Ms Sharon Lee Hughes v Leerdam Pty Ltd T/A Electric Control Products
[2010] FWA 6211
•20 AUGUST 2010
[2010] FWA 6211 |
|
DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Ms Sharon Lee Hughes
v
Leerdam Pty Ltd T/A Electric Control Products
(U2009/12985)
COMMISSIONER WILLIAMS | PERTH, 20 AUGUST 2010 |
Termination of employment.
[1] Ms Sharon Hughes, the applicant has applied for an unfair dismissal remedy pursuant to s. 394 of the Fair Work Act 2009 (the Act). The respondent is Leerdam Pty Ltd t/as Electric Control Products.
[2] The application was the subject of a conference before a conciliator however the matter has not been resolved.
[3] The applicant was employed on 1 February 2007 and terminated on 5 October 2010.
[4] The respondent objects to the application, arguing that the dismissal was a genuine redundancy and it was consistent with the Small Business Fair Dismissal Code.
[5] Section 385 of the Act specifies when a person has been dismissed. Section 388 and 389 respectively define genuine redundancy and when a dismissal is consistent with the small business code, as follows:
s.385 What is an unfair dismissal
A person has been unfairly dismissed if FWA is satisfied that:
(a) the person has been dismissed; and
(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.
Note: For the definition of consistent with the Small Business Fair Dismissal Code: see section 388.
s.388 The Small Business Fair Dismissal Code
(1) The Minister may, by legislative instrument, declare a Small Business Fair Dismissal Code.
(2) A person’s dismissal was consistent with the Small Business Fair Dismissal Code if:
(a) immediately before the time of the dismissal or at the time the person was given notice of the dismissal (whichever happened first), the person’s employer was a small business employer; and
(b) the employer complied with the Small Business Fair Dismissal Code in relation to the dismissal.
s.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.
Introduction
[6] The respondent produces safety switches for conveyor systems used in the mining industry. These are sold to the mining industry through distributors based in Western Australia, Queensland, New South Wales, Victoria, South Africa and Indonesia.
[7] Immediately prior to the applicant’s dismissal there were eight employees engaged by the respondent including those employees who the respondent says were made redundant along with the applicant.
[8] The applicant was employed on 1 February 2007 as the respondents Bookkeeper on a Part Time basis of around 30 hrs per week on four days a week.
[9] She was responsible for all accounting, administration and payroll duties, including ongoing monthly and quarterly payroll/tax liabilities & debtor/creditor management.
[10] Towards the end of 2007, Marcus Coyle the Managing Director of the respondent established a new electroplating business in partnership with his wife, Fiona Coyle. The premises were located across the road from the respondent’s premises. The applicant was also responsible for managing the accounts of this new business (“Fimar”) and during this ‘start-up’ phase was responsible for setting up and managing the administration and accounting of the new entity.
[11] The commencement of operation of Fimar was delayed. Fimar was regularly billing the respondent for “Research & Development” & “Labour” at approximately $9,000 a fortnight plus regular reimbursement expenses for capital purchases. As directed by Marcus Coyle the applicant continued to routinely transfer regular, ongoing payments to Fimar.
[12] This the applicant says was gradually taking its toll on the respondents finances and cash flow was increasingly compromised.
[13] In February 2009, Marcus Coyle told the applicants mother Susan Hughes, who was then working three days a week for the respondent in the office, that “for financial reasons” he had to terminate her employment. She was able to negotiate with Marcus Coyle to continue her employment but this was reduced to one day per week, to cover the day off the applicant had each week.
The redundancies
[14] The evidence of the witnesses was that on Friday 2 October 2009, Susan Hughes telephoned the applicant and advised her she had just been terminated by Marcus Coyle over the telephone. Marcus Coyle advised her that her employment had come to an end and her services were no longer required due to financial reasons 1.
[15] The applicants evidence was that on Monday 5 October 2009 Marcus Coyle met with her and told her
“The directors had a meeting over the weekend and have decided on a restructure of the company. As a result, your position is no longer required. You need to hand me your keys, pack up your belongings & leave the premises immediately” 2
[16] Evidence was also given by Mr Thomas Silk who had been the production manager for the respondent until he was also terminated by Mr Marcus Coyle on Monday 5 October 2009 who advised him that the business was to be restructured and his position was no longer required 3.
[17] Evidence for the respondent was given by Mr Marcus Coyle the Managing Director of the respondent. His evidence in terms of how the dismissals of Sharon Hughes, Susan Hughes and Thomas Silk were carried out was generally consistent with the evidence of the dismissed employees. His evidence was that the respondent business is owned by his parents, Martin and Brenda Coyle, whereas Fimar Pty Ltd (Fimar) is a separate entity owned by himself and his wife Fiona Coyle.
[18] Evidence was also given by Mr Martin Coyle and Mrs Fiona Coyle.
[19] Martin Coyle’s evidence went to the declining financial position of the respondent which decided that a restructuring was necessary and that Marcus Coyle was left to make the decision as to how to resolve the financial position of the respondents to ensure the continuation of its operations. Martin Coyles evidence was that the intention when establishing Fimar was that once it was up and running it would have a direct benefit to the respondent but that in hindsight the timing of establishing Fimar was poor. Consequently it took longer to get Fimar up and running than was expected and that this caused an ongoing financial drain for the respondent. This coincided with a downwards trend in sales and that it was this situation that necessitated the restructure and ultimately the redundancies of Sharon Hughes, Susan Hughes and Thomas silk.
[20] The evidence of Mr Marcus Coyle is that Fimar is partly funded by the respondent to assist it in its startup phase. The intention was that went it was up and running Fimar will provide electroplating and electro polishing services to the respondent which are elements of the production process of the respondent and this was expected to have significant benefits for the respondent's operations and its capacity to meet the demands of its customers in the future.
[21] His evidence was that the financial situation of the respondent at the time of the dismissal of the applicant had deteriorated as a result of the slowdown within the mining industry which had reduced the respondent sales and profits. As a result of reduced sales the number of production employees in the factory had fallen from 12 in early 2009 to 3 at the time of the applicant's dismissal. This reduction had occurred mostly through natural attrition.
[22] Marcus Coyle agrees that there were significant payments from the respondent to Fimar and this also contributed to the deterioration in the respondent's financial position. His evidence was that as a consequence of this he and his wife and also Martin and Brenda Coyle had to, from time to time, transfer significant amounts of their personal money into the respondent's bank accounts in order to maintain a cash flow necessary to pay suppliers and wages.
[23] Marcus Coyles evidence was that in order to keep the respondent trading a restructure was necessary. Prior to deciding to implement redundancies he spoke to his distributors about future contracts and was informed by them that their work was being put on hold and this wasn't likely to change. He says that he analysed the company's costs and its wages and concluded that the wages, at a time when the company's production was in decline, were high. Having discussed the issue with Martin Coyle who had agreed there was a need to reduce costs and having spoken with his wife Fiona Coyle he decided that the redundancies were the appropriate restructure to reduce costs.
[24] I find then that Marcus Coyle was the decision maker who decided to dismiss the applicant.
[25] His evidence was that:
“Given that the production manager and administration positions were ancillary to production and their duties could be absorbed into other roles it was decided to make these positions redundant. The production manager duties were taken on by myself and the factory staff, and some duties were abolished. Some of the bookkeeper/admin and accounts manager duties were taken on by Fiona Coyle within her existing part-time role, with the accountants P W Wishart taking on the Bas/Tax and other financial tasks.” 4
[26] Mrs Fiona Coyles evidence was that she was first employed by the respondent 2002 as a full time office person taking care all of the office and bookkeeping requirements until December 2004 when she went on maternity leave through to 2006. Since then she had continued to work from home assisting Marcus Coyle with the testing of products.
[27] Her evidence was that to keep the respondent trading a restructure was needed and that having gone through all the bank and financial reports it was decided that the dismissal of the two administration staff and the production manager were necessary to reduce the wages costs.
[28] Her evidence is that she has taken over some of those administrative duties and bookkeeping responsibilities however after the applicant left a number of deficiencies in the accounts came to light which have necessitated the respondent engaging a sub contract book keeper, who has been working part time to resolve the bookkeeping deficiencies but that contract will conclude in November and not be extended beyond that. Her evidence was that as part of the restructuring cost cutting the cleaning of the office areas and the factory were now being done by herself.
Submissions
The respondent
[29] The respondent submits that a decline in demand had placed the Respondent in a position where its expenditure was greater than the income it was receiving.
[30] The transaction history for the respondent 5 shows that over the period between May 2009 and October 2009 it was necessary for Marcus and Fiona Coyle and Martin and Brenda Coyle to inject between them $173,000 of their personal monies in order to pay wages and other expenses. The transaction history also show that without the monies paid into the Respondent by the family members, the debits to the Company’s account between April 2009 till July 2010 was $4,479,761 compared to credits of $4,227,343. In other words, the Respondent was in the red.
[31] The Applicant’s evidence was that she was also aware of the financial problems being faced by the Respondent during 2009.
[32] Given the above it was appropriate for the Respondent to consider how it would reduce expenses in order to re-establish a positive cash flow for the business. Marcus Coyle spoke to his distributers to determine the likely prospects for increased orders within the foreseeable future. He was informed by his distributers that jobs were being put on hold and this wasn’t likely to change.
[33] On the basis that wages costs were higher than income from production it was decided to reduce the level of expenditure on wages. As a result of this it was determined that the greater cost savings could be achieved by reducing the number of office based staff. Given that these roles are ancillary to production the loss of these positions would have the least impact upon productivity. Furthermore with the reduced number of employees and demand for the Company’s products, the duties still required of these employees could be absorbed into other positions.
[34] The definition of redundancy under the Act is made up of two parts. The first being that “the person’s employer no longer required the person’s job to be performed by anyone” and secondly that this occurs “because of changes in the operational requirements of the employer’s enterprise”.
[35] With respect to the first part of the definition, in the recent decision of Ulan Coal v Howarth & others 6 the Full Bench examined the situation of where an employee was made redundant due to operational reasons notwithstanding that their duties may still be performed. In examining this issue, the Full Bench determined:
[17] It is noted that the reference in the statutory expression is to a person’s “job” no longer being required to be performed. As Ryan J observed in Jones v Department of Energy and Minerals (1995) 60 IR 304 a job involves “a collection of functions, duties and responsibilities entrusted, as part of the scheme of the employees’ organisation, to a particular employee” (at p. 308). His Honour in that case considered a set of circumstances where an employer might rearrange the organisational structure by breaking up the collection of functions, duties and responsibilities attached to a single position and distributing them among the holders of other positions, including newly-created positions. In these circumstances, it was said that:
“What is critical for the purpose of identifying a redundancy is whether the holder of the former position has, after the re-organisation, any duties left to discharge. If there is no longer any function or duty to be performed by that person, his or her position becomes redundant...” (at p.308)
[36] This does not mean that if any aspect of the employee’s duties is still to be performed by somebody, he or she cannot be redundant 7. The examples given in the Explanatory Memorandum illustrate circumstances where tasks and duties of a particular employee continue to be performed by other employees but nevertheless the “job” of that employee no longer exists.
[37] In Kekeris v A. Hartrodt Australia Pty Ltd 8Hamberger SDP considered whether a dismissal resulting from the restructure of a supervisory team was a case of genuine redundancy. As a result of the restructure, four supervisory team leader positions were replaced by three team leader positions. The Senior Deputy President said:
“When one looks at the specific duties performed by the applicant prior to her termination they have much in common with those of two of the new positions in the new structure. The test is not however whether the duties survive. Paragraph 1548 of the explanatory memorandum makes clear that it can still be a ‘genuine redundancy’ where the duties of a previous job persist but are redistributed to other positions. The test is whether the job previously performed by the applicant still exists.” (at par [27])
[38] In this situation, whilst a number of the duties of the applicant have been absorbed into the roles of others and continue to be performed, the applicants job no longer existed.
[39] The question as to whether a position has been made redundant lies on whether the job is no longer required to be performed by anyone due to changes in operational requirements. The test is not one based on whether the employer made the right decision in making a particular position or person redundant.
[40] Given the circumstances and size of the Employer this was a logical approach to restructuring the business, the Act does not require Fair Work Australia to consider whether this is the most effective way of restructuring the business, this being the prerogative of the respondent.
[41] With respect to the second part of the definition of redundancy, “because of changes in the operational requirements of the employer’s enterprise” in Doolan & others v Winderee Investments 9, Commissioner Thatcher adopts the definition prescribed by the former Workplace Relations Act 1996 (Cth) which is defined as “reasons of an economic, technological, structural or similar nature relating to the employer’s undertaking, establishment, service or business, or to a part of the Employer’s undertaking, establishment, service or business”10.
[42] Here the trigger for the redundancies was due to changes in the economic circumstances in which declining income was exceeded by expenses.
[43] The above decision also adopts the reasoning adopted by the Full Bench of the AIRC in Carter and Village Cinemas Australia Pty Ltd 11
... the operational reason relied upon by the employer need only be a ground or cause for the termination of the employment of an employee. It need not be something that demands or brings about an obligation to terminate the employment of a particular employee. The termination of employment of the particular employee does not have to be an unavoidable consequence of the operational reason for the limitation in s. 643(8) to operate. Consequently, whether the employer could have done something other than terminating the employee's employment will generally be irrelevant in deciding whether the termination was for the genuine operational reasons, or reasons that include genuine operational reasons.
[44] The Applicant has argued the genuineness of the redundancy is tainted because she was not given the opportunity to renegotiate her contract of employment to allow her employment to be maintained. Even were such negotiations likely to avert the need to make the position redundant, the above decision highlights that this is not a consideration in assessing whether the redundancy is genuine.
[45] It is the Applicant’s contention that the redundancies were used as a sham in order to terminate the applicant for personal reasons. The Respondent disputes this assertion, and as the information outlines above confirms there were substantial financial pressures on the Respondent which was the cause for the Applicant’s position to be made redundant.
Consultation Obligations
[46] There is no enterprise agreement or other registered agreement covering employees engaged by the Respondent.
[47] Section 12 of the Act defines a modern award as “a modern award made under Part 2-3”. The modern awards made under this Part did not commence effect until 1 January 2010, being after the termination took effect.
[48] Given the absence of either instrument in these circumstances the consultation obligations specified in s.389(1)(b) did not apply.
[49] However there is some question as to the application of the Minimum Conditions of Employment Act 1993 (W.A.) which includes s. 41 Employee to be Informed which contains reference to possible consultation obligations at s.41(1) and (2).
Alternative Employment
[50] As a result of the reason for the three redundancies and the small size of the Respondent there were no alternative positions within either the respondent or Fimar, at the time of the redundancies. Fimar had two subcontract positions but no employees.
[51] The Applicant claims that it would have been reasonable for the Respondent to redeploy her in the position of accountant. The respondent does not engage the services of a full time accountant, rather uses an accountancy firm to perform those tasks that require the skills of a professional accountant. As such there is not a position of accountant available within the organization.
[52] The Applicant’s submission is that there was an obligation on the Respondent to give the applicant first option on any future positions created within the respondent. This argument would extend the obligation prescribed by s.389(2) to redeploy where reasonable as an ongoing obligation upon an employer which continues to apply after the employment has ceased. There is nothing in the wording of the Act or Explanatory Memorandum which supports this proposition.
Small Business Fair Dismissal code
[53] The evidence of Marcus Coyle confirms that immediately prior to the redundancies there were eight employees engaged by Electric Control Products (including those employees who were made redundant), of which 3 were employed on a part time basis. Consequently the Full Time Equivalent would be less than eight. To the extent that Fimar may be an associated entity for the purpose of s.23(3) of the Act, it did not at the time engage any employees. At the time of the dismissal Fimar engaged the services of 2 subcontractors. Whilst subcontractors are not included for the purpose of determining the number of employees engaged by a business, even were it to be successfully argued that the engagement of these individuals should have been that of an employee, there would still have been fewer than 15 employees.
[54] From this it is clear the respondent is a small business as defined by the Act.
[55] For the purpose of s388 of the Act a declaration was made by the then Acting Minister for Employment and Workplace Relations on 24 June 2009 establishing the Small Business Fair Dismissal Code.
[56] As detailed in the previous sections of this submission, the termination of the Applicant was as a result her position being made redundant due to the need to restructure the Company’s operation due to declining income.
[57] On the basis therefore that the termination is for reason of redundancy, it is therefore consistent with the Small Business Fair Dismissal Code.
[58] The dismissal was a genuine redundancy fulfilling the requirements established under s 389 of the Act in that:
- The Employer no longer required the applicants job to be performed by anyone because of changes in the operational requirements of the respondents enterprise
- There were no consultations obligations required of the respondent.
- There were no alternative positions within the respondents business or Fimar in which the Applicant could be redeployed.
- Therefore the applicant has not been unfairly dismissed.
The applicants submission
[59] The applicant cannot succeed if the dismissal was a case of genuine redundancy as defined in the Act.
[60] Section 389(1) sets out four factors that need to be present for a redundancy to meet the definition of a genuine redundancy.
[61] The applicant gives evidence that her dismissal is not a genuine redundancy but came about as a result of a ploy by the Respondent to unfairly dismiss her and two other employees for personal reasons.
[62] As Lacey SDP stated in Moxharn v Baxter Business Pty Ltd 12
[30] I think it trite to say that where it is apparent that operational reasons have seen contrived for the retrenchment of an employee who is targeted for personal reasons the operational reasons simply cannot he genuine.
[63] In this case the Tribunal should accept the evidence that the termination was contrived for personal reasons and therefore cannot be claimed to be a genuine redundancy.
[64] In the restructure the Respondent chose not to re-negotiate the Applicants conditions of employment to accommodate the restructure before making her making redundant.
[65] The evidence submitted by the Applicant demonstrates that the restructure failed within a short space of time and the bookkeeper position was re-advertised in January 2010.
[66] The applicant submits that the employer was obligated to offer first refusal of the position to the applicant given her exemplary service. If in the first instance the redundancy was genuine then it would be reasonable to reinstate the Applicant.
[67] The applicant submits that in the original circumstances it would have been reasonable to redeploy the applicant into one of the restructured positions. However, because no redundancy discussions ever took place this option was not canvassed.
[68] The applicant submits that the applicant's job in substance still exists and is required and is being done the new bookkeeper.
[69] Subtle changes to duties do not take away from the fact that the Applicants position continues in substance.
[70] The applicant submits that in this case the Applicant was willing ready and able to fit into the restructure but was never given the opportunity. In this case the Applicant was able to do the role allocated to the Accountant.
[71] The applicant submits that under the current provisions the focus is squarely on the circumstances of the termination in question.
[72] In this case this carries with it the problem referred to by the Full Bench in Cruickshank v Priceline Pty Ltd 13.
[10] Speaking generally the reasons for termination of employment are the reasons of the decision-maker. In many cases the decision-maker will be easily identifiable. In other cases the situation may not be straight forward. For example the decision may have been taken by a group such as a committee. In any event the evidence of the decision-maker, or decision-makers if there are more than one, will be pivotal.
[73] The applicant submits that FWA has insufficient evidence other than that provided by the Applicant as to how the decision was arrived at and by whom and the economics involved.
[74] This in reality was a restructure to bring about a predetermined result and does not qualify as a genuine redundancy.
[75] I note that the applicant’s submissions did not clarify whether or not there was a modern award or agreement that obliged the respondent to consult about the redundancy but rather said this was a “grey area”.
[76] The applicant submits that if the tribunal finds that this was a genuine redundancy then the Applicant should have been redeployed initially or subsequently after a few weeks when the decision was made to reinstate the bookkeeper position the applicant should have been offered this.
[77] If the tribunal concludes that this was not a genuine redundancy the applicant submits that was no valid reason for the dismissal and the applicant was not notified of the reason for the termination until after the termination was made and there was no opportunity therefore to respond to the reasons for the dismissal consequently it has submitted the dismissal was harsh unjust and unreasonable.
Consideration
[78] Section 389 defines genuine redundancy to mean a dismissal where the person’s employer no longer requires the person’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise.
[79] The phrase “no longer required the person’s job to be performed by anyone” involves the employer no longer wishing the job an employee has been doing to be done by anyone, rather than any personal act, default or consideration peculiar to the employee dismissed 14.
[80] As the respondent argues this can involve instances where an employer might rearrange the organisational structure by breaking up the collection of functions, duties and responsibilities attached to a job and distributing them among the holders of other positions, including newly-created positions 15.
[81] This is what the evidence of the respondents witnesses discloses happened in this case. The respondents intention was to distribute the functions and duties of the applicant in a particular way with Mrs Fiona Coyle picking up a significant part of those duties however as events unfolded an alternative arrangement was put in place which involved utilising the resources of the respondents accountants and sometime later also a bookkeeper and a new junior data entry employee as well as Mrs Coyle. These arrangements were put in place some weeks after the applicant was terminated. The job the applicant was doing is no longer being done by anyone but her duties have been distributed across a number of these other individuals. The respondent’s witnesses were not shaken on their evidence regarding the intention of the respondent at the time the applicant was terminated nor on the subsequent developments and arrangements that were actually put in place.
[82] The evidence of the applicant regarding the advertisement of a position some time after she was terminated and of Mr Silk regarding persons in the office when he visited some weeks later after his termination were in part explained by the respondents witnesses or the interpretation the applicant placed on these facts is refuted by the respondent. Ultimately this evidence for the applicant does not in my view seriously challenge the evidence of the three respondent’s witnesses on the critical issues. I do accept the evidence for the respondent and there is no doubt then that the respondent had decided that it did not want the applicant's job to be done by anyone.
[83] However the definition of genuine redundancy also requires the tribunal to consider the reasons for this decision.
[84] The applicant says that the real reason for this was to do with personal issues or conflicts between the respondent and the applicant. The applicant argues that questions she had raised both about the money that was being moved between the respondent’s accounts and Fimar and about the subcontractors to Fimar in particular Mr Ashbury were the real reasons for the respondent's decision to dismiss her.
[85] The applicant's evidence was that these questions were asked quite some time prior to her dismissal and that she had not noticed any deterioration in the relationship between her and the respondent’s management between having raised these questions and her dismissal. This similarly was the evidence of Mrs Susan Hughes.
[86] The applicant acknowledges that the respondent had significant cash flow difficulties and in fact she was concerned about this herself. The applicant did not approve of monies being paid to Fimar as was occurring and authorised by Marcus Coyle.
[87] The onus is on the respondent to establish that the operational requirements were the reasons for the dismissal. It is not sufficient for an employer merely to assert there are operational reasons for a job being made redundant. Here the respondent has explained the reasoning and the evidence on this is broadly consistent between Marcus Coyle, Martin Coyle and Fiona Coyle. In short sales and income had been declining for a period and at the same time ongoing payments to Fimar were required as it was being set up and together this caused the respondent's business to be in financial difficulties. This triggered a review of the situation and the decision was made that there needed to be a restructure of the business to resolve the financial problems.
[88] Mr Marcus Coyle made the decision that the respondents wages costs needed to be reduced and so the restructure would involve a reduction in administration office staff whilst retaining the production employees. His decision was to make the three positions of the applicant, Mrs Hughes and Mr Silk redundant. There is nothing to suggest that there was some ulterior motive for this other than the assertions of the applicant that are not supported by the evidence. In all the circumstances I accept that the reason for the applicants job no longer being required to be done by anyone was changes to the operational requirements of the respondent made in response to the respondents deteriorating financial situation.
[89] The fact that the applicant would have preferred the respondent to take a different course of action or a different form of restructure does not change this conclusion.
Obligation to consult about the redundancy?
[90] Both parties touched on but only provided brief submissions on the obligations to consult about the redundancy that may have applied in this case by virtue of section 389 (1) (b) of the Act which is set out below:
“the employer has complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy.
[91] The applicant's representatives did not suggest to the tribunal any particular instrument in which such an obligation may lie however the respondent's representatives questioned whether the Minimum Conditions of Employment Act 1993 (WA) may be applicable in particular s.41.
[92] No modern award would have applied to the applicant's employment because the dismissal occurred prior to 1 January 2010.
[93] Neither party suggested nor is it apparent to the tribunal that the respondent was covered by any enterprise agreement at the time of the dismissal that would have applied to the applicant's employment.
[94] That however is not the end of the matter because the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 at Schedule 3 Transitional instruments and the FW Act, Part 5, Item 36 Application of unfair dismissal provisions, provides at (b):
“ the reference in sub paragraph 382 (b) (i) and paragraph 389 (1) (b) of that Act to a modern award include a reference to an award based transitional instrument”
[95] In this case the tribunal needs to consider whether or not there was an award based transitional instrument that applied to the employment of the applicant and if so whether the employer has complied with any obligations in it to consult about the redundancy.
[96] Consideration of the terms of the previous legislation the Workplace Relations Act 1996 reveals that Schedule 8 State Employment Agreements and State Awards provides at Clause 31 that an employer such as a constitutional corporation defined in section 6 of the Workplace Relations Act 1996, which I am satisfied the respondent was, who do not use a pre-reform state employment agreement, but rather was bound by a relevant pre-reform state award or State or Territory industrial law, to regulate in whole or in part the terms and conditions of employment of its employees immediately before 27 March 2006 is bound by a Notional Agreement Preserving a State Award, commonly called a NAPSA.
[97] In this instance the evidence is that the business was operating prior to 27 March 2006 and employed staff. Consequently if the terms and conditions of one employee at that time were not determined under a state employment agreement then they would have been determined in part by the Minimum Conditions of Employment Act 1993 (WA) which was a state industrial law and so became a NAPSA. Consequently a NAPSA would have come into operation on 27 March 2006 which would have bound the current employees and future employees including apparently the applicant 16.
[98] Clause 34 Terms of a Notional Agreement Preserving State Awards of Schedule 8 of the Workplace Relations Act 1996 however explains that in such circumstances only what are defined in that clause as 'preserved entitlements' are taken to become terms of the NAPSA.
[99] The list of preserved entitlements include notice of termination and redundancy pay but do not include any other terms that touch on or could be interpreted as being an obligation in the NAPSA to consult about the redundancy.
[100] My conclusion then is that whilst the Minimum Conditions of Employment Act 1993 (WA) may have had application to the applicant's employment at the time of the dismissal as a NAPSA its terms were limited to preserved entitlements and there are no preserved entitlements that involve obligations on the employer to consult about the redundancy.
[101] In this case for the purposes of section 389 (1) (b) there was no obligation that applied to the applicants employment for the respondent to consult about the redundancy
[102] Finally for the applicant it was argued that the Respondent should have renegotiated the Applicants conditions of employment as an alternative to the redundancy and the respondent was obligated to offer first refusal of the bookkeeping position which was later established to the applicant given her exemplary service. These arguments however are not supported by any authority and there is no basis for the tribunal to conclude that what were such ongoing obligations on the respondent.
Redeployment?
[103] In terms of requirements in section 389(2) as to whether it would have been reasonable in all the circumstances for the applicant to have been redeployed either within the respondent's enterprise or an associated entity of the respondent there is no evidence before the tribunal that would support a conclusion that this was possible. In terms of the respondent's enterprise there were no other positions to which the applicant could be redeployed and if indeed Fimar is an associated entity of the respondent at the time of the termination it had no employees so again it was not reasonable or possible for the applicant to be redeployed there.
[104] For the reasons above then I find that within the meaning of section 389 the dismissal of the applicant was a case of genuine redundancy. Consequently because of the terms of section 385 the applicant has not been unfairly dismissed.
Small Business Fair Dismissal Code
[105] Given this matter is disposed on the basis that the dismissal was a genuine redundancy the issue of the Small Business Fair Dismissal Codes application does not need to be determined.
[106] The application is dismissed.
COMMISSIONER
Appearances:
Mr Fayle, Solicitor, on behalf of the Applicant
Mr P Moss of the Chamber of Commerce and Industry of WA on behalf of the Respondent
Hearing details:
2010.
Perth:
August 3
1 Witness Statement Susan Hughes Para 27
2 Witness Statement Sharon Hughes
3 Witness Statement of Thomas Silk Para 1, 3, 8 and 10.
4 Witness Statement M Coyle “Redundancy”
5 Exhibit A4
6 Ulan Coal Mines Limited v Henry John Howarth and others[2010] FWAFB 3488
7 see Dibb v Commissioner of Taxation (2004) FCR 388 at 404-405
8 [2010] FWA 674
9 Tyson Doolan, Ian Bilston & Geoff Faulkner v Winderee Investments Pty Ltd, T/A City Toyota[2010] FWA 4236 at 10-17
10 s643(9)
11 Carter and Village Cinemas Australia Pty Ltd [2007] AIRCFB 35 at 28
12 [2007] AIRC 488
13 [2007] AIRC 292
14 Amcor Limited v Construction, Forestry, Mining and Energy Union & ors (2005) 222 CLR 241 at pn 43 and 54, 9 March 2005
15 Ulan Coal Mines Limited v Henry John Howarth and others[2010] FWAFB 3488 at 17
16 Items 32 and 33 of Schedule 8 Workplace Relations Act 1996
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