Ms Julieanne Kovacs v GTE Employment Services Pty Ltd
[2012] FWA 3720
•30 APRIL 2012
[2012] FWA 3720 |
|
DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Ms Julieanne Kovacs
v
GTE Employment Services Pty Ltd
(U2011/1791)
COMMISSIONER STANTON | NEWCASTLE, 30 APRIL 2012 |
Application for unfair dismissal remedy - whether contractor or employee - whether casual, part-time or full-time employee - whether genuine redundancy.
[1] The applicant in this matter is Ms Julieanne Kovacs (the applicant). The respondent is GTE Employee Services Pty Ltd (the respondent), a labour hire provider. The applicant’s employment with the respondent commenced on or about 1 July 2010. She was dismissed on 22 August 2011 following a decision by the host employer, Brand Ade Pty Ltd (Brand Ade), to close the export clothing and cloth cutting section of the business in Newcastle due to poor quality of stock and lack of availability.
[2] The respondent commenced the supply of labour to Brand Ade on or about 1 July 2010, following Brand Ade’s acquisition of an unincorporated entity known as ABC Bag of Rags (ABC) from Mrs P Morrison (Mrs Morrison).
[3] The applicant contends she was engaged under a sham contract as an independent contractor by ABC for approximately nine years prior to 1 July 2010 when ABC was acquired by Brand Ade. In that regard, the applicant argues she was at all times an employee of ABC undertaking work governed by the terms and conditions of the Textile Industry (State) Award and the relevant NAPSA up to the operation of the Textile, Clothing, Footwear and Associated Industries Modern Award 2010 1 (Textile Industries Award) from 1 January 2010.
[4] The applicant contends she was offered secure employment with Brand Ade and subsequently commenced work with Brand Ade on or about 1 July 2010 as an employee under the terms of the Textile Industries Award.
[5] In the course of proceedings, the applicant’s agent, Mr B Evans (Mr Evans) informed the Tribunal that the applicant (and her daughter) had commenced proceedings elsewhere against Mrs Morrison for unpaid wages, unpaid superannuation, unpaid leave entitlements and the like, 2 on the grounds she was at all times an employee of ABC.
[6] It was shortly after her dismissal on 22 August 2011 that the applicant claims she first became aware she was employed by the respondent and not Brand Ade. The applicant denies that prior to her dismissal she was aware the respondent was her employer. Rather, she understood “GTE was a payroll company who looked after our wages.” 3 In that regard, the applicant claims she had never met a representative of the respondent, been given any documents or told she “was an employee or casual employee of that company.”4 Shortly stated, the applicant was resolute she was employed by the respondent without her knowledge or consent.
[7] It was the applicant’s understanding that Brand Ade would employ her as a full-time employee and not a casual employee as was the case with her employment with the respondent.
[8] The applicant further argues there was a transfer of work in or around 1 July 2010 within the meaning of s.311 of the Fair Work Act 2009 (the FW Act) between ABC and the respondent.
[9] An order pursuant to s.590(2) of the FW Act requiring the former owner of ABC, Mrs Morrison, to attend proceedings on 24 January 2012 was made on 8 December 2011. A medical certificate stating Mrs Morrison was unfit to attend proceedings was filed on 9 January 2012 and the very serious nature of her illness was acknowledged by the parties during proceedings on 24 January 2012. 5 There was certainly no application to adjourn these proceedings to provide Mrs Morrison with an opportunity to comply with the s.590(2) order. In any event, Mrs Morrison is not a party to these proceedings.
[10] The respondent contends:
a. Brand Ade simply purchased a business and sourced labour requirements from it.
b. No transfer of work occurred and there is no relationship or connection between ABC and the respondent.
c. The work is different as Brand Ade introduced product sorting following the purchase of ABC.
d. No assets of ABC were transferred to the respondent and the respondent is neither an associated entity of ABC or Brand Ade.
e. Mrs Morrison is not able to give direct evidence or contest the contentions and evidence of the applicant. Accordingly those contentions should be given little or no weight.
[11] Mr Evans submitted during the course of the hearing that the applicant was prepared to concede she was terminated by the respondent “for lack of work”. 6 However, redundancy imposes mandatory obligations on the respondent. Mr Evans explained if the Tribunal determined that the applicant was either a casual, part-time or full-time employee of ABC and there was a transfer of work within the meaning of s.311 of the FW Act, the applicant would be entitled to five weeks statutory notice and a 16 week redundancy payment consistent with the National Employment Standards (NES).7 In the alternative, if the Tribunal determined the applicant was a contractor, the applicant’s service with the respondent would entitle her to two weeks notice and a redundancy payment of four weeks pay.8
Employee or independent contractor
Evidence
Applicant
[12] The applicant first “worked” for ABC in or about February 1992 for a period of three or four years. She rejoined ABC in October 2001 and subsequently left for family reasons in May 2002. In or about October 2001, Mrs Morrison told her to obtain an Australian Business Number (ABN). In August 2002, Mrs Morrison contacted her and “asked me to cut 200 bags of rags for her and to get my daughter Shari to work with me.” 9 It was the applicant’s written evidence that when she applied for the ABN she did not believe she was running her own business: “I was just paid for the work that Shari and I completed.”10
[13] Shortly after rejoining ABC in August 2002, the applicant contended Mrs Morrison “instructed Shari to work with me and this continued until 10 June 2010.” 11 In that regard, it was the applicant’s evidence that her daughter was not paid by Mrs Morrison between August 2002 and June 2010. However, the applicant did not regard Shari as her employee, but rather, she was “helping me at work based on instructions” 12 from Mrs Morrison.
[14] The applicant contended Mrs Morrison directed her daughter to obtain an ABN during the course of 2007. The ABN was subsequently obtained but not provided to ABC.
[15] The applicant’s evidence was that she and her daughter cut about 1.5 bags of rags per hour, remunerated at $7.00 per bag. The number of completed bags were progressively marked on a factory blackboard. At the end of each week Mrs Morrison would prepare an invoice in the applicant’s name and subsequently cash a cheque at a local bank for the relevant invoice amount and pay her in cash. 13 The applicant claims she worked between 38 and 54 hours per week for ABC.
[16] The applicant maintains the remuneration of $7.00 per bag was not a negotiated rate, rather, it was the rate stipulated by Mrs Morrison.
[17] In cross examination, Ms James, Counsel for the respondent, referred the applicant to paragraph 9 of her statement where she said:
I am aware that Shari was never paid by Pauline during that period of time (August 2002-June 2010) and so it was left to me to pay Shari for helping me with my work.
[18] In that regard, the applicant stated her reference to the term “pay” meant she would purchase clothes and personal items for her daughter in return for her assistance.
[19] Ms James subsequently referred to the bundle of tax invoices for the period of 7 July 2005 to 28 June 2010 set out in Exhibit A2. In relation to those tax invoices, the applicant confirmed she was paid by the bag and the invoices were dated approximately one week apart. The applicant agreed that tax invoice materials set out in Exhibit A2 contained a summary of payments made, headed “Contractor’s Name Julie Kovacs”. The applicant could not recall making an application for an ABN as a sole trader but did recall she had used the trading name, “Bits and Pieces”, which she agreed reflected “the type of work you did as a contractor”. 14
[20] The applicant agreed she was able to control the pace of her work “as best I could” 15 and was adamant Mrs Morrison prepared the tax invoices. The applicant also agreed she had some control over start and finish times and, in the event she wished to leave early, she was able to make the time up at a later date.
[21] In re-examination by Mr Evans, the applicant stated that at the time of making her application for an ABN, she “did not know what a contractor was” 16 nor was she aware of the meaning of “trading name”.17 Further, during the course of her work with ABC she did not operate any accounts, accumulate expenses or use her own equipment.
[22] In further cross examination, the applicant agreed that whilst engaged by ABC she never received payslips nor was tax withheld from payments made to her.
Ms Shari Kovacs
[23] The evidence of Ms Kovacs was supportive of the contentions held by the applicant; that she was an employee of ABC and Mrs Morrison had encouraged her to assist the applicant to cut rags in August 2002. 18
Submissions
Applicant
[24] Mr Evans referred to recent case law to support the contention that the applicant was an employee of ABC and was at no time an independent contractor. 19 Mr Evans maintains the applicant worked for ABC under a contract that was wholly and principally for labour.
[25] Mr Evans summarised the applicant’s position in the following terms:
The respondent has not produced any evidence to rebut the evidence presented by the applicant relating to the contractual relationship, and I use that term loosely. It was supported and corroborated by Shari Kovacs that Pauline Morrison engaged the applicant as a contractor who was not and could not run a business, who worked up to 50 hours a week regularly to complete that work, who never believed that she was employed by her mother, who was the applicant, never received any payment for assisting the applicant during that long period of time. 20
[26] Despite the fact that Mrs Morrison was not a party in this matter nor was she available to give direct evidence and to defend the claims against her, Mr Evans devoted substantial time to press his case that the applicant was an employee of ABC, between August 2002 and June 2010.
Respondent
[27] Ms James’ threshold submission was that the Tribunal should place little weight on what Mrs Morrison is alleged to have said or done in connection with the applicant’s work at ABC:
As a preliminary matter, Commissioner, and I made reference to this earlier in these proceedings, for reasons entirely outside of the control of the respondent, Mrs Pauline Morrison is not able to be here, and her evidence is not able to be tested or in fact given, and it’s my submission that anything said about what Mrs Morrison may have said or did should be given very little weight if any at all, because that is not in evidence, and has not been able to be tested in the normal course. 21
[28] It is clearly not the role of the respondent in this matter to rebut or defend the claim that the applicant was at all times an employee of ABC between August 2002 and June 2010. Nor does the respondent have a capacity to do so.
Consideration and Finding
[29] In the normal course, both the applicant and ABC would file and serve evidentiary materials to support their respective positions. Sadly, Mrs Morrison is, according to the parties, seriously ill. In that regard, Mr Evans informed the Tribunal he had discussed Mrs Morrison’s prognosis and availability to attend proceedings with her solicitor prior to the hearing and, given the nature of her illness, it was unlikely she would be available. 22 The Tribunal notes no application was made by either party to adjourn proceedings to provide Mrs Morrison, if available, with an opportunity to present evidence in this matter.
[30] In my assessment, having considered all the material before the Tribunal, there is plainly insufficient documentary material before the Tribunal to enable a concluded view on the applicant’s claim that she was not a contractor. The evidence and contentions that the applicant was an employee of ABC simply cannot be tested by the Tribunal. And, as noted above, Mrs Morrison was not a party to these proceedings.
[31] Notwithstanding the lengthy submissions of Mr Evans, including a plea that the invoices tendered in proceedings did not comply with tax law, there is plainly insufficient material before the Tribunal to determine whether the applicant’s “engagement” with ABC was one of employee or independent contractor without the unacceptable risk of doing an injustice to one or the other. In any event, the courts have determined that each case will turn on its own facts. 23 It also follows that the applicant’s contention there was a transfer of work between ABC and the respondent cannot, unfortunately, be tested.
Casual, part-time or full-time employee
Evidence
Applicant
[32] The applicant contends she was employed by Brand Ade to work a 38 hour week on or about 1 July 2010. The rate of pay was $18.05 per hour.
[33] The applicant worked all day on 1 July 2010 and was told during the course of that day to return to work on 5 July 2010. She recalled she “undertook an induction test” on 5 July 2010. 24
[34] The applicant recalled completing an application form which she understood was a Brand Ade document. At the time the applicant was unaware the application form was for work with a labour hire company and maintained that lack of awareness continued until she filed her unfair dismissal claim:
At all times, I believed GTE was a payroll company who looked after our wages. I have never met anybody from GTE, never been given any documents from GTE or told by them that I was an employee or casual employee of that company. 25
[35] The applicant recalled that in early July 2010 a meeting was convened with Mrs Morrison, now manager of the Brand Ade Newcastle facility, Shawn Newburn (Ms Newburn) and another person named Ashlyn McLean (Ms McLean) to complete some paperwork. The applicant’s evidence was that she is now aware the “paperwork” included a GTE Induction document. In that regard, the applicant contends she was not given a copy of the GTE Induction document - but rather, she was simply given the answers to the Induction Questionnaire by Mrs Morrison and Ms McLean. She further contended that other employees, including Ms Newburn, who later replaced Mrs Morrison as manager, were all unaware they had been employed by a labour hire company.
[36] In cross examination, the applicant confirmed the following:
- On 23 June 2010 she completed and signed a document headed, GTE Private and Confidential Employment Application Form. 26 The applicant agreed she was careful to “tick things accurately” when completing such documents.27 The application form recorded the applicant had applied for casual employment. In that regard, the applicant states she had ticked the casual employment option because “that’s what I was told I was applying for.”28
- On or about 23 June 2010, the applicant supplied the respondent with a copy of her birth certificate, tax file number declaration and superannuation fund choice form. 29 With respect to her tax file number declaration, the applicant agreed she had declared her employment to be casual employment because she “was aware that the nature of the employment was casual employment.”30
- In or about 23 June 2010, the applicant attended a group induction where Ms McLean read from an induction manual. 31 In that regard she could not recall Ms McLean’s reference to Section 2 - Responsibilities of the Employer and the Host Employer:
1. GTE is a Company established to undertake Recruitment and Labour Hire Services. GTE is the Employer. GTE may place you at the premises of their Client. Their Client is the Host Employer. Both GTE and the host employer have the same responsibilities in relation to the following:
a. Providing and maintaining Safe Systems of work;
b. Implementing arrangements for the Safe use, Handling, Storage and Transport of Plant and Substances;
c. Maintaining the Safe condition of the workplace;
d. Providing employees with adequate facilities;
e. Ensuring employees have adequate information, instruction, training and supervision to work in a Safe and Healthy manner, so employees are not exposed to hazards;
f. Adequately monitor our employee’s Health;
g. Keep information and records relevant to our employees Health and Safety;
h. Employ or engage people with the necessary qualification and expertise to advise you on Health and Safety issues at the workplace should they arise;
i. Generally monitor conditions at the workplace; and
j. If necessary, provide employees with information in the appropriate language(s) about your workplace’s Health and Safety arrangements, including the names of those to whom the workers can make and enquiry or complaint with.
2. When shown a copy of her Induction Questionnaire completed on or about 23 June 2010, the applicant stated she ticked GTE as her employer because:
I read that question, I put my hand up and (Ms McLean) said GTE, so we all ticked GTE. 32
3. She received pay slips from GTE - however she thought GTE “were the payroll people that paid us”. 33
4. She did not receive a contract of employment sent to her by GTE which identified her employment was of a casual nature.
[37] With regard to the hours worked each week, according to her payslips tendered in proceedings, 34 the applicant denied that Mrs Morrison would talk to her each Friday about work availability the following week. However when pressed, the applicant admitted Mrs Morrison would talk to staff about work availability “not every Friday”35 and work was available “mainly four to five days a week”.36 The applicant was also adamant she worked every day unless she was off due to personal illness or family responsibilities. However, she did agree that her actual hours worked had varied between 16 and 38 per week.
[38] The applicant was reluctant to admit the work was seasonal and contended that when the demand for cutting fell, employees would bag, press or sort rag product.
[39] The applicant acknowledged signing a document headed “ABC Samaritans Wipes - Job Specification - 30.11.10” which stated she was employed as a “Casual Part-Time - Cutter/Sorter/Packer/Driver”. In that regard the applicant stated she had delayed signing the Job Specification because she did not like driving the large truck she was required to drive. 37 The applicant confirmed she did not object at any time to the reference of “Casual” in her job specification.38 In that regard, the applicant agreed she was being paid casual rates of pay.
Mr Michael Anderton
[40] Mr Anderton is a director of Brand Ade. His evidence was that Brand Ade instructed the respondent to provide labour hire services for the three former ABC employees from 1 July 2010:
Employment Packs were given to staff on June 23 before the handover date stating the name of the employer, the casual nature of the work and the higher hourly rate. 39
[41] Mr Anderton instructed Mrs Morrison on the work to be done in the factory on a weekly basis. That work was subsequently allocated to the applicant and Ms Newburn on a daily basis between the tasks of rag cutting, clothing sorting and rag packing in accordance to daily orders and available stock. Mr Anderton also maintained clothing supplies were seasonal - higher in summer than in winter. In cross examination, Mr Anderton stated Ms McLean had confirmed to him that the Employment Packs were given to staff on 23 June 2010.
[42] Mr Anderton explained that he decided to engage the services of GTE because his partner in the Newcastle Brand Ade business also operated a similar business in Cardiff employing some 50 persons engaged through GTE.
[43] Mr Anderton contended his interpretation of the expressions “casual part-time” related to a situation where an employee would work less than a full working week. 40 He was surprised that the applicant had worked 38 hours per work for 17 of the 50 pay periods tendered as part of Exhibit R5.41
[44] Mr Anderton further contended the hours worked by the applicant were unpredictable reflecting the nature of her work and the irregular nature of Brand Ade business and its order book.
Ms Ashlyn McLean
[45] Ms McLean provides accounting and administrative support to Brand Ade on a contract basis.
[46] It was Ms McLean’s evidence that she provided GTE Employment Packs for persons who had previously worked for ABC, including the applicant. All the relevant paperwork was set out on GTE letterhead. 42
[47] Ms McLean conducted a group induction for potential GTE Employees at the premises of Brand Ade at Redhead. Ms McLean maintained she read through the Induction Manual and constantly asked members of the group whether they understood what she was putting to them - “they all said yes”. 43
[48] Ms McLean stated she did not provide answers to the Induction Questionnaire. All completed documentation was forwarded to GTE for processing.
[49] Ms McLean explained Brand Ade supplied GTE with hours worked by staff and in turn GTE paid and supplied staff with GTE payslips. She maintained the applicant was employed as a casual employee.
[50] In cross examination Ms McLean could not remember whether she gave the Employment Packs to staff directly or left them for Mrs Morrison to distribute. However, employees signed off that they had received the Employment Packs, with the exception of the Induction Manual. A central copy of the Induction Manual had been made available for employees to read at their leisure.
Ms Grace Tombolato
[51] Ms Tombolato is the Director of the respondent.
[52] It was Ms Tombolato’s evidence that the applicant was employed by the respondent as a casual employee and all documents completed and submitted to the respondent identified the nature of employment as being “casual”. 44
[53] The applicant’s hours of work varied throughout the period employed by the respondent including some weeks when she did not work at all. The applicant was engaged under the direct supervision of Brand Ade as a casual employee. The applicant’s payslips show she was paid at the rate of $18.05 per hour, being the relevant loaded casual rate of pay.
[54] In cross examination Ms Tombolato confirmed the applicant worked under the direct supervision of Brand Ade who “dictate the hours the employees work”. 45
[55] It was Ms Tombolato’s understanding that a letter of engagement had been given to the applicant. In addition, Ms Tombolato stated the respondent cannot process an employee’s pay unless the appropriate application form, tax file number declaration, bank and superannuation account details have been received. However, it was possible that the respondent would pay an employee for the hours they had worked in the event the particular employee had not returned a signed copy of the letter of engagement. It was Ms Tombolato’s evidence that the applicant’s pay slips showed she undertook irregular and intermittent work. 46
[56] Ms Tombolato claimed the applicant had not been dismissed but rather had been “disengaged”. She remained “on the books” despite the fact that the respondent did not have an office in Newcastle which may have been able to place the applicant with another host employer. 47
Submissions
Applicant
[57] Mr Evans submitted the applicant had worked on a regular and systematic basis for more than a year with a reasonable expectation of continuing employment. 48
[58] Mr Evans contended the respondent had never spoken to or met the applicant and “deliberately neglected to give precise information to the applicant and others to know they were employed by a labour hire company”. 49
[59] Mr Evans submitted the applicant was engaged as a full-time employee under the Textile Industries Award as she was not engaged “in relieving work or work of a casual, a regular or intermittent nature”. 50 Mr Evans referred to the evidence of Mr Anderton that Mrs Morrison organised work for the applicant from week to week and, in his opinion, the applicant’s evidence was uncontested.51
[60] In support of his proposition that the employment relationship between the respondent and the applicant was not truly casual, Mr Evans referred to the decisions in Williams v MacMahon Mining Services Pty Ltd 52 and Reed v Blue Line Cruises.53
Respondent
[61] Ms James submitted the work of the applicant was in part irregular or intermittent and consistent with the definition of casual employment under the Textile Industries Award. In the absence of a definition of “casual employee” under the FW Act, Ms James contended it becomes a question of fact whether a given worker is or is not a casual. 54
[62] Ms James contended the decision in Reed v Blue Line Cruises that casual work is typically characterised by its informality, uncertainty and irregularity “applies perfectly to the work the applicant did.” 55
[63] Ms James submitted the reference in MacMahon Mining Services Pty Ltd to the decision in Hamzy v Tricon International Restaurants 56 at [38] that “casual employee” embraces “an employee who works only on demand by the employer” and that “the essence of casualness is the absence of a firm advance commitment as to the duration of the employee’s employment or the days (or hours) the employee will work” was relevant to the operations of Brand Ade.
[64] Ms James relied on the applicant’s application for employment, tax file number declaration and job specifications letter, and the pattern of irregularity concerning her hours of work evidenced by the relevant respondent payslips, in support of the proposition that the applicant was a casual employee. Ms James also relied upon the evidence of Mr Anderton that the work was seasonal and dependent on the day to day requirements of customers.
Consideration and Finding
[65] In Williams v MacMahon Mining Services Pty Ltd, Barker J considered the case law applicable to casual employees:
33. Nonetheless, the concept of a casual worker being involved in work which is discontinuous – intermittent or irregular – remains relevant and helpful in understanding the concept today. In Reed, Moore J, at IR 425, by reference to those and other well known authorities, observed:
A characteristic of engagement on a casual basis is, in my opinion, that the employer can elect to offer employment on a particular day or days and when offered, the employee can elect to work. Another characteristic is that there is no certainty about the period over which employment of this type will be offered. It is the informality, uncertainty and irregularity of the engagement that gives it the characteristic of being casual.
34. I do not consider that these observations by Moore J should be read other than as general observations concerning the concept of casual employment. Certainly, they were not, in my view, intended to be observations about employment on a casual basis under any particularly statutory or regulatory regime. They are a helpful commentary on what the early authorities, such as Doyle, have to say on the topic of what casual employment is under the general law today.
35. This in my view is confirmed by what the Full Federal Court said in Hamzy v Tricon International Restaurants [2001] FCA 1589; (2001) 115 FCR 78 (Hamzy), at [38]; namely, that “casual employee” embraces “an employee who works only on demand by the employer” and that “the essence of casualness is the absence of a firm advance commitment as to the duration of the employee’s employment or the days (or hours) the employee will work”.
[66] In Hamzy at [38], the Court also determined “the essence of casualness” was not inconsistent with the possibility of the employee’s work pattern turning out to be regular and systematic.
[67] Clause 14 of the Textile Industries Award deals with casual employment in all of its forms. In my view, the general nature of the language used in the construction of subclause 14.1 of the Award implies that for an employee to be covered by Clause 14, they must be “engaged in relieving work or work of a casual, irregular or intermittent nature”. It is further implied that the term, “casual employment” be given its ordinary meaning.
[68] However, it also seems subclause 14.10, Conversion of casuals, can be broadly interpreted to embrace both “irregular” casuals as defined under subclause 14.1 and casuals “simpliciter.” Subclauses 14.10(a), (c) and (e) of the Textile Industries Award gives consideration to casual employees who are not irregular casuals and work for the employer on a regular and systematic basis. On that view, the casual employment provisions of the Award would cover both employees engaged on a regular and systematic basis and irregular casuals as defined.
[69] In that regard, subclause 14.10(g) of the Textile Industries Award gives consideration to employees who may have worked on a part-time or full-time basis throughout the period of their casual employment for the purposes of casual conversion to part-time or full-time employment.
[70] The FW Act does not define the term “casual employee” nor did previous legislation including the Workplace Relations Act 1996 which suggests Parliament intended it to be given its ordinary meaning. However, s.12 of the FW Act defines what is meant by a long term casual employee, although there is no definition of the term “casual”:
long term casual employee: a national system employee of a national system employer is a long term casual employee at a particular time if, at that time:
(a) the employee is a casual employee; and
(b) the employee has been employed by the employer on a regular and systematic basis for a sequence of periods of employment during a period of at least 12 months.
[71] In my view, the evidence in these proceedings concerning both the work available to the applicant, confirmed by the respondent’s pay slips and the nature of her work, supports the proposition that her employment as a casual employee was on a regular and systematic basis with a reasonable expectation of continuing employment by the respondent on a regular and systematic basis.
[72] Reasons in support of the proposition that the applicant was employed by the respondent as a casual include the fact that the applicant’s employment the following week was usually subject to discussions with Mrs Morrison on the previous Friday. Whilst the applicant did work a number of 38 hour weeks, there were weeks when she worked as few as 16 hours. The work was regular and systematic, in the sense that the nature of the work provided the applicant with an expectation that work would continue from week to week with hours of work dependant on the availability of product to cut or process and the demand for Brand Ade’s finished products in the marketplace.
[73] Further, given the nature of the applicant’s work and the employment documents relied upon by Ms James, including the application for employment, job specification and tax file number declaration, the rates of pay applied, together with the non payment of sick leave, annual leave and public holidays by the respondent, suggest to me that an ordinary person in such circumstances would consider themselves a casual employee. Having considered all the material’s relevant to whether the applicant was a part-time or full-time employee, I find that at all times she was employed on a casual basis.
Dismissal or Genuine Redundancy
Evidence
Applicant
[74] The applicant contends that at the time Mrs Morrison sold ABC to Brand Ade, she was introduced to Mr Anderton who subsequently told her “I was not to worry because my job was safe”. 57
[75] On 16 August 2011, there was an altercation in the workplace between the applicant and Mrs Morrison. The ensuing argument flared and Mrs Morrison subsequently told the applicant to leave the premises.
[76] The applicant sought a meeting with Mr Anderton who agreed to meet with her following a discussion with Mrs Morrison and other employees who may have witnessed the incident. The following day, the applicant alleged Mr Anderton phoned to inform her that she would be offered a redundancy package as there was no longer work for her at Brand Ade. The applicant was upset at this sudden news and the fact that Mr Anderton could not provide any reasons why Mrs Morrison and Ms Newburn remained in employment.
[77] The applicant stated that at no time prior to the altercation with Mrs Morrison did Brand Ade inform her that work was running down. In fact, the applicant’s view was there was plenty of work available.
[78] However, the applicant conceded that from the time Brand Ade “took over the business, I was asked on a number of occasions to reduce my weekly hours by the manager, Pauline Morrison” who at the time was trying to encourage another employee, Mr Jason Way, to leave for reasons of insufficient work. 58
[79] In cross examination, the applicant denied Mr Anderton had sought to resolve the issues between Mrs Morrison and herself. In that regard, the applicant agreed she received a letter from the respondent dated 22 August 2011 which, shortly stated, informed her that the details of the altercation could not be substantiated by employees in the vicinity at the time, other then Mrs Morrison and herself. Accordingly, rather than take sides, the respondent cautioned both employees and expected its standards of workplace behaviour to be upheld. The applicant denied she was counselled or encouraged to improve her standards of behaviour in the workplace.
[80] The applicant was adamant the respondent had offered her a redundancy package and was upset when she received further correspondence also dated 22 August 2011 advising her that the sorting and cutting production section of Brand Ade had been closed due to poor stock quality and lack of availability of raw product. In that regard, the applicant denied any knowledge that raw product was becoming scarce. The applicant believed she was being dismissed for reasons associated with her altercation with Mrs Morrison.
Mr Michael Anderton
[81] Mr Anderton’s evidence was that the sales of cut rag did not expand as first hoped by Brand Ade. Accordingly, Brand Ade began operations to sort export grade clothing in addition to cutting and packing rag product. 59
[82] Mr Anderton contended the business was seasonal with higher activity in summer compared to winter. The supply of clothing/rag product had been falling on an annual basis for some time. However, weekly deliveries from Brand Ade’s main supplier, the Lifeline charity, began to fall some weeks prior to the middle of August 2011. In that regard, Mr Anderton contended all factory employees were aware of this development and it was common knowledge that the hours would need to be reduced to meet the short fall. 60
[83] Following a meeting with a co-director on 12 August 2011 concerning Brand Ade’s financial situation, a decision was made to reduce costs immediately and take steps to close down the sorting of clothing and rag cutting at its Newcastle facility.
[84] Shortly thereafter it became apparent that Brand Ade would need to dismiss one employee. As Mrs Morrison proposed to retire at the end of 2011, a decision was made to make Ms Newburn assistant manager and subsequently inform both Ms Newburn and the applicant of that decision on 16 August 2011, the day of the altercation incident. Ms Newburn possessed computer skills relevant to the assistant manager’s position.
[85] Mr Anderton explained the economic circumstances facing Brand Ade to all employees other than the applicant at a meeting convened at approximately 10.00am on 16 August 2011. He made a number of attempts to contact the applicant via her daughter’s mobile phone, which had been disconnected. Mr Anderton subsequently contacted the applicant on 18 August 2011 where he and Ms Irene Winkler, a manager with the respondent, explained the decision to close cutting and sorting in Newcastle. Mr Anderton was also adamant that no redundancy package was offered because the applicant was a casual employee. Certain invoices from Lifeline formed part of Mr Anderton’s contentions that the supply of cloth/product available to Brand Ade in Newcastle had dwindled in recent times.
[86] In cross examination, Mr Anderton could not recall informing the respondent’s employees hosted by Brand Ade that there were concerns about on-going work. He was surprised the applicant had suggested in her evidence that Brand Ade had given her some guarantee concerning job security. Mr Anderton was adamant no redundancy offer had been made to the applicant.
[87] Mr Anderton contended the work of Brand Ade was unpredictable because orders would fluctuate on a daily basis. 61
Submissions
Applicant
[88] Mr Evans conceded the applicant was prepared to accept she was dismissed due to lack of work. However, the respondent has not complied with the NES requirement that an employer must not terminate an employee unless the employer has given the employee written notice on the day of the termination. 62 There was also an obligation on the respondent to consult with the employee in the event the applicant was going to be made redundant.63 Mr Evans submitted that, as a minimum, the applicant was entitled to two weeks notice and four weeks redundancy pay. If there was a transfer of work, the quantum would increase to four weeks notice and 16 weeks redundancy pay.
[89] Brand Ade was aware for some time that work was declining. In those circumstances, Brand Ade should have informed the respondent that the applicant’s job was under threat so as to provide her with adequate notice rather then dismiss her by telephone.
[90] In the event the Tribunal finds the applicant was not made redundant, she is entitled to compensation for the unfair dismissal that occurred and the denial of procedural fairness.
Respondent
[91] Ms James submitted the NES concerning the obligation to provide redundancy pay do not apply to casuals. 64 In any event, whilst speculative, the applicant “remained on the books”.65 The applicant was dismissed for a valid reason, lack of work.
[92] The evidence of Mr Anderton and Ms Tombolato was that the nature of the applicant’s work was irregular on the grounds that the work fluctuated from week to week. Accordingly, the nature of the applicant’s employment could not be described as regular and systematic or that she had a reasonable expectation of continuing employment. 66
[93] Ms James further contended the applicant’s dismissal was a genuine redundancy within the meaning of s.389 of the FW Act. Clearly, in her view, on any interpretation of the evidence, the applicant’s job was no longer required to be done by her and the respondent had complied with the award obligation to consult about the redundancy. 67 Mr Anderton and his business partner had made a business decision to close a section of the business which was conveyed to the Newcastle employees on 17 August 2011. The applicant was not at work as a result of the altercation incident and attempts were made to contact her to no immediate avail. Mr Anderton was successful in contacting the applicant on 18 August 2011. Ms James conceded the applicant was not given “a lot of notice”.68
[94] Ms James referred to the decision in Di Masi v Coastal Fisheries Pty Ltd ATFT Sea Empire Unit Trust 69 where at [44] Commissioner Williams held that the procedural failure of the employer to fully comply with its award consultation obligations would in the circumstances of that case, had no practical impact on Mr Di Masi.
Consideration and Finding
[95] On the material before the Tribunal, there is universal agreement that the applicant was dismissed for reasons relating to a shortage of work and the decision of Brand Ade to close a section of its business in Newcastle.
[96] The factors which trigger a redundancy situation were considered in the Termination, Change and Redundancy Decisions 70 and subsequently in Amcor Limited v Construction, Forestry, Mining and Energy Union and Ors (Amcor),71 namely that a “redundancy” arises in circumstances where the job the employee is doing is no longer done by anyone.
The Legislative Framework
[97] Section 396 states that FWA must consider a number of matters before considering the merits of the Application.
396 Initial matters to be considered before merits
FWA must decide the following matters relating to an application for an order under Division 4 before considering the merits of the application:
(a) whether the application was made within the period required in subsection 394(2);
(b) whether the person was protected from unfair dismissal;
(c) whether the dismissal was consistent with the Small Business Fair Dismissal Code;
(d) whether the dismissal was a case of genuine redundancy.
[98] If the Applicant’s dismissal was a case of genuine redundancy, her s.394 application for unfair dismissal is jurisdictionally barred and cannot proceed.
[99] Section 385 of the FW Act relevantly defines what is an unfair dismissal:
A person has been unfairly dismissed if FWA is satisfied that:
(a) the person has been dismissed;
(b) the dismissal was harsh, unjust or unreasonable; and
(c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and
(d) the dismissal was not a case of genuine redundancy.
[100] The respondent argues the applicant's dismissal was a genuine redundancy. The practical effect of s.385(d) of the FW Act is that where an employer succeeds with the jurisdictional objection the dismissal is excluded from the operation of s.385. Accordingly, in the case of genuine redundancy, the applicant cannot succeed with an argument that the dismissal is unfair on the grounds that it was harsh, unjust or unreasonable.
[101] In circumstances where the employer fails to establish the dismissal was a case of genuine redundancy, it does not automatically follow that the Tribunal will find it was harsh, unjust or unreasonable. The onus shifts to the applicant to establish that the dismissal was unfair because it was harsh, unjust or unreasonable and the Tribunal is required to consider the criteria determining harshness provided by s.387 of the FW Act.
[102] Therefore in this matter, if the respondent establishes that the dismissal was a case of genuine redundancy, the applicant is precluded from pursuing an unfair dismissal remedy that the dismissal was otherwise harsh, unjust or unreasonable. However, if the respondent's genuine redundancy argument fails, the applicant must establish that her dismissal was unfair on the grounds that it was harsh, unjust or unreasonable.
[103] Section 389 of the FW Act relevantly provides:
389(1) A person’s dismissal was a case of genuine redundancy if:
(a) the 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.
389(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 or an associated entity of the employer.
[104] In relation to s.389 of the FW Act, the Explanatory Memorandum to the Fair Work Bill 2008 states the intention is that if a dismissal is a genuine redundancy it will not be an unfair dismissal. 72 The Explanatory Memorandum also establishes the relevant considerations for determining a case of genuine redundancy are set out in s.389 of the FW Act and there is no requirement for the Tribunal to consider the fairness or otherwise of the selection process applied.73
[105] Where the Tribunalfinds a particular dismissalwas not a case of genuine redundancy as provided by s.389 of the FW Act, it must also be satisfied that the dismissal was harsh, unjust and unreasonable, before it can be found that the dismissal was unfair. In considering whether a dismissal was harsh, unjust or unreasonable, FWA must take into account the following matters as set out in s.387 of the FW Act:
(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 the dismissal; and
(e) If the dismissal related to unsatisfactory performance – 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 FWA considers relevant.
[106] The immediate issue for determination in this matter is whether the applicant's dismissal was a case of genuine redundancy.
[107] Section 389(1)(b) of the FW Act provides the obligation to consult is to be discharged consistent with the relevant obligation contained in the award or enterprise agreement. Accordingly, the test to be applied in this matter arises from the obligation on the respondent arising from clause 9 of the Textile Industries Award:
9. Consultation regarding major workplace change
9.1 Employer to notify:
(a) Where an employer has made a definite decision to introduce major changes in production, program, organisation, structure or technology that are likely to have significant effects on employees, the employer must notify the employees who may be affected by the proposed changes and their representatives, if any.
(b) Significant effectsinclude termination of employment; major changes in the composition, operation or size of the employer’s workforce or in the skills required; the elimination or diminution of job opportunities, promotion opportunities or job tenure; the alteration of hours of work; the need for retraining or transfer of employees to other work or locations; and the restructuring of jobs. Provided that where this award makes provision for alteration of any of these matters an alteration is deemed not to have significant effect.
9.2 Employer to discuss change
(a) The employer must discuss with the employees affected and their representatives, if any, the introduction of the changes referred to in clause 9.1 the effects the changes are likely to have on employees and measures to avert or mitigate the adverse effects of such changes on employees and must give prompt consideration to matters raised by the employees and/or their representatives in relation to the changes.
(b)The discussions must commence as early as practicable after a definite decision has been made by the employer to make the changes referred to in clause 9.1.
(c)For the purposes of such discussion, the employer must provide in writing to the employees concerned and their representatives, if any, all relevant information about the changes including the nature of the changes proposed, the expected effects of the changes on employees and any other matters likely to affect employees provided that no employer is required to disclose confidential information the disclosure of which would be contrary to the employer’s interests.
[108] In the circumstances of this particular case I am satisfied the respondent made a decision to make the applicant redundant. The closure of a section of a business where only a handful of employees work constitutes a major workplace change within the meaning of the Award Consultation clause. Specifically, that change, namely termination of employment, is defined as a significant change under the Award. Accordingly, the respondent is required to comply with s.389(1)(b) of the FW Act.
[109] On the material before the Tribunal, the respondent did consult with the applicant by telephone shortly after the decision was made to close the applicant's section of the business. As a result of the altercation incident, the applicant was absent from the earlier consultation meeting with the general body of employees. There were also some earlier difficulties incurred contacting her by telephone.
[110] Whilst in the circumstances of this case it might be said the applicant was not afforded "a lot of notice", the respondent has met the obligations to consult imposed by Clause 9, Consultation regarding major workplace change under the Textile Industries Award. I note Mr Evans did not take serious issue concerning the degree of consultation. In many respects, the applicant was in a similar situation to the applicant in the Di Masi case where despite the impediments to consultation identified, there were no obvious measures that could have been taken to avoid him losing his job in the circumstances. The applicant also received a letter dated 22 August 2011 confirming the closure.
[111] The applicant's dismissal was a case of genuine redundancy as the respondent no longer required the applicant's job to be performed. Moreover, in accordance with s.389 (2)(a) and (b) of the FW Act, there were no redeployment options available to the applicant.
[112] The applicant's dismissal was a case of genuine redundancy pursuant to s.389 of the FW Act. Accordingly, the application is jurisdictionally barred on the grounds the dismissal was a genuine redundancy. Accordingly, the application made to s.394 of the FW Act is dismissed.
COMMISSIONER
Appearances:
For the applicant, Mr B Evans, Agent.
For the respondent, Ms E James, of Counsel.
Hearing details:
2012
Newcastle
January 24 and 25
1 Textile, Clothing, Footwear and Associated Industries Modern Award 2010 [MA000017]
2 Transcript at para PN1353
3 Applicant’s statement - Para 15
4 [Ibid] para 15
5 Transcript at para PN1368-70
6 Transcript at para PN1357
7 Transcript at para PN1245 and PN1340
8 Transcript at para PN1345
9 Exhibit A1 - para 5
10 [Ibid] para 7
11 [Ibid] para 6
12 [Ibid] para 9
13 [Ibid] para 11
14 Transcript at para PN184
15 Transcript at para PN414
16 Transcript at para PN561
17 Transcript at para PN563
18 Exhibit A3
19 Mr Francesco Di Masi v Coastal Fisheries Pty Ltd ATFT Sea Empire Unit Trust[2010] FWA 6280; ACE Insurance Ltd v Trifunovski [2011] FCA 1204; Williams v MacMahon Mining Services Pty Ltd [2010] FCA 1321; On Call Interpreters and Translaters Agency Pty Ltd v Commissioner of Taxation (No 3)[2011] FCA 366; Hollis v Vabu Pty Ltd [2001] HCA 44; and Reed v Blue Line Cruises Limited [1996] IRCA 601 (29/11/96)
20 Transcript at para PN1170
21 Transcript at para PN1366
22 Transcript at para PN1370
23 Hollis v Vabu Pty Ltd (2001) 207 CLR 21
24 Applicant’s statement - Para 14
25 Applicant’s statement - Para 21
26 Exhibit R1
27 Transcript at para PN221
28 Transcript at para PN222
29 Transcript at para PN226-232
30 Transcript at para PN235
31 Exhibit R3
32 Transcript at para PN284
33 Transcript at para PN296
34 Exhibit R5
35 Transcript at para PN324
36 Transcript at para PN326
37 Transcript at para PN370
38 Transcript at para PN390
39 Exhibit R9 paragraph 2
40 Transcript at para PN786
41 Transcript at para PN791
42 Exhibit R11 para 2
43 Exhibit R11 para 3
44 Exhibit R12 para 6
45 Transcript at para PN1016
46 Transcript at para PN1046-1048
47 Transcript at para PN994 and PN1017
48 Transcript at para PN1250
49 Transcript at para PN1263
50 Transcript at para PN1265
51 Transcript at para PN1292-1293
52 Williams v MacMahon Mining Services Pty Ltd[2010] FWA 132
53 Reed v Blue Line Cruises (1996) IRCA 601
54 Transcript at para PN1372
55 Transcript at para PN1373
56 Hamzy v Tricon International Restaurants [2001] FCA 1589; (2001) 115 FCR 78
57 Exhibit A1 para 18
58 Exhibit A1 para 16
59 Transcript at para PN739
60 Exhibit R9 para 8
61 Transcript at para PN810
62 Transcript at para PN1329
63 Transcript at para PN1331
64 S.123 (1)(c)
65 Transcript at para PN1453
66 Transcript at para PN1456-1463
67 Transcript at para PN1465-1466
68 Transcript at para PN1470
69 Di Masi v Coastal Fisheries Pty Ltd ATFT Sea Empire Unit Trust (2010) FWA 6280
70 (1984) 8 IR 34; (1984) 9 IR 115
71 Amcor Limited v Construction, Forestry, mining and Energy Union and Ors ([2005] HCA 10; 222 CLR 241)
72 Fair Work Bill 2008 Explanatory Memorandum paragraph 1546
73 Fair Work Bill 2008 Explanatory Memorandum paragraph 1553
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