Shane Hryhorec v Mobility Plus

[2013] FWC 1072

[2013] FWC 1072

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Shane Hryhorec
v
Mobility Plus
(U2012/12479)

COMMISSIONER GREGORY MELBOURNE, 13 MARCH 2013

Genuine Redundancy.

Introduction

[1] This is an application alleging unfair dismissal brought by the Applicant, Mr Shane Hryhorec (the Applicant) under s.394 of the Fair Work Act 2009 (the Act). The Applicant was employed by Mobility Plus (the Respondent) from 19 January 2012 until his employment was terminated on 9 August 2012. The Applicant appeared on his own behalf. The Respondent was represented by its General Manager, Mr Daniel O’Neil. No witnesses were called and neither party sought to cross examine the other party. During the hearing the parties agreed to a short adjournment to enable discussion in conference about the appropriate way to deal with the matter. Those discussions canvassed a range of matters, however, it was subsequently agreed the matter proceed by way of a hearing.

The Issue to be Decided

[2] The Applicant claims his dismissal was unfair because he was dismissed after refusing to accept an offer to move from full time to casual employment. However, the Respondent claims the Applicant’s dismissal was a case of genuine redundancy and objects to the application on that basis. Section 385 of the Act provides, inter alia, that a dismissal is not a case of unfair dismissal if it was a genuine redundancy. The section states:

“A person has been unfairly dismissed if 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.” 1

[3] Section 396 of the Act also requires that before any consideration of the merits of an unfair dismissal application various matters are required to be determined. It states:

“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.” 2

[4] Accordingly, if it is determined that a dismissal is a case of genuine redundancy, as provided for by the Act, then there is no requirement to determine whether the dismissal was harsh, unjust or unreasonable and the unfair dismissal application must be dismissed.

The Submissions and Evidence

[5] The Applicant was employed on 23 January 2012 and worked with the Respondent until his termination on 9 August 2012. The Respondent manufactures, imports, distributes and maintains a variety of disability equipment and aids. It employs about 21 full-time and part-time employees. The Applicant provided a brief statement which indicated that until the day on which he was dismissed he had only received praise from his employer in regard to the performance of his work.

[6] However, on 9 August 2012 he was called into the office of the Managing Director, Mr Daniel O’Neil. He said he was told by Mr O’Neil his performance was not up to standard, in particular, because he was not responding to customers in a timely manner, and was taking too long to complete the compilation of the company newsletter. He claims he was told that due to his performance he was going to be offered a casual position and if he did not accept that option he would no longer be able to be employed by the Respondent.

[7] The Applicant said he asked Mr O’Neil whether the position was being made redundant, but was told that was not the case. The Applicant said he could not afford to accept the offer of a casual position because he needed to be employed on a full-time basis, particularly as he had financial commitments associated with his mortgage repayments.

[8] The Applicant stated that after his dismissal he unpublished the Facebook page he had been working on as he believed it was inappropriate for the page to remain when he was no longer employed by the Respondent. The Applicant says he subsequently received various demands from the Respondent who wished to reclaim the Facebook page.

[9] He also said he was not counselled at any time about his work performance during his employment with the Respondent and could not recall being offered a part-time employment position during his discussions with Mr O’Neil.

[10] Mr Daniel O’Neil is the Managing Director of the Respondent. His statement indicated that the Applicant’s direct supervisor was Rebecca O’Neil, but given the size of the company he also had direct knowledge of the Applicant’s work performance. The Applicant was initially employed to undertake new marketing activities in order to increase the Respondent’s profile and sales. The Applicant’s main duties were to put together the Facebook marketing initiative and YouTube material, as well as compiling a newsletter on a quarterly basis. He was also required to undertake other tasks such as general marketing and training as required.

[11] The Respondent indicated it originally intended to employ the Applicant on a salary package of $50,000 per annum, including superannuation. A wheelchair was also to be provided. However, the Applicant subsequently indicated he did not require a wheelchair so the package was increased to $50,000 per annum, plus superannuation. Mr O’Neil did not indicate whether any modern award applied to the Applicant’s employment. There was also no evidence of an enterprise agreement that covered the employees at the Respondent’s workplace.

[12] Mr O’Neil stated that during the period of Applicant’s employment his work performance was satisfactory, however, he did need to be supervised at times to ensure his responsibilities were undertaken in a timely manner.

[13] In late June 2012 the Applicant requested to be allowed to take an amount of unpaid leave so he could take up an opportunity with another employer in order to be able to talk at schools about issues associated with disability. He indicated this would only require one or two days leave per month. The Respondent agreed to this request, however, the periods of leave steadily increased. For example, in the week prior to his termination the Applicant only worked for the Respondent for one day in that week, and he was taking a considerable amount of leave to provide these talks to school children. This situation and other factors impacting upon the Respondent’s business subsequently led Mr O’Neil, in discussions with the Sales Manager, Rebecca O’Neil, to form the view that there was insufficient work available to keep the Applicant fully occupied and employed in a full-time position. One of those other factors was, in particular, the increased competition being faced by the Respondent from imported products due to the higher Australian dollar.

[14] Mr O’Neil subsequently confirmed his view that the Applicant’s position could not be maintained as a full-time position. He proposed instead to offer the Applicant a position with reduced hours on the basis that if this offer was not acceptable, the Applicant would be made redundant. He then met with the Applicant in the meeting on 9 August 2012 to advise him that the full-time position could not be sustained and it was intended to replace it with a “part-time casual position” 3. The Applicant was asked whether he wished to continue in the position on that basis, but indicated he could not agree to reduce his hours and could not afford to reduce his salary, particularly because of his mortgage commitments. The Respondent subsequently told the Applicant that if he could not agree to reduce hours then he would need to finish up as the full-time position was being made redundant.

[15] Mr O’Neil indicated the Applicant became very upset and angry during the course of this discussion, but was told it was nothing to do with him, and had simply resulted instead from the fact the Respondent could not afford to maintain a full-time position when there was insufficient work to justify that position being retained. In the material provided Mr O’Neil indicated he has not employed a new person in the position since the Applicant left, and the duties the Applicant previously carried out are now being performed by existing staff in addition to their usual duties.

[16] Mr O’Neil also referred to the issues that arose following the Applicant’s termination concerning the Respondent’s Facebook page and YouTube videos being unpublished. He stated that both of these actions caused the Respondent to lose marketing opportunities. However, these issues obviously came about subsequent to the Applicant’s termination of employment and had nothing to do with that decision.

[17] Mr O’Neil was asked whether he explored any other possible options that might have been available to the Applicant to undertake other work with the Respondent. He indicated those options had been considered but there were no other work opportunities available, other than what the Applicant had been employed to do. The option of reduced hours was considered to be the only option that could be offered in terms of any ongoing employment role for the Applicant.

[18] A statement was also provided by Ms Rebecca O’Neil. She is employed as the Respondent’s Sales Manager and was the Applicant’s direct supervisor during his employment with the Respondent. Her statement indicated the Applicant’s main responsibilities were to undertake tasks including updating the website, where required, creating and maintaining a Facebook page, creating a quarterly newsletter, approaching new potential customers, and developing YouTube videos to accompany some of the Respondent’s products.

[19] She stated the Applicant undertook most of the duties he performed to an adequate standard. She confirmed the details about the Applicant’s request for unpaid leave to undertake talks at schools and indicated this arrangement was agreed to on the basis he provided two weeks notice prior to any leave being taken. Subsequently, however, the periods of leave increased. She also confirmed the discussions with Mr O’Neil in July and August 2012 about the diminishing workload associated with the Applicant’s position and the view it was not sufficient to maintain a full-time position. She subsequently agreed with Mr O’Neil that the Applicant would be offered reduced hours in what she described as a part-time role.

Consideration

[20] Section 389 of the Fair Work Act deals with the meaning of genuine redundancy. It provides –

“(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.” 4

[21] The meaning of genuine redundancy, as dealt with in section 389, was considered by a Full Bench of Fair Work Australia in Ulan Coal Mines Limited v Henry Jon Howarth 5. In that decision the Full Bench made reference to the Explanatory Memorandum to the Fair Work Bill. The Full Bench stated at paragraph 16:

“The Explanatory Memorandum to the Fair Work Bill 2008 provides examples as to when a dismissal will be a case of genuine redundancy:

‘1547 Paragraph 389(1)(a) provides that a person’s dismissal will be a case of genuine redundancy if his or her job was no longer required to be performed by anyone because of changes in the operational requirements of the employer’s enterprise. Enterprise is defined in clause 12 to mean a business, activity, project or undertaking.

1548 The following are possible examples of a change in the operational requirements of an enterprise:

• a machine is now available to do the job performed by the employee;

• the employer‘s business is experiencing a downturn and therefore the employer only needs three people to do a particular task or duty instead of five; or

• the employer is restructuring their business to improve efficiency and the tasks done by a particular employee are distributed between several other employees and therefore the person‘s job no longer exists.’” 6

[22] The Full Bench also continued to note at paragraph 17:

“The examples given in the Explanatory Memorandum illustrate circumstances where tasks and duties of a particular employee continue to be performed by other employees but nevertheless the ‘job’ of that employee no longer exists.” 7

[23] The question of what is required of an employer in terms of the obligations imposed by s.398(2) has also been considered by this Tribunal and its predecessor. In Ulan Coal Mines Limited v Honeysett and Others 8 a Full Bench of the Tribunal said in regard to section 389(2):

“The question remains whether redeployment within the employer’s enterprise or the enterprise of an associated entity would have been reasonable at the time of dismissal. In answering that question a number of matters are capable of being relevant. They include the nature of any available position, the qualifications required to perform the job, the employee’s skills, qualifications and experience, the location of the job in relation to the employee’s residence and the remuneration which is offered.” 9

[24] The Full Bench continued to indicate that each case will depend upon what would have been reasonable in the circumstances.

[25] Both parties were self represented in the proceedings and provided limited submissions and evidence in support of their respective positions. Neither party sought to cross examine the other. The Applicant states that after working with the Respondent for a period of seven months he was simply called to a meeting with the Managing Director and told he was now to be offered the option of moving from full-time employment to a casual role involving less hours per week. He stated he was not told he was being offered a part-time position or that the situation involved a case of genuine redundancy. He also stated he had not previously been spoken to or alerted about any problems or issues to do with his work performance.

[26] The Respondent indicated that after a period of five months employment with the Respondent the Applicant asked to be able to take leave without pay on occasions in order to work with another employer where he would attend and speak to school groups about issues associated with disability. The Respondent agreed to this request. The Respondent also submitted it became apparent with the passage of time that the new role that had been created in which the Applicant was employed was not capable of sustaining a full-time position. This is not an unusual situation to occur in a business following the creation of a new role with a diverse and different range of responsibilities. This situation was exacerbated by the fact the Respondent was facing growing competition from overseas manufacturers who were able to provide similar products to those being produced by the Respondent at a lower cost. The Respondent subsequently came to the view the Applicant’s position could not be maintained on a full-time basis and he was instead to be offered a part-time or casual role, involving a lesser number of hours per week. Alternatively, if this offer was not acceptable the Applicant would be made redundant.

[27] Based on the limited submissions and evidence provided in this matter I am satisfied the Respondent no longer required the Applicant’s full-time job to be performed by anyone because of changes in the operational requirements of the Respondent’s business. It is well established that the question of the redundancy of an employee is linked to the continued utility of the job being performed, rather than to the competence or ability of the employee. My views about the reason for the Applicant’s dismissal are reinforced by the fact that neither the Managing Director nor the Sales Manager, who directly supervised the Applicant, indicated any significant concerns about his work performance prior to his termination. The Sales Manager stated he undertook most of the duties he performed to an adequate standard and the Managing Director indicated his work performance was reasonably satisfactory. The relationship between the Applicant and the Respondent subsequently did become damaged and fractured but this resulted from issues that emerged following the Applicant’s termination and had nothing to do with that decision. I am satisfied that the original intention in the discussion that ultimately led to the Applicant’s dismissal was to consider how he could continue to be employed by the Respondent, but at a lesser number of hours per week. In this context there seems to have been some confusion about whether this was to have been in a part-time or casual role but that confusion appears to have been related to a lack of understanding about the distinction between those two types of employment. It was only when accommodation could not be reached about an agreement on reduced hours that redundancy became the outcome.

[28] No submissions were made about any modern award or enterprise agreement that applied to the Applicant’s employment that could have potentially required consultation about redundancy. Given the nature of the Applicant’s employment I am not satisfied that any modern award has application or coverage in relation to the work he was engaged to perform. I am therefore satisfied there is no particular instrument that imposes an obligation to consult about redundancy.

[29] The Respondent indicated that consideration had been given to whether the Applicant could have been redeployed elsewhere within the business or any associated entity, however, it had come to the view that there was no other work that he could perform. The option of a position involving reduced hours was discussed with the Applicant as a way of endeavouring to maintain his employment with the Respondent, but this option was not acceptable to the Applicant.

[30] As indicated, based on the submissions and evidence provided by the parties in this matter I am satisfied the dismissal was a case of genuine redundancy in accordance with section 389 of the Fair Work Act. Having come to that conclusion section 385 of the Act provides that in a case of genuine redundancy a person has not been unfairly dismissed. The application is accordingly dismissed.

COMMISSIONER

Hearing details:

2012.

Melbourne:

14 December.

 1 Fair Work Act 2009 at s.385

 2   Ibid at s.396

 3   Exhibit O1 at paragraph 20

 4 Fair Work Act 2009 at s.389

 5  [2010] FWAFB 3488

 6   Ibid at paragraph 16

 7   Ibid at paragraph 17

 8  [2010] FWAFB 7578

 9   Ibid at paragraph 28

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