Nathan Taylor v Peninsula Sports Academy T/A Peninsula Sports Academy
[2018] FWC 391
•23 JANUARY 2018
| [2018] FWC 391 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Nathan Taylor
v
Peninsula Sports Academy T/A Peninsula Sports Academy
(U2017/10285)
| Deputy President Gooley | MELBOURNE, 23 JANUARY 2018 |
Application for an unfair dismissal remedy.
Mr Nathan Taylor was employed by Peninsula Sports Academy Pty Ltd from 8 December 2014 until his employment was terminated on 5 September 2017. He was employed as Senior Assistant Coach on a full time basis from 3 April 2017. Peninsula Sports submitted that as Mr Taylor’s position had been made redundant he was not protected from unfair dismissal.
In addition to working for Peninsula Sports, Mr Taylor and Mr Webb the owner of Peninsula Sports were partners in another business, Swim Teachers 2 U. (ST2U)
Mr Webb had been the Head Coach at Peninsula Sports and he stood aside from this position when Mr Taylor was appointed as Senior Assistant Coach. It was his evidence that this was done to free him up to develop his business. While Mr Taylor said that he performed the same functions as Mr Webb, it was Mr Webb’s uncontested evidence that while he had expected Mr Taylor to take over all his tasks he continued to do administrative work associated with the business.
In August 2017, a dispute arose between Mr Webb and Mr Taylor about the ST2U business over monies Mr Webb wanted to withdraw from the business.
On 5 September 2017 Mr Webb and Mr Taylor met to discuss the ST2U and PSA businesses. On 3 September 2017 Mr Webb provided Mr Taylor with a list of 14 matters to be discussed. The last item was PSA and its business requirements moving forward. At the conclusion of the meeting Mr Webb told Mr Taylor that his position with PSA was being made redundant. He gave him a letter dated 4 September 2017 which advised Mr Taylor that PSA was no longer in a financial position to maintain a full time Senior Assistant Coach[1]. Mr Webb then offered Mr Taylor 4 training sessions which Mr Taylor accepted albeit as he described it as a forced acceptance because some work was better than no work.
On 7 September 2017 Mr Taylor and Mr Webb had to meet with a facility in relation to ST2U and at the end of the meeting Mr Webb said that he asked Mr Taylor if their relationship was repairable and if they could continue on in business and Mr Taylor said no. After considering this he decided to revoke the offer of causal employment and resigned from ST2U as well. Mr Taylor denied saying no but said he replied that he needed to consult with his family.
On 8 September Mr Webb sent him an email advising that “due to the rapid deterioration in [their] relationship” he would no longer offer him this coaching role.[2]
Mr Webb accepted that he did not consult with Mr Taylor about the redundancy.
At the hearing, Mr Webb produced financial information about PSA to support his contention that Mr Taylor’s position was redundant due to a deteriorating financial position and due to a lower student retention rate. He also produced evidence to show that after Mr Taylor’s dismissal Mr Webb was not being paid a full time wage. The payroll activity statement showed that Mr Webb was paid for 23 hours work since 1 July 2017.
It was Mr Taylor’s submission that his position was not redundant as the work he was doing is still being done by Mr Webb and other coaches. He did not challenge the financial information tendered nor did he challenge the student retention rate. He did submit that Mr Webb had, in June, proposed employing someone for 6-10 hours per week to do administrative work for ST2U and PSA[3]. He further submitted that PSA had paid for 2 employees’ attendance at a workshop. As well he said that PSA had unnecessarily paid accommodation costs at the recent State Swimming Championship.[4] It was his view that this showed that PSA was not in financial difficulties.
Mr Webb said that the accommodation costs were met by the club and not PSA. In response to the workshop the document provided by Mr Taylor made it clear that PSA would only cover the total costs of the event if the employee remained in employment with PSA for twelve months.[5]
To support his submission that his job was still being performed, Mr Taylor relied upon a document that PSA circulated after his position was made redundant which advised that Mr Webb was returning to full time coaching.[6] The same document announced the resignation of one coach and advised that another coach was having time off to study. The document announced that two new coaches would work with ST2U and PSA. Mr Taylor also gave evidence that he saw two more junior and lower paid coaches taking sessions he had previously taken.
Mr Webb gave evidence that after Mr Taylor was made redundant he took over much of Mr Taylor’s coaching responsibilities but that he also used some of the casual coaches to perform the work. In addition at the end of term, PSA consolidated squads at two training sessions to reduce coaching hours and reduced pool space at one of the facilities it rented. In addition PSA had moved its external pool to a smaller one to reduce costs. Mr Webb said PSA was required to engage cover coaches to replace people on leave and to take some of Mr Webb’s other duties.
Genuine redundancy
The Fair Work provides that a person has not been unfairly dismissed in cases of genuine redundancy.
Section 385 What is an unfair dismissal
A person has been unfairly dismissed if the FWC 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.
A genuine redundancy is defined as follows:
Section 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.
I accept that PSA had operational reasons for making Mr Taylor’s position redundant. The financial position of the business was deteriorating and they had a low student retention rate. The profit and loss statement showed a significant drop in income and profit from 2016. Mr Taylor was PSA’s only full time employee and while I accept that the work he performed is still being performed, his position has not been replaced by a paid employee. It is clearly reasonable for a business owner to increase the amount of unpaid work he or she performs in a business depending of the financial position of the business. That some casual coaches are taking some of his sessions does not mean that they are doing his job. His job involved more than coaching.[7]
Did the employer meet its obligations under the agreement to consult with Taylor?
The relevant Fitness Industry Award 2010[8] provides for consultation as follows:
8.1 Consultation regarding major workplace change
(a) Employer to notify
(i) 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.
(ii) 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.
(b) Employer to discuss change
(i) The employer must discuss with the employees affected and their representatives, if any, the introduction of the changes referred to in clause 8.1(a), 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.
(ii) 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 8.1(a).
(iii) 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.
I am not satisfied that PSA complied with its obligations under the Fitness Award 2010 to consult with Mr Taylor about the redundancy. So much was conceded by Mr Webb.
Was it reasonable to redeploy Taylor?
I have considered whether it would have been reasonable to redeploy Mr Taylor to the casual coaching position. He was offered this position after his position was made redundant and he was due to take up the position late in September 2017 but the offer was withdrawn on 9 September. Clearly Mr Webb considered it reasonable to redeploy Mr Taylor when he offered Mr Taylor the position and when he announced that it would occur in the coaching update sent out on 6 September 2017.[9]
In his outline of argument Mr Webb submitted that Mr Taylor was not able to take up the position due to other commitments. He said Mr Taylor advised him at the meeting on 5 September 2017 that he was only available on Monday morning. This was disputed by Mr Taylor and is inconsistent with the coaching update sent out in 6 September 2017. Mr Webb said that Mr Taylor was not available for work in the afternoon due to requirement for Mr Taylor to do 16.5 hours work with ST2U in the afternoon at $40 per hour. It was Mr Taylor’s evidence that there was no discussion about his availability when he was offered the work. Further the work he was offered was in the morning so there was no issue with his availability.
At the hearing Mr Webb explained that he decided that it would not be good for the business for Mr Taylor to continue working for him as their relationship had deteriorated.
There is insufficient evidence before me to determine that redeployment would not have been unreasonable in all the circumstances. I accept that Mr Webb had a real concern about the relationship, but there was no evidence, other than his view that Mr Taylor had said that the business relationship could not continue, that Mr Taylor had done anything that would indicate that he would not perform his contract of employment. Hence this was not a genuine redundancy.
A small business
PSA is a small business. The small business fair dismissal code provides as follows:
Summary dismissal
It is fair for an employer to dismiss an employee without notice or warning when the employer believes on reasonable grounds that the employee’s conduct is sufficiently serious to justify immediate dismissal. Serious misconduct includes theft, fraud, violence and serious breaches of occupational health and safety procedures. For a dismissal to be deemed fair it is sufficient, though not essential, that an allegation of theft, fraud or violence be reported to the police. Of course, the employer must have reasonable grounds for making the report.
Other dismissal
In other cases, the small business employer must give the employee a reason why he or she is at risk of being dismissed. The reason must be a valid reason based on the employee’s conduct or capacity to do the job.
The employee must be warned verbally or preferably in writing, that he or she risks being dismissed if there is no improvement.
The small business employer must provide the employee with an opportunity to respond to the warning and give the employee a reasonable chance to rectify the problem, having regard to the employee’s response. Rectifying the problem might involve the employer providing additional training and ensuring the employee knows the employer’s job expectations.
Procedural matters
In discussions with an employee in circumstances where dismissal is possible, the employee can have another person present to assist. However, the other person cannot be a lawyer acting in a professional capacity.
A small business employer will be required to provide evidence of compliance with the Code if the employee makes a claim for unfair dismissal to Fair Work Australia, including evidence that a warning has been given (except in cases of summary dismissal). Evidence may include a completed checklist, copies of written warning(s), a statement of termination or signed witness statements.
Mr Taylor was not dismissed because Mr Webb believed on reasonable grounds that Mr Taylor’s conduct was sufficiently serious to justify immediate dismissal.
It is clear in this matter that Mr Taylor was dismissed from the casual position because Mr Webb had formed the view that the relationship had deteriorated and that he did not want to risk having Mr Taylor dealing with his clients as he formed the view that this may damage his business. There is insufficient evidence to support a finding that between the termination of his full time position and 8 September that Mr Taylor had done anything, other than possibly indicating that they could no longer have an ongoing business relationship, which could have reasonably caused Mr Webb to form that view. There was no valid reason for the dismissal. Further there was no evidence that Mr Webb discussed this with Mr Taylor before the decision was taken to terminate the employment relationship. I am therefore satisfied that PSA has not complied with the Code.
Was the termination of employment harsh, unjust or unreasonable?
In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the Fair Work Commission must take into account the following:
s387(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);
I am satisfied that, given the deteriorating financial position of the business, the decision of Mr Webb to take over Mr Taylor’s position in a predominately unpaid capacity was reasonable in all the circumstances. In UES (Int’l) Pty Ltd v Leevan Harvey[10] the Full Bench determined that in circumstances where there was no genuine redundancy due to a failure to consult section 387(a) was not a relevant consideration because the reason for the dismissal did not relate to his conduct or capacity.[11]
However in this case I have found that PSA was unreasonable in not redeploying Mr Taylor to the causal position he had originally been offered. That decision was made because Mr Webb formed the view that the relationship had deteriorated and that he did not want to risk having Mr Taylor dealing with his clients as he formed the view that this may damage his business. There is insufficient evidence to support a finding that between the termination of his full time position and 8 September 2017 that Mr Taylor had done anything, other than possibly indicating that they could no longer have an ongoing business relationship, which would have caused Mr Webb to form that view.
I am therefore not satisfied that there was a valid reason for the dismissal.
s387(b) whether Taylor was notified of that reason;
In Crozier v Palazzo Corporation Pty Limited[12] a Full Bench of the Australian Industrial Relations Commission considered the obligation under an identical provision in a predecessor Act. It held that “as a matter of logic procedural fairness would require that an employee be notified of a valid reason for their termination before any decision is taken to terminate their employment in order to provide them with an opportunity to respond to the reason identified.”[13]
As there was not a valid reason for the dismissal Mr Taylor could not have been notified of the valid reason. Further it is clear from the evidence that there was no discussion between Mr Webb and Mr Taylor about the withdrawal of the offer of casual work.
s387(c) whether Taylor was given an opportunity to respond to any reason related to the capacity or conduct of the person;
Again as there was no valid reason for the dismissal Mr Taylor was not given an opportunity to respond.
s387(d) any unreasonable refusal by the employer to allow Taylor to have a support person present to assist at any discussions relating to dismissal;
Mr Taylor did not request a support person.
s387(e) if the dismissal related to unsatisfactory performance by the person—whether Taylor had been warned about that unsatisfactory performance before the dismissal;
The dismissal did not relate to unsatisfactory performance and hence this criterion is not relevant.
s387(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;
This is small business and I am satisfied that this had an impact on the procedures following in effecting the dismissal.
s387(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;
This business does not have any dedicated human resources management specialist or expertise. I am satisfied that this had an impact on the procedures followed. Mr Taylor was the business’s first full time employee and had there been such specialists Mr Webb would have been advised of his obligations to consult about the redundancy and his obligation to discuss with Mr Taylor his concerns about the deteriorating relationship before he decided to terminate Mr Taylor’s employment.
s387(h) any other matters that the FWC considers relevant.
I have had regard to the fact that PSA did not consult with Mr Taylor about the decision to make his position redundant. I have had regard to the fact that this occurred at a difficult time for Mr Taylor. This was not contested by Mr Webb.
Conclusion
Had this been a situation where PSA had failed to consult I would not have concluded the dismissal was unfair because I am not satisfied that even had consultation occurred that the outcome would have been different. However the decision to terminate Mr Taylor’s employment after he had accepted casual work with PSA was unfair. PSA did not adequately explain why Mr Webb changed his mind and did not give evidence of any conduct on Mr Taylor’s part that caused him to change his mind. In circumstances where there was no valid reason and no procedural fairness the only conclusion possible is that the dismissal was unjust and unreasonable.
Remedy
Mr Taylor is seeking reinstatement to his full time position. I have accepted that this position no longer exists. Therefore it is not reasonable in all the circumstances to reinstate Mr Taylor to this position. I have further decided that it is not reasonable in all the circumstances to reinstate Mr Taylor to the casual position he was initially offered. Mr Taylor did not make any submissions in relation to this position. Further even while I have accepted that there was insufficient evidence before the Commission to explain why Mr Webb decided to terminated Mr Taylor’s employment after offering him casual work, the evidence at the hearing was Mr Webb and Mr Taylor’s business relationship was ended and there were allegations that PSA had poached business from Mr Taylor.[14] In circumstances where Mr Webb and Mr Taylor have competing businesses I do not consider it appropriate in all the circumstances for Mr Taylor to be reinstated.
In assessing any amount in lieu of reinstatement, Fair Work Commission is required to have regard to the following:
(a) the effect of the order on the viability of the employer’s enterprise;
There is evidence before the Commission about the viability of this business. Mr Webb on behalf of PSA submitted that if any order was made provision should be made for the payment of any amount to be done in installments because any order would affect the viability of the business.
(b) the length of the person’s service with the employer;
Mr Taylor’s service as a full time employee was not long but he had worked for PSA since late 2014. This is not particularly long and it would not cause me to adjust the amount of compensation either up or down.
(c) the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed;
Mr Taylor would not have continued on in a full time position. At most he would have been engaged for 6 hours per week commencing on 11 September 2017. However it is clear that after the dismissal PSA and ST2U were in direct competition for work.[15] In those circumstances I accept that it was unlikely that Mr Taylor would have remained in employment for long. That competition for business occurred after 12 September 2017 when one of the organisations ST2U was contracted to provide services to made the decision to terminate that contract and engage PSA to provide the services. I therefore consider that Mr Taylor would have at most remained in employment was one month. As he would have been engaged on a casual basis and been paid $27.50 per hour he would have earned $660.
(d) the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal;
Mr Taylor had applied for 5 positions since his position was terminated. He has obtained casual work for 12.5 hours per week. He said that he had only applied for 5 jobs because he was trying to find the right position. Mr Taylor forwarded information to my chambers after the hearing about other steps he had taken to mitigate his loss. I have had no regard to this information because it was not provided to PSA. I am not satisfied that Mr Taylor has taken sufficient steps to mitigate his loss. However given my decision in this matter I do not intend to reduce the amount of compensation payable.
(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;
Mr Taylor has earned $3,350 since his employment was terminated. I have not deducted any amount for the monies earned by Mr Taylor as I consider that he would have been able to perform the casual work for PSA as well this work.
(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;
Given my decision this criterion is not relevant.
(g) any other matter that FWA considers relevant.
No submissions were made about any other relevant matters.
Conclusion
Mr Webb submitted that any compensation should be paid in instalments. I have decided to order PSA pay Mr Taylor $660 within one month of the date of this decision.
If PSA is unable to comply with this order I give them liberty to apply for additional time to make the payment. If PSA makes such an application I will consider that application after providing Mr Taylor with an opportunity to apply. PSA should make this application by 6 February 2018.
DEPUTY PRESIDENT
Appearances:
N. Taylor appeared on his own behalf.
L. Webb for the Respondent.
Hearing details:
2017.
Melbourne:
15 January.
[1] Exhibit R8
[2] Applicant’s documents
[3] Exhibit A4
[4] Exhibit A1
[5] Exhibit A11
[6] Exhibit A6
[7] Exhibit R6
[8] MA000094
[9] Exhibit A6
[10] [2012] FWAFB 5241
[11] Ibid at [32]
[12] Print S5897
[13] Ibid at [73]
[14] Applicant’s outline of argument at paragraph 7a
[15] Exhibit R10
Printed by authority of the Commonwealth Government Printer
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