[2021] FWC 522

FAIR WORK COMMISSION

DECISION

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

Ms Yiying Guo
v
Intex Connect Pty Ltd
(U2020/11172)

COMMISSIONER SIMPSON

BRISBANE, 2 FEBRUARY 2021

Application for unfair dismissal remedy – Jurisdictional objection on the basis of genuine redundancy – Jurisdictional objection upheld – Application dismissed.

[1] On 17 August 2020 Ms Yiying Guo made an application to the Fair Work Commission (the Commission) under s.394 of the Fair Work Act 2009 (the Act) for an unfair dismissal remedy against Intex Connect Pty Ltd (Intex/the Respondent).

[2] The matter was listed for a conciliation before a Fair Work Commission Conciliator on 8 September 2020, however it did not resolve and the matter was allocated to me. I listed the matter for a directions hearing on 30 September 2020, and set the matter for a substantive hearing on 11 November 2020. The matter was adjourned and relisted for hearing on 6 January 2020. At the commencement of the matter both parties agreed that the matter proceed as a determinative conference.

[3] On the Form F3 Response to unfair dismissal application the Respondent put that it had 16 employees at the time of Ms Guo’s dismissal. I am satisfied there is no argument as to whether the Respondent was a small business and therefore the Small Business Fair Dismissal Code does not apply.

Jurisdictional Objection – Genuine Redundancy

[4] The Respondent raised a jurisdictional objection that the dismissal was a case of genuine redundancy. The Respondent submitted it only has two main customers and it has suffered a serious downturn in sales. It submitted that the position of full-time senior accountant was no longer viable.

[5] The Respondent submitted Ms Guo was not qualified in tax accounting, and therefore the Respondent was required to use an external accountant for its tax affairs. The Respondent submitted that Mr Andre Tautz, Director of the Respondent, has taken over some of Ms Guo’s previous accounting duties, and that an external company is now entering invoices, which takes less than one day per week.

[6] On 29 July 2020, the Respondent sent a Termination Letter to Ms Guo that read as follows:

“Dear Yiying

Termination of your employment by reason of redundancy

The purpose of this letter is to confirm the outcome of a recent review by lntex Connect Pty Ltd (the employer) of its operational requirements, and what this means for you.

As a result of the economic downturn and relocation of company finance operation to NSW, the position of Senior Accountant is no longer needed. Regrettably this means your employment will terminate. This decision is not a reflection on your performance.

An Alternative Position is not available within the organization.

Based on your length of service, your notice period is 2 weeks. Therefore your employment will end on Thursday 13th August 2020.

Due to your employment ending because of redundancy, you will be paid redundancy pay of $3708.33 Net, in accordance with Clerks Private Sector Award. This amount represents 4 weeks' pay which is based on your more than 1, but less than 2 years of service.

There is no requirement to attend the office during your notice period.

Please return all company property, including printed documents and downloaded data that is in your possession, prior to your last day of employment.

You will also be paid your accrued entitlements and any outstanding pay up to and including your last day of employment.

If you have been paid annual leave in advance, any amount of annual leave still owing will be deducted from your final pay.

You may seek information about minimum terms and conditions of employment from the Fair Work Ombudsman. If you wish to contact them you can call 13 13 94 or visit their website at and leave payments will usually give rise to waiting periods for Centrelink payments. You should contact Centrelink to find out how long you have to wait to receive any applicable benefits. The best way to do this is to lodge a claim for payment.

We thank you for your valuable contribution during your employment with us. Please contact me if you wish to obtain a reference in the future.

Yours sincerely,

Andre Tautz”

[7] Ms Guo disputed that there was a genuine redundancy. Ms Guo submitted that there was a meeting the day before she was terminated where there was a discussion where she raised concerns surrounding practices in the business and that her employment was terminated because she raised these concerns. Ms Guo submitted she lost her job because she questioned business operation procedures and for doing her job properly and lawfully.

[8] Ms Guo submitted that Mr Tautz told her that the reason for her dismissal was because “you got into the CNC machine, it costed (sic) you your job”. Ms Guo referred to a document titled “redundancy phone call script” that was attached to her Statement of Evidence.

Evidence

s.389(1)(a)

[9] Ms Guo disputed that her job was no longer required. Ms Guo said the work is now being performed by Mr Tautz and an external entity located in Brisbane. She said Mr. Tautz advised her on the “redundancy phone call” that he will get a part-time bookkeeper for 1-2 days a week to do the job.

[10] Ms Guo said the external company only came on board on 15th April 2020 for the purpose of lodging the 2019 tax return. Ms Guo submitted Mr Tautz has been slowly planning with the external entity to take away jobs from her to make her role non-existent. Ms Guo said in her oral evidence it is common for small and medium sized businesses to have their tax done by an external accountant.

[11] Ms Guo submitted that the company has a busy production schedule in place, and she was the only accounts person in the company therefore there was “no reason whatsoever” as to why she should have been made redundant. Ms Guo said that the onsite accountant job is needed, and the duties of accountant are still required.

[12] Ms Guo said on 11 Aug 2020 Mr Tautz emailed her and said, ‘We have someone preparing your separation certificate and figures for your final payment tomorrow morning.’ Ms Guo said preparing payroll was part of her job, and now Mr Tautz has someone doing her job after getting rid of her.

[13] Ms Guo also disputed that there had been changes in the operational requirements of the business. Ms Guo said the factory, design, assembly, QA, purchasing, warehouse, dispatch, engineers, the other director and accounts are all located in the same building in Capalaba QLD. She said that the business registration and head office are in Capalaba QLD.

[14] Ms Guo submitted that with the cloud based remote access software, there was no necessity to relocate her position to Sydney, as the business operation is based at head office in Capalaba QLD. Ms Guo said her job is now being performed by Coeus, which is located in Brisbane. She claimed that “The reason for so- called relocation finance to NSW, allocation jobs to director and Coeus Advisers was purely because of the directors’ decision to getting rid of me.”

[15] Ms Guo said both directors have been operating another business inside the business, which is registered overseas, not part of the current company income for Australian tax purposes. Ms Guo said she observed that both directors have been using the resources from the Respondent in Queensland to fund the design, operation, manufacturing and freight for the overseas business (Telason) at zero cost, and have been benefiting themselves rather than the Respondent.

[16] Ms Guo confirmed in her oral evidence her view in relation to s389(1)(a) that it was not the case that the employer no longer required her job to be performed by anyone because of changes in the operational requirements, but rather her termination was a result of her acting as a form of internal whistle-blower.

[17] Ms Guo said Mr Tautz and the other director told her on the phone that the reason she was being made redundant was that she “got into the CNC machine and it costed (sic) you your job”. Ms Guo said the real reason for her losing her job was that she was investigating what the CNC machine was being used for, and that it was not being used for the Respondent but for other businesses. Ms Guo said as the old company did not pay out entitlements, she was concerned employees would be disadvantaged and Mr Tautz was transferring benefits to himself. Ms Guo said after the date of her termination she did not know who was performing her former duties.

[18] Ms Guo provided various documents which she claimed supported her view that the CNC was being used for purposes other than for the Respondent.

[19] Mr Tautz said the alleged version of what Ms Guo claimed he said was not the way he speaks and denied those were the exact words he used. He said that he would have said words to the effect that Ms Guo was a senior accountant and spent a lot of time doing things that did not concern her and that she was not paid to go around and take photos of things.

[20] Mr Tautz also said the company Telason that he and the other director Mr Cummings had established, was incorporated in the British Virgin Islands and its total turnover is $55,000 annually. Mr Tautz said contrary to what Ms Guo said all of the product being produced by the Respondent was for the benefit of the Respondent.

[21] Mr Tautz said that Intex is down 50% in turnover, and that it needed to use an external tax accountant because Mr Guo was not qualified to do this, and due to the reduction in turnover it was no longer viable for the company to have a full-time accountant as well as the external accountants.

[22] Mr Tautz said that the most recent tax return provided that the company’s turnover was $2 million dollars, compared to the previous year that provided the turnover was $4 million. Mr Tautz said if they had a contractor and there was no work the contractor will not get paid and given the financial position they could not afford the ongoing position.

[23] In relation to the Respondent’s evidence that the turnover had been reduced by 50% compared to last year, Ms Guo said that this was a different business. Ms Guo did not accept that the new company’s turnover was 50% less than the old company and claimed the directors were enjoying luxury lifestyles.

[24] Mr Tautz was asked who made the decision to make Ms Guo redundant and when that decision was made. Mr Tautz said that the company consistently reviews its costs base and has a turnover so low its struggling to cover costs. Mr Tautz said the Respondent could not justify having a full-time accountant and all roads led to a decision that the position was not viable. Mr Tautz also gave evidence that terminating the senior accountant role would reducing ongoing liability.

[25] Mr Tautz said he and his business partner had discussions regarding how to reduce costs and liability. He said the discussions around the need for a full-time accountant started in January 2020, and the ultimate decision to make Ms Guo redundant was made on the day she was made redundant.

[26] The Respondent submitted since 30 August 2020, there has not been a single incoming email received into Ms Guo’s inbox and that this is indicative of Ms Guo’s workload.

s.389(1)(b)

[27] Ms Guo submitted she was covered by the Clerks Private Sector Award 2010 as a bookkeeper and that the there was a failure to properly consult by the Respondent as required by that Award.

[28] Ms Guo said that there was no employment contract stating she was a senior accountant with the Respondent, and that her duties meant her role was actually the role of a bookkeeper covered by the award. Ms Guo said that her qualifications as a CPA accountant had nothing to do with the job she had been given.

[29] Ms Guo submitted that the tasks she was instructed to do in her role by the Respondent were in the category of clerical workincluding data entry, recording, calculating, invoicing, billing, receiving, answering calls, organising freight, sourcing manufacturers in China, calling suppliers in China about manufacture status, translating, replying to emails per instruction, and administrative duties of a clerical nature.

[30] Ms Guo said her work in the office was instructed by the directors and therefore, for the accounting jobs, she was only limited to perform payroll, reconcile bank transactions, reply to accounts emails, send invoices and chase payment, which was no different to the job duties required to be a bookkeeper.

[31] Ms Guo said in her oral evidence all she was doing was sending invoices, putting data in the system, taking phone calls. She did not have access to the system to do anything more than this. She said her tasks fell within the Clerks Award. She also said she was not being paid a CPA wage and her qualifications were not relevant to her role.

[32] During cross examination it was put to Ms Guo that she misrepresented her role because when she was employed, she was employed as a senior CPA accountant. Ms Guo said she was qualified as a CPA accountant but that her job did not require these qualifications. Ms Guo said that her income was $55,000 annually. During the hearing, Ms Guo accepted that this was a part time wage, and that based on her hours the equivalent full-time wage would be approximately $83,000.

[33] The Respondent submitted Ms Guo was not covered by an Award or Enterprise Agreement, and therefore there was no requirement to consult with Ms Guo about her redundancy. The Respondent argued that Ms Guo was a senior accountant that drew a certain wage, and therefore was not covered by the Clerks Private Sector Award 2010.

[34] In any event, the Respondent submitted Ms Guo was spoken to about the low level of work that the company had for the senior accountant role on several occasions. The Respondent submitted Ms Guo was consulted in regard to moving the BAS accountancy function to the external tax accounting company. The Respondent submitted it had email records that show Ms Guo was copied on these emails and was fully aware that the Respondent was moving this function.

[35] The Respondent submitted that Ms Guo was made aware that the balance of the accounting function was being relocated to the NSW office and that she made it clear that schools and other commitments would make impossible for her to move to NSW.

[36] The Respondent submitted that although Ms Guo had the opportunity to work from home as a result of COVID-19, the job was not being done as well as it would have been done in the office.

[37] Within the evidence was a contract of employment executed in March 2018 between Ms Guo and her previous employer that ceased trading. It was common ground between the parties that when Ms Guo’s employment ceased with the previous employer and commenced with the Respondent there was no new written contract or any renegotiation and the new employment relationship seems to have continued in the same manner as it had with the previous employer.

s.389(2)

[38] Ms Guo was asked who she said performed the duties she used to perform for the Respondent and she replied she did not know. Ms Guo submitted that Mr Tautz told her that he was either going to employ a bookkeeper a few days a week or was going to do her job himself but she was not clear. Ms Guo was asked if she accepted that an external company was now performing part of her previous duties. Ms Guo said she gathered this information from the Form F3.

[39] Ms Guo said in her oral evidence, in relation to s.389(2), that from her own knowledge she could not give any direct evidence other than what was in the Respondent’s material in relation to who is carrying out her previous role since her termination.

[40] Ms Guo relied on a document that appeared to be a typed transcript of her own recollection of a phone call between herself and Mr Tautz, whereby Ms Guo says Mr Tautz told her “We might find a bookkeeper coming in one or two day (sic) a week.” Ms Guo said it would have been reasonable to be redeployed to a suitable JobKeeper position such as the 1-2 days Bookkeeper position as opposed to being terminated.

[41] In oral evidence Ms Guo said she understood a bookkeeper had been engaged and she would have been prepared to perform that work as an alternative to termination, and the Respondent was receiving Job Keeper payments.

[42] However, Mr Tautz said a bookkeeper has not been employed since Ms Guo’s termination, and Ms Guo’s role was being carried out by himself and an external accountancy business. Ms Guo said she did not know whether someone else had been employed to perform her role.

Consideration

[43] In relation to s.389(1)(a), I am of the view that it is likely Mr Tautz and his business partner made the decision that Ms Guo’s position was no longer required due to changes in business operations.

[44] The evidence appears to be that when Mr Tautz was referring during his evidence to a reduction in turnover from $4 million dollars to $2 million dollars he was comparing the Respondent to the company that Ms Guo initially worked for before commencing employment with the Respondent. It seems from the evidence that company was wound up and Ms Guo commenced employment immediately with the Respondent.

[45] Ms Guo did agitate an issue concerning alleged underpayment because of a failure to recognise her service as being continuous on the basis of her employment transferring however ultimately the determination of whether Ms Guo has been underpaid will have to be resolved somewhere else. Contrary to the view expressed by Ms Guo I am inclined to accept the evidence of Mr Tautz that the business was suffering a downturn in turnover. While Ms Guo appeared to reject this evidence, she did not provide any proper basis as to why this was not the case, whilst Mr Tautz gave evidence that the Respondent had declined in both turnover and clients.

[46] I therefore accept that it is likely that as a result of this downturn, Mr Tautz commenced discussions in January 2020 with his business partner about how to reduce costs. This is also consistent with Ms Guo’s own evidence that Mr Tautz was slowing making arrangements for her removal including in reference to the engagement of external tax accountancy assistance in April, months before the discussion in July which Ms Guo claims was the trigger for her termination.

[47] Whilst I accept it is likely Mr Tautz made the final decision to make Ms Guo redundant around the same time Ms Guo began to raise questions about the accounting practices concerning the CNC machine, I am of the view that the decision to make Ms Guo redundant was going to be made regardless. I am satisfied on the evidence that it is logical for the Respondent to have arrived at the view that it did not need to continue to employ a senior accountant, given it already had to outsource some of its work to an external accounting company, and it could achieve savings by outsourcing the functions Ms Guo was performing and only paying for such services when required.

[48] In relation to s.389(1)(b) I am also satisfied that Ms Guo was not covered by the Clerks Private Sector Award, and therefore there was no requirement for the Respondent to consult her regarding the redundancy.

[49] I accept Ms Guo was employed as a Senior Accountant in accordance with her employment contract at the time she was engaged by the entity that was the predecessor to the Respondent, and that it is reasonable from the evidence to infer from the conduct of the parties that they intended that when Mr Guo commenced employment with the Respondent immediately after ceasing employment with the earlier entity, that it was on the same contractual terms as she had previously worked. The actions of the parties point to this conclusion. She was receiving a wage that was the equivalent of a full-time wage of $83,000 per year. On the basis of duties in the earlier contract, her rate of pay and the evidence overall Ms Guo appeared to continue to use the accountancy skills for which she was employed as described in the initial written contract with the earlier entity and there is nothing to suggest this changed with the commencement of employment with the Respondent. On that basis I am satisfied Ms Guo was not covered by the Clerks Award.

[50] In relation to s.389(2), I accept that there is nobody performing Ms Guo’s previous role. I accept Mr Tautz’s evidence that Ms Guo’s duties are now being performed partly by himself, and partly by the external accounting company. I also accept that there was no other suitable position for Ms Guo to be redeployed within the Respondent.

Conclusion

[51] For reasons outlined above I am satisfied that the criteria under s.389 of the Act have been satisfied and that Ms Guo’s termination was a case of genuine redundancy. As such, the Commission does not have jurisdiction to determine the unfair dismissal application and the application is therefore dismissed.

COMMISSIONER

Appearances:

Ms Y. Gou appearing on her own behalf
Mr A. Tautz appearing for the Respondent

Hearing details:

2021,
Brisbane:
January 6

Printed by authority of the Commonwealth Government Printer

Ms Yiying Guo v Intex Connect Pty Ltd