Tania Rabba v United Brands Australia Enterprises Pty Ltd

[2025] FWC 54

[2025] FWC 54

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.394—Unfair dismissal

Tania Rabba
v

United Brands Australia Enterprises Pty Ltd

(U2024/7288)

DEPUTY PRESIDENT BELL MELBOURNE, 7 JANUARY 2025

Application for an unfair dismissal remedy - jurisdiction objection - genuine redundancy - jurisdiction objection upheld - application dismissed.

1. On 25 June 2024, Mrs Tania Rabba (Applicant) made an application (the Application) to the Fair Work Commission (Commission) for relief from unfair dismissal under s 394 of the Fair Work Act 2009 (Cth) (the Act). Mrs Rabba alleges she was unfairly dismissed by the respondent, United Brands Australia Enterprises Pty Ltd, with the dismissal taking effect on 6 June 2024. The respondent agrees the effective date of dismissal was 6 June 2024 but denies the dismissal was unfair.

1. In its Form F3 Employer response, the respondent has raised a jurisdictional objection that Mrs Rabba’s dismissal was a case of genuine redundancy (s 389). The response also states that at the time of Mrs Rabba’s dismissal, the respondent had 4 employees, making it a small business employer.

Uncontentious matters

1. Section 390 of the FW Act provides that the Commission may order a remedy if the Commission is satisfied that the Applicant was “protected from unfair dismissal” at the time of being dismissed and if the Applicant has been “unfairly dismissed”. It was not in contention, and I am satisfied, that the Applicant was protected from unfair dismissal under s 382 of the FW Act and had made her application within time.

1. The primary issue in contention was whether she was dismissed as a result of a “genuine redundancy” (s 385(d) and s 389). If the Applicant’s dismissal was not a genuine redundancy, then the matters requiring determination would be whether her dismissal was “harsh, unjust or unreasonable” (s 385(b) and s 387). Subsequently, the Commission would consider what, if any, relief ought to flow from that conclusion. As Ms Rabba’s dismissal was not related to her “capacity or conduct” to do her job, and there was no suggestion of any conduct involving summary dismissal, the “Small Business Fair Dismissal Code” (s 385(c)) was not applicable, notwithstanding that the respondent was a small business employer.

1. The parties were each represented at the hearing, with permission having been previously granted.

1. There was some procedural history to the matter, particularly on the Applicant’s behalf. She did not file a witness statement but she did file a number of documents and some emails that might be loosely treated as submission. In an email sent by Mrs Rabba on 2 October 2024, she indicated she had “submitted all evidence on Monday” 30 September 2024, which was clearly a reference to the documents filed and her email submissions. The respondent filed witness statements for Brent Strong, Director, and Brenton Foster, Marketing & Operations Coordinator. As Mrs Rabba did not file a witness statement, she was not cross-examined. Each of Messrs Strong and Foster were cross-examined.

Consideration

1. The business of the respondent is importing various luxury cosmetics, which it primarily sells to pharmacies and cosmetic retailers. The exact details are not before me, but the initial territorial focus of the business was Victoria, NSW and Queensland. In about 2019, Mr Strong and Mr Foster sought to expand their business further across Australia. Those plans were put on hold during the COVID-19 pandemic.

1. Up until mid-2022, the role of sales representative in all territories was performed by Mr Strong.[1]

1. In 2022, Mr Strong and Mr Foster continued with their expansion plans. The initial plans contemplated the employment of three sales representatives over roughly two and a half to three years.[2] 

1. Initially, they decided to employ the first additional sales representative. In August 2022, Mrs Rabba was employed to take on the Victorian territory. Her employment was part-time, based on four days a week and she was based in Victoria.

1. Sales growth following Mrs Rabba’s appointment was initially strong. In 2023, a further sales representative was employed, based in Queensland, to expand the business in that region. In the proceedings, the parties generally referred to this representative as “Belle”, which I will too. The exact starting point for Belle is not clear but based on financial sales sheets, she was employed at least at July 2023.

1. During the period from 2022 onwards, Mr Strong had (and retained) responsibility for sales in New South Wales, Western Australia and north Queensland. His role included managing team members as well as managing sales territories, as well as to grow the business.

1. In terms of the physical spread of clients, the concentration of clients in Victoria was the greatest.

1. Notwithstanding the optimism that was existing within the business at the beginning of 2023, some business shocks occurred as a result of supply chain logistics delays. At the same time, the business was not generating the additional revenue that was forecasted to cover the cost in hiring Mrs Rabba and Belle.

1. Pausing here, the case for the Applicant was that her redundancy was a sham redundancy.[3] She states that the business had a role for her which was to grow the business,  particularly the sales in Victoria. She also states that no downsizing was required and the finances of the business were in good shape. The real reason for the ‘redundancy’ was intimated to be because she had made a complaint to the ATO about unpaid superannuation, which she says resulted in a target being put on her ultimately leading to her dismissal. A further thread of Mrs Rabba’s submission was that any selection to reduce the number of sales representatives should have been made to the Queensland sales representative, Belle, but not to Mrs Rabba.

1. Mrs Rabba’s case was essentially based wholly on circumstantial evidence, as it required me to reject the direct testimony from each of Mr Strong and Mr Foster. There is “nothing inherently weak about cases based on circumstantial evidence”[4] but in the present case, the respondent’s evidence is clear and compelling.

1. Having heard from both the respondent witnesses, I have no hesitation in accepting their evidence as honest and, importantly, free from any of the impugned motivations regarding Mrs Rabba’s dismissal. I am readily satisfied from their evidence that the Respondent had formed the view that costs were overall too high and sales being made were not sufficiently high enough to support three sales representatives. Broadly, the business made a decision to reduce three sales representatives down to two. As one of those positions was performed by Mr Strong and he was not going to be made redundant, that in reality meant that there were two positions that would become one, with Mr Strong taking over the sales territory from the employee who would be made redundant. As Mrs Rabba’s territory of Victoria was geographically smaller than the alternative territory of Queensland, it was easier for Mr Strong to take back that territory in addition to retaining his existing territory footprint, which was primarily in NSW.

1. I also consider that the circumstantial evidence supports the respondent’s position, which I will now briefly outline.

1. Returning to the financial position of the respondent, the evidence clearly shows that at the end of 2023 and the beginning of 2024, the finances were being carefully reviewed. While the financial circumstances were not dire, they were not healthy and were impacted by a number of legacy and ongoing issues. The legacy issues included a loan primarily taken to employ the business’ first sales representative to help grow the business post-COVID.[5]

1. In December 2023, a full-time warehouse assistant resigned. The business did not replace him and Mr Foster took over those duties indefinitely. Also in December 2023, Mrs Rabba was provided with a small pay rise.

1. On 5 February 2024, correspondence was received from the respondent’s bank stating a loan account (I infer for the loan described above) was in arrears and requiring urgent action. A file note of a telephone call with the bank on 12 February 2024, itemised a number of options and issues. Issues including “Rep not hitting target” and “Shipping issues”. Options include “Reducing cost” and “Hold off employing warehouse”. A temporary payment arrangement with the bank was recorded in correspondence sent on 14 February 2024.

1. Without criticism of the sales representatives’ efforts, it was clear that the business’ hopes for their ability to grow sales was overly optimistic. An email sent by Mr Strong to Mrs Rabba and Belle on 4 February 2024 was titled “UBA New POS – Targets v Actual”. Here, ‘POS’ stands for ‘Point of Sale’ and is a reference to a new retailer. The email included a table for the three sales representatives and their results. Belle’s target was 4 new retailers, and she had achieved 2. Mrs Rabba’s target was 7 new retailers and she had achieved 2. Mr Strong’s target was 7 new retailers and he had achieved 9. The ‘total’ figure showed that, at a national level, the business was achieving 72% of target for new retailers. The email also states “We are not hitting our new POS targets, and this is affecting our sales.” For the “remaining” part of the financial year, the email concludes:

“we as a team must focus on opening new POS & catch up on our POS targets, whilst providing an efficient service to our Business As Usual (BAU) customers. This will enable the business to have the resources to grow, increase marketing, implement new technology, introduces new brands, improving our sales team efficiently + offer more renumeration benefits & opportunities to you.”

1. In Mrs Rabba’s Form F2 application, she states that on about 30 April 2024, she discovered that the employer had not been making superannuation payments to her. She raised the issue with the employer, which acknowledged its error and acknowledged that the superannuation was required to be paid. It was not paid right away, because the business was struggling financially. The respondent entered into a payment agreement with the Australian Taxation Office to ensure payment.

1. Mrs Rabba asserts in her Form F2 that, after this issue was raised, she started getting picked on in every meeting and started to receive passive aggressive emails and text messages. That assertion is unsupported by any credible evidence and the evidence before me shows the contrary. In any case, the issue about the superannuation only supports the earlier circumstantial evidence that there were legitimate business reasons for the employer to reduce its sales staff.

1. The Applicant focussed on a Profit & Loss statement for the business for the financial years ending 2022, 2023 and 2024. That P&L statement showed net losses for the years 2022 and 2023 but a profit for the 2024 year (albeit the 2024 figures were not finalised). While that document showed a net profit in 2024 (on unfinalised accounts), the amount was modest and comfortably outweighed by the two preceding years’ losses.

1. Other examples of business costs were included in the evidence, which are unnecessary to specifically itemise but clearly support the proposition that a restructure to reduce business costs was plainly justifiable.[6]

1. Moreover, a business does not need to be in any particular financial circumstances before operational decisions to make a restructure are taken, although poor circumstances are frequently a cause of such decisions being made. In this case, the business had formed the view that insufficient revenue was being generated to justify the cost of the two sales representatives additional to Mr Strong.

1. I have no hesitation at all in accepting that the respondent’s assessment of its business circumstances was the sole cause of its decision to reduce its sales representative head count. The only residual issue was whether Mrs Rabba was somehow ‘targeted’ for selection. She was not targeted and the decision to make her position redundant was because it would most readily allow Mr Strong to take over that territory, in comparison to taking over a larger geographic territory in Queensland.

1. On 31 May 2024, Mr Strong sought external advice as to how to proceed. As a consequence, Mr Strong scheduled an ‘at risk’ meeting with Mrs Rabba to explain her possible redundancy.

1. On 4 June 2024, the ‘at risk’ meeting took place by telephone. During that meeting, Mrs Rabba was informed that the business was suffering financial stress and, as a result, the Victorian Sales Representative position was intended to be made redundant. A further meeting was arranged for 6 June 2024. Also on 4 June 2024, the employer sent Ms Rabba a letter stating (formalities excluded) that:

“As discussed, we are presently considering a restructure of the area in which you work because the business is under financial stress, and this is unsustainable moving forward.

In the circumstances, we confirm that we are considering making your role as Victoria Sales Representative redundant.

As such, we would like to meet with you on Thursday 6^th  June 2024 at 1pm to discuss the potential redundancy and any suggestions you may have to avoid this, or any other matters that you would like to raise with us in respect of this proposal.

You are of course welcome to bring a support person or representative to this meeting should you choose.

Before we make a final decision in this regard, we will consider any suggestions or matters raised by you.

Should you have any queries or concerns throughout this process, please contact Brent Strong”

1. The meeting on 6 June 2024 ultimately proceeded by telephone, due to a technical issue with conducting a video conference. Mr Strong attempted to discuss options on how the redundancy might be avoided but, from the employer’s perspective, there were no options. Mrs Rabba did not provide any suggestions to the contrary.

1. Mr Strong’s evidence is that there were no opportunities for redeployment. I accept his evidence, and it is clearly supported by the objective circumstances of the financial position of the business and the need to reduce costs.

Genuine redundancy

1. For the purposes of s 389(1)(a) of the Act, the employer no longer required Mrs Rabba’s job to be performed by anyone because of changes in the operational requirements of the employer’s business. Her sales duties were to be redistributed to Mr Strong.

1. For the purposes of s 389(1)(b) of the Act, the employer complied with the relevant consultation obligations in the Commercial Sales Award. It did so by giving notice (orally and in writing) of the proposed changes, their effect and raised the opportunity to avoid or reduce their effect (although in this case, there were no such options identified because there were none). The employer took these steps promptly after having made a definite decision that Mr Strong would take over Mrs Rabba’s sales duties in addition to his own.

1. Having regard to the circumstances of the business, it would not have been reasonable in all those circumstances for Ms Rabba to have been redeployed: s 389(2).

1. In summary, Mrs Rabba’s dismissal was a case of genuine redundancy within the meaning of s 389 of the Act. As I am satisfied that the dismissal was a case of genuine redundancy, I cannot be satisfied that Mrs Rabba was unfairly dismissed for the purposes of s 385(d) of the Act.

1. As Ms Rabba was not unfairly dismissed, her application must be dismissed. An Order[7] giving effect to these reasons will be issued separately.

DEPUTY PRESIDENT

Appearances:

L. Watts of Counsel for the Applicant
M. Noorzai of Irwin Law Pty Ltd for the Respondent

Hearing details:

2024.
Melbourne:
October 7.

[1] Transcript PN378.

[2] Transcript PN378.

[3] Eg, Transcript PN519.

[4] Australian Competition & Consumer Commission v Air New Zealand Limited [2014] FCA 1157 at [464](2) (Perram J).

[5] CB p.82.

[6] Exhibit R1, SH22 -SH24, emails and letters showing the Respondent in arrears.

[7] PR783054 .

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