Tam Xuan Thi Nguyen v Candor Stationary Manufacturers Pty Ltd T/A Candor

[2016] FWC 7065

[2016] FWC 7065

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Tam Xuan Thi Nguyen
v
Candor Stationary Manufacturers Pty Ltd T/A Candor
(U2016/8333)

COMMISSIONER WILLIAMS PERTH, 4 OCTOBER 2016

Termination of employment - jurisdiction - genuine redundancy.

[1] This decision concerns an unfair dismissal remedy application made under section 394 of the Fair Work Act 2009 (the Act) by Ms Tam Xuan Thi Nguyen (Ms Nguyen or the applicant). The respondent is Candor Stationary Manufacturers Pty Ltd T/A Candor (Candor).

[2] Candor object to the application on the basis that they assert the dismissal of Ms Nguyen was a case of genuine redundancy.

[3] Section 385 of the Act provides that a person has not been unfairly dismissed if the Commission is satisfied that the dismissal was a case of genuine redundancy.

[4] Section 389, set out below, prescribes the meaning of genuine redundancy.

“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.”

[5] At the hearing of this matter evidence was given for the respondent by Mrs Sandra Passanisi (Mrs Passanisi) and Ms Nguyen gave evidence on her own behalf.

Factual findings

[6] Considering the evidence of both witnesses I make the following findings of fact.

[7] Ms Nguyen was first employed in 2003 or 2004. The dismissal took effect in early July 2016.

[8] The letter of dismissal firstly thanked Ms Nguyen for having taken two weeks holiday due to a lack of work and continued on to say that unfortunately due to the current situation work has declined and Candor is not in a position to have full-time machine operators and so it is with regret that Ms Nguyen was to be given four weeks notice of termination.

[9] The letter concluded by saying that Candor will have positions for casual work as orders do come in and if Ms Nguyen would like to apply for a casual position she should do so.

[10] At the time of dismissing Ms Nguyen Candor had a total of five employees; three of whom were part-time.

[11] For the last two years Candor has seen a large downturn in its work. To help with the business cash flow Mrs Passanisi and her husband have taken a pay reduction from $40,000 per year to $9600 and then $8099 in 2015. They have been living off their savings. In the last six months Mr and Mrs Passanisi have also had to use their savings to cover wages and other business costs.

[12] In 2014 Candor made a loss of $72,963 and in 2015 it made a loss of $23,751. The 2016 figures are not yet available but are expected to show no improvement in the situation.

[13] Candor previously had a contract for Rio Tinto which was a large part of their work however this contract has been lost as they have changed their arrangements. This alone has had a huge impact on Candor. The Rio Tinto contract had been 70% of Candor’s turnover.

[14] Orders are now only coming in on a daily and sometimes an hourly basis and the business can only plan for the workload accordingly.

[15] As a consequence Candor took measures to reduce staffing costs.

[16] As a consequence currently the staff only consists of four casuals that are on call if needed and one other staff member. Mr and Mrs Passanisi, to help cover costs, now do the majority of work themselves for at least six hours per day. However some days there is little work or no work at all and this is why the business decided to move to casual workers as an alternative to retaining full-time staff.

[17] Retaining full-time staff involves an ongoing cost on the business, including at times when there is no work to be done and so no income. Casual employees however can be requested to work when there is work to be done and do not require the business to pay ongoing staff costs at times when there is no work and no income.

[18] Around the time of the applicant’s dismissal one Operator had volunteered to reduce his hours to three days per week. The work he does is different to the work Ms Nguyen did. This Operator was dismissed two weeks prior to the hearing of this matter.

[19] The applicant’s statement explains that she was encouraged to take annual leave due to a lack of work a few weeks before she was dismissed. The evidence is this was because there was no work for a period of approximately nine days other than for a small amount of work that was completed by some casual employees.

[20] With respect to the suggestion in the letter of dismissal that Ms Nguyen apply for a casual position it is apparent that Ms Nguyen did not choose to do this.

[21] The applicant’s evidence was that she felt she may have been dismissed because of a disagreement with Mr and Mrs Passanisi about her entitlements. Mrs Passanisi denies this issue was relevant to the decision to dismiss the applicant.

[22] There is no evidence to support the applicant’s feeling that this matter may have led to her dismissal. Rather there is a significant amount of evidence that unequivocally demonstrates that the decision to dismiss Ms Nguyen was a consequence of the lack of work within the business and the need to reduce ongoing staff costs which were not aligned to the irregular and reduced flow of income to the business.

Consideration

[23] Turning to consider whether the evidence above supports a conclusion that the dismissal of Ms Nguyen was a case of genuine redundancy.

[24] Clearly there had been changes in the operational requirements of Candor. There has been a significant loss of business in a downturn in trade which meant Candor needed less employees to do the remaining work. Separately the work that was coming in was irregular and with periods when there was little or no work to be done.

[25] Consequently the business made the decision that it needed to reduce its permanent staffing costs in favour of using casual employees that could be called in when work was available.

[26] The business made the decision that it no longer required a person to be employed in a full-time capacity doing the particular work Ms Nguyen had been doing. This work could be done by casual employees who could be called in and only paid as and when this work was required.

[27] There is no suggestion that an enterprise agreement applied nor is it suggested that there was any obligation in a modern award to consult that has not been complied with.

[28] Ms Nguyen was aware of the downturn in work having previously been encouraged to take a period of leave because there was no work. Ms Nguyen was notified in writing of the respondent’s reasons for making the change and was told at the time why this was occurring by Mrs Passanisi. Given the very small size of the business in practice there were no obvious opportunities to mitigate the adverse consequence of the respondent’s decision.

[29] I find that there were no redeployment opportunities available within Candor.

[30] Whilst the Commission can appreciate that Ms Nguyen believes Candor could have made other changes that might have had less impact on her how a business decides to respond to a significant downturn in orders is ultimately a decision for the business alone to make. Previous decisions of this Commission have reinforced this point and found that for example the decision-making process to select one employee for redundancy instead of others is not relevant in deciding whether the dismissal was a case of genuine redundancy. 1

[31] Consequently I find that the dismissal of Ms Nguyen was a case of genuine redundancy within the meaning of section 389 of the Act. As a result of this the dismissal of Ms Nguyen was not unfair.

[32] There is no jurisdiction for the Commission to consider this application which will now be dismissed and an order to that effect will be issued.

[33] Finally as was explained to Ms Nguyen at the hearing the Commission does not have jurisdiction to deal with issues to do with past leave, long service leave entitlements or superannuation although I note Candor has provided materials which indicate that these have been or are being addressed.

COMMISSIONER

Appearances:

T. Nguyen on her own behalf.

N. and S. Passanisi on behalf of the respondent.

Hearing details:

2016.

Perth:

September 22.

 1   UES (Int’l) Pty Ltd v Harvey (2012) 215 IR 263, 275 [26]‒[27].

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