Ripeka Simpson v KAP Motors Pty Ltd T/A Kerry's Automotive Group

[2016] FWC 5019

[2016] FWC 5019

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Ripeka Simpson
v
KAP Motors Pty Ltd T/A Kerry’s Automotive Group
(U2016/6840)

COMMISSIONER BISSETT DARWIN, 27 JULY 2016

Application for relief from unfair dismissal – genuine redundancy.

[1] Ms Ripeka Simpson has made an application to the Commission for relief from unfair dismissal pursuant to s.394 of the Fair Work Act 2009 (the Act). Ms Simpson was employed by KAP Motors Pty Ltd T/A Kerry’s Automotive Group (KAG) as the Head Detailer. On 22 April 2016 she was advised that her employment had been terminated by reason of redundancy. Ms Simpson says that her dismissal was not a genuine redundancy and that she could have been redeployed.

[2] Ms Simpson represented herself in proceedings and gave evidence on her behalf.

[3] Mr Lee Poulton, Group Fixed Operations Manager, represented KAG and gave evidence. Ms Fiona Gardner, until recently the HR Manager for KAG, also gave evidence.

Legislation

[4] Section 385 of the Act states:

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.

[5] Section 389 of the Act deals with genuine redundancy. It 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.

Evidence and submissions

[6] Ms Simpson says that in March 2016 she was consulted about changes to the detailing area of KAG. She says that, following this consultation, a decision was made to split detailing into two areas – customer service and pre-delivery. She was the Head Detailer in the pre-delivery area. Her evidence is that following the decision to split the two areas, there were a couple of days each week when neither area had much work to do. Her view is that it would have been better to re-combine the two areas.

[7] Ms Simpson says that on 22 April she was approached by Ms Gardner at about lunchtime and asked to attend a meeting about her employment at 4.00 pm that afternoon. Both Ms Gardner and Mr Poulton were at the meeting. She says she was told at that meeting that she was being made redundant.

[8] Ms Simpson says she was not told the purpose of the meeting when she was advised of it although she suspected what was going to happen. She says that if she had known the reason for the meeting she would have got a support person to attend with her.

[9] Ms Simpson says that after she was made redundant she saw a position advertised on the jobs website ‘Indeed’ for a customer service officer and for a sales consultant at KAG. She says that she could have done the customer service position as she has done similar work in the industry before. She says that she was not offered any opportunities to be retrained for other positions with KAG.

[10] Ms Simpson says that, since her dismissal, she has not looked for work and has not done any work. She says that she has a medical condition in relation to her elbow and is waiting to see a surgeon about its treatment before deciding what work she should be looking for. She says that the injury stops her doing the work she would normally perform of detailing.

[11] Mr Poulton gave evidence that a decision was made to separate out detailing for customer service and pre-delivery and that Ms Simpson had been consulted about that change. He says that the change has been successful and there is no reason to undo it and revert to the previous arrangement.

[12] He says that once the change had been made it became evident that the position occupied by Ms Simpson of Head Detailer in pre-delivery was no longer required.

[13] Mr Poulton said that the detailing quality control function previously undertaken by Ms Simpson on the detailing in pre-delivery is now done by the Pre-delivery Manager and customer service is done by the Service Advisor.

[14] Having decided that the position occupied by Ms Simpson was no longer required, Mr Poulton says that Ms Simpson was called to a meeting on 22 April 2016. He says he advised her that her position had been made redundant. He says that she got upset in the meeting and it was not possible to have any detailed discussion with her.

[15] Mr Poulton says that he did not discuss with Ms Simpson if there were any other positions that she could do or other duties she could perform.

[16] Ms Gardner gave evidence that KAG does not have an account with ‘Indeed’ (where Ms Simpson says she had seen positions with KAG advertised) and did not place any jobs with it. She says that at the time Ms Simpson’s position was made redundant, KAG did not have any vacancies and did not then or shortly thereafter, fill any customer service positions.

[17] Ms Gardner says that she advised Ms Simpson at around lunchtime of the need to meet with Mr Poulton at 4.00 pm that afternoon about her employment. She says that at the meeting Mr Poulton explained to Ms Simpson why her position was being made redundant based on the restructure and the need to continue to find cost savings.

[18] She says that at the time Ms Simpson was made redundant there were no other vacancies in the business.

Was Ms Simpson’s dismissal a result of a genuine redundancy?

[19] In order to determine if Ms Simpson was unfairly dismissed, it is necessary to determine if her dismissal was a case of genuine redundancy.

[20] It is well accepted that a job may be redundant because the employer has decided that it no longer requires the same number of staff to do the duties as previously required. 1 This covers circumstances where an employer may decide to absorb the work done by an employee into the work of others. That is the circumstance in this case. KAG reached a decision that the work done by Ms Simpson could and should be absorbed into the jobs of others.

[21] For this reason, and based on the evidence of Mr Poulton, I am satisfied that KAG no longer required the job done by Ms Simpson to be done by anyone because of changes in the operational requirements of the business.

[22] I accept the evidence of Ms Gardner that KAG did not place any advertisement for vacancies with ‘Indeed’ and, that at the time Ms Simpson’s job was made redundant and her employment terminated, there were no vacancies with KAG. I therefore accept that there was no position or job to which Ms Simpson could reasonably be redeployed into.

[23] There is no doubt that Ms Simpson was consulted about the changes proposed by KAG to separate detailing into customer service and pre-delivery areas.

[24] It is clear, however, that at the time of this consultation it was not envisaged that any positions would need to be made redundant (because at that time Ms Simpson’s position of Head Detailer was kept although narrowed in scope) and it was only after the change had been implemented that it became apparent that the job was no longer required.

[25] There was, however, no consultation with Ms Simpson about the redundancy itself. The first Ms Simpson learned of it was the day her employment was terminated.

[26] KAG is covered by the Vehicle Manufacturing, Repair, Services and Retail Award 2010 2 (the Award). The Award requires that, where an employer has made a decision to introduce major change in production, program, organisation, structure or technology that are likely to have significant effects on employees (including termination of employment), the employer must notify the employees who may be affected by the proposed changes and their representatives. The discussion with employees must include measure to mitigate the adverse effects of the change.3

[27] This did not occur at the time KAG decided it no longer required the job done by Ms Simpson. I am therefore satisfied that KAG has not met its requirements under the Award to consult with Ms Simpson as a person affected by its decision to make the position of Head Detailer redundant.

[28] For this reason the dismissal was not a genuine redundancy.

Was Ms Simpson unfairly dismissed?

[29] In deciding if Ms Simpson was unfairly dismissed it is necessary to decide if the dismissal was harsh, unjust or unreasonable. In doing so, I must have regard to 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.

[30] It was accepted by all parties that Ms Simpson’s employment was not terminated on the grounds of her capacity or conduct. I am satisfied that the reason for Ms Simpson’s dismissal was that KAG no longer required her job to be done by anyone and it was not reasonable to redeploy her. Accordingly, there cannot and was not a valid reason for her dismissal relating to her capacity or conduct.

[31] Ms Simpson was advised of her dismissal at the time it took effect. The reason for dismissal did not relate to her capacity or conduct and hence a consideration of whether or not she was given an opportunity to respond to the reason for dismissal relating to capacity or conduct is a neutral consideration.

[32] Ms Simpson says that had she known the purpose of the meeting of 22 April 2014, she would have organised a support person and that by KAG not telling her until around lunchtime to attend a meeting that afternoon about her employment, it did deny her access to a support person.

[33] There is no evidence that Ms Simpson sought to bring the meeting to an end in order to get a support person. I note that in her evidence she indicated that she had an idea what the meeting was going to be about when she was advised of it at lunchtime. In such circumstances, it is not clear to me why she did not organise a support person to attend. In any event, I am not satisfied that KAG did unreasonably refuse her access to a support person.

[34] No submissions were put to me about the size of KAG or its access to human resource expertise. I consider these matters neutral in my consideration.

[35] Whilst KAG had a legitimate reason for the dismissal of Ms Simpson, it did fail to consult with her with respect to the potential redundancy and give her an opportunity to put forward any matters that might have mitigated the effect of the redundancy. Whilst given the circumstances there appears to be little that could be done, that is not a decision for KAG to have reached without giving Ms Simpson an opportunity to engage in consultation. Until that opportunity is given no assessment can properly be made of the potential outcome. Whilst KAG did consult Ms Simpson on the restructure it failed to consult her at the critical time – when it was considering making her job redundant.

[36] In these circumstances I am satisfied that the failure to consult Ms Simpson makes the decision to dismiss her unreasonable.

[37] I am therefore satisfied that Ms Simpson was unfairly dismissed.

Remedy

[38] I am satisfied that Ms Simpson made an application for unfair dismissal, is a person protected from unfair dismissal and was unfairly dismissed.

[39] Ms Simpson does not seek reinstatement and, in the circumstances, I am satisfied that reinstatement is not appropriate.

[40] The determination of compensation requires a consideration of those matters in s.392 of the Act.

392 Remedy – 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.

[41] I am satisfied that, had Ms Simpson not been dismissed, the remuneration she would have been likely to receive would have been one week. This is because I consider that this is how long it would have taken KAG to consult with Ms Simpson and give proper consideration to any proposals she may have put.
[42] It was evident in the hearing of the matter that Ms Simpson considers that what KAG should have done was to undo the restructure for the purpose of keeping her job. Having made a decision that it no longer required her job to be done by anyone, and given this decision was driven by the effect of the reorganisation and the need to generally cut costs, I am not convinced that she would have dissuaded KAG from its decision.

[43] Within that one week period I am satisfied that KAG would have complied with its obligations under the Award.

[44] Ms Simpson was earning $27.39711 per hour at the time she was dismissed. Her lost remuneration for one week (38 hours) is therefore $1,041.09 plus 9.5% superannuation.

[45] Ms Simpson says that, due to the injury to her elbow (similar to an injury she had incurred with KAG) she could not seek work similar to that she had been performing. She says that she is waiting for medical treatment and for this reason has not sought alternative work. She has received no income since the time of her dismissal.

[46] I am satisfied that if Ms Simpson had not been dismissed, despite her injury she would have continued at work, possibly with some restriction of her duties, and received wages.

[47] That Ms Simpson’s elbow injury stops her doing work of the same kind as the work she was performing with KAG is no reason for her not to make any effort to find alternative employment that might mitigate her loss. I do accept however that it may have been difficult within the first week after the loss of her job, for her to find and commence in gainful employment. For this reason I have reduced the amount payable to her by 10%.

[48] There are no other matters relevant to the determination of compensation. There is no need to reduce the amount awarded for misconduct (as there was none) and the amount is well within the compensation cap.

[49] I am satisfied that the order will not adversely affect the viability of KAG.

Conclusion

[50] For all of the reasons given above, I shall order that Ms Simpson be paid an amount of $936.98 plus 9.5% compensation by KAG. Such an amount to be paid within 14 days of the order.

[51] An order 4 to this effect will issue with the decision.

COMMISSIONER

Appearances:

R. Simpson on her own behalf.

L. Poulton with F. Gardner for KAP Motors Pty Ltd T/A Kerry’s Automotive Group.

Hearing details:

2016.

Darwin:

July 25.

 1   Jones v Department of Energy and Minerals (1995) 60 IR 304, 308 (Ryan J); cited in Ulan Coal Mines Ltd v Howarth (2010) 196 IR 32.

 2   MA000089.

 3   Clause 8.1(b)(i).

 4   PR583393.

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