicant was provided prior to the hearing. Mr Robinson relied on that material and also made oral submissions.
[33] Mr Robinson submitted that the key issue in the case was whether or not the applicant’s dismissal was a case of genuine redundancy. He noted that it was agreed between the parties that there was no modern award or enterprise agreement which applied to the applicant’s employment and consequently paragraph (b) of section 389(1) of the Act was not relevant. The points for consideration were those in section 389(1)(a) and (2).
[34] Mr Robinson noted Mr Scott’s evidence that he had considered creating the SSO positions even before he had made the decision to make the applicant’s role redundant. Mr Scott had acknowledged that the applicant had been capable in her role and that she would be capable in the role of an SSO. Yet he had taken no steps to reposition the applicant within the respondent’s business.
[35] Mr Robinson submitted that GBA was clearly an associated entity of the respondent however no efforts had been made to find the applicant a position within its business.
[36] It is submitted that GBA and the respondent are experiencing expansion including in the south eastern area of Queensland. The territory has been increased and two stores have reopened. In the circumstances the applicant should have been offered an alternative role.
[37] Mr Robinson submitted that the applicant’s dismissal was not a case of genuine redundancy as neither section 389(1)(a) nor (2) had been made out.
[38] It is submitted that the applicant’s dismissal was harsh, unjust and unreasonable. At the time the applicant was informed of her dismissal the decision was final. She was provided with no opportunity to respond. The manner in which the applicant was dismissed was particularly harsh in that the letter of termination was thrown on the table and Mr Scott demanded that she sign the Deed of Release.
[39] It is submitted that the respondent is not insignificant in size and that it should have adopted more appropriate human resources policies in effecting the applicant’s dismissal.
[40] Mr Robinson submitted that the evidence of Ms Aziz should be treated with caution. Her testimony concerning the signing of the documents was clearly in error. Mr Robinson also noted that Ms Aziz had not been present for the entire meeting.
[41] Mr Robinson submitted that reinstatement was not the most appropriate remedy especially in light of the fractured relationship between the applicant and Mr Scott. Instead compensation is sought.
SUBMISSIONS ON BEHALF OF THE RESPONDENT
[42] A written outline of submissions on behalf of the respondent was provided prior to the hearing. Mr Byrne relied on that outline and also made oral submissions.
[43] Mr Byrne noted that the question of whether or not the applicant’s dismissal was a case of genuine redundancy was a preliminary issue in relation to which the respondent bore the onus of proof. He submitted that, if the respondent met that onus, then it followed that there had been no dismissal. Even if the respondent was not successful on this point that did not lead to an automatic conclusion that the dismissal was harsh, unjust and unreasonable.
[44] Mr Byrne agreed that paragraph (b) of section 389(1) was not relevant in this case as there is no modern award or enterprise agreement in play.
[45] Mr Byrne referred to section 389(2) and submitted that it would not have been reasonable in all of the circumstances to have redeployed the applicant to another position either within the respondent’s business or an associated entity.
[46] Mr Byrne submitted that, although a person with the applicant’s skills could have done the job of an SSO or indeed that of a kiosk buyer, the evidence was that it would have been a demotion both in terms of remuneration and duties. This would have caused her to lose face and in turn could have led to her becoming disaffected.
[47] Mr Byrne conceded that GBA may be an associated entity of the respondent. He noted however that it did not have any employees in Queensland. Further there was no evidence that any of the other state based organisations were associated entities or that any of them had positions available. Mr Byrne also noted that the applicant did not particularly want to leave Queensland.
[48] Mr Byrne referred to the letter of termination and noted that Mr Scott had not been cross-examined about its contents. In particular Mr Byrne referred to the reference in the second paragraph of the letter to the unsuccessful efforts to find alternative employment for the applicant.
[49] In relation to the provisions of section 389(1) Mr Byrne submitted that there was clear evidence of an operational need to rationalise the size of the business. He noted Mr Bailey’s evidence that the loss of $1.2million had affected the company as a whole and consequently, reductions had to occur even in areas which were profitable. Mr Byrne submitted that there was ample evidence that Mr Scott had taken on all but four of the tasks which were previously carried out by the applicant. In this regard Mr Byrne referred to the decision of Harrison v Queensland University of Technology[2010] FWA 8789 @ para 10.
[50] Mr Byrne submitted that the process of selection for redundancy is not relevant. The important issue is whether or not the position had become redundant.
[51] Mr Byrne submitted that an appropriate inference should be drawn about the applicant’s failure to call the employees she referred to in her evidence. In the circumstances Mr Scott’s evidence should be preferred. That evidence was that there were no District Managers left in the business and further, that it was not reasonable or practical for the applicant to have undertaken either or both of the SSO roles.
[52] The written material addresses the provisions of section 387 of the Act. It is submitted that there is a valid reason for the dismissal based upon a genuine redundancy. The respondent disputes that its size is not insignificant and submits that it is small to medium at best.
CONCLUSIONS
[53] Section 396 of the Act sets out four matters which must be decided in applications of this type before the merits of a claim are considered. The fourth of such matters is whether the dismissal was a case of genuine redundancy. The terms of section 385 are also relevant in that, in order to make a finding that a person has been unfairly dismissed, Fair Work Australia (FWA) must be satisfied, among other things, that the dismissal was not a genuine redundancy.
[54] Section 389 sets out the meaning of genuine redundancy. It provides as follows:
“(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.”
[55] I am satisfied on the basis of the evidence in this case that the respondent no longer required the applicant’s job to be performed by anyone because of changes in the operational requirements of the enterprise.
[56] The evidence is that the business had incurred losses of $1.2 million and the directors were considering shutting the entire operation in Queensland. Instead Mr Scott was given the “go ahead” to implement his plan of consolidation. This involved the rationization of the number of kiosks and a reduction in the number of employees. Part of that plan included the removal of a layer of the structure occupied by the District Managers, including ultimately, the applicant. These were changes in the operational requirements of the business. The fact that the losses were primarily, if not entirely, incurred in areas of the business in which the applicant had no involvement does not mean that the response to those losses should not affect the whole enterprise.
[57] I accept the evidence of Mr Scott as to the allocation of the duties previously performed by the applicant. It is clear that the relevant test is not whether any duties survive a restructure but rather it is whether the job still exists. In this case the applicant’s position of District Manager does not exist. Indeed there are no such positions in the respondent’s business. I am satisfied that the SSOs are not District Managers by another name. It is true that they do four of the tasks previously done by the applicant however, by far the majority have been absorbed into the Regional Manager’s job.
[58] Section 389(1)(a) has been made out. As identified earlier in relation to the submissions, it appears to be the situation that there is no modern award or enterprise agreement that applied to the applicant’s employment. Consequently the respondent had no obligation to consult about the redundancy and hence paragraph (b) of subsection (1) is not relevant.
[59] I now turn to consider section 389(2).
[60] The Full Bench in Ulan Coal Mines Limited v Honeysett and others [2010] FWAFB 7578 considered this provision and said:
“[28] The question remains whether redeployment within the employer’s enterprise or the enterprise of an associated entity would have been reasonable at the time of dismissal. In answering that question a number of matters are capable of being relevant. They include the nature of any available position, the qualifications required to perform the job, the employee’s skills, qualifications and experience, the location of the job in relation to the employee’s residence and the remuneration which is offered.”
[61] The evidence is clear that no other position was offered to the applicant and that the possibility of redeployment was never discussed with her. The only positions which appear to be of real relevance in the respondent’s enterprise are the SSO jobs. Mr Scott agreed that the applicant was capable of doing the jobs and clearly they were in locations where the applicant had previously carried out her duties. The main question relates to the issue of remuneration.
[62] The evidence of Mr Scott is that the salary of the SSO is approximately one-third less than that received by the applicant and the commission is 1.5% rather than 2.5%. The car allowance is much lower however that would presumably be offset, at least in part, by reduced actual travel expenses.
[63] The applicant’s evidence is that she “would definitely have considered” an SSO position if it had been offered to her. She was not pressed on that evidence and there is no reason to disbelieve her.
[64] Although there is a significant difference between the remuneration of the SSOs and the applicant, in my view, it would have been reasonable in all of the circumstances to have redeployed the applicant to one of those positions. Of course the applicant may have declined the position and then different issues may have arisen.
[65] As a consequence of this finding I do not need to consider whether there were any associated entities in which it may have been reasonable to have redeployed the applicant. However I note the evidence was that GBA had no employees in Queensland. There was no evidence as to any vacancies in any of the other Gold Buyers companies even assuming that there were associated entities. Although the applicant stated that she would have considered moving interstate if she could have taken her children, there was not sufficient material before me to have made any determination on this issue.
[66] It follows from my finding that the applicant’s dismissal was not a case of genuine redundancy. It is necessary therefore to consider whether the dismissal was harsh, unjust or unreasonable. Section 387 sets out factors which must be considered in such an exercise. They are.
“(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”
[67] As noted by Vice President Watson in Maswan v Escada Textilvertrile T/A Escada[2011] FWA 4239 many of the provisions of section 387 are not relevant to matters in which the reason for termination is based upon redundancy although not a genuine redundancy within the meaning of section 389.
[68] The reason for the applicant’s dismissal had nothing to do with her capacity or conduct. It was part of a response to changes in the operational requirements of the business. Paragraphs (a), (b) and (c) are consequently not relevant. There was no evidence that there was any refusal by the respondent to have allowed the applicant to have a support person to represent her in the meeting when she was informed of her dismissal. Paragraph (e) is not relevant as there was no issue at all about the applicant’s performance.
[69] In my view the size of the respondent and the absence of any dedicated human resources management specialists or expertise did impact on the procedures followed in carrying out the dismissal. I note that GBA did have human resource specialists at some point in time.
[70] I consider that there are four other factors which are relevant for consideration. The first is the location of the meeting at which the applicant was informed of her dismissal. I understand that the business does not have a board room or office premises. However a meeting such as this is probably one of the most important interactions between an employer and employee. I am sure that somewhere more private could have been arranged. For example, the applicant’s evidence was that there was a coffee shop within the shopping centre where previous meetings had taken place. At the very least such a location should have been considered.
[71] The second factor is that, although there was no legal obligation to consult the applicant about the dismissal, simply handing over a pre-prepared letter referring to discussions which, at that stage, had not occurred does not demonstrate much consideration for a colleague especially one about whose work and conduct there was no criticism.
[72] The third factor is the issue of the errors in the initial estimation of the amount to be paid to the applicant. I accept that these were genuine errors and were corrected within a very short period of time.
[73] The fourth factor is the respondent’s failure to consider redeploying or even offering the applicant one of the SSO positions. Although I accept that Mr Scott believed that such a position would be “beneath” the applicant, in my view, that conclusion is something that only the applicant could decide. She could have refused the position.
[74] In all of the circumstances I have determined, on balance, that the termination of the applicant’s employment was harsh. I also find that the dismissal was unfair.
[75] Sections 390, 391 and 392 of the Act deal with remedies for unfair dismissals. I am satisfied that the provisions of section 390(1) and (2) have been met in this case. Subsection (3) provides that an order for compensation must not be made unless FWA is satisfied that reinstatement is inappropriate.
[76] The applicant does not seek reinstatement. In the circumstances of this case I am satisfied that reinstatement is inappropriate.
[77] Pursuant to section 390(3)(b) I consider that, in all of the circumstances of this case, it is appropriate to make an order for the payment of compensation. Section 392(2) requires that, in determining an amount for the purposes of such an order, FWA must take into account all the circumstances of the case including:
“(a) the effect of the order on the viability of the employer’s enterprise; and
(b) the length of the person’s service with the employer; and
(c) the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed; and
(d) the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal; and
(e) the amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for compensation; and
(f) the amount of any income reasonably likely to be so earned by the person during the period between the making of the order for compensation and the actual compensation; and
(g) any other matter that FWA considers relevant.”
[78] I have considered the evidence as to the financial difficulties faced by the respondent. I am satisfied that the order which I propose to make would not have an adverse effect on the viability of the business.
[79] The length of the applicant’s service with the respondent was between two and two and a half years.
[80] There is always a speculative element involved in assessing the remuneration that a person would have or would have been likely to have received had it not been for the dismissal.
[81] The applicant’s evidence is that she had tried to find other work but had been unsuccessful. I take it that this also means she has earned no remuneration since the dismissal.
[82] There is no evidence on which I could make any finding in relation to paragraph (f). The only other matter which I consider to be relevant under paragraph (g) is the redundancy and notice payments which were made to the applicant at the time of the dismissal.
[83] Having taken all of these matters into account as well as all of the circumstances of the case I determine that I should make an order for four weeks’ compensation. The amount is to be based upon the applicant’s salary of $60,000. It would not be appropriate to include any amount for the car allowance and commission components of her package.
[84] An order reflective of this determination is issued at the same time as this decision.
COMMISSIONER
Appearances:
M. Robinson solicitor for the applicant
M. J. Byrne of Counsel for the Respondent.
Hearing details:
Brisbane.
2012.
May 15
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