Susan Jankovic v Logan Child Friendly Community Limited
[2022] FWC 1108
•23 JUNE 2022
| [2022] FWC 1108 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Susan Jankovic
v
Logan Child Friendly Community Limited
(U2021/9948)
| COMMISSIONER HUNT | BRISBANE, 23 JUNE 2022 |
Application for an unfair dismissal remedy – jurisdictional objection on grounds of genuine redundancy – determination required as to whether employee was covered by a modern award – failure to consult – dismissal unfair – no award of compensation
On 5 November 2021, Ms Susan Jankovic made an application to the Fair Work Commission (the Commission) under s.394 of the Fair Work Act 2009 (the Act) alleging that she had been dismissed from Logan Child Friendly Community Limited (the Respondent) and that her dismissal was harsh, unjust or unreasonable. The Respondent is a small, not-for-profit, community organisation based in Logan, Brisbane, and provides support through programs and initiatives to children and their families in the Logan area. The Respondent employed 12 employees at the time of Ms Jankovic’s dismissal.
The Respondent raised a jurisdictional objection to Ms Jankovic’s application, that the termination of her employment was a case of genuine redundancy as defined in s.389 of the Act.
Relevant legislation
Section 385 of the Act provides that a person has been unfairly dismissed if the Commission is satisfied that:
“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.”
Section 396 of the Act sets out the following:
“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.”
As set out above in s.396 of the Act, consideration as to whether the dismissal was harsh, unjust or unreasonable cannot occur if the dismissal was a case of genuine redundancy. If the Commission determines that the dismissal was a case of genuine redundancy, the application will be dismissed.
Section 389 of the Act provides the meaning of genuine redundancy 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.”
The application was made within the 21-day period outlined in s.394(2) of the Act. Additionally, Ms Jankovic had completed the minimum twelve months of employment, having worked there for 2 years and 6 months. Ms Jankovic’s annual salary was $153,872.38 excluding superannuation.
The Respondent employed 12 employees at the time of the dismissal of Ms Jankovic, and it is therefore a jurisdictional requirement for me to determine if the dismissal was in accordance with the Small Business Fair Dismissal Code (the Code). I am satisfied that the dismissal was not in accordance with the Code on account of the reason for the dismissal being a redundancy. The Code requires consideration only of serious misconduct or performance grounds; these are not the reasons for the dismissal.
The Respondent’s jurisdictional objection is as follows:
The Respondent no longer required the role to be performed by anyone;
The Respondent was not required to consult with Ms Jankovic; and
There were no reasonable redeployment opportunities available.
Background
Ms Jankovic commenced employment with the Respondent on 1 April 2019 as a full-time Deputy Director. Her employment ended on 15 October 2021.
On 12 October 2021, Ms Jankovic met with the Respondent. In this meeting, the Respondent informed Ms Jankovic that due to the Respondent’s Board informally approving a new staffing structure, her role may be made redundant. The Respondent alleges that Ms Jankovic requested for her role to be made redundant immediately after consultation and requested a redundancy payment far in excess of her statutory entitlements. Ms Jankovic holds that she merely asked if she was being made redundant during a meeting discussing workplace concerns and was informed that she was, without the Respondent engaging in appropriate consultation.
The Respondent submits that the job of Deputy Director was no longer required to be performed by anyone for the Respondent. This was due to a decrease in staffing levels and a transition to increased community participation in the work of the Respondent. This resulted in former functions of the Deputy Director role such as ‘team leadership’, ‘project and resource management’, and ‘executive planning’, being removed and redistributed into other positions. The Respondent additionally holds that the job no longer existed and was no longer required to be performed by anyone because of the operational restructure.
The Respondent’s position is that Ms Jankovic was not covered by a modern award or industrial instrument, as she does not fall within the classification structure in the Social, Community, Home Care, and Disability Services Industry Award 2020 (the Award).
If Ms Jankovic’s employment was not covered by an award, this would remove the Respondent’s requirement to consult with Ms Jankovic pursuant to s.389(1)(b) of the Act. Despite this, the Respondent holds that it did engage in ‘extensive and thorough consultation’ with Ms Jankovic, commencing discussions as early as 12 October 2021, seeking feedback on any adverse effects that the redundancy may have on her. In addition to this, the Respondent holds that it provided payment in lieu of notice and eight weeks’ redundancy pay, despite Ms Jankovic not being entitled to payment on redundancy on account of the Respondent employing less than 15 employees.
Ms Jankovic submits that she was covered by the Award as her role was consistent with the classification of a Level 8 Employee in the classification structure. This means that consultation about the redundancy is required as part of the obligations of the Award. She also submits that the Respondent didn’t provide adequate consultation, presenting the ‘redeveloped organisational strategy’ prior to seeking her input, and failing to provide any information in writing, an obligation under the Award. Ms Jankovic contends the Respondent merely told her that the role of Deputy Director would be made redundant, at which point the decision was well beyond the formative stage, meaning that it cannot be described as consultation.
The Respondent also holds that it offered redeployment to Ms Jankovic in a ‘Creative Communication and Community Mobilisation’ (CCCM) role. The Respondent contends that Ms Jankovic declined that role and stated that she no longer wanted to be part of the organisation. The Respondent additionally states that due to the downsizing of the organisation, there were no suitable alternative roles for Ms Jankovic to be redeployed to. Ms Jankovic contends that no redeployment opportunities were offered to her, despite the CCCM role being open.
Hearing
The matter was listed for a video hearing by Teams before me on 14 February 2022. Ms Jankovic was represented by Mr Dan Chen of NB Lawyers. The Respondent was represented by Ms Peta Willoughby of Counsel, instructed by Ms Lindsay Carroll and Ms Sarah Morison of NRA Legal. The following witnesses gave evidence:
·Ms Jankovic;
·Dr Michelle Lucas, Executive Director of the Respondent;
·Mr Matthew Cox, former Executive Director of the Respondent;
·Ms Aunty Faith Green, Chair of Gunya Meta;
·Ms Belinda Brown, former Project Lead of the Respondent; and
·Ms Kathleen Dunning, Business Services Coordinator of the Respondent.
The Respondent’s evidence
Evidence of Dr Michelle Lucas
Dr Lucas is employed by the Respondent as Executive Director, having commenced on 9 July 2021. Dr Lucas holds a Bachelor of Music, Bachelor of Music Education, Masters of Education and Doctorate of Education.
Dr Lucas described the Respondent’s function as a public company and registered charity. It is a not-for-profit community ‘collective impact’ organisation focused on improving outcomes for Logan City’s children and their families through community development work and aligned stakeholder action and investment.
Dr Lucas described the six founding principles required of the collective impact approach:
A nimble and adaptive Backbone Team (Respondent employees engaged to assist with operationally implementing the Respondent’s initiatives and projects);
Help build community and cross-sectoral governance;
Grow social capital;
Build a community movement for change;
Evaluate progress and impact through the application of data and evidence; and
Ensure sustainability of community effort through policy change, systems reform and long-term investment.
The Respondent receives approximately 66% of its income from government grants, and the remainder from donations and bequests, and receives in-kind support from Griffith University. Dr Lucas described the Respondent attempting to, in the past 18 months, redirecting funding away from its paid professionals and moving the funds back into the community.
Dr Lucas described Ms Jankovic’s role as managing the Backbone Team by holding meetings with individual team members, attending launches of projects and initiatives, reviewing briefing documents prepared by funded partners, attending monthly and quarterly meetings in the community, and managing the Respondent’s reporting to philanthropic and government funders.
During the recruitment process to bring Dr Lucas on, she was advised by Ms Margaret Allison, Board Chairperson that the Board had provisionally approved a review of the strategic plan of the organisation. Dr Lucas was informed that she would be expected to develop recommendations for a new strategic approach and associated staffing structure within three months.
Dr Lucas learned that three days prior to her commencement, members of the Board met with all of the Respondent’s staff, informing them that the role of the Backbone Team will shift to being an enabler of others, rather than doing things themselves. The script read to employees is below:
“NOTES FOR STAFF ON CULTURE REVIEW
6 July 2021
· Wrote to you in May about the staff culture review, and wanted an opportunity to meet with you all before Matthew’s departure
· Today is an opportunity for Lyn and I to listen to you as much as to speak to you, and of course, meetings like this are not the only opportunity you have to raise employment related issues
Recap of previous views
· Just wanted to recap the thoughts of the Board on the culture review, although we acknowledge that much has changed over the past few months – not the least of which has been Matthew’s announcement of his departure.
· Although there was a high level of commitment to the goals and vision of Logan Together, we were concerned that some staff experienced a lack of clarity about their roles and responsibilities.
· We also wanted to understand and respond to some of the concerning feedback on workload management issues, internal team communication and the lack of a clear process to raise HR issues confidentially.
The changing role of the Backbone team
· We also commented in our response to staff that we are now in a period of natural transition as we develop our Roadmap for the next (and possibly final) 5 years.
· In this context, our primary commitment is to the development and empowerment of community leadership. The Backbone team role will shift to being an enabler of others, rather than doing things ourselves.
· This transition is neither smooth nor easy. It is further complicated when we work directly with community members who are not obligated to abide by the same behavioural norms that bind us in the workplace. I have recently written to the cochairs of the Leadership Table, suggesting that they considering adopting Logan Together’s draft Code of Conduct which currently applies to staff, volunteers and Board members.
· However, taking a broader view, my view is that we must be generous in any interpretation we make of people’s behaviour. Any new experience of community empowerment is likely to be expressed in a direct and often forceful way which may be uncomfortable for paid workers.
· As for the structure of the Backbone team, I’m aware this may be an anxious time for some of you, both with a new Roadmap and a new incoming ED. These things will resolve themselves in due course, and I am not in a position to offer you any certainty on the issue of job security. It will clear though that many functions will continue to be needed in some capcity. What I can say is the Board is utterly committed to ensuring that we manage functional transitions (that is, what we do) well, and the fair treatment of staff in any change processes.”
After Dr Lucas commenced in the role, she held a series of workshops and forums with stakeholders to assess whether the Respondent was meeting its collective impact social goals and whether philanthropically donated funds were being appropriately utilised to the maximum benefit of the community. In doing so, Dr Lucas held a range of workshops and meetings with the Backbone Team to assess the relevance and impact of their individual activities against collective impact principles.
Dr Lucas considered that a number of duties performed by members of the Backbone Team were undertaken unnecessarily, with little impact on the community, and perpetuated an ongoing need for the Backbone Team, rather than allowing the community to build the capability and make their own decisions that would affect their futures.
Between June 2021 and July 2021, the number of employees the Respondent employed reduced from 17 to 13.
Dr Lucas held weekly meetings with Ms Jankovic to discuss the development of the new strategy and organisational structure, together with the development of new roles such as the First Nations Engagement Lead and the Community Movement Building/Creative Communications Lead.
On 9 September 2021, Dr Lucas requested clarity from Ms Jankovic around her priority areas of work. In response, Ms Jankovic provided to her the workplan for the entire Backbone Team. Dr Lucas considered that it did not provide insight into Ms Jankovic’s specific areas of focus or responsibility.
On 14 September 2021, Dr Lucas sent the following email to Ms Jankovic:
“Hi Sue,
I’ve now had a good look at your work plan – thank you for the detail you have included. It will be really good to sit with you on Thursday to explore your priorities and contributions. I’m just trying to look beyond the tasks to make sure the bigger picture of your role is visible as the team changes shape in line with the emerging strategy. What I would really love to understand is the end to end work you are leading right now and a guestimate of the weekly load for these pieces of work. I understand you are supervising team members and I’d also love to chat about that and where the needs lie for those individuals.”
Later that day, Ms Jankovic responded by email as follows:
“Dear Michelle
I wanted to take the time to respond to your email as initially the tone was unsettling.
I understood from your feedback that you were unsure about what was occupying my time and you requested a few dot points. Unfortunately a few dot points was not possible due to the significant transition and change processes occurring. I attempted to take some initiative and not only provide you with an overview of current responsibilities but also actions/decisions that need to be made to support the emerging strategy.
Since your commencement I’ve attempted to manage the impact of 5 staff (Matthew, Vic, Georgie, Sam, Karen) leaving the organisation. In some instances, I am now taking direct responsibility of the work load and/or supporting the wellbeing of staff due to the major changes. My approach was also to consider the space you needed to be able to dive deep into your orientation so I attempted to maintain the work flow as we move from one operating frame to another.
My hope of providing the detail was to assist you to get some sense of the current day to day operational matters that are occupying my time. Most of which was emerging due to the constant and emerging changes (noting another 2 staff member will be leaving in 6 weeks). I also included a column titled “Effort” which attempted to address your query about how much time/focus the activity/task takes. More than happy to discuss this in more detail and get your direction on were we invest moving forward.
I appreciate that you are interested in the bigger picture. My attempt, periodically to check in was to ensure I was keeping abreast with future directions whilst balancing the strategic operational requirements (whether that’s contractual or HR items like PD development, etc). I maintained this pace with the understanding that you needed time to orientate and form up the new direction as you continued to meet with external partners. It’s also been challenging to grasp the emerging strategy fully (and how it may align with my role) as I’ve felt excluded from this processes. Again I’ve tried to be supportive and acknowledge the space you needed to connect and form relationships with partners but I feel what’s emerging is a bigger disconnect for the team and I as we continue to be omitted from partner engagement and critical meetings that set the foundations for the way forward.
I would value a discussion about team needs and what we focus on in our routine (fortnightly catch ups) and the support and advice provided in the course of their daily work. In part, there’s been quite a distinct focus with team members to change the mental models and approach so that they are aligned to your vision, expressed to date. There’s also a systems approach that I undertake in trying to connect the pieces within the team but more specifically externally however this is getting more difficult with the disconnect of late. Also, as I mentioned last week team members are feeling devalued and stressed/concerned so I spend time managing staff wellbeing as we navigate through an ambiguous work environment.
I’ve attached the Board approved accountabilities and performance criteria for my role so you are able to have some oversight of the strategic nature that was placed in my role, at the time of development. I totally understand this will significantly shift however I think it is very difficult to shape my role currently to the emerging strategy when we really haven’t had the space to work together on this and while there is still so many loose ends because of the significant changes we’ve experienced.
I hope that we can move forward to shape up my role in a way that better supports the current and emerging strategic vision as the current state is weighing very heavily on me at the moment and its not fulfilling or valuing space to be in.
Look forward to discussing more on Thursday
Regards Sue”
On 16 September 2021, Dr Lucas and Ms Jankovic met. Dr Lucas asked Ms Jankovic to talk to how her duties contribute to the organisation. Ms Jankovic responded to the effect, “I don’t know..I keep looking for things to do and there’s nothing.” Dr Lucas stated that Ms Jankovic confirmed she felt dissatisfied in her role, and as though she was not contributing to organisational goals.
In September 2021, Ms Jankovic offered to undertake data analysis work, for which she did not have the requisite specialist qualifications. Further, the Respondent already had a full-time data analyst and did not require further support in this area.
Dr Lucas began to consider whether the Respondent required Ms Jankovic’s role to be performed by anyone. She considered which of the role’s duties could be redistributed within the organisation, or otherwise ceased altogether. Dr Lucas then concluded that the Deputy Director role was no longer required, and it would be more cost-effective to redistribute any remaining duties of the role to herself. Dr Lucas also concluded that the role of Project Lead was no longer required.
On 11 October 2021, Dr Lucas presented the redeveloped organisational strategy to the Board. This included a staffing restructure which would make the Deputy Director role redundant. The Board provisionally approved the organisational restructure but required Dr Lucas to provide them with staffing cost projections before final approval would be given.
On 12 October 2021, Dr Lucas met with Ms Jankovic to advise her of the potential redundancy of her role, subject to Board approval. She explained that after a review undertaken over September and October 2021, she had identified that it would be more cost-effective and align better with organisational goals for the majority of the Deputy Director’s duties to be discontinued in their entirety, and for the remainder of the role’s reporting duties to be redistributed to Dr Lucas.
Dr Lucas’ evidence is that Ms Jankovic stated that she was unable to cope with the uncertainty and it was clear her role was to be made redundant. She asked for her role to be made redundant. She then said words to the effect, “Yes, I guess with the team diminishing in size, you don’t need a Deputy Director any longer.” Dr Lucas said that Ms Jankovic described the news as a “good development”.
Dr Lucas’ evidence is that Ms Jankovic implored her to fast-track the endorsement by the Board. Ms Jankovic requested a generous redundancy payment beyond the National Employment Standards to meet her personal and family needs and enable her some space to get everything in order.
Dr Lucas’ evidence is that Ms Jankovic was offered and rejected the opportunity to redeploy to the CCCM role, a role she herself had identified and designed on 1 September 2021. In response to this offer, Ms Jankovic stated words to the effect, “No….it is time to go.”
Dr Lucas subsequently spent the balance of the day creating the required Board papers, working through projections and organising with the Board a time-limited but robust process which would enable final endorsement to be made.
Later that morning, a member of the Board, Emeritus Professor Lesley Chenoweth AO emailed Dr Lucas as follows:
“I have just spoken with Lyn who I think will have already rung you.
We agree that you should proceed promptly with the process as discussed.
Could you prepare an letter offering an appropriate redundancy so we can offer this to Sue today.
We think that a week to tidy up will be sufficient but we can offer her an additional two weeks pay.”
The Board papers prepared by Dr Lucas state the following:
“The Deputy Director role was originally established around 2.5 years ago at a time when the Backbone Team numbered 16 part and full-time staff. Since January 2021, the Backbone Team has diminished in size with two contractors leaving prior to June 30, 2021. Since July 2021, a further two contracts have ended and one staff member has accepted another role elsewhere. The need for a Deputy Director role managing the operations of a small team has therefore already become redundant.
The key areas which will need handover and reallocation will be:
·Reporting
·The Early Years Education Program
·Eagleby Hub project support
·Infrastructure proposals”
Further commentary within the Board papers was made by Dr Lucas on 12 October 2021:
“Deputy Director role (the decision has been made by the Deputy Director and shared with the ED on 12 October, that she seeks a redundancy. The Deputy Director will now fulfil a final week completing work at home. The following plan aligns with that decision.
· Details of redundancy prepared by the Business Services Coordinator
· Letter of departure drafted by Deputy Director and agreed by Executive Director asap
· Conversation with Backbone Team as soon as letter is received, and with the full knowledge of the Deputy Director. Follow up phone call for those BB Team members out of the office at that time
· Conversation with the Leadership Table either in LTLT meeting (possible 14 October), or by separate memo
· Email to Action Group at the same time as Leadership Table communication
· Contact funders by phone to share information and identify any next steps required
· Update in next newsletter”
Dr Lucas sought the following action from the Board:
“Decision required from the Board:
The Board is requested to approve the proposed staff restructure and staff communication plan noting the mitigations to the identified risks of this activity.”
Later that afternoon, Dr Lucas emailed Professor Chenoweth and Ms Lyn Hamill as follows:
“Attached, please find the Board Paper for further circulation amongst your members. I hope this meets your needs.
Kath has developed a draft letter for the Deputy Director which is in line with the recommendations and requirements of the Ombudsman, asking for her to complete her remaining few days (up to and including Friday 15 October) at home, and offering her 2 weeks’ pay additional to the redundancy pay stipulated by the National Employment Standards. I will work with Sue to draft an appropriate letter informing our colleagues of her departure.
Thank you for advice and support as we work to re-shape the Logan Together Backbone Team to best meet the needs of Logan’s children.”
Dr Lucas telephoned Ms Jankovic to advise her that the Board had endorsed the new staffing model, as she had requested. Ms Jankovic acknowledged that her employment would be terminated.
On 13 October 2021, Dr Lucas provided the following termination letter to Ms Jankovic:
“Termination of your employment by reason of redundancy
Dear Sue
The purpose of this letter is to confirm the outcome of a recent review by The Logan Together Child Friendly Ltd Board, of its operational requirements, and what this means for you.
As a result of the developed strategy and vision for the next phase for the Logan Together Movement, the position of Deputy Director is no longer needed. Regrettably this means your employment will terminate. This decision is not a reflection on your performance.
As per our previous discussion, you are aware that there is no alternative position for you within the Logan Together Backbone Team.
Your employment will end at close of business Friday 15 October 2021. Based on your length of service, your notice period is 3 weeks. Instead of receiving that notice, you will be paid $8,877.24, plus the redundancy entitlement set out below.
Due to your employment ending because of redundancy, you will also be paid redundancy pay of $23,672.64, which is above the minimum amount stipulated in the National Employment Standards. This amount represents six weeks’ pay which is based on your 2 years and 7 months of service, plus an additional 2 weeks’ redundancy pay, which is contingent upon confidentiality concerning your redundancy conditions and upon your commitment to work with me to develop appropriate communications regarding the cessation of your employment.
You will also be paid your accrued entitlements and any outstanding pay up to and including your last day of employment. This includes the balance of any time off instead of overtime paid accrued but not yet taken (paid at the overtime rate applicable when the overtime was worked), and superannuation.
If you have been paid annual leave in advance, any amount of annual leave still owing will be deducted from your final pay.
You may seek information about minimum terms and conditions of employment from the Fair Work Ombudsman. If you wish to contact them you can call 13 13 94 or visit their website at and leave payments will usually give rise to waiting periods for Centrelink payments. You should contact Centrelink to find out how long you have to wait to receive any applicable benefits. The best way to do this is to lodge a claim for payment.
Affected employees and their partners have immediate access to jobactive prior to becoming eligible for income support. For information about jobactive eligibility and other support services available, you can access the Help for workers who have recently lost their jobs fact sheet. In addition, the ‘What’s Next’ website provides an online self-help resource for affected employees and employers.
For more information, visit We thank you for your valuable contribution during your employment with us. Please contact me if you wish to obtain a reference in the future.
Yours sincerely,
Dr Michelle Lucas
Executive Director
Logan Together”
In evidence given during the hearing, Dr Lucas stated that Ms Jankovic was an executive member of the Backbone Team, and deputised for Dr Lucas when she away from the business. She is aware that Ms Jankovic dismissed at least one employee in the time they worked together. Further, Ms Jankovic reported directly to the Respondent’s funders.
Dr Lucas stated that at the 11 October 2021 Board meeting, she had proposed the restructure, but the Board had not endorsed the redundancies at that time. The Board asked her to come back to the next Board meeting with a series of different documentation to support her thinking and they would consider endorsing the redundancies and the strategic direction.
Dr Lucas stated it was approximately 5:00pm on 12 October 2021 when the Board approved the redundancies. Dr Lucas stated she was aware that Ms Jankovic was anxious to learn of the Board’s decision to fast-track the redundancy of her position.
Dr Lucas considered that there was not a suitable job to redeploy Ms Jankovic into. The only available roles were that of a First Nations Engagement Officer which Ms Jankovic was not eligible for, and the CCCM role. Dr Lucas stated the following during the hearing:[1]
Dr Lucas:In the meeting of 12 October, the morning of 12 October, amongst other things Sue had asked me to fast-track these documents so that we could get them to the board. And when I agreed to do that, Sue said that she hoped that I would do the right thing, and that I'd support her through the transition and consider she asked for a generous payout because she had family obligations and wanted time to – for the finances to settle. And I said, 'Look, I will do anything in regards to supporting you through the transition.' I said I would do anything. And she was upset, Sue was upset, and so it was a huge moment. So I said to Sue, 'I'll do anything I can to support you. I will help you find work. I will give you a reference, I'll a be referee. What can I do? And there's a community mobilisation job, what about' – and I stopped there because Sue was quietly and calmly shaking her head and she said, 'No, it's time to go.' And we moved on from there. She said, 'It's time to go.' She remained with me for a period of time, quite some time after that. She said she was leaving with full respect. She said that she didn't want to harbour any ill-will and I sat with her for some time. There were some tears. I felt – it was awful. And then the best I could do, because the time was – the clock was ticking, the best I could do, and we talked about it several times, I said, 'Sue, I don't want to leave you. What can I do? I just don't want to leave you.' And I said, 'I'm going to go next door. I'm going to get Kath', who was a friend of Sue's and a business services coordinator, and I said, 'When Kath comes in, I'll go. I'll make the first phone call to the board and see if I can get this done as fast as possible for you.'
In a supplementary witness statement filed by Dr Lucas, she stated that on 3 February 2022, Ms Dunning told her that in or around September 2021, Ms Jankovic enquired as to what her redundancy entitlements would be if her employment with the Respondent was terminated.
Dr Lucas is aware that Ms Jankovic registered an ABN on 6 October 2021, prior to her being informed her role was being made redundant.
In cross-examination, Dr Lucas was asked if she had offered Ms Jankovic the ability to apply for the CCCM role, or had actually offered to her the role. Dr Lucas answered as follows:[2]
Dr Lucas:… I began by saying to Sue, 'And what about this role?' I got as far as saying, you know, the role exists basically – didn't even get that far, and Sue was already shaking her head and saying, 'No, it's time for me to go.'
In re-examination, Dr Lucas stated that she felt Ms Jankovic had some of the skills required for the CCCM role, but she considered that she did not possess all of the skills required; graphic, high-level artistic, graphic design skills and a deep understanding of collective impact.[3]
In answering questions from me, Dr Lucas stated that Ms Jankovic was paid an additional two weeks’ redundancy pay on top of the National Employment Standards redundancy pay. Dr Lucas did not learn until after the dismissal and the payment had been made that there was no obligation to pay to Ms Jankovic any redundancy pay on account of the Respondent being a small business.
As to the viability of the Respondent, noting that Ms Jankovic sought in her application to be awarded $56,000, Dr Lucas stated that the Respondent’s primary focus is ensuring that by 2025, 5,000 children in Logan lead a better life. She considered the fact that the Respondent was involved in these proceedings and having to be represented was devastating and would have preferred the funds be used for the purposes they were intended when they were provided to the Respondent.
Evidence of Ms Kathleen Dunning
On the day of the hearing, I requested that Ms Dunning give evidence on account of the contest of facts regarding Ms Jankovic’s demeanour and distress following her meeting with Dr Lucas on 12 October 2021. Ms Dunning set about preparing a brief witness statement and affirmed it during the hearing. The statement is produced below:
“I, Kathleen…….
1. I am employed by Logan Child Friendly Limited (Logan Together) as Business Services Coordinator.
2. I make this statement based on my own knowledge, information and belief unless otherwise stated. Where I make statements based on information provided to me, I identify the source of that information and otherwise believe it to be true and correct.
The Applicant’s awareness of the redundancy of her role in September 2021
3. In or around mid-September 2021, prior to her taking personal leave, I had a conversation with Susan Jankovic. She said words to the effect of, ‘I can’t see a role for me here. I can’t see my role anywhere in the new strategy. I’ll be gone’.
4. I told her at that time that I would have a look to see what her redundancy entitlements were.
5. Approximately one week later, I looked on what I understand to be the Fair Work Ombudsman’s website for that information. I walked over to Susan Jankovic and told her that she would be paid her annual leave entitlements, and 4 weeks’ redundancy pay if her employment was terminated. She might also be paid 2 weeks’ pay in lieu of notice.
My meeting with Susan Jankovic on 12 October 2021
6. On the morning of 12 October 2021, Michelle Lucas came to me, and asked me to sit with Susan Jankovic, because Susan was upset, and Michelle wanted me to provide some emotional support to her.
7. I sat with Susan Jankovic for approximately 15 minutes. I observed that Susan Jankovic was somewhat distressed and asked her what had happened.
8. Susan Jankovic told me that her role was redundant. She said to me words to the effect of, ‘I knew, I knew there wouldn’t be a job for me.’
Payment of Susan Jankovic’s entitlements
9. I instructed the bookkeeper to pay Susan her termination entitlements on 20 October 2021. I had understood that Susan was entitled to 4 weeks’ redundancy pay.
10. I was not aware that Logan Together did not have an obligation to pay redundancy pay.
11. However, I had forgotten to tell the bookkeeper to pay an additional two weeks’ pay to Susan. The Board of Logan Together had agreed to pay this additional 2 weeks’ pay because it wanted the termination of her employment to be amicable. This was paid to Susan on 27 October 2021.”
I asked Ms Dunning if her statement was correct, as Ms Jankovic had in fact been paid eight weeks’ redundancy pay. Ms Dunning stated that she had read that a small business doesn’t need to make redundancy payment to redundant employees, but she wasn’t 100% sure it was correct.
Ms Dunning became teary when giving evidence as to the comfort she provided to Ms Jankovic on 12 October 2021. Consequently, Ms Jankovic also became teary during the hearing. It is clear to the Commission that it was an emotional time for both women to reflect upon and Ms Dunning held appropriate empathy for Ms Jankovic’s plight. Ms Dunning said she had comforted Ms Jankovic for around 15 minutes. The following evidence was given:[4]
Ms Willoughby: Thank you. The last question that I asked you, was if you could tell us what Ms Jankovic said to you during the meeting that you had?
Ms Dunning: When I went in, I said how are you Sue. She said that Michelle has just told her that her role was redundant and she said to me, I knew it. I knew there wouldn't be a job for me.
Ms Willoughby: Beyond that, was there more to the context of the discussion that you had, or perhaps there was more?
Ms Dunning: There was more, yes, yes. Then Sue said, look, I'm going to go home and work from home because she had some things to finish off and she didn't want the team to see her upset. So, she just got a couple of things. Yes, so there was - it was more just a comforting role.
Ms Willoughby: Was there anything further that you discussed of any substance in that meeting, or that discussion?
Ms Dunning: No, no. It was really just establishing that she knew the job was redundant, but it was what she was expecting as a strategy was worked, she could see that there wasn't going to be a role for her.
Ms Dunning confirmed that she is across the finances of the Respondent and estimated that there was approximately $900,000 in the bank, and accordingly, an award of compensation would not affect the viability of the Respondent.
Submissions of the Respondent
Changes in operational requirements
It was submitted that the role of Deputy Director was no longer required to be performed by anyone for the Respondent. This occurred because of an operational restructure resulting from a review of the Respondent’s operations conducted by the Board.
The Respondent referred to the decision in Dale v Marky Industries Pty Ltd,[5] summarising the circumstances which most commonly result in a person’s job no longer being required to be performed by anyone, including:
“… it is necessary to draw a distinction between the employee’s job and the employee’s duties. A dismissal may be a redundancy within the meaning in s.389(1)(a) of the Fair Work Act in a number of circumstances including where:
· the duties remain and operational changes result in fewer employees being required to perform those duties;
· all or some aspects of an employee’s duties are performed by someone else as a result of operational change;
· structural change has eliminated the need for specific duties or the employer has found another way to have those duties performed.”
On 11 October 2021, the Board confirmed in concept a new strategic approach and endorsed the same by telephone and via email on 12 October 2021. This new strategic approach identified that a number of changes were required to enable the Respondent to achieve its organisational objectives. Specifically, the Respondent would:
· move away from a model of service delivery;
· increase community participation in the work of the Respondent; and
· reduce its staffing levels to refocus its philanthropically donated funds back into the community.
Over time, the Respondent had increased its involvement in the provision of service delivery. This caused an increase to the staffing levels of the Respondent that made it necessary for the role of Deputy Director to take responsibility for the ‘team leadership’ and ‘project and resource management’ functions. However, in accordance with the Board’s June to September 2021 review of operations, the Respondent’s staffing levels had decreased from 17 staff in March 2021 to 13 staff in July 2021 and down to 9 staff in October 2021.
With the reduced staffing levels and the renewed focus upon achieving a more efficient structure, the executive planning tasks previously performed by the Deputy Director role could be absorbed into the Executive Director role. The Respondent referred to Dibb v Commissioner of Taxation,[6] a Full Court decision in the Federal Court where it was identified that an employee may still be terminated by way of genuine redundancy even if certain aspects of the employee’s duties are still being performed by other employees.[7]
The Respondent referred to the decision of Senior Deputy President Hamberger in Kekeris v A. Hartrodt Australia Pty Ltd T/A a.hardrodt,[8] where the Senior Deputy President confirmed that the question to be answered is “… whether the job previously performed by the applicant still exists”.
It was submitted that despite some of the duties of the Deputy Director role being redistributed throughout the organisation (in part to the Executive Director), the job itself, comprised of its component duties as a whole, no longer existed and was no longer required to be performed by anyone, as a direct result of the operational changes occurring within the organisation.
Compliance with consultation obligations
The Respondent submitted that it was not required to consult with Ms Jankovic about the redundancy as she is not covered by a modern award or industrial instrument.
The Respondent accepts that it is covered by the Award on account of operating within the social and community services sector.
The “key accountabilities” of Ms Jankovic’s role as set out in the Position Description for the Deputy Director role include:
“Joint responsibility for direction and measurable achievements
Subject to the strategic direction of the Board and the guidance and endorsement of the Leadership Table, and in collaboration with the Director, develop and implement a data-informed roadmap to achieve Logan Together goals of measurable improvements in the health and wellbeing of Logan children 0 – 8 years.”
The Award’s level 8 characteristics, responsibilities and requirements are detailed below:
“B.8 Social and community services employee level 8
B.8.1 Characteristics of this level
(a) A person employed as a Social and community services employee level 8 is subject to broad direction from senior officers and will exercise managerial responsibility for the organisation’s relevant activity. In addition, employees may operate as a senior specialist providing multi-functional advice to either various departments or directly to the organisation.
(b) A person employed as a Social and community services employee level 8 will be subject to broad direction from management/the employer and will exercise managerial responsibility for an organisation. In addition, employees may operate as a senior specialist providing multi-functional advice to other professional employees, the employer, Committee or Board of Management.
(c) General features of this level require the employee’s involvement in the initiation and formulation of extensive projects or programs which impact on the organisation’s goals and objectives. Employees are involved in the identification of current and future options and the development of strategies to achieve desired outcomes.
(d) Additional features include providing financial, specialised, technical, professional and/or administrative advice on policy matters within the organisation and/or about external organisations such as government policy.
(e) In addition, employees will be required to develop and implement techniques, work practices and procedures in all facets of the work area.
(f) Employees at this level require a high level of proficiency in the application of theoretical approaches in the search of optimal solutions to new problems and opportunities which may be outside of the original field of specialisation.
(g) Positions at this level will demand responsibility for decision-making within the constraints of organisational policy and require the employees to provide advice and support to all facets of the organisation. Employees will have significant impact upon policies and programs and will be required to provide initiative, and have the ability to formulate, implement, monitor and evaluate projects and programs.
(h) Positions at this level may be identified by the significant independence of action within the constraints of organisational policy.
B.8.2 Responsibilities
A position at this level may include some of or similar responsibilities to:
(a) undertake work of significant scope and complexity. A major portion of the work requires initiative;
(b) undertake duties of innovative, novel and/or critical nature with little or no professional direction;
(c) undertake functions across a range of administrative, specialist or operational areas which include specific programs or activities, management of services delivery and the provision of high level advice;
(d) provide authoritative specialist advice on policy matters and contribute to the development and review of policies, both internal and external;
(e) manage extensive programs or projects in accordance with organisational goals. This may require the development, implementation and evaluation of those goals;
(f) administer complex policy and program matters;
(g) may offer consultancy service;
(h) evaluate and develop/revise methodology techniques with the organisation. The application of high level analytical skills in the attainment and satisfying of organisational objectives;
(i) where the prime responsibility is in a specialised field, employees at this level would undertake at least some of the following:
(i) contribute to the development of operational policy;
(ii) assess and review the standards of work of other specialised personnel/external consultants;
(iii) initiate and formulate organisational programs;
(iv) implement organisational objectives within corporate goals;
(v) develop and recommend ongoing plans and programs.
B.8.3 Requirements of the position
Some or all of the following are needed to perform work at this level:
(a) Skills, knowledge, experience, qualification and/or training
(i) detailed knowledge of policy, programs, guidelines, procedures and practices of the organisation and external bodies;
(ii) detailed knowledge of statutory requirements.
(b) Prerequisites
(i) qualifications are generally beyond those normally acquired through a degree course and experience in the field of specialist expertise;
(ii) substantial post graduate experience;
(iii) lesser formal qualifications and the acquisition of considerable skills and extensive and diverse experience relative to an equivalent standard; or
(iv) attained through previous appointments, service and/or study with a combination of experience, expertise and competence sufficient to perform the duties of the position.”
The Respondent submitted that the Deputy Director’s joint responsibility with the Board and the Executive Director for the formulation of the Respondent’s goals and objectives demonstrates a level of responsibility not contemplated in the Level 8 classification, and further, not traditionally contemplated within modern award coverage generally. A Level 8 employee is responsible for the “identification of current and future options and the development of strategies to achieve desired outcomes”. It was submitted that the Deputy Director role was responsible for the setting of desired outcomes and goals for the organisation in collaboration with the Board and Executive Director.
Section 143(7) of the Act provides that a modern award must not be expressed to cover classes of employees who have traditionally not been covered by awards due to the seniority of their roles. It was submitted that the Deputy Director role is an executive-level type role involving duties which do not traditionally fall within the coverage of modern awards, and no classification levels within the Award contemplate the level of responsibility and executive duties of the Deputy Director role.
An alternative position was put that in the event the Commission finds that Ms Jankovic was covered by the Award, the Respondent engaged in extensive consultation with her. The Respondent submitted that this included:
·6 July 2021 when the Board commenced a group discussion with all employees of the Respondent in respect of the proposed operational restructure. The Respondent submitted that this put Ms Jankovic on notice regarding the significant operational changes occurring within the organisation from as early as July 2021.
·Consultation on 12 October 2021, where Dr Lucas informed Ms Jankovic that the Board had approved a restructure that meant the job of Deputy Director would no longer be required to be performed by anyone.
·At the same meeting, Ms Jankovic expressed a concern regarding her ongoing ability to provide for her family and requested that the redundancy of her role be expedited and her employment be terminated with immediate effect.
Redeployment
The Respondent submitted that Ms Jankovic was offered a reasonable redeployment opportunity but declined the offer of alternative employment.
In Ulan Coal Mines Limited v Honeysett and Others,[9] the Full Bench held that:
“…It is an essential part of the concept of redeployment under s.389(2)(a) that a redundant employee be placed in another job in the employer’s enterprise as an alternative to termination of employment. Of course, the job must be suitable, in the sense that the employee should have the skills and competence required to perform it to the required standard either immediately or with a reasonable period of retraining. Other considerations may be relevant such as the location of the job and the remuneration attaching to it.”
In Technical and Further Education Commission T/A TAFE NSW v Pykett,[10] the Full Bench confirmed that the assessment of options for redeployment is to occur at the time when the employee is dismissed, and held:
“The use of the past tense in this expression directs attention to the circumstances which pertained at the time the person was dismissed.”
It was submitted that Ms Jankovic had the necessary skills to perform the CCCM role. It is the Respondent’s contention that Dr Lucas offered Ms Jankovic the role on 12 October 2021 which she declined, stating, “no… it is time to go”. Given Ms Jankovic’s rejection of the role, it would not have been reasonable to redeploy her in the circumstances.
Ms Jankovic’s Evidence
Ms Jankovic commenced with the Respondent on 1 April 2019 in the role of Deputy Director. She stated that the role was contemplated to be for a fixed term of five years. Ms Jankovic holds a Bachelor of Social Work and has held senior roles in large organisations.
The role of Deputy Director reports directly to the Executive Director. Ms Jankovic described the duties as including:
· Managing portfolios and projects to ensure they were delivering the Respondent’s objectives and working in synergy;
· Playing a leading role in community engagement and engaging with key stakeholders to increase the reach of the Respondent’s organisation and meet community needs;
· Managing contracts in accordance with relevant governance requirements and establishing relationships with funders and partners;
· Developing work practices and procedures; and
· Managing a team of employees with various accountabilities.
Dr Lucas commenced in the Executive Director role in July 2021. Prior to this, Mr Matthew Cox had held the role until his resignation. Ms Jankovic considered that in the six months prior to Dr Lucas’ commencement, the Respondent was in a state of internal turmoil. She described a diabolical relationship between two Co-Chairs of the Leadership Table where they would frequently argue and have disagreement. One of the Co-Chairs of the Leadership Table shall be referred to in this decision as Mr E.
Ms Jankovic considered this conflict had an impact on staff and on Mr Cox. Ms Jankovic noted that four employees resigned their employment, including Mr Cox.
Ms Jankovic noted that in the 6 July 2021 briefing by the Board, the following was stated, “We work directly with community members who are not obligated to abide by the same behavioural norms that bind us.” She considered that no action was taken by the Respondent to address the behaviour of Mr E whom she considered was aggressive and rude.
Ms Jankovic said it could not be said that the meeting of 6 July 2021 constituted consultation regarding the new strategic approach and restructure. She said that she was aware of changes being contemplated, however she was unaware of the extent of the restructure.
Ms Jankovic stated that from July 2021 she temporarily absorbed several roles and gave direction and oversight to others in the business. Dr Lucas was new to the Respondent, and Ms Jankovic considered that it fell upon herself to provide staff with support as to the uncertainty of any restructure because Dr Lucas had not built up a working relationship with employees.
Ms Jankovic denied that she had weekly meetings with Dr Lucas on account of Dr Lucas’ busy diary.
Ms Jankovic considers that she recommended the roles of Communications Lead and Community Lead to be combined into the CCCM role. She considered that she was already delivering on the requirements of the two earlier roles prior to Dr Lucas commencing with the Respondent.
In September 2021, Dr Lucas requested further information from her regarding her role. After providing the information, Dr Lucas suggested she was unclear about Ms Jankovic’s role or what was taking up her work time. Ms Jankovic provided to Dr Lucas a spreadsheet containing her responsibilities and priorities. Ms Jankovic was disappointed when Dr Lucas said to her that she only wanted a few dot points as she considered her role could not be explained or captured within a few dot points.
Ms Jankovic sent the email at [31] as she considered that Dr Lucas was excluding her from strategic matters such as meetings with stakeholders, leaving Ms Jankovic with operational matters which were substantial. Ms Jankovic denies having said that she keeps on looking for things to do as she considers that she was stretched thin. Ms Jankovic considers the statement attributed to her to be ludicrous. She does recall saying, “I am used to far more strategic work and the operational work is not as fulfilling, but I understand they need to be done for the best of the organisation.”
Ms Jankovic became upset and was then certified unfit for work from 15 September 2021 until 1 October 2021. On returning from leave, Ms Jankovic attempted to have a catch-up meeting with Dr Lucas. She reviewed her calendar and noticed a free timeslot on 12 October 2021. At this meeting, Ms Jankovic attempted to discuss the remaining matters within her 14 September 2021 email. She considered that Dr Lucas was disinterested in providing answers to her questions which upset Ms Jankovic.
As a result of Dr Lucas’ indifference or disinterest, Ms Jankovic asked whether her attitude was because her role was going to be made redundant by the Respondent. Her evidence is that Dr Lucas confirmed that her role was redundant, however it was awaiting final approval from the Board. Ms Jankovic rejects Dr Lucas’ evidence that she had stated it was a mere proposal; her evidence is that Dr Lucas informed her it was a definite decision, and she was merely awaiting endorsement by the Board.
Ms Jankovic denies that she said that she was unable to cope with the uncertainty and that it was clear her role was to be made redundant. She said she merely suggested that Dr Lucas was not engaging with her because her role was to be made redundant.
Ms Jankovic denies that she explicitly requested her role be made redundant.
After Dr Lucas informed her the role was to be made redundant, Ms Jankovic accepted the role may no longer be required because of the reduced size of the team. She considers that it was a mature comment based on her understanding of the Respondent’s requirements. Her evidence is that she did not mean that she considered that there were no roles of functions she could perform. She thought the broad scope of the Deputy Director role meant there would be residual duties she could still perform, regardless of whether they were strategic or operational in nature, allowing her to remain employed on an ongoing basis.
She denies that she requested Dr Lucas to fast-track the Board’s endorsement. She denies that she asked for a generous redundancy payment.
Ms Jankovic denies that Dr Lucas made any reference to the CCCM role on 12 October 2021. Her evidence is that she did not even know that Dr Lucas had decided to introduce the CCCM role until she read Dr Lucas’ email of 13 October 2021. Ms Jankovic denies that there was an offer of redeployment or even an opportunity to apply for the CCCM role.
As a result of the stress of the conversation, Ms Jankovic agrees she said, “I need to go” or words to that effect as an indication she wanted to leave the office immediately in order to avoid causing a scene in front of other staff members in the office. She stated that she wanted to preserve her own dignity in emotional circumstances. She is perplexed how Dr Lucas has interpreted, “I need to go” to her not wanting to consider any redeployment opportunities. She repeated that redeployment was not offered to her.
Ms Jankovic’s evidence is that she would have gladly accepted redeployment into the CCCM role if it had been offered to her.
Since the dismissal, Ms Jankovic has attempted to find alternate work. She stated that there are few roles which are being advertised at the same level of seniority as her former role with the Respondent. Ms Jankovic has received feedback that for some of the roles she has interviewed for, she may be over-qualified.
Ms Jankovic’s job description is summarised below:
“BACKGROUND
Logan Together is a transformative, whole-of-community initiative that uses the Collective Impact approach to make big, long term changes in rates of healthy child development. Logan Together will initially focus on families with children in the pre-birth to age eight cohort living in Logan City. It is one of the most ambitious social change programs in Australia.
…
POSITION OBJECTIVES
This position leads the main community delivery activities of the Logan Together movement and is the 2IC position to the Director, often assuming wider responsibilities on behalf of the Director. The role must work with organisational and community leaders from the most senior levels to the grass roots to faithfully implement projects that will deliver the Logan Together Roadmap. On-the-ground action is led through a portfolio of project groups, with 10-20 projects underway at any one time. The role is also responsible for the community engagement and community leadership functions essential to the work of the movement, liaising with and galvanising support and involvement from leaders and community members across the full spectrum of Logan’s very diverse community.
Dr Lucas was not ready to discuss the issue of redundancy with Ms Jankovic on 12 October 2021, however Ms Jankovic initiated the conversation and asked Dr Lucas a direct question. Dr Lucas told Ms Jankovic the truth; that her role was being contemplated for redundancy and a proposal had been put to the Board. She could have chosen to not properly answer the question, however she could see that Ms Jankovic was pained and expected a truthful answer.
Upon learning that truth, the expected course of events was altered by the fact that Ms Jankovic asked that the proposed redundancy be expedited and she declared that it was time for her to go, which I accept was her expressing her views that it was appropriate that she depart the organisation, not the meeting itself.
Following the meeting, Dr Lucas put all other commitments aside and tasked herself with effecting approval of the redundancy. This was something she was not expecting to do that day.
A more rational course of action might have been to allow Ms Jankovic to work from home for the rest of the week without having to be present in the office, while time was taken to properly put to Ms Jankovic, in writing, the concept of the redundancy, approved by the Board, and to offer to Ms Jankovic some breathing space to determine if she wished to be considered for the CCCM role. Instead, all of the decision making was compacted into a very short space of time while individuals were under emotional pressure. I do note, however, that Ms Jankovic did not, in the days thereafter, seek to be considered for the CCCM role.
Regrettably, the Respondent was of the view that it did not hold an obligation to consult with Ms Jankovic with respect to the redundancy on account of her being award-free. I have concluded that her employment was covered by the Award.
I have also had regard for the fact that the dismissal was conducted in breach of the consultation provisions of the Award and that issue weighs heavily for a finding that the dismissal was harsh, unjust or unreasonable. The Respondent’s submission that complying with the Award by informing Ms Jankovic in writing of the redundancy and inviting consultation was futile is utterly rejected. It is a lawful requirement of the Respondent.
Conclusion
The jurisdictional objection that the dismissal was a case of genuine redundancy requires two affirmative elements and one negatory element which must be satisfied so as to establish whether a dismissal was or was not a case of genuine redundancy.
I have determined that the second affirmative element was not satisfied in this case. Specifically, the Respondent has not complied with an obligation in the Award that applied to Ms Jankovic’s employment to consult about her redundancy. Therefore, the dismissal did not satisfy the meaning of genuine redundancy as contained within s.389(1)(b) of the Act.
It is necessary for the Commission to determine if the dismissal was consistent with the Code. As stated, the Code does not provide any relevant application in the instance of dismissal for redundancy, where the dismissal is not connected with any conduct, capacity or performance issues but instead arose from a financial imperative.
Consequently, the jurisdictional objection have been determined and rejected, and consideration has turned to the substantive merits of the application. Having appropriate regard for the various factors contained within s.387 of the Act, I determine that Ms Jankovic’s dismissal on 15 October 2021 was unjust and therefore she has been unfairly dismissed. The primary reason for this is the failure to consult with Ms Jankovic as required by the terms of the Award.
I have formed a view that had the Respondent consulted with Ms Jankovic over a period of one week from the date the definite decision was made to dismiss her on the grounds of redundancy, in those circumstances the dismissal would not have been harsh, unjust or unreasonable, and therefore not unfair.
Remedy
Section 390 of the Act reads as follows:
“390 When the FWC may order remedy for unfair dismissal
(1) Subject to subsection (3), the FWC may order a person’s reinstatement, or the payment of compensation to a person, if:
(a) the FWC is satisfied that the person was protected from unfair dismissal (see Division 2) at the time of being dismissed; and
(b) the person has been unfairly dismissed (see Division 3).
(2) The FWC may make the order only if the person has made an application under section 394.
(3) The FWC must not order the payment of compensation to the person unless:
(a) the FWC is satisfied that reinstatement of the person is inappropriate; and
(b) the FWC considers an order for payment of compensation is appropriate in all the circumstances of the case.
Note: Division 5 deals with procedural matters such as applications for remedies.”
Ms Jankovic is a person protected from unfair dismissal for the Act’s purposes and is a person who has been unfairly dismissed. Accordingly, I am empowered to exercise discretion as to whether she can be reinstated.
I am satisfied that it is inappropriate to order reinstatement due to the size of the business, the roles available, Ms Jankovic’s incomplete skill-set for the CCCM role and her stated issues with Mr E.
I now turn to consideration of compensation.
Compensation
Section 392 of the Act provides:
“392 Remedy—compensation
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.”
Authorities
The approach to the calculation of compensation is set out in a decision of a Full Bench of the Australian Industrial Relations Commission in Sprigg v Paul’s Licensed Festival Supermarket.[25] That approach, with some refinement, has subsequently been endorsed and adopted by Full Benches of the Commission in Bowden v Ottrey Homes Cobram and District Retirement Villages inc T/A Ottrey;[26] Jetstar Airways Pty Ltd v Neeteson-Lemkes[27] and McCulloch v Calvary Health Care (McCulloch).[28]
I have had regard to the above authorities, and I have considered the submission of each party.
The effect of the order on the viability of the respondent
Having regard to the assets of the Respondent, I am satisfied that an award of compensation would not affect the viability of the Respondent’s enterprise.
The length of Ms Jankovic’s service
Ms Jankovic had approximately 2.5 years’ service. This is not a long period of time.
The remuneration that Ms Jankovic would have received, or would have been likely to receive, if she had not been dismissed
I am satisfied that had the Respondent consulted with Ms Jankovic as required by the Award, it would have properly and fairly determined to dismiss Ms Jankovic. I am satisfied on the evidence before me that Ms Jankovic would not have been employed in the CCCM role and she had stated during the meeting of 12 October 2021 that it was time to leave the business. Ms Jankovic accepted during the hearing that she used this expression in the context of Mr E’s impact upon her. I cannot accept Ms Jankovic’s submissions that she would have been employed in the CCCM role for a period of at least six months.
In all of the circumstances, I consider that it would have been appropriate to consult with Ms Jankovic over a period of one week, given the size of the Respondent and the matters for consideration.
The efforts of Ms Jankovic (if any) to mitigate the loss suffered because of the dismissal
I accept the news of the redundancy came as a shock to Ms Jankovic and she was not in a position to immediately look for other work. She later did and also engaged in contracting work with Mr Cox, not long after the dismissal.
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
Ms Jankovic earned sizeable remuneration in November and December 2021. It is a not a relevant consideration given I am satisfied that Ms Jankovic’s employment would have only lasted one week on account of the obligation of consultation.
If, however, I had found that the employment would have continued throughout November and December 2021, it would have been necessary to make an appropriate deduction for the sums earned by Ms Jankovic in her contracting work.
The amount of any income reasonably likely to be so earned by Ms Jankovic during the period between the making of the order for compensation and the actual compensation
This factor is not relevant in the circumstances of this matter.
Other relevant matters
I have had regard to the fact that the Respondent paid to Ms Jankovic an amount of eight weeks’ severance pay equalling $23,672.48. This was taxed as a bona fide redundancy, with only a minute amount taxed, and the majority falling under the Australian Taxation Office’s tax-free threshold.
On account of the Respondent being a small business at the time of Ms Jankovic’s dismissal, Ms Jankovic was not entitled to any redundancy pay at all. On account of her length of service, if the Respondent had not been a small business, she would have been entitled to six weeks’ redundancy pay. The Respondent chose to pay an additional two-week gratuity, but it had no obligation to make any payment to Ms Jankovic at all, other than for notice and annual leave accrual.
The gross sum of $23,672.48 is, on Ms Jankovic’s calculations, equal to approximately 13.67 weeks’ pay having regard to usual taxation of wages. While eight weeks’ (almost) tax-free payment was made to her, it represents what she would have earned in 13.67 weeks if she had been taxed.
I consider this to be a very generous payment by the Respondent to Ms Jankovic in all of the circumstances. Even if Ms Jankovic had been entitled to six weeks’ redundancy pay, and her consultation period would have been for a period of one week, I would have declined to have awarded Ms Jankovic compensation on account of the additional two-week payment made to her by the Respondent.
Misconduct reduces amount
Section 392(3) of the Act requires that if the Commission is satisfied that the misconduct of a person contributed to the employer’s decision to dismiss the person then the Commission must reduce the amount it would otherwise order by an appropriate amount on account of the misconduct.
The section requires that consideration be given by the Commission, amongst other things, as to whether a person’s misconduct contributed to the decision to dismiss an employee even if the Commission has found that there was no valid reason for the person’s dismissal. However, if there was no valid reason for the dismissal that may be relevant to the Commission’s decision as to the appropriate amount by which the amount of compensation should be reduced.[29]
I do not find that Ms Jankovic engaged in any misconduct that would reduce the amount to be awarded to her.
Shock, distress etc. disregarded
I confirm that any amount ordered does not include a component by way of compensation for shock, distress or humiliation, or other analogous hurt caused to Ms Jankovic by the manner of the dismissal.
Compensation Cap
As is evident below, the compensation cap is not in issue.
Payment by instalments
This is not a relevant consideration.
No order of compensation
I have determined that the generous payment by the Respondent to Ms Jankovic exceeds the amount of one weeks’ pay representing a period for consultation I would have ordered. Accordingly, I decline to make an order of compensation to Ms Jankovic.
COMMISSIONER
Appearances:
Mr Dan Chen appearing on behalf of the Applicant.
Ms Peta Willoughby appearing on behalf of the Respondent.
[1] Transcript PN 171.
[2] Transcript PN 197.
[3] Transcript PN 416.
[4] Transcript PN 917.
[5] Dale v Marky Industries Pty Ltd [2019] FWC 8446.
[6] Dibb v Commissioner of Taxation [2004] FCAFC 126.
[7] Ibid at paras [43]-[44].
[8] Kekeris v A. Hartrodt Australia Pty Ltd T/A a.hardrodt [2010] FWA 674.
[9] Ulan Coal Mines Limited v Honeysett and Others [2010] FWAFB 7578 at [18].
[10] Technical and Further Education Commission T/A TAFE NSW v Pykett [2014] FWCFB 714.
[11] Transcript PN 674.
[12] McMillan v Northern Project Contracting[2012] FWA 7049 at [14].
[13] Jones v Department of Energy and Minerals [1995] IRCA 292 (16 June 1995), [(1995) 60 IR 304 at p. 308 (Ryan J)]; cited with approval in Ulan Coal Mines Limited v Howarth and others[2010] FWAFB 3488 (Boulton J, Drake SDP, McKenna C, 10 May 2010) at para. 17, [(2010) 196 IR 32].
[14] Ibid.
[15] [2010] FWA 674.
[16] [2010] FWAFB 3488.
[17] (1995) 60 IR 304.
[18] Pages 168 and 169 of the Digital Court Book.
[19] Ulan Coal Mines Limited v Honeysett (2010) 199 IR 363 at [28].
[20] [2017] FWCFB 6847 at [20].
[21] [2014] FWCFB 714, (2014) 240 IR 130 at [36].
[22] (1995) 185 CLR 410, [465].
[23] Sayer v Melsteel[2011] FWAFB 7498 at [20].
[24] Walton v Mermaid Dry Cleaners Pty Ltd(1996) 142 ALR 681, 685.
[25] (1998) 88 IR 21.
[26] [2013] FWCFB 431.
[27] [2014] FWCFB 8683.
[28] [2015] FWCFB 2267.
[29] Crawford v BHP Coal Pty Ltd [2017] FWC 154, [345] – [346]; Read v Gordon Square Child Care Centre Inc. [2013] FWCFB 762, [83].
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