Philippe Elomar v Z Transport Group T/A Z Staff Pty Ltd

[2020] FWC 4773

[2020] FWC 4773

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Philippe Elomar
v
Z Transport Group T/A Z Staff Pty Ltd
(U2020/6467)

COMMISSIONER YILMAZ MELBOURNE, 14 SEPTEMBER 2020

Application for relief from unfair dismissal - application of the Small Business Fair Dismissal Code – impact of COVID-19 pandemic – long term casual.

[1] On 11 May 2020, Mr Philippe Elomar made an application to the Fair Work Commission (Commission) under s.394 of the Fair Work Act 2009 (Cth) (FW Act) for a remedy, alleging that he had been unfairly dismissed from his employment with Z Transport Group Pty Ltd (Z Transport). Z Transport submit it complied with the Small Business Fair Dismissal Code, therefore Mr Elomar is not protected by s.390 of the FW Act. Mr Elomar disputes his dismissal was in accordance with the Small Business Fair Dismissal Code and is seeking reinstatement and compensation.

When can the Commission order a remedy for unfair dismissal?

[2] Section 390 of the FW Act provides that the Commission may order a remedy if:

(a) the Commission is satisfied that the Applicant was protected from unfair dismissal at the time of being dismissed; and

(b) the Applicant has been unfairly dismissed.

[3] Both limbs must be satisfied. I am therefore required to consider whether the Applicant was protected from unfair dismissal at the time of being dismissed and, if I am satisfied that the Applicant was so protected, whether the Applicant has been unfairly dismissed. In this case the Respondent submits the Applicant is not protected due to the business being a small employer that has complied with the Small Business Fair Dismissal Code.

When is a person protected from unfair dismissal?

[4] Section 382 of the FW Act provides that a person is protected from unfair dismissal if, at the time of being dismissed:

(a) the person is an employee who has completed a period of employment with his or her employer of at least the minimum employment period; and

(b) one or more of the following apply:

(i) a modern award covers the person;

(ii) an enterprise agreement applies to the person in relation to the employment;

(iii) the sum of the person’s annual rate of earnings, and such other amounts (if any) worked out in relation to the person in accordance with the regulations, is less than the high income threshold.

When has a person been unfairly dismissed?

[5] Section 385 of the FW Act provides that a person has been unfairly dismissed if the Commission 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.

Background

[6] The uncontested factual background to the matter is as follows:

•  Mr Elomar was first employed on 22 September 2014 in the role of pushbike courier;

•  Mr Elomar was a casual employee engaged on a regular and systematic basis and had a reasonable expectation of continuing employment on a regular and systematic basis;

•  Mr Elomar’s employment was terminated by Z Transport on 21 April 2020;

•  Z Transport is a small business;

•  Mr Elomar satisfied the minimum employment period, met the salary threshold and was covered by a modern industry Award - the Road Transport and Distribution Award 2020; and

•  Mr Elomar filed his application within the statutory time limit.

The hearing

[7] There being contested facts involved, a hearing was scheduled for 28 August 2020.

Witnesses

[8] Mr Elomar gave evidence on his own behalf.

[9] The following witnesses gave evidence on behalf of the Respondent:

•  Mr Peter Blegg, Business Manager.

Submissions

[10] On 21 April 2020, Mr Elomar was advised by Mr Blegg, the Operations Manager of Z Transport, that his role was terminated due to the impact of COVID-19 and that no other role was available for redeployment.

[11] Mr Elomar submits he was employed as one of two pushbike couriers and the decision to terminate only his position was unfair because he was a long serving pushbike courier. He also submits that his role and roster was identical to the one other courier who retained employment.

[12] Further, Mr Elomar submits that during the meeting when he was informed of his termination of employment, he had made suggestions that Z Transport retain both couriers and split the reduced workload, but Z Transport did not agree that both could be retained. 1

[13] In respect of process, Mr Elomar submits he had no forewarning that his employment would be terminated, he submits the termination of employment meeting occurred by chance as he was at the office to complete tasks and because of the unexpected nature of the meeting, he did not have an opportunity to have a support person present. 2

[14] Mr Elomar submits that subsequent to his termination of employment, he enquired whether he was stood down or made redundant and contends that he did not receive an adequate response. 3

[15] Z Transport submit that it is a small business with fewer than 15 employees; evidence of size of business was not disputed.

[16] Z Transport submits that following from stage 3 COVID-19 restrictions, the pushbike courier work diminished rapidly because the CBD clients that utilised the service began working from home.

[17] From 20 March 2020 to 20 April 2020, Mr Blegg conducted a review of the pushbike courier business to ascertain whether the business could sustain 2 couriers. This review showed a decline in jobs for the month of March from 791 to 134 in April. The allocation of 5 jobs per courier was economically unsustainable. 4

[18] Mr Blegg submits that in the meeting with Mr Elomar regarding the decision to terminate his employment, it was discussed that the business did not qualify for JobKeeper and that there was no other role for him in the business. Mr Blegg gave evidence that splitting shifts was unsustainable due to the requirement of a minimum 4 hour engagement and based on the number of jobs, the allocation of 1.5 jobs per hour per courier does not cover operational costs. Mr Blegg gave evidence that it was decided that it was in Mr Elomar’s best interests that he would be eligible for jobseeker if his employment was terminated.

[19] Mr Blegg gave evidence that the decline in work was obvious to both couriers and that he was aware that the despatcher had also suggested to Mr Elomar to apply for JobSeeker payments.

[20] Mr Blegg submits that Z Transport complied with the requirements of the Small Business Fair Dismissal Code.

Was the dismissal consistent with the Small Business Fair Dismissal Code?

[21] Section 388 of the FW Act provides that 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.

[22] As mentioned above, I find that the Respondent was a small business employer within the meaning of s.23 of the FW Act at the relevant time, having 7 employees (including casual employees employed on a regular and systematic basis).

[23] However, Z Transport submit Mr Elomar’s employment was terminated due to business downturn rather than his performance or conduct. Further they submit that the second courier position was not replaced. Where the termination is due to business downturn, the Small Business Fair Dismissal Code does not apply. Rather where employment is dismissed due to business downturn, the question to be determined is whether the dismissal was due to genuine redundancy.

Was the dismissal a case of genuine redundancy?

[24] Under s.389 of the FW Act, a person’s dismissal was a case of genuine redundancy if:

(a) the 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.

Operational reasons

[25] Z Transport gave evidence of job numbers for pushbike couriers which showed an average of 638 per month in the preceding 12 months to end of March 2020. The business was immediately affected by the COVID-19 pandemic with job numbers falling to 134 for the month of April. 5 The evidence in business downturn is not contested.

[26] Mr Blegg gave evidence that he considered alternatives to termination of employment but concluded there was no alternative. He submits no other employment opportunities were available for redeployment. Drivers of motorcycles, cars and vans were all engaged as contractors and while the COVID-19 pandemic affected job numbers in that area of the business the impact was to a lesser degree, the greatest impact was on the work of the two casual pushbike couriers. Splitting the work among two casual couriers was economically unworkable as the fall in job numbers to 134 was significant compared to pre-COVID-19, where couriers on average split 638 jobs between them. These options were discussed with Mr Elomar in the termination of employment meeting.

[27] I am satisfied on the evidence that there were operational reasons for the decision to make Mr Elomar’s position redundant. I am also satisfied that no alternative positions were available.

[28] I am also satisfied that the position is no longer required to be performed by anyone for operational reasons and I am satisfied that s.389 (1)(a) of the FW Act has been met. However, notwithstanding the valid operational reason and reasonable grounds for no alternative positions for redeployment, s.389 (b) requires consideration of the consultation provisions in an enterprise agreement or modern award. Z Transport was subject to the terms of clause 30 of the Road Transport and Distribution Award 2020 (the Award).

Obligations to consult

[29] Clause 30 of the Award provides as follows:

30. Consultation about major workplace change

30.1 If an employer makes a definite decision to make major changes in production, program, organisation, structure or technology that are likely to have significant effects on employees, the employer must:

(a) give notice of the changes to all employees who may be affected by them and their representatives (if any); and

(b) discuss with affected employees and their representatives (if any):

(i) the introduction of the changes; and

(ii) their likely effect on employees; and

(iii) measures to avoid or reduce the adverse effects of the changes on employees; and

(c) commence discussions as soon as practicable after a definite decision has been made.

30.2 For the purposes of the discussion under clause 30.1(b), the employer must give in writing to the affected employees and their representatives (if any) all relevant information about the changes including:

(a) their nature; and

(b) their expected effect on employees; and

(c) any other matters likely to affect employees.

30.3 Clause 30.2 does not require an employer to disclose any confidential information if its disclosure would be contrary to the employer’s interests.

30.4 The employer must promptly consider any matters raised by the employees or their representatives about the changes in the course of the discussion under clause 30.1(b).

30.5 In clause 30 significant effects, on employees, includes any of the following:

(a) termination of employment; or

(b) major changes in the composition, operation or size of the employer’s workforce or in the skills required; or

(c) loss of, or reduction in, job or promotion opportunities; or

(d) loss of, or reduction in, job tenure; or

(e) alteration of hours of work; or

(f) the need for employees to be retrained or transferred to other work or locations; or

(g) job restructuring.

[30] The Award requires the employer to notify employees who may be affected by a definite decision that is likely to have significant effect by the proposed changes. This clause anticipates that the employer will consult with employees likely to be affected prior to the implementation of the decision and the information is to be provided in writing. The purpose of consultation prior to the termination of employment is that the employer’s decision may be influenced through consultation. Significant effects in consultation clauses include a termination of employment.

[31] Mr Elomar was a long-term casual since 2014, worked 5 days per week with some variation in his hours of work due to certain regular tasks and the allocation of courier jobs. Despite the variation in hours, Mr Elomar was a casual employee engaged regularly and systematically with a reasonable expectation of continuing work on a regular and systematic basis. While engaged as a casual, there is no entitlement to notice or redundancy pay, there is nevertheless, a requirement on Z Transport to follow procedural steps.

[32] There was no evidence Z Transport consulted as required by the Award until the day of the dismissal. Z Transport failed to comply with the technical requirements of the consultation clause in the Award.

[33] While I am not satisfied that Mr Elomar was provided with a genuine opportunity to influence the decision of Z Transport through notification and written notice, the consequences of not doing so would not have resulted in a different outcome.

Was the termination unfair?

[34] Section 387 of the FW Act requires me to consider the following matters:

“387 Criteria for considering harshness etc.

In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, FWA 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 FWA considers relevant.”

Was there a valid reason? (s.387(a))

[35] The termination was due to a business downturn.

[36] In this matter I find Mr Elomar was not dismissed for reasons related to his capacity or conduct, but for operational reasons being a valid reason.

Notification and opportunity to respond (ss.387(b) and (c))

[37] The matters in Section 387(b) and (c) of the FW Act deal with whether there was procedural fairness in respect of a reason for dismissal related to the Applicant’s capacity or conduct. Mr Elomar was not notified of his termination until the day of his dismissal, on the day there had been discussion regarding alternatives to termination, however, given the reason for the dismissal, I consider this a neutral matter with respect to my consideration whether the dismissal is harsh, unjust or unreasonable.

Support person (s.387(d))

[38] Z Transportdid not advise Mr Elomar that he could have a support person at the meeting when he was advised of his dismissal. While it is not required that Z Transport offer the opportunity, rather, it is required that Z Transport do not deny the opportunity for a support person. In this case, Mr Elomar was denied any warning that a meeting was planned or that his employment would be terminated on 21 April 2020, this situation did not give rise to a request for a support person. Mr Elomar’s employment of six years was terminated at what Mr Elomar describes as an impromptu meeting, giving him no warning or opportunity to consider whether he required a support person. I regard this consideration to be in Mr Elomar’s favour with respect to whether the dismissal was harsh, unjust or unreasonable.

Unsatisfactory performance (s.387(e))

[39] The dismissal did not relate to unsatisfactory performance, so this matter is not relevant to my consideration. I regard this a neutral matter in terms of whether the dismissal was harsh, unjust or unreasonable.

Size of the enterprise and human resource management (s.387(f) and (g))

[40] Z Transport is a small business of 7 including the long-term casuals. The size of the business did affect the process adopted to inform Mr Elomar of his dismissal. The sharp fall in jobs was obvious, and while size affected the process, the outcome of termination would not have been different had Z Transport had greater resources.

Other matters (s.387(h))

[41] Mr Blegg submitted during the hearing that the termination of Mr Elomar’s employment may not be characterised as a termination of employment because he was a casual employee. This is inconsistent with the evidence that Mr Elomar was a long-term regular and systematic casual employee, and further, the actions of Mr Blegg constituted a dismissal when he invited Mr Elomar into the meeting to terminate his employment. I am satisfied that there was a dismissal and that Mr Elomar was a person afforded protection from unfair dismissal.
[42] While the termination and redundancy provisions contained in the Award do not apply, the consultation clause does, and this concerns procedural fairness that should have been afforded to Mr Elomar who was a long-term casual employed since 2014. Mr Blegg submitted that he understood that Z Transport was not required to give a casual employee notice, however, he failed to recognise that a long-term casual, engaged regularly and systematically, with a reasonable expectation of regular and systematic employment, has protections under unfair dismissal laws.

Conclusion regarding harsh, unjust or unreasonable

[43] Taking into account the matters referred to above, I am satisfied that the process of termination of Mr Elomar’s employment by Z Transport was unfair. The failure in procedural fairness prior to the dismissal was unreasonable and unjust, despite there being a valid reason for the dismissal.

Remedy

[44] Mr Elomar is seeking reinstatement and Z Transport gave evidence that there remains insufficient work for a second pushbike courier.
[45] Reinstatement of Mr Elomar is not practicable. In the circumstances, I consider that an order for compensation would be appropriate.
[46] In considering compensation I am required by Section 392(2) of the FW Act to consider the following:

“(2) In determining an amount for the purposes of an order under subsection (1), FWA must take into account all the circumstances of the case including:

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

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

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

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

(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; and

(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; and

(g) any other matter that FWA considers relevant.”

[47] No submissions were put forward by Z Transport regarding the impact of any order on the viability of the enterprise, but it did provide evidence of the viability of the pushbike courier business. I have taken into account the size of the enterprise, the direct evidence concerning pushbike income and the direct impact of the COVID-19 pandemic on the business.

[48] Mr Elomar was a regular and systematic casual employee for some 6 years. This period is not insignificant. Had COVID-19 not impacted the business Mr Elomar would have had a longer period of employment.

[49] The witness evidence of Mr Elomar that he made efforts to apply for a number of jobs was not supported by further evidence. Mr Elomar also submitted that he did not apply for JobSeeker payments. Considering the nature of work performed by Mr Elomar and the comparable positions he sought with other courier businesses, it is reasonable to accept that finding employment during this pandemic would be challenging. Had Z Transport adopted a fairer process leading up to the dismissal, Mr Elomar would have had a further week of employment.

[50] I make no deduction for misconduct as this consideration is not relevant and I make no deduction for failure to provide further mitigating evidence.

[51] I have calculated a compensation figure of $818.20 gross, based on his average hours worked per week in the period July 2019 to April 2020. This figure is to be paid to Mr Elomar within 7 days less applicable tax. Mr Elomar made submissions that he did not receive an employment separation certificate and while I cannot direct that Z Transport provide one, it would be reasonable for Z Transport to do so.

[52] An Order will be issued concurrently with this decision requiring the payment of this compensation less appropriate taxation within 7 days.

COMMISSIONER

Appearances:

Mr P. Elomar for himself

Mr P. Blegg and Mr V. Smits for the Respondent

Hearing details:

2020
Melbourne (by telephone)
28 August

Printed by authority of the Commonwealth Government Printer

<PR722558>

 1   Applicant’s outline of argument at Q6a and transcript.

 2   Ibid at Q6d and transcript.

 3   Applicant’s outline of argument at Q6a and 6b, Applicant’s statement of evidence, emails of April 2020 and transcript.

 4   Respondent’s outline of submissions and statement of Mr Blegg.

 5   Respondent’s outline of argument - attachment A.