Samuel Thomas v GH Quality Bricklaying Pty Ltd

[2016] FWC 2852

[2016] FWC 2852

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Samuel Thomas
v
GH Quality Bricklaying Pty Ltd
(U2015/16306)

COMMISSIONER PLATT ADELAIDE, 12 MAY 2016

Application for relief from unfair dismissal – whether applicant resigned – whether constructive dismissal – whether termination a genuine redundancy – obligation to consult – failure to consult – whether termination harsh, unjust or unreasonable – application dismissed.

1. Summary

[1] Mr Thomas has lodged an application pursuant to s.394 of the Fair Work Act 2009 (the Act) seeking a remedy for an alleged unfair dismissal by his former employer GH Quality Bricklaying Pty Ltd (GH).

[2] Mr Thomas commenced employment as an apprentice bricklayer on 14 May 2014.

[3] In addition to the working proprietor Mr Garry Hong, GH employed two casual bricklayers and two full time apprentices to provide bricklaying services, almost exclusively, to a residential builder. GH is a small business employer within the meaning of s.23 of the Act.

[4] In late 2015, the amount of bricklaying work contracted to GH reduced substantially. Mr Hong sought to secure on-going contracts from the residential builder and contacted other builders to prevent further loss of workflow. Mr Hong also adopted a number of strategies in an effort to retain his current employees.

[5] After a short period, Mr Hong determined that it was unlikely that he would be able to secure enough work to retain his existing employees and reviewed GH’s staffing arrangements.

[6] On 9 November 2015, a meeting took place between Mr Thomas, his mother, Mr Hong and a representative of the State Government Traineeship & Apprenticeship Service (TAS). Three options were explored, a suspension of the apprenticeship, the transfer of Mr Thomas’ apprenticeship contract to another employer and the termination of the contract.

[7] Mr Thomas considered his position and on 11 November 2016, advised GH that he wished to terminate the contract. GH agreed and the employment ceased on that day.

[8] GH contended that Mr Thomas resigned. I do not accept this characterisation of the termination. Mr Thomas did not freely choose to resign, the termination arose as a result of GH’s actions and thus was at the initiative of the employer.

[9] Although GH discussed the shortage of work and potential options with Mr Thomas, the failure to provide this information to Mr Thomas in writing, is inconsistent with the consultation provisions in the Building and Construction General On-Site Award 2010 (Award) and consequently the dismissal cannot be regarded as a genuine redundancy within the meaning of s.389 of the Act.

[10] I find however, that Mr Thomas’ dismissal was as result of a shortage of work and that the procedural error in failing to document the information provided verbally did not render the dismissal harsh, unjust or unreasonable. The application is dismissed.

[11] My reasons for this decision are detailed below.

2. Overview

[12] Mr Thomas contended that his dismissal was unfair because he believed that his position was not genuinely redundant and that the dismissal was as a result of a number of minor grievances he had had with Mr Hong.

[13] Mr Thomas sought compensation.

[14] GH contended that that Mr Thomas was not dismissed at the employer’s initiative or in the alternative, that the employment was terminated by way of genuine redundancy.

3. Factual matrix

[15] Mr Thomas was employed by GH as an apprentice bricklayer in May 2014. Mr Thomas had a full time, fixed term, contract of employment and also entered into a training contract with GH.

[16] In addition to Mr Thomas, GH employed two casual bricklayers and another apprentice.

[17] GH provided bricklaying services almost exclusively to a residential builder, Weeks Building Group (Weeks). The work was awarded to GH by Mr Leigh Iry with whom Mr Hong had a close working relationship. GH was awarded almost all of the bricklaying work within Mr Iry’s control.

[18] In October 2015, Mr Iry advised Mr Hong that he intended to leave his employment with Weeks. Mr Hong recognised that the loss of Mr Iry’s contracts posed a great risk to GH’s workflow and sought to secure work from other management persons at Weeks and explore alternative sources of work.

[19] Mr Hong gave evidence that he informed his employees of the changes at Weeks (and the risk to the level of work) as soon as he became aware. Mr Thomas does not recall being so informed.

[20] The issues with Weeks were further exacerbated by the fact that in late 2015, bricklaying work decreased. This was due two factors, the first was that the size of the houses being built reduced (and thus the number of bricks to be laid) and the second, that consumers were moving towards the use of alternative materials like Heeble which does not require bricklayers.

[21] Mr Hong provided a table comparing the volume of work from August 2015 to April 2016 with the preceding 12 months. This indicated that there had been a 42% reduction in work over that period. In the November 2015, work dropped by 80% from 5 jobs to 1 job.

[22] Mr Thomas did not perceive any change in work volume during his period of employment and contended that his employment was terminated as a result of a series of disagreements with Mr Hong over access to his Ute, a work injury and him leaving trade school early.

[23] On 9 November 2016, Mr Hong met with Mr Thomas, his mother and a representative from TAS to discuss the viability of the business and how to respond to the shortage of work. Mr Hong was concerned that he would be required to continue to pay Mr Thomas despite having no work for him and that he could not engage him only when work was available, as he did with the casual employees.

[24] The TAS representative proposed three options, a suspension of the training contract, transfer of the contract to another employer or the termination of the training contract. Mr Thomas stated that this meeting was the first time he became aware of the shortage of work.

[25] Mr Thomas was given some time to consider his position. There was an option to work for another employer at Aldinga but Mr Thomas did not want to travel that distance and thought he could secure work closer to home.

[26] On 11 November 2016, Mr Thomas sent Mr Hong a text message, advising him that he wished to terminate the training contract. The employment ceased on that day.

[27] On 13 November 2016, Mr Thomas signed a form formally terminating the training contract on the grounds of a shortage of work.

[28] On 18 November 2016, GH provided a Centrelink Separation Certificate which advised that the employment had ended due to a shortage of work.

[29] It is apparent that the relationship between Mr Hong and Mr Thomas is now poor. Mr Thomas has instituted separate proceedings concerning an alleged underpayment of wages.

[30] Mr Hong gave evidence that after the termination of Mr Thomas’ employment, the other apprentice agreed to suspend their training contract and subsequently the employment ceased by way of shortage of work.

[31] Mr Thomas secured alternative employment 11 weeks after his dismissal.

4. Did Mr Thomas resign from his employment?

GH submitted that Mr Thomas resigned from his employment by virtue of the text message sent on 11 November 2016.

[32] Section 386 of the Act states:

“386 Meaning of dismissed

368(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.”

[33] The event that triggered the dismissal was the meeting called by the Mr Hong on 9 November 2016. But for this meeting, Mr Thomas would not have been presented with three options to consider, all of which had the effect of terminating the employment contract. The continuation of the employment relationship was not an option available to Mr Thomas.

[34] GH’s presentation of these options (through the TAS representative) had the effect of bringing the employment to the end, the only question was which option would be selected. Following the reasoning in Mohazab v Dick Smith Electronics Pty Ltd (No.2) 1 and O’Meara v Stanley Works Pty Ltd,2 I find that the dismissal was at the initiative of the employer.

[35] GH contended that, in the alternative, Mr Thomas was dismissed in circumstances that constituted a genuine redundancy.

[36] Section 385 of the Act states:

“385 What is an unfair dismissal

385 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.”

[37] Mr Thomas was not dismissed on the basis of gross misconduct, performance or capacity and therefore the Small Business Fair Dismissal Code has no application. The key issues are whether the dismissal was a case of genuine redundancy and whether the dismissal was harsh unjust or unreasonable.

5. Was the dismissal a genuine redundancy?

[38] Section 389 of the Act states:

“389 Meaning of genuine redundancy

389(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.

389(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.”

[39] GH submitted that the dismissal was the direct result of a shortage of work. Mr Thomas contended that the decision to dismiss him may have been a result of earlier disputes between him and Mr Hong. I prefer the evidence of GH on this matter. In order to accept Mr Thomas’ position, I would have to conclude that Mr Hong set up an elaborate scheme involving Mr Iry, the TAS representative and the dismissal of the other apprentice, in order to justify the dismissal of Mr Thomas. I do not accept this argument.

[40] I accept that GH had hitched its wagon to a single source of work, and that the change in circumstance resulted in the reduction of work available. Mr Hong’s approach to the problem whilst, regrettable for Mr Thomas, is a logical response. Although GH had the capacity to engage the casual bricklayers as required, this flexibility was not available to Mr Thomas’ position.

[41] I find that GH dismissed Mr Thomas because of changes in their operational requirements (i.e. shortage of work).

[42] Mr Thomas was employed under the Building and Construction General On-Site Award 2010 (the Award). Cause 8 of the Award relevantly states:

“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.”

[43] I accept that GH notified Mr Thomas of the change and the potential impact on his employment as soon as possible. GH also involved Mr Thomas in a process designed to mitigate the impact of the situation. This included securing Mr Thomas alternative employment which would have allowed his apprenticeship to continue, satisfying cc.8.1(b)(i) and (ii) of the Award. However, c.8.1(b)(iii) of the Award expressly states that this information must be provided in writing and consequently, the Award consultation obligations have not been satisfied, and the requirements of section 381(1)(b) of the Act has not been met.

[44] As a result, the dismissal cannot be regarded as a genuine redundancy as described in s.389 of the Act.

[45] I have considered the approach adopted by the Full Bench in UES (International) Pty Ltd v Harvey, 3 and Vice President Watson in Jamil Maswan v Escada Textilvertrieb T/A Escada,4 These cases similarly involved dismissals which arose from redundancy, where the Award consultation requirements were not met.

[46] I now turn to consider whether the dismissal was harsh, unjust or unreasonable pursuant to s. 387 of the Act.

6. What the dismissal harsh unjust or unreasonable?

[47] Pursuant to s.387 of the Act, 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.”

Section 387(a)

[48] Notwithstanding its formulation under a different legislative environment, I have adopted the definition of a valid reason set out by Northrop J in Selvachandran v Peteron Plastics Pty Ltd⁵which requires the reason for termination to be “sound, defensible or well founded.”

[49] The reason for the dismissal of Mr Thomas was related to the shortage of work and accordingly there was no valid reason for the dismissal related to his capacity or conduct. I regard this as a neutral factor in determining whether the dismissal was harsh, unjust or unreasonable.

Sections 387(b) and (c)

[50] The matters in s.387(b) and (c) of the Act deal with whether there was procedural fairness in respect of a dismissal related to capacity or conduct. As stated above, I have found that Mr Thomas’ dismissal was not related to his capacity or conduct and therefore it must follow that he was not notified of or given an opportunity to respond to a reason for his dismissal related to his capacity or conduct. However, given the reasons for his dismissal, I regard these as neutral matters with respect to my consideration as to whether the dismissal was harsh, unjust or unreasonable.

Section 387(d)

[51] GH allowed Mr Thomas to have a support person attend the meeting on 9 November 2016. I regard this as a neutral matter as to whether the dismissal was harsh, unjust or unreasonable.

Section 387(e)

[52] Mr Thomas’s dismissal did not relate to unsatisfactory performance so this matter is not relevant to my consideration as to whether the dismissal was harsh, unjust or unreasonable.

Sections 387(f) and (g)

[53] GH had four employees and no internal human resource management capability at the time of the dismissal, this matter assists in understanding the procedural errors in the dismissal. These are matters that weigh against a conclusion that the dismissal was harsh, unjust or unreasonable.

Section 387(h)

[54] As I have discussed earlier, there was a sound, defensible and well-founded reason for Mr Thomas’ dismissal, being that GH no longer required Mr Thomas’ position to be performed by anyone because of the change in the operational requirements of the business and it was not reasonable in the circumstances for GH to redeploy him. I note that that GH (with the assistance of the TAS representative) secured an offer of alternative employment which was rejected by Mr Thomas. These are matters that weigh against a conclusion that the dismissal was harsh, unjust or unreasonable.

7. Conclusion

[55] In UES (International) Pty Ltd v Harvey 6 the employer failed to consult at all as the applicant was on leave at the time the decision was made. In this case GH failed to document the discussions and information provided to Mr Thomas. In considering the size of the enterprise and absence of human resources, this failure is at a much lower level that that which occurred in UES. I do not believe that a written document detailing the information and options provided Mr Thomas during his discussions with GH would have changed the outcome. Having considered each of the factors detailed in s.387 of the Act, I have concluded that the termination of Mr Thomas’ was not harsh, unjust or unreasonable.

[56] The application will be dismissed and an Order 7 giving effect to this decision will be issued.

COMMISSIONER

Appearances:

S Thomas, on his own behalf.

G Hong, on behalf of GH Bricklaying Services Pty Ltd.

Hearing details:

2016.

Adelaide:

May 2.

 1 (1995) 62 IR 200.

 2   [2006] AIRC 496.

 3   [2012] FWAFB 5241.

 4   PR511174.

5 (1995) 62 IR 371 at 373.

 6   [2012] FWAFB 5241.

 7   PR580081.

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