Ms Kwanta Chaiprasroet-Wall v Standom Smallgoods Butchers Pty Ltd
[2010] FWA 5263
•15 JULY 2010
[2010] FWA 5263 |
|
DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Ms Kwanta Chaiprasroet-Wall
v
Standom Smallgoods Butchers Pty Ltd
(U2010/6073)
COMMISSIONER STEEL | ADELAIDE, 15 JULY 2010 |
Termination of employment – Jurisdiction – Genuine redundancy
Introduction
[1] This application concerns an application under s 394 of the Fair Work Act 2009 (“the Act”) by Ms Chaiprasroet-Wall (“the applicant”) who alleges that the termination of her employment with Standom Smallgoods Pty Ltd (“the respondent”) was unfair with reference to the definition of unfair dismissal contained within s 385 of the Act.
[2] This application was the subject of an unsuccessful conciliation. The respondent has subsequently raised a jurisdictional objection on the basis the applicant was made “genuinely redundant” consistent with the definition in s 385 of the Act.
[3] The tribunal decided a hearing was appropriate in this matter. The hearing was conducted in Adelaide on 9 June 2010. That hearing addressed initially the jurisdictional matters, however the tribunal further heard submissions and evidence that went to the respective arguments on merit for the convenience of all parties.
[4] During the hearing it was apparent that the English language was not the applicant’s first language. The applicant is from Thailand and has a limitation in respect to the reading and writing of English. In employment matters she has obviously depended on her husband’s assistance generally.
[5] The parties agreed with the tribunal that the applicant has provided competent evidence to the best of her abilities and there were no objections as to prejudice falling from the process of this matter.
The legislation
[6] Relevantly, the meaning of genuine redundancy is covered in the Act as follows:
“389 Meaning of genuine redundancy
(1) A person’s dismissal was a case of genuine redundancy if:
(a) the person’s employer no longer required the person’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise; and
(b) the employer has complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy.
(2) A person’s dismissal was not a case of genuine redundancy if it would have been reasonable in all the circumstances for the person to be redeployed within:
(a) the employer’s enterprise; or
(b) the enterprise of an associated entity of the employer.”
Furthermore, the relevant Explanatory Memorandum states:
- a machine is now available to do the job performed by the employee;
- the employer’s business is experiencing a downturn and therefore the employer only needs three people to do a particular task or duty instead of five; or
- the employer is restructuring their business to improve efficiency and the tasks done by a particular employee are distributed between several other employees and therefore the person’s job no longer exists.
“1547. Paragraph 389(1)(a) provides that a person’s dismissal will be a case of genuine redundancy if his or her job was no longer required to be performed by anyone because of changes in the operational requirements of the employer’s enterprise. Enterprise is defined in clause 12 to mean a business, activity, project or undertaking.
1548. The following are possible examples of a change in the operational requirements of an enterprise:
1549. It is intended that a dismissal will be a case of genuine redundancy even if the changes in the employer’s operational requirements relate only to a part of the employer’s enterprise, as this will still constitute a change to the employer’s enterprise.
1550. Paragraph 389(1)(b) provides that it will not be case of genuine redundancy if an employer does not comply with any relevant obligation in a modern award or enterprise agreement to consult about the redundancy. This does not impose an absolute obligation on an employer to consult about the redundancy but requires the employer to fulfil obligations under an award or agreement if the dismissal is to be considered a genuine redundancy.
1551. Subclause 389(2) provides that a dismissal is not a case of genuine redundancy if it would have been reasonable in all the circumstances for the person to be redeployed within the employer’s enterprise, or within the enterprise of an associated entity of the employer (as defined in clause 12).
1552. There may be many reasons why it would not be reasonable for a person to be redeployed. For instance, the employer could be a small business employer where there is no opportunity for redeployment or there may be no positions available for which the employee has suitable qualifications or experience.”
[7] A dismissal which is a genuine redundancy is not an unfair dismissal because of the combined effects of ss 385 and 389 of the Act.
The relevant factual context
[8] The tribunal has had regard to all the evidence and submissions provided. Where a conflict in evidence has arisen the tribunal has resolved the facts on an evaluation of the total evidence and the probability of the events in question.
[9] The respondent is a small goods manufacturing company located principally at Hendon in South Australia and has several retail outlets. It employs approximately 60 employees. In the Hendon facility there is a production area, a butcher’s area, a packing and dispatch area, an administration area and an attached retail outlet.
[10] The applicant was employed as a full-time employee in the “packing room” from May 2009 September until 12 February 2010 (8+ months). Her duties were predominantly packing with some incidence of cleaning of offices, peeling of tongues in production and transfer of orders. She did not participate in duties in the delivery, retails sales or dispatch areas.
[11] The ownership of the respondent company changed in January 2010 and the new owners undertook a review of operations seeking to make the business more viable and profitable. They considered the business was overstaffed and affected by declining sales. The applicant accepts that sales of the company product were declining in the period leading up to February 2010. The respondent subsequently reports that 13 people have been made redundant as a consequence of the above review and restructuring of the workforce.
[12] The respondent advised the applicant and her husband in separate meetings in early January 2010 of the proposed review and its potential for operational changes and effects on employees. In the packing area, the applicant and another employee were identified for redundancy, with their full-time roles were to be abolished. However the respondent intended the applicant was to be provided with casual hours of between 25 and 35 per week, subject to a review after three months. Her full-time job was redundant and she was now to be a casual employee on variable hours.
[13] The applicant was advised of this change in a meeting with management and by letter on 22 January 2010. It was to be effective 1 February 2010. The letter did not mention redundancy of the applicant’s job. As a consequence of the meeting the respondent thought the applicant had agreed to a change of contract of employment with the applicant as she raised no objection to the proposal.
[14] The applicant joined the Australasian Meat Industry Employees Union (“the union”) on 22 January 2010. There was no evidence provided to the tribunal as to the nature of contacts between the union and the Australian Meat Industry Council (“AMIC”) as to the respondent’s conduct. However AMIC was contacted by the applicant’s husband, Mr Peter Wall re the respondent’s actions in regard to the applicant. It is not in evidence the respondent knew that the applicant was a union member at any time.
[15] Following that contact from AMIC the respondent reconsidered their approach and in a meeting with the applicant and her husband on 5 February 2010, they advised the applicant by letter that they had acted to change her from full-time to casual employment in error and that such an approach was to be reversed. The applicant was reinstated from 22 January 2010 as a full-time employee.
[16] In that same meeting and letter on 5 February 2010, the applicant was advised she was to be made redundant effective 12 February2010 and was provided with the appropriate notice in lieu. The respondent involved the applicant’s husband on the basis they considered he was her normal assist or representative due to her language skills and it is apparent Mr Wall understood the details of the event. A colleague of the applicant in the packing area, Mr Tsatsanis was also made redundant on 12 February 2010.
[17] The packing area labour force was altered by the respondent to that of a multi skilled labour force involved in packing, dispatch, retailing and deliveries with all employees undertaking varied duties. The total labour force being six, however hours reduced in the weeks after 1 February 2010 in the range of 264 hours down to 194 hours.
[18] The applicant, following her redundancy on 12 February 2010, went overseas for the period 10 April 2010 to 28 April 2010. She was not actively looking for a job prior to the holiday and has subsequently made limited efforts to secure employment.
Consideration
[19] In regard to the jurisdictional objection in this matter the tribunal is bound to identify if the termination of the applicant’s employment was a genuine redundancy as contemplated by the Act.
[20] In consideration of the evidence it is clear that the respondent was undertaking a restructuring of its labour force for sound commercial reasons. It was seeking to reduce labour costs and costs generally and a reduction in full-time staff had been identified as being necessary to achieve this result.
[21] The packing labour force and the applicant’s full time role were to be converted to a group of multi-skilled workers predominantly casual in nature. The applicant may have been able to be provided with work hours in this model in her areas of skill but it would be in contrast to her fellow colleagues who were multi-skilled and who worked in different areas subject to requirements to do so. The hours provided to her would have also been limited and could not have sustained full-time employment as the total hours of this workforce have been reduced overtime.
[22] The applicant’s lack of skills in those areas other than packing, and it is acknowledged she has worked in cleaning and incidental production work, were not a fit with the multi-skilled concept identified and implemented by the respondent. In this respect the respondent’s position is consistent with s 389 (1) (a) of the Act. That is, the applicant’s job was no longer required due to a change in operational requirements. In regard to s 389 (1) (b) of the Act, which refers to conformity with consultation requirements in the relevant modern award, the relevant industrial instrument in this matter is the Meat Industry Award 2010, which at cl 9 provides for notification and discussion requirements with affected employees in respect to change in the workplace and states:
“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 effects include 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 0, 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 0.
(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.”
[23] The tribunal acknowledges the respondent held meetings with staff to advise of the employer’s plans for the enterprise and its implications for staff employment. The respondent was not aware the applicant was a union member at the occasion of the meetings held in January to discuss impending issues, so no invitation was provided to the union. It is not in evidence that the applicant’s husband was advised in early January in respect to her situation and or his situation. Consequently the tribunal can accept that the respondent did notify the applicant but given the evidence and the tribunal’s experience with the applicant’s language skills, it is not conclusive that the applicant understood the content of such notification.
[24] When a decision had been made in relation to the applicant’s employment the respondent met again with her on 22 January 2010. However the focus was not of advice of redundancy and its accompanying requirements. It was about the applicant’s conversion from full-time to casual employment. In that meeting the applicant was unaccompanied and unrepresented and hence again the tribunal is concerned at the extent of the understanding of the applicant as to her situation, the effects of the change upon her, of any mitigation issues etc. such that she could adequately respond in her own interests.
[25] The respondent, upon consideration of their actions and also as a consequence of the involvement of AMIC, such involvement assumed to have been instigated by a contact from the applicant’s husband, reconsidered their approach and arranged a further meeting on 5 February 2010. The respondent had decided to reverse their action of conversion from full-time to casual employment and reinstate the applicant’s service. The respondent had also decided that the applicant was to be made redundant immediately as a full-time role was not available.
[26] In the meeting, the applicant received this advice by the reading of a letter that she was provided with by Ms Sharon Mathews, in the company of her husband and Ms Daniela Kuta. The respondent obviously provided for the applicant’s husband to be in the meeting. The union was not invited. It is apparent that there was limited discussion.
[27] In consideration of these actions the tribunal considers the actions of the respondent do not conform with the nominated requirements in the modern award as to substance and effectiveness of being notified and having the opportunity to discuss the change imposed as per clause 9. It follows that the respondent has not complied with its obligations within section 39 1 (b) of the Act.
[28] For completeness, the tribunal has contemplated the actions of the employer against the requirements of s 389 2 (a) and (b) of the Act and is satisfied that the applicant’s skill assessment had been considered in respect to redeployment. The tribunal considers that in consideration of all the circumstances, it was not reasonable for the employer to redeploy her to another area of the business.
[29] The tribunal therefore finds that the termination of employment by the applicant was not a genuine redundancy as the respondent did not conform with the obligations in the modern award to consult adequately with the applicant. In many respects they did not consider or allow for her lack of language skills that they were fully aware of and which in their mind limited her capacity for varied duties.
[30] Given that the jurisdictional objection does not stand the tribunal finds that the dismissal was, as per s 385 (d) of the Act, an unfair dismissal. Accordingly the dismissal must be assessed in terms of remedy as per Division 4 of Part 3.2 of the Act.
[31] Taking into account all the evidence and the provisions of the Act the tribunal finds that an order for reinstatement is inappropriate in this matter because of the earlier findings as to the circumstances of the respondent in regard to a commercial restructuring of the labour force.
[32] The tribunal finds that an order for compensation is the remedy in this matter taking into account the substantive requirements for consideration within s 392 of the Act and the totality of circumstances in this matter.
[33] Taking all those aspects into consideration the tribunal awards an amount of compensation to the value of what the applicant would have earned as a packer at the MI4 classification under the Meat Industry Award 2010 from the date of termination, 12 February 2010, until 10 April 2010 based on a five day working week, Monday to Friday at 30 hours per week (30 hours being the average of the offer of hours of work available post 22 January 2010).
[34] An order to this effect shall be issued separately.
COMMISSIONER
Appearances:
Mr Smith for the applicant
Mr Johnston with Mr Sandercock for the respondent
Hearing details:
Adelaide
2010:
June 9
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