Sharon Harris v Newnham Trucking Pty Ltd

Case •

[2024] FWC 1320

•

20 MAY 2024
[2024] FWC 1320

FAIR WORK COMMISSION
DECISION

Fair Work Act 2009

s.394—Unfair dismissal

Sharon Harris
v

Newnham Trucking Pty Ltd

(U2024/1872)

COMMISSIONER SIMPSON

BRISBANE, 20 MAY 2024

Application for Unfair Dismissal Remedy – Jurisdictional Objection that the dismissal was a case of Genuine Redundancy – Failure to consult as required by the Award – Dismissal in the circumstances unfair – appropriate remedy equivalent to time required to consult as required by the Award.

  1. In the course of the hearing earlier today, I issued a brief extempore decision finding the dismissal of Ms Sharon Harris (Ms Harris / the Applicant) was unfair in accordance with the considerations under section 387, and determined that a remedy of compensation of $653.85, gross taxed according to law, be ordered. I advised the parties more fulsome written reasons would follow. These are those reasons.

  1. On 21 February 2024, Ms Harris applied to the Fair Work Commission (the Commission) under s.394 of the Fair Work Act 2009 (the Act) for an unfair dismissal remedy, alleging she was unfairly dismissed from her employment with Newnham Trucking Pty Ltd (the Respondent).

  1. I listed the matter for a directions hearing on 25 March 2024. The matter was listed for hearing on 20 May 2024.

  1. Ms Harris appeared at the hearing on her own behalf. The Respondent was represented by Danielle Baillie (Ms Baillie) of PCS Profectus Pty Ltd trading as Professional Client Services (PCS).

  1. The Applicant relied on her Form F2 Application and its attachment, documentary evidence, written submissions and oral submissions and evidence. The Applicant’s written material filed on 8 April 2024[1] and written material in reply filed on 22 April 2024[2] was adopted as evidence. The Respondent relied on its Form F3 Response, documentary evidence and oral submissions and evidence in the form of a witness statements from Mr Graeme Newnham,[3] and Ms Danielle Baillie.[4]

  1. The Applicant was made redundant on the Respondent’s initiative on 19 February 2024. The Application was filed on 21 February 2024, within 21 days of dismissal. The Respondent is a small business employer and provides the dismissal was consistent with the Small Business Fair Dismissal Code.

Relevant legislation

  1. 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.”

  1. The question for determination is whether Ms Harris’ dismissal was harsh, unjust or unreasonable pursuant to s.387 of the Act, which states:

“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.”

Background

  1. Ms Harris commenced employment with the Respondent on 16 August 2021 as Office Manager.

  1. Ms Harris was on annual leave between 25 January 2024 and 16 February 2024, returning to the office on 19 February 2024. On return, the Respondent’s Director, Mr Newnham, and Ms Baillie invited Ms Harris to a meeting in which Ms Harris was made redundant with payment in lieu of notice.

  1. At the time of dismissal, the Respondent was a small business with 12 employees.

  1. On 10 March 2024, Ms Harris accessed the MYOB system using her company account.

Applicant Submissions

  1. The Applicant submitted that the redundancy was not a genuine redundancy and that the Respondent did not follow the Small Business Fair Dismissal Code.

  1. Ms Harris submitted that the redundancy was not genuine as she was not consulted for her redundancy and there was no genuine consideration of redeployment. Ms Harris submitted that the Respondent took actions on 7 February 2024 before any consultation which indicated the Respondent had already determined to terminate her employment, and that the termination meeting on 19 February 2024 did not constitute consultation as the Respondent had already prepared her termination letter and did not give her the opportunity to consult.

  1. Ms Harris provided that ordinarily when she is on leave she still performs several services for the Respondent such as payroll. Before her leave on 25 January 2024, she said a junior employee informed her that she was not required to perform these duties while on leave and they would be performed by an employee of PCS until she returned.

  1. Ms Harris submitted that the conduct of Ms Baillie on 7 February 2024 on instructions of the Respondent indicated that they had already determined to terminate her employment. Ms Baillie contacted Ms Harris by phone to obtain her work passwords and ‘spoke very abruptly and rude to me’, then ‘proceeded to threaten to come to my home if I did not comply with her demands’. Ms Harris queried Ms Baillie as to why she was requesting the work passwords to which Ms Baillie allegedly refused to respond. The Respondent removed Ms Harris’ access to her work emails, accounts and her company fuel card following this call. Ms Harris submitted this was the Respondent beginning to terminate her employment.

  1. Ms Harris contacted Mr Newnham to enquire about the contact from Ms Baillie. Ms Harris provided Mr Newnham stated ‘I don’t know anything about why Danielle wanted passwords’ and did not consult or inform Ms Harris about the Respondent’s consideration of her redundancy. Ms Harris sent an SMS to both Ms Baillie and Mr Newnham enquiring as to whether she was being dismissed to which she received no response from either. Ms Harris said the stress from these altercations caused Ms Harris significant stress and anxiety and she contacted a doctor.

  1. Ms Harris provided that she was very unwell heading into her return to work on 19 February 2024 due to the conduct of the Respondent and Ms Baillie. On her entry to the office she noted that her desk had been taken by Ms Baillie. Ms Baillie handed Ms Harris her redundancy letter and Ms Harris was not given an opportunity to contact Mr Newnham, and the Respondent prevented Ms Harris from retrieving her personal belongings from her desk.

  1. On 10 March 2024 Ms Harris logged into the MYOB system to check sales as they were a condition of receiving her bonus for February and March while she was on notice. She was then informed by Ms Baillie that it was not appropriate for her to access these systems.

  1. Ms Harris denied the allegation of the Respondent that Mr Newnham had a meeting with her to provide the redundancy letter and instead asserted that Ms Baillie was the person who communicated with her that she had been made redundant.

  1. Ms Harris argued that as the Respondent did not engage in consultancy, they did not meet the Small Business Fair Dismissal Code requirements for redundancy. As such, and due to the conduct of Mr Newnham and Ms Baillie, the Applicant submitted that the dismissal was not a genuine redundancy and it was harsh, unjust and unreasonable.

Respondent Submissions

  1. The Respondent did not provide written submissions beyond its Form F3 Employer Response. As such, I am taking the Respondent’s submissions as those provided in its Form F3 and in the witness statements from its director Mr Newnham and representative Ms Baillie.

  1. The Respondent submitted that the dismissal constituted a genuine redundancy and that it was consistent with the Small Business Fair Dismissal Code. Mr Newnham and Ms Baillie gave witness statements and provided oral evidence.

  1. The Respondent provided that on 7 February 2024 it reviewed their operational requirements with assistance from PCS as to its administration and accounting functions. As a result, the Respondent determined that it would restructure itself and the role performed by Ms Harris would be subsumed to being a part of their existing relationship with PCS, with some other work being performed by another existing employee.

  1. The Respondent provided a mostly complete copy of the Small Business Fair Dismissal Code which asserted that the dismissal was due to redundancy and that there had been appropriate consultancy forming part of the redundancy process.

Witness Statement of Ms Baillie

  1. Ms Baillie is employed by PCS providing external accounting and tax agency work for the Respondent. She was contacted by the Respondent to arrange for PCS to assist with Ms Harris’ role during Ms Harris’ annual leave.

  1. On 7 February 2024 Ms Baillie met with the Respondent to discuss the duties performed by Ms Harris as well as PCS’ existing services to the Respondent. Ms Baillie made an offer on behalf of PCS to extend their existing services to include the majority of the duties performed by Ms Harris on an ongoing basis. The Respondent on 7 February 2024 informed Ms Baillie that they would make Ms Harris redundant and engage PCS. Ms Baillie assisted the Respondent in drafting Ms Harris’ termination letter and prepared her termination payment as well as completing the Small Business Fair Dismissal Code.

  1. Ms Baillie submitted that on 19 February 2024 she was in attendance when Ms Harris was advised of her redundancy.

Witness Statement of Mr Newnham

  1. Mr Newnham is the director of the Respondent. He employed and managed Ms Harris in her role.

  1. When Ms Harris applied for leave from 25 January 2024, Mr Newnham contacted PCS and arranged for them to cover Ms Harris’ duties while she was on leave. PCS offered a discounted ‘bookkeeping rate’ for the work, and that a PCS employee would attend the Respondent’s office once a week.

  1. On 7 February 2024, Mr Newnham met with Ms Baillie to discuss the duties performed by Ms Harris as Office Manager and the existing services provided by PCS. Ms Baillie then provided a list of services and a fee estimate, which included the existing services performed by PCS as well as most duties ordinarily performed by Ms Harris. Mr Newnham determined that the Respondent would make Ms Harris redundant and engage PCS to fulfil her duties. He engaged PCS to draft the termination letter and prepare the termination payment calculation, and reviewed the ‘Small Business Fair Dismissal Checklist’.

  1. Mr Newnham provided that he, ‘with the assistance of PCS’, issued a termination letter in person to Ms Harris upon her return from leave on 19 February 2024 and that she ‘was asked to leave that same day’.

  1. Mr Newnham provided that the Respondent at the time had 12 employees, which is not disputed.

Consideration

  1. It is not in dispute that the employer is a small business however the Small Business Fair Dismissal Code has no relevance in this case as the dismissal did not pertain to performance or misconduct. 

  1. In the course of oral evidence, I raised a series of questions with the parties and following that Ms Harris appropriately conceded that on the basis of the evidence before the Commission the Respondent had satisfied the requirements of subsections 389(1)(a) and 389(2) of the Act.

  1. I read to the witnesses for the Respondent various parts of clause 38 of the Clerks – Private Sector Award 2020 (the Award) concerning the consultation requirements in relation to major workplace change.

  1. It was apparent on the basis of the evidence of the Respondent’s witnesses that decision was taken by Mr Newnham on behalf of the Respondent on 7 February 2024, to make Ms Harris’s position of Office Manager redundant while Ms Harris was on annual leave. 

  1. It was conceded by the witnesses for the Respondent that a letter of termination was prepared and on the day Ms Harris returned to work from annual leave on 19 February 2024 she was advised that her employment was terminated and she was handed the termination letter. 

  1. In the circumstances, the Respondent failed to comply with its obligations under clause 38 of the Award.  Ms Harris was denied any opportunity to attempt to mitigate the adverse impact of the decision to terminate her employment as required by the Award. 

  1. Because the Respondent did not satisfy the requirements of subsection 389(1)(a) of the Act, the termination of Ms Harris was not a genuine redundancy within the meaning of section 389 of the Act.

  1. Having determined that the termination was not a genuine redundancy it is necessary to consider whether the dismissal was unfair in accordance with the requirements of section 387 of the Act.

  1. The question of whether there was a valid reason for the dismissal related to the person’s capacity or conduct is a neutral consideration as the reason for dismissal was not related to performance or conduct. 

  2. Ms Harris was informed of the reason being redundancy orally and in the letter handed to her setting out the reasons on 19 February 2024.  This is a neutral consideration.

  1. Subsection 387(c) is also a neutral consideration as the reason was not related to capacity or conduct.

  1. The Respondent did not reject a request from Ms Harris for a support person to be present to assist at any discussions relating to dismissal.

  2. Section 387(e) is also a neutral consideration for the same reasons as set out above.

  3. In relation to sections 387(f) and (g) the Respondent is a small business and this is likely to have impacted on the procedures followed in effecting the dismissal. The Respondent subscribed to support from an external human resource management specialist in Employsure however did not consult with Employsure before terminating Ms Harris.

  1. In terms of any other matters that may be relevant, Ms Harris provided evidence that her health has been impacted by the manner in which she was terminated by the Respondent. 

Conclusion on whether Dismissal was Unfair

  1. I am satisfied having considered all of the matters that I am required to take into account in section 387 of the Act, that the termination of Ms Harris was unfair because the Respondent failed to consult with her about its decision to terminate her employment before putting that decision into effect.

Remedy

  1. The evidence is clear that the position of Office Manager held by Ms Harris was made redundant in a restructure and there were no other positions available at the time within the Respondent’s business that Ms Harris could have been redeployed into.

  1. The evidence is clear that it is inevitable that Ms Harris was not going to continue in her employment with the Respondent, however she was entitled under the Award to be consulted about the decision and given an opportunity to put forward any proposals that may have mitigated the decisions impact on her. 

  1. In the particular facts of this case, a reasonable period to allow her to respond to the advice of the decision would have been in the order of two days.  I am satisfied that had the Respondent complied with its obligation to consult Ms Harris she would have remained in employment until at least Wednesday 21 February 2024. 

  1. On the basis of evidence provided at the hearing, one day’s pay for Ms Harris at the time of termination was equal to $326.92 making two days’ pay $653.85. I have considered each of the other matters as contained in section 392 of the Act that are required to be considered. There is no other matter that would warrant reducing the amount of $653.85 any further.

Conclusion on Remedy


  1. I have concluded that Newnham Trucking Pty Ltd should pay to Sharon Harris the amount of $653.85 gross taxed according to law plus superannuation on that amount to Ms Harris’ nominated superannuation fund within 14 days of the date of this decision.  An Order to this effect will be issued separately and concurrently with this decision.

COMMISSIONER

Appearances:

Ms Sharon Harris on her own behalf.

Ms Danielle Baillie and Mr Graeme Newnham for the Respondent.

Hearing details:

2024
By Microsoft Teams Video
20 May.


[1] Exhibit 1

[2] Exhibit 2

[3] Exhibit 3

[4] Exhibit 4

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