Thi Van Hanh Nguyen v The Vietnamese Community in Australia NSW Chapter Incorporated
[2022] FWC 3332
•22 DECEMBER 2022
| [2022] FWC 3332 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Thi Van Hanh Nguyen
v
The Vietnamese Community in Australia NSW Chapter Incorporated
(U2022/7818)
| COMMISSIONER MCKINNON | SYDNEY, 22 DECEMBER 2022 |
Application for an unfair dismissal remedy
The Vietnamese Community in Australia NSW Chapter Incorporated (VCA NSW) is an independent representative body of Vietnamese Australian refugees and permanent residents in NSW. It is comprised of a Management Committee (Committee), and Advisory and Supervisory Council (AS Council), association members and individual members. The Committee is the representative body for VCA NSW, whose role is to manage the activities and staff of VCA NSW. The AS Council represents the association members and supervises the Committee.
Ms Thi Van Hanh Nguyen was employed by VCA NSW as a Problem Gambling Counsellor and Welfare Centre Coordinator from 15 February 2016 until 11 July 2022, when she was dismissed due to a “lack of funding and financial resources”. Ms Nguyen applied in time for an unfair dismissal remedy from the Commission. VCA NSW is a small business employer. It objects to the application on the basis that the dismissal was a case of genuine redundancy.
I have decided that the dismissal was not a case of genuine redundancy and that Ms Nguyen was unfairly dismissed. These are my reasons.
Protection from unfair dismissal
A person is protected from unfair dismissal if, at the time of dismissal, they have completed at least the minimum employment period and they are covered by a modern award, and/or an enterprise agreement applies to them, and/or their annual rate of earnings is less than the high income threshold.[1]
Ms Nguyen was employed by VCA NSW for more than 12 months. She has completed at least the minimum employment period as an employee of VCA NSW. There is no dispute that Ms Nguyen was dismissed from her employment by VCA NSW.
At the time of dismissal, Ms Nguyen’s annual rate of earnings was below the high income threshold of $158,500. In any event, Ms Nguyen was covered by the Social, Community, Home Care and Disability Services Industry Award 2010 (the Award). Ms Nguyen is protected from unfair dismissal.
Under section 385 of the Act, a person has been unfairly dismissed if the Commission is satisfied that they have been dismissed; that the dismissal was harsh, unjust or unreasonable; that the dismissal was not consistent with the Small Business Fair Dismissal Code and that it was not a case of genuine redundancy.[2]
The employment of Ms Nguyen was terminated for reasons of redundancy. The dismissal was not consistent with the Small Business Fair Dismissal Code because the Code does not apply to dismissals due to redundancy. The question is whether the dismissal was a case of genuine redundancy.
If the dismissal was not a case of genuine redundancy, the second question is whether the dismissal was harsh, unjust or unreasonable (and so unfair).
Relevant background
Under the VCA NSW Constitution, the term of a member of the VCA NSW Committee is 2 years. The Committee President is only allowed 2 consecutive terms. Clause 15.2 of the Constitution provides that if the whole Committee cannot carry out their duties, the AS Council is required to temporarily take over the responsibility of managing the Vietnamese Community and organise an election within 4 weeks, or if the transition occurs within 3 months of the expiry of elected terms, until the term expires and a new Committee has been elected. If the AS Council temporarily takes over management tasks of the community, the President of the AS Council temporarily acts as President of the Committee (clause 17.2).
On 7 November 2021, Ms Nguyen attended VCA NSW’s annual general meeting. During the meeting, the Committee President, Mr Paul Huy Nguyen as well as the other members of the Committee, resigned. Mr Nguyen advised that management of VCA NSW would be taken over by the AS Council.
On 21 December 2021, Ms Nguyen wrote to the AS Council advising that VCA NSW’s funding agreements with the Department of Customer Services was going to expire on 31 December 2021, at which time the Problem Gambling Counsellor employment contracts of herself and Mr Dinh Trong Dang would also end. Ms Nguyen notified the AS Council of outstanding contractual obligations to acquit the expiring funding agreement, as well as the Welfare Centre’s projects that needed to continue in 2022-2023, projects handed over by the “Ex-President” Mr Nguyen and leave accruals for staff to 1 December 2021. The letter also asked for guidance and decisions on future plans, including whether staff could continue to use the offices and office facilities, how to deal with issues in relation to projects handed over, and a proposal to apply for VCA NSW to become a registered provider of aged care services.
On 31 December 2021, the funding agreement referred to above expired and VCA NSW’s role in providing problem gambling counselling services ceased.
On a date that is unknown in February 2022, the President of the AS Council and acting President of the Committee, Mr Huynh Xem, told Ms Nguyen that she and Mr Dang should “keep working on your current projects”. Ms Nguyen followed this advice and continued working as Welfare Centre Coordinator, project lead on two cancer projects, small grant applications and provider of community information.
On 31 March 2022, Vice President of the AS Council, Ms Kim Huong Thi Nguyen (Ms Huong), asked Ms Nguyen to send her the details of VCA NSW’s bank accounts. Ms Nguyen did as she was asked.
On 8 April 2022, Ms Nguyen noticed that she had not been paid for the fortnight from 24 March 2022 – 6 April 2022. She rang the bookkeeper for VCA NSW, Mr Cong Binh Tran, and asked him why. Mr Tran told Ms Nguyen that a third‑party problem had caused the bank accounts to be frozen and that he had not been authorised to process the payroll.
On 11 April 2022, Ms Nguyen attended a meeting with Ms Huong and two other AS members as well as Mr Dang. Ms Nguyen advised the AS Council members that staff had not been paid for the past fortnight. Ms Huong advised that VCA NSW’s bank accounts had been frozen.
At around the same time, Ms Nguyen noticed on Facebook that a group of 8 people had agreed to retain the former President of the Committee, Mr Nguyen, as President for another 2 years. After this announcement, Ms Nguyen was blocked from accessing and viewing the welfare accounts of VCA NSW.
In May 2022, Ms Nguyen was blocked from accessing and using her work email address. She made enquiries but received no response.
On 18 May 2022, Ms Nguyen emailed the AS Council again. The covering email stated:
“Dear Advisory and Supervisory Council,
Over the past 2 months, Welfare Staff had a number of issues in maintaining the existing project activities. On behalf of the Staff, I would like to propose some changes to the routines of our daily work and to make a number of requests for your support in preparing for our upcoming project-activities as detailed in the attached letter.
Thanks and best regards,
Thi Van Hanh Nguyen”
The letter attached to the email advised that staff had not been paid from 24 March 2022 and among other things proposed alternative (reduced) hours of work for the employees, including herself and requested support in preparing for upcoming activities.
On 14 June 2022, Mr Nguyen emailed Ms Nguyen and asked her to meet with him to discuss “future work plan and arrangements”, stating that the Committee had not received any reports from staff in respect of work in progress or ongoing projects.
Ms Nguyen was not sure if it was appropriate to meet with Mr Nguyen given his resignation from the Committee on 7 November 2021. On 16 June 2022, she responded by email to say that she was seeking advice from the AS Council and would try to get back to him soon. Mr Nguyen asserted in reply that he was the President of VCA NSW. She separately emailed the AS Council seeking confirmation of Mr Nguyen’s current role in the organisation and whether she was required to meet with him. The response she received on 17 June 2022 was as follows:
“I refer to your email and confirm that the Management Committee of the VCA/NSW resigned at the Annual General Meeting on 7 November 2021 and that the Advisory Council has been the acting Management Committee of VCA/NSW from that day.
Mr Paul Huy has no authority in managing the VCA from 7 November 2021. Any attempt to assume power by Paul Huy Nguyen will be treated as an illegal Act.
Kind Regards,
Kim Huong Thi Nguyen
Vice President of Advisory Council”
On 23 June 2022, Ms Nguyen and Mr Dang met with Mr Nguyen and Ms Kate Hoang, who said they were acting as President and Vice President of VCA NSW at that time. They asked for performance reports and timesheets and payroll summaries for the period since 24 March 2022. Ms Nguyen appears to have taken minutes of the meeting. VCA NSW deny that they are an accurate record of what occurred. I accept the minutes of the meeting as an accurate summary of the discussion from Ms Nguyen’s perspective and reject the evidence of Mr Nguyen to the effect that he told Mr Dang and Ms Nguyen in that meeting that “if we can’t find sufficient funding immediately, we won’t be able to keep you on”.
On 28 June 2022, Ms Nguyen received an email from Mr Nguyen saying:
“This is to confirm that the above meeting was held and i like to confirm the following:
- The welfare staff did not report to the EC any work activities nor work schedules, time sheets since November 2021.
- We requested the office to send the detail of past performance reports (for the last 6 months) including any new grants/work in progress of existing grant … etc
- We requested all time sheets and payroll summary for each fortnight for the same period with view to sort out all outstanding wages commitment.
To date, we have not received any response from you.”
Ms Nguyen did not respond immediately to these requests because she was unsure of Mr Nguyen’s authority to act in the matters.
On 30 June 2022, Mr Nguyen wrote to Ms Nguyen and Mr Dang as follows:
“I write to advise you that the Management Committee and Advisory council held a meeting on 29/6 to discuss the above matter and matters relating to our earlier meeting on 23/6 with Welfare office.
We noted the following:
- To date there were reports sent by the office to MC.
- Income grants from the last 6 months was approximately $6,000
- Wages for all staff has been paid and or accrued amount to $3,850 PER WEEK and continues (approximately $100,100 in wages & super for the last 6 months) plus all leave accruals entitlements.
- There were no prospect of any income or grants from any sources in the foreseeable future,
- Our office overheads continue to incur at around $800 a month.
Having due regard to the above mentioned facts, we are of the view that the current situation is financially unsustainable and if this continues would lead to a dire financial consequences of VCA NSW.
In light of the above we ask that if you would have any responses to the above concerned problems.
Paul Huy Nguyen”
On 1 July 2022, Mr Tran sent payroll summaries from 24 March 2022 to 29 June 2022 to Mr Nguyen to show wages outstanding for staff.
On the morning of Monday, 4 July 2022, Ms Nguyen arrived at the office in Cabramatta. She could not open the door. She went to the police station to report the incident and was advised to call a locksmith, which she did. She also called Mr Dang and sent messages to Mr Huynh and Ms Huong, telling them that a locksmith was on his way.
Shortly afterward, Mr Dang and Ms Huong arrived at the office. The locksmith had also arrived by this time and reset the key lock and number lock on the door in the presence of Ms Huong. They entered the office and noticed that their computer screens had changed and another user login had been used.
On 6 July 2022, Mr Nguyen sent an email to all staff and volunteers asking them to vacate the Cabramatta office immediately and work from home until further notice, in connection with the “unauthorised change of the office door’s password and/or lock”.
On 7 July 2022, Ms Nguyen sent an email to the AS Council with a letter about the Cabramatta office door lock and monies owed. She asked that staff be paid their outstanding wages of $40,459.80 and provided a calculation of accrued leave entitlements. She asked for advice on the employment status of staff and foreshadowed the making of a Fair Work Ombudsman complaint or court action. By this time, staff had not been paid for more than 3 months.
On 8 July 2022, Ms Nguyen and the other staff were at the office. As they went to leave at approximately 5.00pm, they saw a small group of people with mobile phones in their hands taking photos and videos of them. This included Mr Tat Phuong Nguyen, a member of the AS Council, and his wife, who followed the staff for about 10 minutes after they left the office.
On 11 July 2022, Ms Nguyen received a letter of termination on the grounds of redundancy under the signature of Mr Nguyen, VCA NSW President.
Was the dismissal a case of genuine redundancy?
Did VCA NSW no longer require Ms Nguyen’s job to be performed because of changes in its operational requirements?
I am satisfied that at the time of dismissal, Ms Nguyen’s job was no longer required by VCA NSW to be performed by anyone. VCA NSW is a not-for-profit community organisation that relies on government funding for the vast majority of its activities and projects. From 31 December 2021, the funding associated with her role of Problem Gambling Counsellor ceased. This represented a major change in the operational requirements of VCA NSW as it meant the cessation of problem gambling services that it had delivered in the community for many years. From that time on, Ms Nguyen continued to perform work at the direction of Mr Xem on other projects, but this was not a sustainable long‑term solution.
The unsustainable financial position of VCA NSW was set out clearly in the email from Mr Nguyen to Ms Nguyen and Mr Dang on 30 June 2022. While income grants for the past 6 months were approximately $6,000, the wages bill for staff over that period was accruing at $3,850 per week, plus leave accruals and superannuation (approximately $100,100 in the same 6‑month period) and the cost of maintaining the office was around $800 per month. In relation to this email, it is necessary to observe that I do not read it as falsely asserting that staff had been paid their wages for all of this period. The words used by Mr Nguyen were “paid and or accrued”, referring to wage liabilities in the 6‑month period from 1 January 2022 to 30 June 2022. Employees of VCA NSW were paid for approximately half of that period. For the remaining half, their unpaid entitlements continued to accrue.
While there is no direct evidence of when the decision was made by VCA NSW to terminate the employment of Ms Nguyen due to redundancy, I find that this occurred after 7 July 2022, when Ms Nguyen asked the AS Council to confirm the employment status of staff, and before 11 July 2022, when the decision to terminate her employment was communicated to Ms Nguyen.
Failure to consult under the Award
The dismissal will not be a genuine redundancy for the purposes of the Act unless VCA NSW has complied with its redundancy-related consultation obligations under the Award.[3]
Clause 8 of the Award applies if an employer makes a definite decision to make major changes in production, program, organisation, structure or technology that are likely to have significant effects on employees. Clause 8 applied to the cessation of problem gambling services upon completion of the funding grant on 31 December 2021. This is because it was likely to mean the end of employment or at the very least, reduced working hours, for at least two of its four employees.
Under clause 8, as soon as practicable after the decision to cease providing the service was made, VCA NSW was required to:
(a) give notice of the changes it had decided to make to all employees who may be affected by them and any of their representatives; and
(b) discuss with them the introduction of the changes, their likely effect on employees; and measures to avoid or reduce the adverse effects of proposed changes.
This case is slightly unusual in that the decision to cease providing problem gambling services was made by acquiescence rather than expressly. That is, VCA NSW had a Performance and Funding Agreement with the NSW Department of Customer Service to provide the service. The Agreement expired on 31 December 2021. It was a notorious fact to VCA NSW that funding for the service would end on this day. The matter was also brought to the attention of the AS Council (then acting in the dual role of the Committee) on 21 December 2021 by Ms Nguyen. There is no evidence of attempts by VCA NSW to secure alternative funding to continue to provide the service. It was simply assumed that provision of the service would also cease.
Ms Nguyen’s efforts to seek guidance on the likely consequences for staff when the funding agreement came to an end were met with silence. I accept that it is likely that this was because VCA NSW was embroiled in an internal dispute between members of the AS Council and Committee. The inattention to staff matters in the meantime resulted in a failure of VCA NSW to give notice of the cessation of the services to its staff (except through Ms Nguyen herself). There was no discussion about the introduction of the change or its likely effect on employees. There was no discussion about measures to avoid or reduce the adverse effects of the proposed changes. It was not until sometime in February 2022 that it was confirmed to employees that they could continue working on other projects. Further attempts for clarification and/or approval on proposed reductions in working hours were unsuccessful.
I find that VCA NSW did not comply with its obligations to consult about the redundancy with Ms Nguyen under clause 8 of the Award.
Reasonable redeployment
A dismissal is not a case of genuine redundancy if it would have been reasonable in all the circumstances for the person to be redeployed within the employer’s enterprise or that of one of its associated entities.
There is no evidence that it would have been reasonable to redeploy Ms Nguyen within VCA NSW to another position. There is no evidence that there was any such vacant position. There is also no evidence of any associated entities of VCA NSW. I am not satisfied that it would have been reasonable in all the circumstances to redeploy Ms Nguyen.
Was the dismissal harsh, unjust or unreasonable?
Whether a dismissal was harsh, unjust or unreasonable depends on an assessment of all the relevant facts and circumstances, including those set out in section 387 of the Act. Those are considered in turn.
Was there a valid reason for the dismissal related to capacity or conduct, and was it notified to Ms Nguyen?
I find that there was a valid reason for the dismissal of Ms Nguyen on the basis that VCA NSW no longer required her role to be performed by anyone, for the reasons given above. The reason was foreshadowed, but not expressly notified to Ms Nguyen in communications with Mr Nguyen between 14 June 2022, 23 June 2022 and 30 June 2022. The reason was only notified to Ms Nguyen when the decision to terminate her employment on redundancy grounds was communicated on 11 July 2022.
Was there an opportunity to respond to any capacity or conduct related reason?
The reasons for dismissal did not relate to the capacity or conduct of Ms Nguyen. This is not a relevant matter in the circumstances.
Was there any unreasonable refusal to allow a support person to be present to assist at any discussions relating to dismissal?
There was no unreasonable refusal to allow Ms Nguyen to have a support person assist in discussions about the dismissal. This is not a relevant consideration.
Was Ms Nguyen warned about relevant unsatisfactory performance?
Ms Nguyen’s dismissal was not related to unsatisfactory performance. This is not a relevant consideration.
Degree to which the size of the employer’s business and any absence of dedicated human resources management specialists or expertise in the business would be likely to impact on procedures followed in effecting the dismissal
VCA NSW is a small business employer. There is no evidence that it had relevant human resources or other specialist expertise to assist with the process of making an employee redundant. Volunteer members of the Committee and AS Council do not appear to have been overly familiar with the Award or its application to the circumstances that it faced. These matters contributed to deficiencies in the process adopted to make Ms Nguyen redundant.
Other relevant matters
Ms Nguyen has not been paid any wages since the last week of March 2022 and nor was she paid her entitlements on termination, including notice of termination under the National Employment Standards. It is not for the Commission to determine underpayment claims, but the matter remains relevant because of the uncertainty it created in relation to Ms Nguyen’s role from at least 31 December 2021.
The Committee and the AS Council knew in April 2022 that the bank accounts of VCA NSW had been frozen due to a legal dispute. They must have known that one consequence of this was that employees would no longer be paid wages. Likely, they also considered that at some point in the future, the question of their ongoing employment would need to be addressed. And yet they took no positive steps to consult with employees about what had happened, how they might be affected by the separate legal case, and how VCA NSW proposed to ensure that it met its obligations to them.
This allowed employees including Ms Nguyen to be left in a position of uncertainty – working but not being paid – for more than three months before the decision to terminate her employment was finally communicated. In my view, this was manifestly unreasonable.
A related question is whether VCA NSW was aware that its staff were still working after 31 December 2021. I do not accept that it was staff failures to follow the correct payroll process that left members of the Committee and/or AS Council in the dark. As they had done for many years, staff continued to follow the usual process, which was to submit time sheets to Ms Nguyen for sign off in her capacity as Welfare Centre Coordinator and once signed off, for Ms Nguyen to email them to Mr Tran, the bookkeeper. Based on the signed timesheets, Mr Tran then prepared the payroll summaries and activities and arranged for payment of staff with approval of the Committee Treasurer, Mr Minh Trien Nguyen. Of course, Mr Tran was unable to complete the payroll process without approval from the Committee. This was where the process failed, and responsibility sits with VCA NSW, rather than Ms Nguyen or any other employee.
As to Mr Nguyen’s authority to act in relation to the termination of Ms Nguyen’s employment, the precise machinations of VCA NSW in relation to its office-bearers over the period from late November 2021 to 11 July 2022 are not in evidence. Mr Nguyen resigned as President on 7 November 2021, likely because his 2‑year term on the Committee had expired. A dispute seems to have arisen between members of the Committee and members of the AS Council, causing a change in the office bearers over the period. It seems likely that after his resignation, Mr Nguyen was asked to step up to the role again, if not permanently, then in an acting capacity. Whatever his status was under the VCA NSW Constitution, it appears that he had the endorsement of the President of the AS Council through Mr Huynh. I find that Mr Nguyen had at least apparent authority to act as he did in relation to the employment of Ms Nguyen.
There is one final matter of relevance. There have been factual disputes in the evidence as between Ms Nguyen and Mr Nguyen – specifically in relation to whether Mr Nguyen resigned, and in relation to communications from the staff to Mr Nguyen after 31 December 2021. In each case, I have preferred the evidence of Ms Nguyen, whose evidence was clear, genuine and to the point, to that of Mr Nguyen, whose evidence was more cautious and difficult to follow at times.
Conclusion on the merits
I find that Ms Nguyen was unfairly dismissed. While there was a valid reason for dismissal, in the circumstances, the dismissal was unjust because it involved conduct that was contrary to law, and unreasonable because of the failure to engage in any meaningful communication with Ms Nguyen about what was likely to happen with her employment for more than three months. It was also harsh to Ms Nguyen, who is 61 years old and had worked diligently and proudly for VCA NSW and for the benefit of the Vietnamese community in Australia, for more than 6 years.
Compensation
Reinstatement is not an appropriate remedy in this case because of the financial position of VCA NSW, which now appears to be reliant on volunteers to undertake the limited project work for which it is funded.
Compensation is the appropriate remedy for Ms Nguyen.
Section 392(2) of the Act deals with how compensation is to be assessed in connection with an unfair dismissal. The established methodology is elaborated on in Bowden v Ottrey Homes Cobram and District Retirement Villages Inc (Bowden).[4] I respectfully adopt and apply the approach set out in that decision.
Viability (s.392(2)(a))
While VCA NSW has limited access to ongoing project funding, I am not satisfied that an order for compensation will materially affect its viability. No reduction in the amount of compensation is made for this reason.
Remuneration Ms Nguyen would have received, or would have been likely to receive, if she had not been dismissed (s.392(2)(c))
It is likely that Ms Nguyen would only have remained in employment with VCA NSW for approximately four weeks had an appropriate process to give effect to the dismissal been adopted.
Ms Nguyen’s weekly earnings on 23 March 2022 when her wages ceased being paid were $3,019.10 gross per fortnight (70 hours at $43.13 per hour). I find that Ms Nguyen would have earned $6,038.20 gross in the 4-week period had she not been dismissed, although it is unlikely that she would have received payment of this amount given the failure of VCA NSW to pay wages since March 2022.
Remuneration earned (s.392(2)(e)) and income reasonably likely to be earned (s.392(2)(f))
Ms Nguyen was not paid an amount in lieu of notice of termination and there is no evidence that she has earned any other income in the period since dismissal.
No adjustment of the compensation amount is required on this basis.
Length of service (s.392(2)(b))
Ms Nguyen had more than 6 years’ service with VCA NSW. While this is not an insignificant period of service, no adjustment is made in relation to the assessment of compensation on this account.
Mitigation efforts (s.392(2)(d))
There is also no evidence that Ms Nguyen has tried to mitigate her losses since the dismissal other than a “job search” in October 2022 where no roles relevant to her skill set were apparent. In the circumstances, including that Ms Nguyen is 61 years old and had continued working without pay for more than three months, no adjustment of the compensation amount will be made on this account. It is likely that Ms Nguyen has already had to adjust her personal circumstances to manage without an income for this period.
Other matters (s.392(2)(g))
No adjustment of the amount of compensation is made for contingencies because of the period of time that has elapsed since the dismissal, and the limited prospects of any change in the circumstances of Ms Nguyen between the date of hearing and decision.
Misconduct (s.392(3))
There is no evidence that misconduct was a contributing factor to the dismissal. No reduction in the amount of compensation is appropriate under section 392 of the Act.
Shock, Distress (s.392(4))
The amount of compensation does not include a component for shock, humiliation or distress.
Compensation cap (s.392(5)&(6))
The amount of $6,038.20 gross is less than the compensation cap of 26 weeks’ pay and no further adjustment of the amount is necessary.
Instalments (s.393)
An application was made by VCA NSW to pay any compensation awarded by instalments. I consider this appropriate and will order that the compensation amount be paid in two equal fortnightly instalments.
Conclusion on remedy
In my view, the compensation figure arrived at in this case does not yield an amount that is clearly excessive or clearly inadequate.
For the reasons set out above, I am satisfied that a remedy of compensation in the sum of $6,038.20 gross in favour of Ms Nguyen is appropriate in the circumstances of this case. I will issue an order [PR749121] to that effect.
COMMISSIONER
Appearances:
L Meagher of Counsel for the applicant.
A Kaylinger of Counsel for the respondent.
Hearing details:
2022.
Sydney (by video):
December 15.
[1] Fair Work Act 2009 (Cth), s.382.
[2] Fair Work Act 2009 (Cth), s.385.
[3] Fair Work Act 2009 (Cth), s.389(1)(b).
[4] [2013] FWCFB 431.
Printed by authority of the Commonwealth Government Printer
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