Natalie Findlay v Pacific Holiday Village Pty Ltd T/A Stonelea Resort

[2016] FWC 5070

[2016] FWC 5070

FAIR WORK COMMISSION

DECISION

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

Natalie Findlay
v
Pacific Holiday Village Pty Ltd T/A Stonelea Resort
(U2016/1650)

COMMISSIONER WILSON MELBOURNE, 2 AUGUST 2016

Application for relief from unfair dismissal; whether genuine redundancy; dismissal unfair; compensation ordered.

[1] Ms Natalie Findlay was employed by Pacific Holiday Village Pty Ltd (ACN 166 094 748), trading as Stonelea Country Estate, until 21 March 2016. Although Pacific Holiday Village Pty Ltd had taken over the business of Stonelea Country Estate on 4 December 2013, Ms Findlay had worked at the business from an unspecified date in 2011. She argues that she has had continuous service at the business from 2011 for reason of there being a transfer of business between the original owners and Pacific Holiday Village Pty Ltd in 2013.

[2] On 8 April 2016 Ms Findlay commenced an action for unfair dismissal against Pacific Holiday Village Pty Ltd under the Fair Work Act 2009 (the Act). Ms Findlay alleges that she has been unfairly dismissed, principally because she was not given notice for termination or any severance for redundancy payments which she claims are due to her.

[3] On 19 May 2016, the Federal Court of Australia ordered that Pacific Holiday Village Pty Ltd be wound up in insolvency under the provisions of the Corporations Act 2001 (Cth), and appointed Mr Andrew Poulter of the firm Abbott Welsh as the official liquidator. Earlier, on 14 April 2016, the same company had appointed Mr Poulter as the Administrator of the company again pursuant to the provisions of the Corporations Act 2001.

[4] I have given consideration to whether the Fair Work Commission has jurisdiction to determine the application in the circumstances of the Respondent being wound up in insolvency by Court Order. Relevantly, s.471B of the Corporations Act 2001 provides as follows;

Stay of proceedings and suspension of enforcement process

While a company is being wound up in insolvency or by the Court, or a provisional liquidator of a company is acting, a person cannot begin or proceed with:

(a)  a proceeding in a court against the company or in relation to property of the company; or
(b)  enforcement process in relation to such property;

except with the leave of the Court and in accordance with such terms (if any) as the Court imposes.

[5] The Full Bench of the Australian Industrial Relations Commission in Smith 1held that the Commission was not a Court for the purposes of s.471B, and so that section did not apply to and preclude the commencement or continuation of Commission proceedings. I therefore find that the Commission does have jurisdiction to determine the application in such circumstances.

[6] Because of the circumstances of the Pacific Holiday Village Pty Ltd, no conciliation was able to take place and so the matter was assigned to me for arbitration.

[7] After giving an opportunity to the liquidator or anyone associated with the Respondent to file material in relation to Ms Findlay’s application and to be heard in relation to it, the Commission was advised by Mr Poulter on 14 July 2016 that his firm would not be making submissions, as liquidator of Pacific Holiday Village Pty Ltd, in relation to Ms Findlay’s application.

[8] On 22 June 2016, JobWatch Inc, acting for Ms Findlay, filed an Outline of Submissions and witness statement on her behalf to which I have had regard in making my decision about her application. After it became apparent that there would be no appearance in the Commission by any representative on behalf of Pacific Holiday Village Pty Ltd, Ms Findlay advised that she did not wish to be heard in relation to the application and that she was content for the Commission to determine the matter on the papers.

[9] Having regard to the provisions of s.397 of the Act I am satisfied that this matter does not involve facts the existence of which are in dispute and that it is therefore not necessary for me to conduct a conference or hold a hearing in relation to it. Accordingly, this decision has been determined by me on the papers as filed.

[10] I am required by s.396 to have regard to four initial matters before considering the merits of the application. Relevantly, in respect of the criterion within s.396(a), I am satisfied that the application was made within the allowable period for the making of an unfair dismissal application; in relation to s.396(b), I am satisfied that Ms Findlay was at the time employment ended, a person protected from unfair dismissal having been employed for at least the minimum employment period and with her duties being covered by a modern award, being the Hospitality Industry (General) Award 2010; 2 in relation to s.396 (c), for reason that Ms Findlay believes that the Respondent was not a small business employer within the meaning of the Act at the time she was dismissed, no question arises as to whether her dismissal was consistent with the Small Business Fair Dismissal Code.

[11] However, I am required to make a finding regarding the criterion within s.396(d) relating to whether Ms Findlay’s dismissal was a case of genuine redundancy.

BACKGROUND

[12] Prior to her job ending, Ms Findlay had worked for Pacific Holiday Village Pty Ltd as a casual housekeeper, working between 10 and 30 hours per week for which she was paid $21.90 per hour. As a housekeeper, Ms Findlay’s duties included cleaning rooms, working as a waitress and kitchen-hand and any other duties which were required of her.

[13] The circumstances by which Ms Findlay came to be dismissed, according to her unsworn and uncontested witness statement, include that she had been working as a casual housekeeper for Stonelea Country Estate since an unspecified date in 2011 and that on 21 March 2016, when she arrived at work, she found the premises were closed and locked. She was subsequently told at that time by another person that the business had closed.

[14] Her manager at that time was Ivan Fan. Ms Findlay says that at no time since 21 March 2016 has she received any contact from Mr Fan or any other party representing Pacific Holiday Village Pty Ltd. However on 22 March 2016 she attended the premises of the Respondent where she noticed that the business appeared to be fully operational. In particular, with it being an accommodation retreat business, she noticed that the rooms appeared to be in the process of being cleaned by migrant workers.

[15] She queried her situation with Mr Fan in a letter she sent to him on 31 March 2016 that was prepared by her and some other employees. The correspondence was not responded to by Mr Fan or anyone else.

[16] On an unknown date she learned that Pacific Holiday Village Pty Ltd had gone into liquidation.

[17] She reports that since her job ended she has not been paid any accrued entitlements, which she considers includes long service leave and annual leave. She is concerned that since her position appears to have been filled by migrant workers that she has been “dismissed”, which I take to mean a dismissal for performance or conduct-related reasons, rather than having been made “redundant” which she puts forward as the basis for her termination of employment.

[18] Since leaving employment with Pacific Holiday Village Pty Ltd, Ms Findlay has been unable to find a new job.

CONSIDERATION

[19] In all the circumstances I am satisfied that Ms Findlay has been dismissed within the meaning of s.386 of the Act.

[20] In order for a person’s dismissal to be a case of genuine redundancy, the dismissal must conform with the definition of the term contained within s.389 of the Act. Relevantly, a dismissal is a case of genuine redundancy if an employer no longer requires an employee’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise and the employer has complied with any obligation in a modern award or enterprise agreement that applied to the person’s employment to consult about the redundancy. The same section provides that a dismissal was not a case of genuine redundancy if it would have been reasonable in all the circumstances for the person to be redeployed either within the employer’s enterprise or the enterprise of an associated entity of the employer.

[21] In this case the evidence leads to a finding that Pacific Holiday Village Pty Ltd no longer required Ms Findlay’s job to be performed by anyone for reason firstly because of its trading difficulties in and around the period on which she was locked out from her employment, and secondly, because of its liquidation, which was ordered by the Federal Court in May some weeks after her employment ended. While that is the case, a finding that the employer has complied with the obligations within the Hospitality Industry (General) Award 2010 to consult about the redundancy is unable to be made by me. In this regard, I note the provisions of the modern award which are in the standard terms, and require consultation with employees over definite decisions to introduce changes that are likely to have significant effects on employees, provide relevant information about the proposed changes, and give prompt consideration to matters raised by employees or their representatives. 3

[22] There is no evidence that would allow me to make a finding that redeployment of Ms Findlay either within the enterprise or an associated entity was ever considered by Pacific Holiday Village Pty Ltd.

[23] As a result, I find that Ms Findlay’s dismissal by Pacific Holiday Village Pty Ltd was not a case of genuine redundancy. I therefore turn to consider whether her dismissal was harsh, unjust or unreasonable within the meaning of s.387 of the Act.

[24] In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the FWC must take into account of each of the criteria within s.387 of the Act, which provides as follows;

387 Criteria for considering harshness etc.

In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the FWC must take into account:

(a) whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees); and

(b) whether the person was notified of that reason; and

(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and

(d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and

(e) if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal; and

(f) the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(h) any other matters that the FWC considers relevant.

(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)

[25] There is no evidence before me about the reasons for Ms Findlay’s dismissal.

[26] Determination of a valid reason involves an examination of whether the reason given is “sound, defensible or well founded”, within the overall context of the employment relationship. 4

[27] Accordingly I am unable to make a finding there was a valid reason for Ms Findlay’s termination of employment.

(b) whether the person was notified of that reason

[28] As there was no valid reason, Ms Findlay could not be notified of it. In any event Ms Findlay was never notified of the reason for her termination of employment.

(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person

[29] As there was no valid reason for the dismissal, Ms Findlay cannot have been given an opportunity to respond.

(d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal

[30] There were no discussions relating to Ms Findlay’s dismissal and accordingly further consideration of this criterion is not relevant to my consideration.

(e) if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal

[31] This criterion is not relevant as Ms Findlay was not terminated for performance-related matters.

(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

[32] There was no evidence or submission that the size of the enterprise had any impact on the procedures followed for Ms Findlay’s termination of employment.

(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

[33] There is no evidence or submission about whether the Respondent had any human resource management specialists or expertise.

(h) any other matters that the FWC considers relevant

[34] Ms Findlay was terminated without notice after having worked at Stonelea Country Estate for about five years, including the period after 4 December 2013 when the business was taken over and then run by Pacific Holiday Village Pty Ltd. There is no evidence of any previous warnings or incidents.

REMEDY

[35] Through her outline of submissions, Ms Findlay seeks that the Commission reinstate her to an associated entity of the Respondent and seeks an order for compensation for the total of her lost income from the date of her dismissal until the date of her reinstatement, and failing that remedy, seeks compensation in lieu of reinstatement.

[36] The business where Ms Findlay worked has been placed into liquidation by the Federal Court. I am satisfied there is no position within the Respondent company to which she could be reinstated. On the basis of the limited material before me I am not satisfied that an order for reinstatement in any form is appropriate to make. However, I consider that an order for compensation in lieu of reinstatement is appropriate to make.

[37] In considering an order for compensation, the Commission is required to have regard to the criteria set out within s.392(2). I turn to consider each of these matters.

(a) the effect of the order on the viability of the employer’s enterprise

[38] While there is no evidence before me in relation to this criterion I must note that the company is presently in liquidation and that the liquidator informed the Commission that “Ms Findlay will be admitted as a creditor in the winding up in respect of any entitlements and/or compensation to which the Fair Work Commission finds she is entitled”.

(b) the length of the person’s service with the employer

[39] Ms Findlay had worked for Stonelea Country Estate for between four and five years. She is imprecise as to when she started employment at Stonelea Country Estate other than the commencement of employment being in “approximately 2011”. In addition, Ms Findlay’s statement notes that the Respondent entity, Pacific Holiday Village Pty Ltd, purchased the business and commenced trading as Stonelea Country Estate on or about 4 December 2013. That date means that she worked for the Respondent entity for slightly over two years. While there is no formal evidence on the subject before me, it appears consistent with the overall circumstances that there was a transfer of business between the former employer and Pacific Holiday Village Pty Ltd, meaning that her overall continuous employment was from the date when she commenced employment with Stonelea Country Estate in 2011.

[40] In the circumstances, and in the absence of any confirming evidence that her service was greater than 5 years, I find that Ms Findlay’s service with the employer, including continuous service with a former employer under a transfer of business, is more than four years, but less than five years.

(c) the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed

[41] Had the Respondent endeavoured to structure its affairs by terminating Ms Findlay’s employment through a genuine redundancy, she would have been employed, or entitled to payment in lieu of notice, for a further three weeks, or four weeks in the event that she is older than 45 years of age (noting that her age is not referred to within the submissions filed on her behalf). Having been dismissed for reason of redundancy, Ms Findlay would have been entitled to a redundancy payment of a further eight weeks pay.

(d) the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal

[42] I have no material before me regarding Ms Findlay’s efforts to obtain further employment or to otherwise mitigate the loss she has suffered through her dismissal.

(e) the amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for compensation

[43] I have no material before me in relation to this criterion.

(f) the amount of any income reasonably likely to be so earned by the person during the period between the making of the order for compensation and the actual compensation

[44] I have no material before me in relation to this criterion.

(g) any other matter that the FWC considers relevant

[45] It is appropriate for me to take into account the circumstances by which Ms Findlay lost her employment and in particular her assertion that when she attended the Respondent’s premises on the day after she found herself locked out, she found that the business appeared to be fully operational and that the accommodation rooms appeared to be in the process of being cleaned by migrant workers.

[46] I consider this unsatisfactory circumstance to balance out the deduction that might otherwise be made from an order for compensation for the absence of evidence or material about the Applicant’s efforts after employment to obtain further employment or any income which she may actually have obtained.

[47] Section 392 (3) requires that if the FWC is satisfied that misconduct of a person contributed to the employer’s decision to dismiss the person then the FWC must reduce the amount it would otherwise order by an appropriate amount on account of the misconduct. There is no material before me in relation to an allegation of misconduct on the part of Ms Findlay and so no reduction will be made by me in this respect.

CONCLUSION AND ORDERS

[48] After consideration of the foregoing issues, I find that the Applicant was dismissed and that it was unfair within the meaning of the Act. I find that reinstatement is not an appropriate remedy in this case. I find that compensation is appropriate.

[49] The approach by the Fair Work Commission in these matters, and which I follow here, is to estimate the remuneration the employee would have received if they had not been dismissed (usually calculated by estimating how long the employee would have remained in the relevant employment but for the termination of their employment); deduct any remuneration earned by the employee since their dismissal until the end of the anticipated period of employment; deduct an amount for contingencies; consider the impact of taxation and adjust the figure accordingly; and assess the figure against the compensation cap set by s.392(5). 5

[50] In relation to the matter of contingencies, I find there are none that ought to be taken into account in this matter. 6

[51] At the time her employment ended, Ms Findlay worked between 10 and 30 hours per week. I have found that had her dismissal been a genuine redundancy she would have been entitled to 3 weeks further work or payment in lieu of notice together with a redundancy payment of eight weeks pay, being a total of 11 weeks’ pay. For the purposes of compensation I will assess her regular hours of work as being 20 hours per week. On that basis, and at the hourly rate of $21.90 per hour, Ms Findlay would have earned $438 per week. Her compensation should therefore be an amount of $4,818, with that amount being equivalent to 11 weeks’ pay, together with a further amount of 9.5% of that amount as compensation for superannuation that otherwise would have been payable to her. The combination of those two amounts is $5,276.

[52] The above amount does not exceed the compensation cap applying at the time of dismissal.

[53] An order requiring Pacific Holiday Village Pty Ltd, to pay to Ms Findlay an amount of $5,276 taxed according to law, is issued at the same time as this decision. The total will be ordered to be split between a payment directly to her, and a payment to her superannuation account, on her behalf.

[54] In accordance with this decision, $4,818, less taxation, is to be paid directly to Ms Findlay, and $458 is to be paid to her superannuation account. The order will require the payments to be made within 14 days of the date of this decision.

COMMISSIONER

 1   Smith & Ors v Trollope Silverwood & Beck Pty Ltd (in liquidation) PR940508.

 2   MA000009.

 3   Ibid cl 8.

 4   Selvachandran v Peteron Plastics (1995) 62 IR 371 at 373.

 5   Haigh v Bradken Resources Pty Ltd[2014] FWCFB 236; see also Sprigg v Paul’s Licensed Festival Supermarket (1998) 88 IR 21 at 32, and Ellawala v Australian Postal Corporation Print S5109 [33].

 6   Ellawala v Australia Post Corporation Print S5109 [41]-[43], with reference to Slifka v J W Sanders Pty Ltd. (1995) 67 IR 316.

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