Phelim Quinn v Sassellas Bar & Tavern T/A Sassellas Tavern

[2016] FWC 6037

[2016] FWC 6037

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Phelim Quinn
v
Sassellas Bar & Tavern T/A Sassellas Tavern
(U2016/6197)

COMMISSIONER WILLIAMS PERTH, 26 AUGUST 2016

Termination of employment - jurisdiction.

[1] This decision concerns an unfair dismissal remedy application made by Mr Phelim Quinn (Mr Quinn or the applicant) under section 394 of the Fair Work Act 2009 (the Act). The respondent is Sassellas Bar & Tavern T/A Sassellas Tavern (the respondent).

[2] The respondent has lodged a jurisdictional objection to the application on the grounds that the dismissal of Mr Quinn was a case of genuine redundancy and separately that the dismissal was in any event consistent with the small business fair dismissal code.

Factual findings

[3] At the hearing of this matter Mr Quinn gave evidence on his own behalf and Mr Michael George Sassella (Mr Sassella), the Owner and Director of the respondent gave evidence as did Mr Geoffrey Cross (Mr Cross) the respondent’s Accountant and Financial Advisor.

[4] Considering the evidence of the witnesses I find as follows.

[5] At the time of Mr Quinn’s dismissal the respondent employed 13 staff.

[6] In early 2015 Mr Sassella became concerned at the slide in revenue which was threatening the solvency of the business. The downturn in sales had commenced a year earlier and showed no signs of improving.

[7] He consulted with Mr Cross about the difficult trading conditions and felt the business was not able to justify the number of full-time employees in the situation.

[8] Whilst the costs of goods sold ratios was sound during the period and in line with industry averages the labour costs were around 39% of the cost of sales. Mr Cross’s view was that the business was carrying too much labour for the level of activity.

[9] Mr Sassella undertook a review of staff requirements in March 2015 and consequently decided to terminate the employment of the Assistant Venue Manager as there were no longer sufficient customers to justify the position. He was ultimately dismissed in June 2015.

[10] Over the second half of 2015 the management worked on improving sales by marketing and promotions but this was not successful.

[11] By the beginning of 2016 it was apparent things were only going to get more difficult. Mr Sassella met again with Mr Cross and explained the marketing efforts had not been successful and suggested he needed to make additional staff reductions so the business could survive. He told Mr Cross he was going to restructure the kitchen to make further labour savings.

[12] After a review of the staffing requirements Mr Sassella decided to dismiss one full-time employee in the kitchen and consequently one of the cooks, Ms Sulley, was terminated by reason of redundancy however at the same time there was a vacancy for a casual cook and she was offered and accepted that casual position.

[13] Trade continued to fall dramatically in the month of March 2016. The profit and loss statement for February produced in late March indicates a loss of $8000 for the month.

[14] A forward-looking review indicated the business was forecast to lose $60,000 over the remaining four months of the financial year if no further action was taken. Mr Sassella at this point believed the business would fail.

[15] The detailed financial records submitted confirm the deteriorating finances of the business.

[16] Consequently Mr Sassella decided that he personally would assume the responsibilities that had previously been assigned to the Head Chef. Mr Sassella took over the responsibilities for kitchen hygiene and cleanliness, freshness of food produce, weekly rostering, menu planning, hiring and firing of staff, disciplining staff, scheduling plant and equipment maintenance, dealing with suppliers and sourcing of products, product quality, production efficiency and customer complaints.

[17] Mr Sassella’s evidence was that Mr Quinn had previously assume the position of Head Chef but his duties had not changed and had remained limited to food preparation, cooking, ordering stock and staff supervision. His evidence was that all of Mr Quinn’s tasks could be performed by himself along with the rest of the cooks in the kitchen.

[18] Mr Quinn was the highest-paid kitchen employee and Mr Sassella reasoned that by making this position redundant it would have the greatest effect on improving the solvency of the business.

[19] Consequently Mr Sassella made Mr Quinn’s position redundant on 24 March 2016.

[20] Mr Sassella reviewed the Fair Work website to determine his obligations and followed the small business fair dismissal code and calculated Mr Quinn’s entitlements.

[21] I accept that he informed Mr Quinn of his decision after his shift ended on the evening of 24 March 2016 and had intended consulting with him about that decision however Mr Quinn immediately upon being told of the decision became verbally aggressive towards Mr Sassella. Consequently further discussions were not possible.

[22] Mr Quinn was provided with a letter dated 24 March 2016 which explained that his employment was terminated by reason of redundancy due to the downturn in revenue and that the Head Chef position was no longer required. Mr Quinn was given four weeks’ notice with his employment to end on 21 April 2016. This date on the letter had been manually altered to 31 March 2016.

[23] A second letter was provided to Mr Quinn of the same date which expressed Mr Sassella’s concern for his personal safety and referred to Mr Quinn being verbally aggressive towards him.

[24] Mr Quinn’s evidence in his first statement of evidence dated 14 April 2016 which was provided in response to the Commission’s directions in part went to events prior to his dismissal which was not relevant to the matters to be determined by the Commission.

[25] Mr Quinn’s statement also dealt with his complaint as to how he was treated towards the end of February 2016 after he had injured himself at work.

[26] He evidence was that he had been employed for approximately two years as the Head Chef at the time he was dismissed but in total had worked for the respondent for approximately six and a half years.

[27] Mr Quinn agrees that under the direction of Mr Sassella he had earlier in the year terminated the employment of Ms Sulley because the respondent could no longer afford her.

[28] Mr Quinn also provided a second statement the day before the hearing which was in effect an email he drafted on 13 April 2016 which in some detail dealt with conflict between him and Mr Sassella which he says occurred the day before he was made redundant. Specifically he says that on Wednesday, 23 March 2016 they had a verbal altercation having completed the daily food audit and he told Mr Sassella he was sick of his bullying attitude towards staff. Mr Quinn says when he went to walk away Mr Sassella blocked his path and the men continued to argue.

[29] Mr Quinn says he later told Mr Sassella he needed to change his attitude and in reply Mr Sassella said he would accept Mr Quinn’s resignation. Mr Quinn said he wasn’t resigning and had done anything wrong and Mr Sassella replied that he was then going to terminate his employment because of his attitude. Mr Quinn said he couldn’t do that and he says Mr Sassella then said okay he would terminate Mr Quinn because he can’t afford him.

[30] Rather confusingly the explanations Mr Quinn gave for his dismissal and the events leading up to it in his two written statements 1 are somewhat contradictory.

[31] Under cross-examination Mr Quinn acknowledged that he was aware the respondent’s business was in financial difficulty.

[32] Under cross examination Mr Sassella denied that he asked for Mr Quinn’s resignation or that he threatened to terminate Mr Quinn as Mr Quinn’s second statement indicates.

[33] Having considered the evidence of both Mr Quinn and Mr Sassella I am persuaded that as Mr Quinn said there had been a clash between the two men on Wednesday, 23 March 2016 and that Mr Sassella may in all likelihood have behaved inappropriately towards Mr Quinn on that evening.

[34] However the evidence of both Mr Cross and Mr Sassella was not challenged and I am satisfied that notwithstanding those events the true reason for the respondent dismissing Mr Quinn was the pressing need for the respondent to reduce its staff costs in response to the dire financial situation it had been experiencing for an extended period of time. I find that the dismissal of Mr Quinn was a consequence of the respondent having decided to make his position redundant.

Consideration

[35] The effect of section 385 of the Act, set out below, is that a person has not been unfairly dismissed if the Commission is satisfied that the dismissal was a case of genuine redundancy.

“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.

Note: For the definition of consistent with the Small Business Fair Dismissal Code: see section 388.”

[36] What is meant by the words “genuine redundancy” is specified in section 389 of the Act set out below.

“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.”

[37] In this case the evidence is very clear that the financial position of the respondent had been deteriorating for an extended period of time. The downturn in trade and the consequent reduction in profitability had caused the respondent to look to reduce its labour costs by reducing the number of employees.

[38] Prior to the dismissal of Mr Quinn the respondent had already been forced to make two other positions redundant. The decision was made by Mr Sassella to do away with Mr Quinn’s position and for the duties he had been undertaking to be done by the remaining kitchen staff and himself. I am satisfied that Mr Quinn’s job was no longer required to be performed by anyone because of changes in the operational requirements of the respondent.

[39] No evidence or submissions have been provided as to their being any agreement or award obligation with respect to consultation. In any event I accept the evidence of Mr Sassella that his attempt to consult fully with Mr Quinn about his redundancy was thwarted by Mr Quinn’s aggressive response which may well have been triggered by the events that occurred the previous day.

[40] The business is a small business and there was no opportunity to redeploy Mr Quinn within the respondent’s enterprise nor is there any suggestion this was possible in some unspecified associated entity of the employer.

[41] Consequently I am satisfied that the dismissal of Mr Quinn was a case of genuine redundancy and so cannot be an unfair dismissal. I uphold the respondent’s objection and dismiss the application.

[42] An order to that effect will now be issued.

COMMISSIONER

Appearances:

P. Quinn on his own behalf.

S. Farrell of the Chamber of Commerce & Industry of Western Australia for the respondent.

Hearing details:

2016.

Perth:

August 3.

 1   Exhibits Q1 and Q2.

Printed by authority of the Commonwealth Government Printer

<Price code C, PR584659>