Pollyanne Brown v The Hair Room Lancefield

[2017] FWC 3449

[2017] FWC 3449

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394 - Application for unfair dismissal remedy

Pollyanne Brown
v
The Hair Room Lancefield
(U2017/197)

COMMISSIONER WILSON MELBOURNE, 29 JUNE 2017

Application for an unfair dismissal remedy - whether genuine redundancy.

[1] Pollyanne Brown was employed as a hairdresser by Jodie Philippe, trading as The Hair Room Lancefield until a date in January 2017, with the precise date of termination being disputed by the parties.

[2] The Applicant submits that in all the circumstances her dismissal was not a genuine redundancy, and that question is the focus of this decision. For its part the Respondent argues both that Ms Brown’s termination of employment was a genuine redundancy as well as The Hair Room being a small business within the meaning of the Act.

[3] Section 396 of the Fair Work Act 2009 (the Act) requires the determination of four initial matters before consideration of the merits of the application, with the section providing;

396 Initial matters to be considered before merits

The FWC must decide the following matters relating to an application for an order under Division 4 before considering the merits of the application:

(a) whether the application was made within the period required in subsection 394(2);

(b) whether the person was protected from unfair dismissal;

(c) whether the dismissal was consistent with the Small Business Fair Dismissal Code;

(d) whether the dismissal was a case of genuine redundancy.

[4] While a finding that the Applicant is protected from unfair dismissal is consistent with the evidence, for the reason that she first commenced employment with The Hair Room in February 2015, no findings are made about whether the application was made within the 21 day period for lodgement or whether the termination was consistent with the Small Business Fair Dismissal Code.

[5] In relation to whether Ms Brown’s application was made within the time period allowed for by the Act, on the construct of the Respondent’s evidence the application by Ms Brown may be premature. If her termination of employment took effect on 20 January 2017, as argued for by The Hair Room, then the application, having been made on 8 January 2017, is not one “within 21 days after the dismissal took effect”; per Mihajlovic v Lifeline Macarthur 1. I have not made findings about whether the application was within time, since my finding about Ms Brown’s termination of employment being a genuine redundancy means that it is unnecessary to do so.

[6] Also, because of my findings on the subject of genuine redundancy, it is unnecessary to consider further the matter of consistency with the Small Business Fair Dismissal Code

[7] In relation to the fourth initial matter, whether the dismissal was a case of genuine redundancy, I find that it was and for the reasons set out below.

[8] It follows therefore that Ms Brown has not been unfairly dismissed within the meaning of s.385 of the Act and that her application must be dismissed.

BACKGROUND

[9] On 4 January 2017, while on annual leave, Ms Brown was rung by her employer, Jodi Philippe, and the two had a discussion about the future of her employment. The matters discussed within the phone call are disputed, however the phone call is the first marker of several in a path that led to Ms Brown’s termination of employment.

[10] At the time Ms Brown worked as a hairdresser at The Hair Room, Lancefield, which is owned and managed by Ms Philippe. While working there since 5 February 2015, most of Ms Brown’s employment had been as an adult apprentice. That status changed in October 2016 when the apprenticeship was completed and Ms Brown became recognised as a tradesperson hairdresser.

[11] Ms Brown’s version of the matters discussed within the 4 January 2017 telephone call is that Ms Philippe told her that her employment was to be terminated effective immediately with that being on the advice of her accountant who had informed her that she could no longer afford to pay Ms Brown.

[12] Ms Philippe’s version of the matters discussed within the phone call puts forward that the conversation was somewhat more consensual, being a conversation between two friends about their collective future. In particular Ms Philippe says that she discussed with Ms Brown her current financial difficulties and what should be done about them, at least as they impacted upon Ms Brown. By way of background to the conversation, Ms Philippe gave evidence that over the Christmas break she had changed over the accounting system and employed a new bookkeeper, who then provided her with financial advice that her financial situation was quite serious and that the business needed to at least be restructured. Ms Philippe was advised to cut costs and in doing so the financial advisor explained the options available to her - with one of those options being to reduce staffing expenses.

[13] Ms Philippe’s recollection of the 4 January 2017 conversation is that it was a long one and that she and Ms Brown discussed the situation in some detail, with an agreement being reached that the two would go their separate ways. Ms Philippe also says that in the course of their discussions Ms Brown had raised with her the possibility of Ms Philippe giving her a termination of employment letter that she could take to Centrelink, with the date of termination being backdated to 24 December 2016.

[14] Ms Philippe also puts forward that Ms Brown was at the time on three weeks of annual leave, which had commenced on 23 December 2016. 2

[15] Before and after the telephone call on 4 January 2017, and Ms Brown and Ms Philippe exchanged text messages and emails.

[16] The first text message, from Ms Brown, was to Ms Philippe on 4 January 2017 at 3:21 PM;

“Hi Jodie. Hpoe (sic) all is well.. Thought I would touch base. Back for work start Wednesday … are you still going to the beach?? Beautiful here” 3

[17] That text was responded to a minute or so later by Ms Philippe who said that she would call Ms Brown.

[18] The telephone conversation referred to above appears to have then taken place and a further text message was sent from Ms Philippe to Ms Brown at 3:58 PM, which said “[e]mailed now”, followed with a sad face emoticon. 4

[19] An email was then sent by Ms Philippe to Ms Brown at 3:58 PM which set out the following;

“From: Jodie Philippe

<email address>

Sent: Wednesday, 4 January 2017 3:58 PM

To: Pollyanne

Subject: End of Employment letter

Dear Pollyanne,

I am writing to confirm the end of your employment at The Hair Room Lancefield, from 24/12/2016.

The business is no longer able to sustain a full time qualified hairdresser.

The year has not been profitable and I have underestimated the salon’s capacity to pay you.

With this in mind I regret to inform you that your services will no longer be required.

Thank you very much for your dedicated and professional service.

Yours sincerely,

Jodie Philippe

The Hair Room Lancefield” 5

[20] At 3:59 PM Ms Philippe sent a further text message “I will do reference tonight ok” followed by a heart emoji. 6

[21] The following day, on 5 January 2017, and extending into 6 January 2017, there was then a string of text messages between Ms Brown and Ms Philippe regarding payment. Those text messages set out the following; 7

• On 5 January 2017;



• From Ms Brown at 3:21 PM – “Hi luv.. just checked my bank. Any idea when u can put it in??”;



• From Ms Philippe 3:25 PM – “Hi pol, I'm at work have to do when I finish .. Won't be long”;



• From Ms Brown at 7:06 PM – “Jodie…have u forgotten about my money?”;



• From Ms Philippe between 7:08 PM and 8:51 PM – “No Polly we are working it out pls”; “.. forgive .. Discrepancy between figures. Will do as soon as they sort it Out”; and “Paid 400 just til she gets back to me, won't be til tomorrow morning now. Sorry for the inconvenience pol X”.



• On 6 January 2017;



• From Ms Philippe 11:24 AM – “Hey pol can I pls leave the keys with me or in my letter box if that's easier. Thanks xx”;



• From Ms Brown at 1:40 PM – “Hi Jodie…can u please tell me when to expect all money owed to me. Thanks pol.”;



• From Ms Philippe at 2:58 PM – “Hello Pol I'm sorry to leave you wondering that. It will be in the next day or two. As soon as I am aware of the amount you are entitled to, and I can pay you. Did u see my text about keys?”.

[22] Notwithstanding that the initial “end of employment letter” had been forwarded to Ms Brown on 4 January 2017 referring to the end of her employment on 24 December 2016, a further letter was sent by Ms Philippe to Ms Brown on 6 January 2017 referring to the end of her employment in different terms. The correspondence, which was sent to Ms Brown by email on 8 January 2017 at 1:44 PM, was as follows;

“6th January 2017

The Hair Room Lancefield

[Address]

PollyAnne Brown

[Address]

NOTICE OF TERMINATION

Dear PollyAnne,

I am writing to you about the termination of your employment with The Hair Room Lancefield, [Address].

Based on your length of service your notice period is 2 weeks. Therefore, your employment will end on 20" January 2017. You will continue to be paid based on your ability to serve out your notice period.

You will be paid out your accrued entitlements in your final pay and any payments in advance will be deducted from your final pay.

I have had to reassess the direction I am moving in with the business and unfortunately, have had to make some hard decisions about staff and payroll.

I wish you well in your future endeavours.

Regards

Jodie Philippe” 8

[23] Shortly after the email was sent, commencing at 2:38 PM there was a text message exchange between two;  9

• From Ms Philippe at 2:38 PM;

“Hi Pol I have emailed you, have a look and give me a call when you're free. I am happy to go through it with you if it's not clear.

I’ve paid your holiday pay today - minus the $400 advance..

Finally, thanks for your patience.

I am about to forward you the remainder of the fee reimbursement money this afternoon.

The notice period is two weeks for the period of time you have been working on the books as a hairdresser.. from your sign up date, it is a little under two years. That's what it goes on.

I would like you to work those two weeks out, your usual hours, Wednesday to Saturday from this week.

If you would prefer not to you will be ineligible for payment.

Cheers xx”

• From Ms Brown at 2:41 PM – “Sorry…have already sent your original email to fair works Australia. In their hands now.”



• From Ms Philippe at 2:43 PM – “Call me when you’re free pol.”

[24] Ms Philippe says about the second termination letter that she had never intended to give Ms Brown notice of termination of her employment in the course of the early January conversations, which is why she felt it necessary to provide a second official letter. The purpose of the 4 January 2017 phone call was not to terminate Ms Brown’s employment but to share the news about Ms Philippe’s financial position. She could not sit on that information and needed to discuss it with Ms Brown.

[25] As alluded to in the foregoing text messages, Ms Brown then made an unfair dismissal application to the Fair Work Commission on 8 January 2017 at 7:33 PM. That application, which is the subject of this decision, refers to Ms Brown having been notified of her dismissal on 4 January 2017 with the date of dismissal taking effect on the same day.

[26] Ms Brown suspects that her termination of employment came about for reasons other than the business’ operational requirements, putting forward that instead it stemmed from her having raised repeated concerns with Ms Philippe about underpayments of wages, with Ms Philippe undermining “the legitimate and rational basis” for her inquiries. 10 Ms Philippe denies that possibility.

LEGISLATION

[27] The legislative provision which is relevant to this matter is set out in s.389 of the Act, which is as follows;

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.

CONSIDERATION

[28] There are potentially several matters requiring determination in this decision.

[29] Firstly, and because it is an initial matter requiring determination before the merits of an application, consideration needs to be given to whether or not Ms Brown’s termination of employment was a genuine redundancy within the meaning of s.389 of the Act.

[30] Depending upon whether or not Ms Brown’s termination of employment was a genuine redundancy, it may then also be necessary to determine the date upon which Ms Brown’s employment was terminated, with there being several possibilities for that date. The first of those possibilities is the date referred to within Ms Brown’s application, being 4 January 2017. The latest of the possible dates of termination are those set out within the second termination of employment letter which states that Ms Brown’s employment will end on 20 January 2017 and that “[y]ou will continue to be paid on your ability to serve out your notice period”. 11

[31] Also in the event that the dismissal was not a genuine redundancy, consideration will need to be given to the merits of the application and whether in all the circumstances Ms Brown’s termination of employment was an unfair dismissal.

[32] The meaning of the term “genuine redundancy” is set out in s.389 of the Act. The definition has two elements; firstly, that a person’s job is no longer required to be performed by anyone because of changes in the operational requirements of the enterprise; and secondly that there has been compliance with any obligation in the modern award or enterprise agreement which applied to the employment to consult about the redundancy.

[33] In relation of the first element, the evidence leads to the conclusion that Ms Philippe no longer required Ms Brown’s job to be performed by anyone because of changes in the business’ operational requirements. Ms Philippe gave significant and cogent evidence about the financial position faced by her business and that she was strongly advised by her bookkeeper that significant cost-cutting was required to be undertaken. That cost-cutting included changing the premises from which the business operates in Lancefield in order to reduce its rental overhead, as well as to reduce staffing costs. Ms Philippe’s evidence included that her most significant staffing cost was the employment of Ms Brown and that after dismissal she has not been replaced, at least to the extent of the hours previously undertaken by Ms Brown. Ms Philippe’s evidence also included that she is now herself spending more time working directly in the business generating income.

[34] The parties agree that the Hair and Beauty Industry Award 2010 12 applied to Ms Brown’s employment.

[35] Clause 8 of the Award requires there to be consultation by an employer with affected employees about major changes that are likely to have significant effects on them, with the clause being in the following terms, so far as is relevant;

“8. Consultation

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.

8.2 Consultation about changes to rosters or hours of work [clause omitted]”

[36] An analysis of the text messages and correspondence between Ms Brown and Ms Philippe, referred to above, shows that initially those texts were consensual and not the subject of animus between the two. The texts and email on 4 January 2017, while mainly from Ms Philippe to Ms Brown, nonetheless do not show any anxiety on the part of Ms Brown having been sent an email that said her employment had ended a week and a half earlier on 24 December 2016. The following day’s text messages involve a query by Ms Brown about whether money would be put into her bank account by Ms Philippe. The tone of those texts and the ones from the following day on 6 January 2017 changes a little as Ms Brown becomes concerned about the payment of money for her annual leave and when it would be paid.

[37] As recorded above, Ms Philippe chose to withdraw the first notice of termination and replace it with the second, dated 6 January 2017, but did not actually provide it to Ms Brown until 8 January 2017.

[38] Consideration of all of the evidence and material in this matter leads to the view that the telephone conversation between Ms Philippe and Ms Brown on 4 January 2017 was more likely than not as consensual as Ms Philippe related in her evidence. That is, Ms Philippe puts forward that this was a conversation between two friends about their future direction. This view has been formed by the fact that the text and email before and after the conversation and into 5 January 2017 continued to be friendly and that a product of the telephone call was the issuing of the first termination letter, referring to a backdated end date of 24 December 2016, which was not particularly objected to at the time by Ms Brown. In this regard, Ms Philippe’s evidence was that the product of their conversation was that Ms Brown did not object to leaving the business if Ms Philippe was able to help out with a backdated termination letter for the purposes of provision to Centrelink. That explanation is consistent with there being no immediate objection on the part of Ms Brown once she received the email on 4 January 2017. In contrast, when she received the second termination letter on 8 January 2017 she filed an unfair dismissal application in the Commission a few hours later.

[39] It is consistent with my acceptance of Ms Philippe’s evidence about the nature of the telephone call on 4 January 2017 for me to then accept that the first termination letter was more likely than not the product of a request made of Ms Philippe by Ms Brown.

[40] Having accepted the premise of the 4 January 2017 telephone call put forward by Ms Philippe, the question then arises as to whether or not the same phone call suffices for the purposes of consultation required by the Award. I find that it does. The actions required to be undertaken by an employer bound by the Award under the consultation clause include notifying the affected employees of proposed changes that would have significant effects upon them (which includes termination of employment); discussion with the affected employees about the likely effects of the changes on them and of “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”.

[41] While there was only a single phone call and there was not a notification by Ms Philippe to Ms Brown in writing of relevant information about the changes that she proposed and their expected effects, I find that functionally, within the context of the size of Ms Philippe’s business as well as what was said between the two and Ms Brown’s reaction to Ms Philippe’s news, Ms Philippe had satisfied her obligation to notify, discuss and consider averting or mitigating actions. For reason of the content of the first termination letter, Ms Brown clearly had enough of an opportunity to raise averting or mitigating measures.

[42] Further, I am satisfied that it would not have been reasonable, in the all the circumstances, for the Respondent to redeploy Ms Brown within the employer’s enterprise. Having found that the change in operational requirements of the business was such that the Respondent could not afford to employ Ms Brown because of its financial position, it follows that, in the circumstances, there was no reasonable redeployment opportunity available to it. The evidence allows a finding that, upon receiving the financial advice, The Hair Salon necessarily moved to reduce staff and relocate its premises in moves to reduce expenditure.

[43] Further, the evidence in the matter does not disclose any associated entities of the employer to which Ms Brown may have been redeployed.

[44] As a result of these findings, it follows that I also accept that Ms Brown’s termination of employment by Ms Philippe was a genuine redundancy within the meaning of the Act.

[45] As a result it is unnecessary to consider the other matters identified for determination, set out above.

[46] I find that Ms Brown’s dismissal was a case of genuine redundancy within the meaning of s.389 of the Act and that because of that finding, together with the provisions of s.385, it is not possible for the Commission to make a finding that she had been unfairly dismissed.

[47] Accordingly, Ms Brown’s application for unfair dismissal must be dismissed, which I now do. An order to that effect is issued at the same time as this decision.

COMMISSIONER

Appearances:

Mr T Hancock, solicitor, for the Applicant.

Ms N Philippe for the Respondent.

Hearing details:

2017.

Melbourne:

24 April.

Final written submissions:

Applicant: 1 May 2017.

Respondent: 9 May 2017.

 1   [2014] FWC 1871 [42].

 2   Exhibit R2, Respondent’s Outline of Submissions, [C1].

 3   Exhibit A3, Text Message Exchange, 1.

 4   Ibid.

 5   Exhibit A1, Witness Statement of Pollyanne Brown, Attachment PB – 2.

 6   Exhibit A3.

 7   Ibid, 2.

 8   Exhibit A1 Attachment PB – 3.

 9   Exhibit A3, 5.

 10   Exhibit A1 [11]-[13].

 11   Ibid Attachment PB – 3.

 12   MA000005.

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