Phuong Truong v Mekong Australia Pty Ltd T/A Findon Rightprice Pharmacy
[2010] FWA 2466
•26 MARCH 2010
[2010] FWA 2466 |
|
DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Phuong Truong
v
Mekong Australia Pty Ltd T/A Findon Rightprice Pharmacy
(U2009/13471)
SENIOR DEPUTY PRESIDENT O'CALLAGHAN | ADELAIDE, 26 MARCH 2010 |
termination of employment – genuine redundancy.
[1] This decision deals with an initial issue associated with an application made on 4 November 2009 by Ms Truong, pursuant to section 394 of the Fair Work Act 2009 (the Act). Ms Truong’s application followed the termination of her employment with Mekong Australia Pty Ltd trading as Findon Rightprice Pharmacy (Mekong). Ms Truong asserts that this termination of employment was harsh, unjust or unreasonable. Mekong asserts that this termination of employment was a genuine redundancy.
[2] Ms Truong’s application was unable to be settled through the conciliation process. Following discussions with the parties on 9 December 2009, I issued directions in which I noted that there was no dispute that Mekong employed fewer than 50 employees, and accordingly, the Small Business Fair Dismissal Code had application.
[3] My directions required both parties to file and serve witness statements and copies of any documents relied upon prior to the hearing of the matter on 17 March 2010. Neither party complied properly with this requirement. Both parties represented themselves at this hearing.
[4] In reaching a conclusion in this matter I have had regard to the documents provided to me and the evidence of Mr V Pham, Ms J Pham and Mr D Pham, the Accountant providing services to Mekong, Mr Remeljej, together with that of Ms Truong and Ms Titus who is a former Mekong pharmacy assistant.
[5] The background to the matter is that Mekong is majority owned by Mr V Pham who is the Director of the company. Mr D Pham is the son of Mr V Pham, he is a minority shareholder, and works as a pharmacist in the business. Ms J Pham works in the pharmacy as well as undertaking various administrative functions.
[6] Ms Truong was initially employed on a casual basis. She sought full-time employment but left after a few weeks work. She returned to work at the pharmacy some weeks later and was appointed on a full-time weekly hire basis around September 2008. It appears that Ms Truong’s employment was intended to allow Mr D Pham to reduce his work hours from the seven-day work week he had previously worked.
[7] There are no apparent performance issues associated with Ms Truong’s work.
[8] Mekong assert that the termination of Ms Truong’s employment followed the provision of its financial accounts which showed a significant reduction in sales and increased operating costs over the 2008/2009 financial year. Further, Mekong asserts that its cash flow position required injections of funds into the business from another (non-employing) business owned by Mr V Pham and from Mr V Pham and Mr D Pham personally. As a result, Mekong asserts that it resolved to terminate Ms Truong’s employment and return to the previous arrangement whereby Mr D Pham worked a seven-day work week and the hours of a second, part-time pharmacist were increased from approximately 15 per week to 21 per week. Since the termination of Ms Truong’s employment, Mekong advises that it has also used a locum pharmacist on one or two occasions. Mekong asserts that it was an assessment of its cash flow situation that determined the timing of the termination of Ms Truong’s employment.
[9] Ms Truong’s position is that, firstly, she had an argument with Mr D Pham via an online communication medium on 15 October 2009 and that Mr D Pham did not speak to her again prior to advising her of the termination of employment by SMS and then e-mail on 21 October 2009. Secondly, Ms Truong advises that on 21 October 2009 she was absent from work on sick leave and that, by implication, these two factors were taken into account in the decision to terminate her employment.
[10] Thirdly, Ms Truong argues that in any event, the termination of her employment cannot be regarded as a genuine redundancy in that the work she had been doing was still being done, albeit by Mr D Pham and the part-time pharmacist.
[11] Finally, Ms Truong asserted that other employees had been engaged to undertake work which he had been doing. However, evidence to support this assertion was not established.
Findings
[12] I am satisfied that Mekong is a small business for the purposes of section 388, irrespective of whether the non-employing associated corporate entity owned by Mr V Pham is taken into account.
[13] Section 388 provides for the establishment of a Small Business Fair Dismissal Code. This Code sets out the basis upon which a small business employer can fairly dismiss an employee. The operation of the Code is summarised in a checklist. Of itself, the Code does not refer to redundancy situations. The checklist does so. This is because section 385 operates such that if a dismissal was a genuine redundancy it cannot be regarded as unfair.
[14] Section 396 identifies a series of matters which must be considered as initial matters before any consideration of the merits of the application. The question of whether the dismissal was a case of genuine redundancy is one of these initial matters.
[15] Section 389 states:
“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.”
[16] It is possible that the web based disagreement Ms Truong had with Mr D Pham on 15 October 2009 was an issue between Ms Truong and Mr D Pham at the time of the termination of Ms Truong’s employment. However, I have concluded that the termination of employment decision was made by Mr V Pham and that Mr D Pham was simply charged with giving effect to that decision. In reaching this conclusion I have had particular regard to the evidence of Ms Titus but I am unable to agree that this evidence establishes the basis of the termination of Ms Truong’s employment or that any alleged unfairness associated with the later termination of Ms Titus’ employment allows conclusions relative to Ms Truong’s situation.
[17] I do not consider that Ms Truong’s absence on sick leave on 21 October 2009 formed a basis for the termination of employment decision. There is nothing that indicates that this absence was taken into account, or that Mr V Pham, as the decision maker, was aware of it at the time the termination decision was made.
[18] I accept the evidence of Mr V Pham, Mr D Pham and Ms J Pham, to the effect that, following the termination of Ms Truong’s employment, the Mekong business has been restructured and Mr D Pham is now working substantially increased hours, that the part-time pharmacist hours have been increased from 15 to 21 per week and that a locum pharmacist has been used on two separate days.
[19] I similarly accept the evidence that the trading position of Mekong deteriorated substantially in the 2008-2009 financial year with significant reductions in sales turnover and an increase in operating costs. This downturn followed some seven years of continuous growth in the business. I accept the evidence that injections of cash from the other business owned by Mr V Pham and from Mr V Pham and Mr D Pham were considered necessary with some $20,000 injected into Mekong in October 2009.
[20] This deteriorating financial position provides an entirely appropriate basis for Mekong to make substantial changes in the operation of its business, and I consider that it formed the basis for Mr V Pham’s decision to terminate Ms Truong’s employment.
[21] Mekong’s restructure involves the reallocation of work to existing employees, being Mr D Pham and the 6 hours per week increase in the hours worked by the part-time pharmacist. Mr D Pham is one of the owners of the business and he was contributing cash to sustain it. Accordingly, the increase in his hours is quite consistent with a genuine restructure. The increase in hours of the part-time pharmacist is marginal and clearly does not represent a replacement of the full-time position occupied by Ms Truong.
[22] The capacity for an employer to utilise other employees to do a particular task in the context of a genuine redundancy was recognised in the Explanatory Memorandum which states:
“1548. The following are possible examples of a change in the operational requirements of an enterprise:
• a machine is now available to do the job performed by the employee;
• the employer’s business is experiencing a downturn and therefore the employer only needs three people to do a particular task or duty instead of five; or
• the employer is restructuring their business to improve efficiency and the tasks done by a particular employee are distributed between several other employees and therefore the person’s job no longer exists.”
[23] On this basis I am satisfied that the requirements of section 389(1)(a) have been met.
[24] Section 389(1)(b) requires that Mekong meet any obligation in a relevant modern award or enterprise agreement to consult about the redundancy. There is no indication of an enterprise agreement having application. The operation of an award also appears problematic. I consider it most likely, that at the time of the termination of Ms Truong’s employment the appropriate award was the Retail Pharmaceuticals Chemists Award, which was a Notional Agreement Preserving State Award. The relevant modern award did not become operational until 1 January 2010. Accordingly, I do not consider that section 389(1)(b) has application.
[25] In reaching this conclusion, it would be entirely inappropriate to convey any impression that Mekong’s decision to inform Ms Truong of the termination of her employment by SMS and then e-mail represents a fair or equitable approach. Had this matter been capable of proceeding to determination on the merits, the method of advising Ms Truong of her dismissal would have been a factor indicative of unfairness.
[26] Subsection 389(2) requires consideration of whether it would have been reasonable, in all of the circumstances, for Ms Truong to have been redeployed elsewhere in the Mekong business.
[27] The evidence before me is that Mekong is a small business, that there is only one other full-time employee, Mr D Pham and that reductions in staff employed as pharmacy assistants occurred around this same time. Accordingly, I am satisfied that redeployment was not reasonable.
Conclusion
[28] On the basis set out above I am satisfied that the termination of Ms Truong’s employment represented a genuine redundancy. Accordingly, she is excluded from consideration for unfair dismissal and her application must be dismissed. An Order [PR995471] to this effect will be issued.
SENIOR DEPUTY PRESIDENT
Appearances:
P Truong on her own behalf.
J Pham representing Mekong Australia Pty Ltd t/as Findon Rightprice Pharmacy.
Hearing details:
2010.
Adelaide:
March 17.
Printed by authority of the Commonwealth Government Printer
<Price code C, PR995459>
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