Piper v Pacific Coast Contractors Pty Ltd T/A Hope Estate Wine Group

[2014] FWC 2891

[2014] FWC 2891

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Piper
v
Pacific Coast Contractors Pty Ltd T/A Hope Estate Wine Group
(U2013/14431)

VICE PRESIDENT CATANZARITI SYDNEY, 2 MAY 2014

Application for unfair dismissal remedy - not a genuine redundancy - consultation obligations not complied with - compensation ordered.

Introduction

[1] On 12 October 2013, an application pursuant to s.394 of the Fair Work Act 2009 (the Act) for a remedy for unfair dismissal was lodged by Mrs Leonie Piper (the Applicant).

[2] The matter was the subject of conciliation on 22 November 2013; the matter was not resolved and was consequently listed for hearing. At the hearing eventually conducted on 24 April 2014, the Applicant was represented by Mr Jim Nolan of Counsel. Pacific Coast Contractors Pty Ltd T/A Hope Estate Wine Group (the Respondent) did not attend the hearing.

[3] The Applicant filed written submissions in the Fair Work Commission (the Commission) on 5 February 2014. In contravention of the directions issued by the Commission on 22 January 2014, the Respondent did not file any written submissions.

[4] The Applicant gave evidence on her own behalf at the hearing.

Procedural History

[5] The only written material provided by the Respondent throughout the proceedings was its Form F3 Employer’s Response to Application for Unfair Dismissal Remedy. The employer’s response briefly refuted the Applicant’s contentions without going into detail about the Respondent’s case.

[6] Subsequent to the unsuccessful conciliation, both parties were sent a Notice of Listing informing them that the matter had been listed for arbitration hearing. Included in the Notice of Listing were directions requiring both parties to file in the Fair Work Commission and serve on the other party an outline of submissions, witness statements and any other documentary materials by a specified date. The Notice of Listing and directions were each amended a number of times due to changes in the listing date and, on one occasion, on the basis of an application by the Applicant to have the directions amended. On 5 February 2014, the Applicant filed her written submissions and witness statements. The Respondent had been directed to file its written submissions and materials no later than noon on Thursday, 27 February 2014. Even with the benefit of numerous reminders from Fair Work Commission staff, the Respondent failed to comply with the directions and did not file any materials.

[7] Despite the Respondent’s failure to comply with directions, the matter was listed for arbitration before me at 10:00am on Wednesday 2 April 2014. With less than half an hour before the listed hearing date, an employee of the Respondent informed the Commission that Mr Michael Hope (Mr Hope), a director of the Respondent who was intending to be its representative, had become ill and was not able to attend. While no medical certificate was provided on the day, my associate asked the Respondent’s employee to ensure that a medical certificate be provided to the Commission as soon as possible. On this basis, I vacated the hearing and listed a directions teleconference to be heard on Tuesday 8 April 2014.

[8] Despite numerous attempts to connect with the Respondent on Tuesday 8 April 2014, the Respondent did not participate in the directions teleconference. At the directions teleconference it was determined that the matter would be re-listed for hearing on 24 April 2014 and that as the Respondent had not yet provided a medical certificate to supports its previous application to vacate, an affidavit would be required to support that application. The Respondent was informed of this by email on 8 April 2014.

[9] After the Respondent had been sent an email on 8 April 2014 informing it of the outcome of the directions teleconference, a medical certificate was sent to chambers by an employee of the Respondent. The medical certificate certified that Mr Hope was unfit for work from 2 April 2014 to 7 April 2014 inclusive. The medical certificate was unusual insofar as it had been completed by a registered pharmacist.

[10] No further materials were filed by the Respondent, nor was any further correspondence received. The Respondent failed to provide an affidavit in support of its application to vacate the hearing of 2 April 2014 as I had directed on 8 April 2014. At the hearing of 24 April 2014 the Respondent did not attend, nor did the Respondent attempt to contact the Commission prior to or subsequent to the hearing in order to request that the hearing be vacated or in order to explain its absence. Thus, the hearing took place despite the Respondent’s absence.

Background

[11] The Applicant had been employed by the Respondent in a full-time position since July 2010. Her employment was governed by the Commercial Sales Award 2010 [MA000083], and at no stage had the Applicant entered into a written employment contract with the Respondent.

[12] On 10 December 2012, Mr Hope emailed the Applicant to inform her that a change in distributorship “may lead to a change in your circumstances.” Despite indicating that he would provide the Applicant with further information before the end of the next week, no further details were forthcoming. On 5 July 2013, the Applicant began to hear from her clients that representatives from a different company were visiting them and advising them that the new company, “Kollaras”, 1 was now the exclusive distributor of the Respondent’s products.

[13] The Applicant contacted Mr Hope requesting clarification of her role given this development. Mr Hope replied by email confirming that an agreement was being finalised with Kollaras to distribute the Respondent’s product and Mr Hope informed the Applicant that he would organise an interview for the Applicant with Kollaras to discuss her continued employment on the North Shore of Sydney. The Applicant attended a meeting with Kollaras on 12 July 2013 that Mr Hope had arranged. At the meeting the Applicant was told about a role in the Eastern Suburbs territory, not the North Shore as had previously been advised by Mr Hope. The Applicant was told that a written offer would be sent to her.

[14] On 18 July 2013, the Applicant spoke with Mr Hope and expressed a view that she was concerned about whether she would be a good cultural fit with Kollaras. On the same day the Applicant emailed Mr Hope and informed him that she was of the view that her role with the Respondent had become redundant and that she was entitled to a redundancy payment in line with the National Employment Standards. In his reply, Mr Hope asserted that “there is no redundancy as you have an offer of employment from Kollaras on the same terms as currently.”

[15] On 19 July 2013, the Applicant received an email asking her to contact Ms Melinda Larsen (Ms Larsen), a human resources representative from Kollaras. On 20 July 2013, the Applicant emailed Ms Larson and asked for the Kollaras employment offer to be email to her.

[16] On 22 July 2013, the Applicant received an employment contract from Kollaras for a new position. On the same day the Applicant informed Mr Hope that she was considering the contract and would send a response to Kollaras on the next day.

[17] On 23 July 2013, the Applicant emailed Ms Larsen to ask some clarifying questions regarding the contract, including whether her service with the Respondent would be recognised by Kollaras. Ms Larsen responded by return email confirming that this was a new role and that a probation period would apply. Ms Larsen suggested that issues relating to the Applicant’s prior service should be addressed to Mr Hope. The Applicant emailed Mr Hope on 24 July 2013 informing him that she was entitled to a redundancy payment and requesting that he provide such payment upon termination of her employment.

[18] On 24 July 2013, Ms Larsen sent the following email to the Applicant:

“Hi Leonie,

Due to extenuating circumstances we are withdrawing our offer of employment sent on Monday morning.

I apologise for any inconvenience and wish you all the best.

Regards,

Melinda Larsen”

[19] No further correspondence was received from either Kollaras or Mr Hope. The Applicant continued in her role and took her scheduled annual leave from 24 August 2013 to 13 September 2013. Upon her return to work on 16 September 2013, the Applicant emailed Mr Hope seeking to discuss the current status of her employment and her future role with Hope Estate. On 17 September 2013, Mr Hope wrote to the Applicant to inform her that she had two options. Either she would accept the offer of employment from Kollaras (with Mr Hope offering to ensure that they amend the offer to recognise the Applicant’s period of service with the Respondent) or she would be required to relocate to the Hunter Valley for a sales role based at the winery. Mr Hope concluded his email by asking the Applicant to “[p]lease let me know if you’d like me to make the necessary arrangements with Kollaras today otherwise we’ll see you [at the winery in the Hunter Valley] at 9am tomorrow to run through your role here.”

[20] On 19 September 2013, the Applicant replied to Mr Hope informing him that she would review a revised offer from Kollaras once she had received it, but that it was not feasible for her to relocate to the Hunter Valley as she had family in Sydney. On 21 September 2013, Mr Hope responded by terminating the Applicant’s employment in an email. The email reads as follows:

“Leonie,

I write to inform you that as you have declined to accept the position in the Hunter I am forced to finish your employment with Pacific Coast Contractors Pty Ltd.

With the appointment of Kollaras as our National Distributor I did arrange an offer of employment from them so that you could remain in Sydney. They inform me that they tried unsuccessfully to discuss the offer with you but did not receive any replies to emails or phone messages.

I did offer to continue your employment in a sales role at the winery but you have indicated that you do not wish to relocate nor commute the 90 mins from your house. I would of course have paid your relocation expenses but understand that you wish to remain in Sydney.

Your termination of employment will take effect immediately and while you will be paid 4 weeks notice there is no requirement to work out the time.

Can you please pack into the car all the company property that you hold - samples, price lists etc - and I will have the car collected on Monday. Please do not drive the car in the meantime.

Your work email address and phone number will be re-directed to the winery so that customers can be advised of the situation going forward.

After collection of the car and company property Monday full payment will be made for you [sic] salary, notice and unused entitlements.

I appreciate your efforts over the past years and wish you every success in the future.

Regards

Michael Hope”

[21] On 23 September 2013 the Applicant replied to Mr Hope identifying what she perceived to be inaccuracies in his termination letter and informing him that, on her view, there was no offer from Kollaras and no reasonable alternative offer by the Respondent, and thus her position was redundant and she was entitled to redundancy pay in addition to other outstanding entitlements. On 27 September 2013 the Applicant received a response from Aubrey Brown Partners, a law firm acting for the Respondent. Aubrey Brown Partners informed the Applicant that:

“We note that you have raised with [Mr Hope] some concerns that your employment with [Kollaras] would not be one of ‘continued employment.’ We are instructed that this is incorrect and the purpose of the meeting between yourself and [Kollaras] was for them to clarify that the offer of employment included recognition of your employment [with the Respondent] and they would then resubmit another offer to you confirming this. Accordingly, as the offer was one which offered continual employment you are not entitled to redundancy under the National Employment Standard.”

[22] On 8 October 2013, the Applicant responded to Aubrey Brown Partners and reiterated her view that she was entitled to redundancy and other unpaid entitlements. The Applicant also reiterated her position that no genuine offer of employment was made as Kollaras’ offer was rescinded and the Respondent’s offer to work from the Hunter Valley was unreasonable.

[23] The Applicant submits that her dismissal was unfair and seeks an order that she be compensated six months’ pay in lieu of reinstatement.

Employer’s Response

[24] As noted above, the Respondent’s only substantive participation in these proceedings has been to lodge a Form F53 Employer’s Response to Application for Unfair Dismissal Remedy. As this form constitutes the entirety of the Respondent’s case in this matter it bears reproducing the salient aspects of the form:

“2. What were the reasons for the dismissal?

2.1. The Respondent as a result of a restructure outsourced its wine distribution to Tosti Cellars at Port Kembla Pty Ltd (“Wholesale Beverage Company”). This meant that the Respondent did not require the Applicant’s job to be done by anyone any longer. As a result the Applicant’s employment with the Respondent was terminated.

2.2 Wholesale Beverage Company made an offer of employment of the Applicant which was an offer of continued employment.

3. What is your response to the Applicant’s contentions?

3.1 Wholesale Beverage Company made the Applicant an offer of employment on terms and conditions similar to the Applicants terms and conditions with the Respondent which enabled her to in effect carry out the same job that she was carrying out for the Respondent in the same area. That offer also included an offer of continued employment.

3.2 The Applicant rejected that offer.

3.3 The Respondent also offered the Applicant employment in a sales role at the Hope Estate Winery in Pokolbin. As Pokolbin is approximately ninety (90) minutes from the Applicant’s residence the Respondent also offered to pay the Applicant relocation to Pokolbin expenses. The Applicant rejected this offer as she wished to remain in Sydney.

3.4 As the offer of employment with the Wholesale Beverage Company included recognition of the Applicant’s employment with the Respondent and had the Applicant accepted that offer her employment would have been transferred by the Applicant was not entitled to be paid a redundancy payment.”

[Errors in original]

Protection from Unfair Dismissal

[25] An order for compensation may only be issued where I am satisfied that the Applicant was protected from unfair dismissal at the time of the dismissal.

[26] Section 382 of the Act sets out the circumstances that must exist for the Applicant to be protected from unfair dismissal:

“382 When a person is protected from unfair dismissal

A person is protected from unfair dismissal at a time if, at that time:

(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.”

[27] It was not contested, and I am satisfied, that the Applicant has completed the minimum employment period and is covered by the Commercial Sales Award 2010 [MA000083]. Consequently, I am satisfied the Applicant was protected from unfair dismissal.

[28] I will now consider if the dismissal of the Applicant by the Respondent was unfair within the meaning of the Act.

Was the dismissal unfair?

[29] A dismissal is unfair if I am satisfied, on the evidence before me, that all of the circumstances set out in s.385 of the Act existed. Section 385 provides as follows:

“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.”

Was the Applicant dismissed?

[30] A person has been unfairly dismissed if the termination of their employment comes within the definition of “dismissed” for the purposes of Part 3-2 of the Act. Section 386(1) of the Act provides as follows:

“386 Meaning of dismissed

(1) A person has been dismissed if:

(a) the person’s employment with his or her employer has been terminated on the employer’s initiative; or

(b) the person has resigned from his or her employment, but was forced to do so because of conduct, or a course of conduct, engaged in by his or her employer.”

[31] I am satisfied on the basis of the termination letter sent by Mr Hope that the Applicant was dismissed within the meaning of s.386(1)(a) of the Act.

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

[32] No evidence was put on by either party with respect to the number of employees employed by the Respondent at the time of the dismissal, so it is unclear whether the Respondent was a “small business employer” as defined in s.23 of the Act. In any event, there is nothing to suggest that the Respondent complied with the Small Business Fair Dismissal Code (the Code), and I am therefore not satisfied that the dismissal was consistent with the Code.

Was the dismissal a genuine redundancy?

[33] The Respondent has consistently asserted that this was not a case of redundancy. Regardless of the Respondent’s assertions, however, I must be satisfied that this was not a case of genuine redundancy under the Act before I can make a finding that the dismissal was unfair. Section 389 of the Act defines the meaning of genuine redundancy:

“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.”

Was the Applicant’s job no longer required to be performed?

[34] Despite the Respondent’s contention that the Applicant was not made redundant, it does contend that the Applicant’s job was no longer required to be performed by anyone. The Applicant also submits that her role “is no longer required to be undertaken by an employee of Hope Estate and this is through no fault of [the Applicant].”

[35] This statement, however, must be considered in the context of the Respondent’s continued refusal to accept that the Applicant was made redundant. Despite the Respondent’s inconsistent approach to the issue, it seems more likely than not that the Applicant’s job was no longer required to be performed by anyone.

Did the Respondent comply with any consultation obligations?

[36] At the time of the dismissal, the Commercial Sales Award 2010 [MA000083] applied to the employment relationship. The consultation provisions in the Commercial Sales Award 2010 appear at clause 8, which provides 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.”

[37] I am not satisfied that the Respondent complied with clause 8 of the Commercial Sales Award 2010. Mr Hope’s email of 10 December 2012 informed the Applicant that the Respondent was “reviewing the whole distribution model as the current model does not contribute enough sales for the resources employed.” The email continued to state that the Respondent was “in discussions with a major wholesaler with the view to them taking over our domestic distribution which may lead to a change in your circumstances.”

[38] In a further email on 5 July 2013 Mr Hope informed the Applicant that the Respondent was in the process of finalising an agreement with Kollaras to distribute wine through its channels. This email was only received after the Applicant had asked Mr Hope to clarify her role with the company after being informed by her clients that they had been contacted by representatives of Kollaras. Thus, Mr Hope did notify the Applicant of changes to the structure of the organisation, albeit in a delayed manner.

[39] However, despite the Respondent’s eventual compliance with Cl 8.1(a), the Respondent entirely failed to comply with the discussion requirements found in Cl 8.1(b). First, the Respondent failed to provide any relevant information about the nature of the changes proposed or the expected effects of the changes on the Applicant in accordance with Cl 8.1(b)(iii). Secondly, the Respondent failed to engage in any discussions with the Applicant in order to discuss the changes, the effects of the changes or ways in which the adverse impact of the changes could be mitigated. In his email of 5 July 2013, Mr Hope alluded to discussions that would take place in Wollongong between Kollaras and the Applicant, however, at no stage did the Respondent arrange for discussions to take place with the Applicant about the change in the structure of the company.

[40] Clause 8.1(b) of the Commercial Sales Award 2010 requires more than simply informing an affected employee of the company’s decision; a genuine discussion must take place. There is no evidence in this matter of such discussions occurring. Indeed, the evidence points towards a consistent disregard on the Respondent’s behalf of its obligations to consult with its employees about the introduction of significant changes to the structure of the business.

[41] In order to be satisfied that the Applicant’s dismissal was a case of genuine redundancy, I must be satisfied of both limbs of the test in s.389(1). As I am not satisfied that the employer complied with its obligations to consult about the redundancy, the dismissal was not a case of genuine redundancy.

Harsh, unjust or unreasonable

[42] Having been satisfied of each of s.385(a),(c)-(d) of the Act, I must consider whether I am satisfied the dismissal was harsh, unjust or unreasonable. The criteria I must take into account when assessing whether the dismissal was harsh, unjust or unreasonable are set out at s.387 of the Act:

“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.”

[43] The ambit of the conduct which may fall within the phrase ‘harsh, unjust or unreasonable’ was explained in Byrne v Australian Airlines Ltd [1995] HCA 24; (1995) 185 CLR 410 at 465 by McHugh and Gummow JJ as follows:

.... It may be that the termination is harsh but not unjust or unreasonable, unjust but not harsh or unreasonable, or unreasonable but not harsh or unjust. In many cases the concepts will overlap. Thus, the one termination of employment may be unjust because the employee was not guilty of the misconduct on which the employer acted, may be unreasonable because it was decided upon inferences which could not reasonably have been drawn from the material before the employer, and may be harsh in its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct in respect of which the employer acted.

[44] I am under a duty to consider each of these criteria in reaching my conclusion. 2 I will now consider each of the criteria at s.387 of the Act separately.

Was there a valid reason for dismissal relating to capacity or conduct? - s.387(a)

[45] As the reason for the Applicant’s dismissal did not relate to the Applicant’s performance, this factor has a neutral impact in determining whether or not the Applicant’s dismissal was harsh, unjust or unreasonable. 3

Was the Applicant notified of that reason and given an opportunity to respond? - ss.387(b)-(c)

[46] The Full Bench of Fair Work Australia (as it then was) found that the factors in ss.387(b)-(c) relate only to procedural fairness in relation to dismissals that relate to a person’s capacity or conduct. 4 As the Applicant was not dismissed for reasons relating to her capacity or conduct, issues of procedural fairness in relation to her dismissal will be considered below under the heading of s.387(h).

Did the Respondent unreasonably refuse to allow the Applicant to have a support person present to assist at any discussions relating to dismissal? - s.387(d)

[47] The Applicant was not given an opportunity to discuss her dismissal, and was therefore denied the opportunity to have a support person present to assist with any such discussions.

Was the Applicant warned about unsatisfactory performance before the dismissal? - s.387(e)

[48] As the dismissal did not relate to unsatisfactory performance, this matter is of neutral impact in determining whether the Applicant’s dismissal was hard, unjust or unreasonable. 5

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 the degree to which the absence of dedicated human resource expertise would impact on the procedure followed - s.387(f)-(g)

[49] No evidence was led with respect to the size of the Respondent. It can be inferred from the materials, however, that the Respondent is not a large organisation, and it seems unlikely that the Respondent has any dedicated human resource specialists or expertise. Despite this, however, these factors do not mitigate the fundamental failure of the Respondent to provide even the most basic level of procedural fairness to the Applicant.

Other relevant matters - s. 387(h)

[50] Section 387(h) provides the Commission with a broad scope to consider any other matters it considers relevant. I consider the following matters to be relevant to the determination of whether the dismissal of the Applicant was harsh, unjust or unreasonable.

[51] There were significant procedural issues with the approach taken by the Respondent. As outlined above, the Respondent did not provide the Applicant with an opportunity to discuss the changes to the company’s structure. Given the fatal impact of this restructure on the Applicant’s job, this failure cannot be justified. Further, for the most part the Respondent only engaged with the Applicant at all in relation to her employment upon the Applicant’s initiative. This behaviour evinces a callous disregard for an employer’s obligations under the relevant award. Beyond its effect on the Applicant, however, the Respondent’s conduct precluded the Applicant from working with the Respondent to determine suitable options for redeployment within the company, or any examination of alternative options. Had such discussions taken place, I consider that there was a chance that a mutually suitable alternative could have been found.

[52] In addition to the lack of consultation about the restructure to the company, the Respondent appears to have been under the impression that the Applicant had a standing job offer with Kollaras. This offer was, however, unilaterally revoked by Kollaras before the Applicant had a chance to respond to it. While assisting the Applicant to find an alternative position with Kollaras may have been a mitigating factor, in the circumstances the Respondent’s continued insistence that this offer was available to the Applicant made it difficult for the Applicant to comprehend her own circumstances as well as engage in meaningful discussions about any alternatives to dismissal.

[53] In his email of 17 September 2013, Mr Hope wrote to the Applicant to inform her that she had two options: either accept a role at Kollaras or relocate to the Hunter Valley, commencing at 9am the following day. Despite the Applicant’s refusal of the Respondent’s offer of a position in the Hunter Valley, it is unreasonable to provide an employee with less than 24 hours to make a decision as significant as moving away the city in which they currently reside. Further, Mr Hope alluded to a revised offer from Kollaras (without acknowledging the unilateral revocation of the previous offer), to which the Applicant responded that she would review a revised offer from Kollaras before making a decision. Before any revised offer was received, however, the Respondent was abruptly dismissed. The Applicant submits, and I accept, that this conduct caused unnecessary angst and stress. Further, it prevented the Applicant from obtaining an employer’s reference to assist in gaining employment despite the fact that at no time did the Respondent assert that there were issues with the Applicant’s capacity or conduct.

Conclusion

[54] Having considered each of the matters specified in s.387, I am satisfied that the dismissal of the Applicant was harsh, unjust or unreasonable. Accordingly, I find the Applicant’s dismissal was unfair.

Remedy

[55] Section 390 of the Act sets out the circumstances in which I may make an order for reinstatement or compensation:

“390 When the FWC may order remedy for unfair dismissal

(1) Subject to subsection (3), the FWC may order a person’s reinstatement, or the payment of compensation to a person, if:

(a) the FWC is satisfied that the person was protected from unfair dismissal (see Division 2) at the time of being dismissed; and

(b) the person has been unfairly dismissed (see Division 3).

(2) The FWC may make the order only if the person has made an application under section 394.

(3) The FWC must not order the payment of compensation to the person unless:

(a) the FWC is satisfied that reinstatement of the person is inappropriate; and

(b) the FWC considers an order for payment of compensation is appropriate in all the circumstances of the case.

Note: Division 5 deals with procedural matters such as applications for remedies.”

[56] I have already dealt with the issues at s.390(1)(a)-(b) above. I am satisfied that the Applicant was protected from unfair dismissal pursuant to s.387 of the Act and that the Applicant was dismissed unfairly. Accordingly I am required to determine whether to order the reinstatement of the Applicant or, in circumstances where reinstatement is inappropriate, an order for compensation if I am satisfied such an order is appropriate in all the circumstances.

[57] The Applicant is seeking compensation as the primary remedy. Regardless of the remedy sought by the Applicant, s.390 of the Act requires I first determine whether reinstatement is appropriate before I may consider an order for compensation.

[58] As both parties have asserted that the Applicant’s position is no longer required to be performed by anyone, I accept that the Applicant’s role is no longer available. Further, the Applicant has commenced employment with a new employer. I therefore do not consider it appropriate in all the circumstances to reinstate the Applicant.

Compensation

[59] In making an order for compensation in lieu of reinstatement, the Act sets out the circumstances that I must take into account in making such an order:

“392 Remedy—compensation

Compensation

(1) An order for the payment of compensation to a person must be an order that the person’s employer at the time of the dismissal pay compensation to the person in lieu of reinstatement.

Criteria for deciding amounts

(2) In determining an amount for the purposes of an order under subsection (1), the FWC 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 the FWC considers relevant.

Misconduct reduces amount

(3) If the FWC is satisfied that misconduct of a person contributed to the employer’s decision to dismiss the person, the FWC must reduce the amount it would otherwise order under subsection (1) by an appropriate amount on account of the misconduct.

Shock, distress etc. disregarded

(4) The amount ordered by the FWC to be paid to a person under subsection (1) must not include a component by way of compensation for shock, distress or humiliation, or other analogous hurt, caused to the person by the manner of the person’s dismissal.

Compensation cap

(5) The amount ordered by the FWC to be paid to a person under subsection (1) must not exceed the lesser of:

(a) the amount worked out under subsection (6); and

(b) half the amount of the high income threshold immediately before the dismissal.

(6) The amount is the total of the following amounts:

(a) the total amount of remuneration:

(i) received by the person; or

(ii) to which the person was entitled;

(whichever is higher) for any period of employment with the employer during the 26 weeks immediately before the dismissal; and

(b) if the employee was on leave without pay or without full pay while so employed during any part of that period—the amount of remuneration taken to have been received by the employee for the period of leave in accordance with the regulations.”

[60] The method for calculating compensation under s.392 of the Act was dealt with by a Full Bench of the Commission in Bowden, G v Ottrey Homes Cobram and District Retirement Villages Inc. T/A Ottrey Lodge 6 (Bowden). In that decision the Full Bench set out the order in which the criteria and other factors should be applied, taking into account authority under the Workplace Relations Act 1996 in Sprigg v Paul’s Licensed Festival Supermarket7 and Ellawala v Australian Postal Corporation8. I have adopted the methodology utilised in Bowden in determining the amount of a payment of compensation.

[61] I will now consider each of the criteria in s.392 of the Act.

Remuneration that would have been received - s.392(2)(c)

[62] The Applicant’s annual remuneration with the Respondent including salary, a fully maintained car and mobile phone was $73,200.

[63] Had the Applicant remained employed by the Respondent, it is likely that she would have continued to be employed for another 12 months. I make this finding on the basis that there is a real chance that an appropriate arrangement could have been made with respect to redeployment, had the Respondent complied with its consultation obligations. While the Applicant found the Respondent’s offer of relocation to be unacceptable for personal reasons, there is nothing to suggest that a suitable arrangement could not have been developed between the Applicant, the Respondent and Kollaras. The fact that Kollaras apparently had a need for a salesperson to work in Sydney’s Eastern Suburbs and that the Applicant was willing to consider such a role suggests that there was certainly capacity between the three entities to come to a suitable arrangement.

[64] Thus, had the Applicant remained employed it is likely that she would have received $72,300.

Remuneration earned subsequent to dismissal - s.392(2)(e)

[65] The Applicant gave evidence that she was to commence a position with a new employer on Monday 28 April 2014. As the Applicant was without work for 31 weeks and 2 days following her dismissal, I find that the amount of compensation to which the Applicant is entitled should be limited to 31 weeks and 2 days. This amount should further be reduced by the 4 weeks’ notice paid out to the Applicant following her dismissal. This reduces the total compensation to 27 weeks and 2 days.

Income reasonably likely to be earned between the making of the order for compensation and the actual compensation - s.392(2)(f)

[66] Given my decision, this factor is not relevant.

Viability - s.392(2)(a)

[67] There has been no suggestion that the making of such an order would affect the viability of the Respondent.

Length of service - s.392(2)(b)

[68] The Applicant had worked for the Respondent for over three years. This is a significant period of time.

Mitigating effort - s.392(2)(d)

[69] The Applicant gave evidence that she had made efforts to mitigate her loss suffered as a result of the dismissal. Her efforts at mitigating the loss included applying for new jobs, including successfully commencing employment with a new employer in April 2014. I find that the Applicant has made efforts to mitigate her loss suffered as a result of the dismissal.

Misconduct - s.392(3)

[70] I have not found any misconduct by the Applicant that contributed to her dismissal.

Other matters - s.392(2)(g)

[71] In Enhance Systems Pty Ltd v James Cox (PR910779), a full bench found as follows:

“[38] Any discount for contingencies depends upon the circumstances of each particular case. As was said in Ellawala:

‘A discount for contingencies is a means of taking into account the various probabilities that might otherwise affect earning capacity.’ [Ellawalla v Australian Postal Corporation Print S5109, 17 April 2000, at para [43]]

[39] For the period from the date of the termination of employment until the hearing of this application by the Commission at first instance, the economic effect of the termination of the respondent’s employment is known and capable of calculation. There is considerable force in the argument that any discount for contingencies should only be applied in respect to an "anticipated period of employment" that is not actually known, i.e. a period that is prospective to the date of the decision. We make no discount for the period actually known.”

[72] I intend to adopt the full bench’s approach to the issue of contingencies, and thus make no discount for contingencies in relation to the period that is actually known. In this matter, the unknown “anticipated employment period” is less than one week and I therefore make no discount for contingencies in relation to that period.

Shock, distress, etc. - s. 392(4)

[73] I note that the amount of compensation calculated does not include a component for shock, humiliation or distress.

Compensation cap - s.392(5)

[74] I must reduce the amount of compensation to be ordered if it exceeds the lesser of the total amount of remuneration received by the Applicant, or to which the Applicant was entitled, for any period of employment with the employer during the 26 weeks immediately before the dismissal, or the high income threshold immediately prior to the dismissal.

[75] The amount the Applicant would have earned, or to which the Applicant was entitled, for the 26 week period immediately prior to the dismissal was $36,600. The amount of compensation I will order exceeds the compensation cap. I will reduce the amount of compensation to be ordered to $36,600.

Conclusion

[76] I am satisfied that the Applicant was protected from unfair dismissal, that the dismissal was unfair and that a remedy of compensation is appropriate.

[77] An order will be issued with this decision.

VICE PRESIDENT

Appearances:

J Nolan of Counsel for the Applicant.

Hearing details:

2014.

Sydney:

April 24.

 1   It should be noted that there are inconsistencies in the identity of the company that took over distribution for the Respondent. The Applicant refers to the company as “Wholesale Beverage Company T/A Kollaras” whereas the Respondent refers to it as “Tosti Cellars at Port Kembla Pty Ltd T/A Wholesale Beverage Company.” As both parties refer to the company as “Kollaras” in their communications to each other, this is the term I have adopted for the purposes of this Decision.

 2   Sayer v Melsteel[2011] FWAFB 7498.

 3   UES (Int'l) Pty Ltd v Harvey[2012] FWAFB 5241, [42].

 4 Ibid [43].

 5 Ibid [45].

 6   [2013] FWCFB 431.

 7 (1998) 88 IR 21.

 8   Print S5109.

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