Warwick James Shaw v Australian Biotechnologies Pty Ltd

[2011] FWA 1380

[2011] FWA 1380

FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.394 - Application for unfair dismissal remedy

Warwick James Shaw
v
Australian Biotechnologies Pty Ltd
(U2010/1910)

COMMISSIONER RAFFAELLI SYDNEY, 14 MARCH 2011

Unfair dismissal - jurisdiction.

[1] The matter before me concerns an application for an unfair dismissal remedy pursuant to section 394 of the Fair Work Act (the Act).

[2] The application has been made by Mr Warwick Shaw (the Applicant) and the remedy is sought against his former employer, Biotechnologies Pty Ltd (the Respondent).

[3] The Respondent raised several jurisdiction objections to the application. The objections were the subject of proceedings before me on 4 February 2011.

[4] Section 394 is predicated on a person having been dismissed, and indeed, dismissed unfairly. Section 385 defines when a person has been unfairly dismissed. It provides as follows:

“385 What is an unfair dismissal

A person has been unfairly dismissed if FWA 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.”

[5] It is clear that all four situations described in section 385 must be satisfied in order for there to be an unfair dismissal.

[6] I propose to deal with one of the matters raised by the Respondent, that being that the dismissal was a case of genuine redundancy. If it is correct, then section 385(d) would not be satisfied and, by definition, there would not have been an unfair dismissal.

[7] Section 389 gives the meaning to “genuine redundancy” for the purposes of section 385. It provides:

“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.”

[8] In proceedings before me, the evidence of Mr Tom Mende, the Respondent’s Chief Executive Officer, was that for financial reasons the Respondent decided to discontinue the Applicant’s role. (Exhibit AB1/16 at PN35, PN172 and PN174). The Respondent did not give evidence that challenged Mr Mende’s testimony in that regards.

[9] I find that the Respondent no longer required the Applicant’s job to be performed by anyone because of the changes in the operational requirements of the Respondent’s enterprise.

[10] It was also the evidence of Mr Mende that, in his view, there were no alternative redeployment opportunities for the Applicant (Exhibit AB1/17 at PN36, and PN175). His evidence was based on the fact that the Applicant was paid a base salary of $170,000. Any vacancies within the Respondent were limited to manufacturing technician positions which attracted salaries of about $55,000 (PN36). It was also the evidence that the Applicant had previously indicated a wish that his salary be increased. The Applicant did not give evidence to challenge this view, including by any indication that he might have considered such a large drop in income.

[11] I find that this is not a situation where it would have been reasonable in all the circumstances for the Applicant to have been redeployed with the Respondent.

[12] That leaves a consideration as to whether the Respondent complied with any obligation, in a modern award or enterprise agreement that applied to the Applicant’s employment, to consult about the redundancy.

[13] It is not disputed that no enterprise agreement applied.

[14] There was disagreement as to award coverage. I have decided to assume that the “Professional Employees Award 2010” [MA000065] (the Award) applied to the Applicant’s employment.

That Award provides at clause 9 the following:

“Consultation regarding major workplace change

9.1 Employer to notify

(a) Where an employer has made a definite decision to introduce major changes in production, program, organisation, structure or technology that are likely to have significant effects on employees, the employer must notify the employees who may be affected by the proposed changes and their representatives, if any.

(b) Significant effects include termination of employment; major changes in the composition, operation or size of the employer’s workforce or in the skills required; the elimination or diminution of job opportunities, promotion opportunities or job tenure; the alteration of hours of work; the need for retraining or transfer of employees to other work or locations; and the restructuring of jobs. Provided that where this award makes provision for alteration of any of these matters an alteration is deemed not to have significant effect.

9.2 Employer to discuss change

(a) The employer must discuss with the employees affected and their representatives, if any, the introduction of the changes referred to in clause 9.1, the effects the changes are likely to have on employees and measures to avert or mitigate the adverse effects of such changes on employees and must give prompt consideration to matters raised by the employees and/or their representatives in relation to the changes.

(b) The discussions must commence as early as practicable after a definite decision has been made by the employer to make the changes referred to in clause 0.

(c) For the purposes of such discussion, the employer must provide in writing to the employees concerned and their representatives, if any, all relevant information about the changes including the nature of the changes proposed, the expected effects of the changes on employees and any other matters likely to affect employees provided that no employer is required to disclose confidential information the disclosure of which would be contrary to the employer’s interests.”

[15] It is clear that a definite decision to review its cost structure and then a decision to make the Applicant’s role redundant would have significant effects on the Applicant (clause 9.1(a), (b)). The Applicant agreed that he was so informed on 12 November 2010.

[16] I find that the Respondent notified the Applicant as to major workplace change as required by clause 9.1.

[17] However, the issue of consultations as provided in clause 9.2 was in contention.

[18] It was the evidence of Mr Mende that during the meeting of 12 November 2010 he told the Applicant that he was terminating his employment for business reasons. The Applicant had asked him three times as to the cause of the termination and three times he was told that it was not a “for cause” termination and the Applicant was thanked for his work (PN37).

[19] Mr Mende was cross-examined by the Applicant who represented himself. In response to a question from the Applicant, Mr Mende agreed that in stating that the termination was not a “for cause” termination meant that the Respondent was comfortable with the Applicant’s performance. It was merely a matter of the cost of the Applicant’s employment (PN173).

[20] It was also the evidence that during the 12 November 2010 meeting the Applicant was given a written termination letter (Exhibit AB1/TM4). That letter commenced by stating that:

“This letter is to formally record the termination of employment by Australian Biotechnologies Pty Ltd effective 12 November 2010 . . .”

[21] It then set out details of entitlements and obligations on termination.

[22] It was the submission of Ms Paterson, solicitor for the Respondent, that (leaving aside the Respondent’s argument that the Award did not apply to the Applicant) the Respondent did in fact consult with the Applicant on 12 November 2010. The Respondent was a very small business (it had nine employees) and the level of consultation was adequate.

[23] In his submissions, the Applicant said that on 12 November 2010, he was requested to come to the boardroom by Mr Mende. Another director was present. When told of his termination his first reaction was to say “well, this is certainly a different meeting than he was expecting”. He asked three times why he was being terminated. He was gobsmacked, particularly because he was not given an opportunity to offer alternatives. (PN471)

[24] He was told he was being terminated for business reasons. (PN473) The meeting lasted less than five minutes. (PN475) In his view, there was no consultation. (PN477)

[25] It is clear that on 12 November 2010, the Respondent met and informed the Applicant of his termination. The Applicant said he was “gobsmacked” and he asked the reason for the termination three times. The Respondent had responded to that three times. It was not the Applicant’s case that he wanted more information and discussion and that the Respondent refused to talk. In the circumstances of this small workplace and notwithstanding the brevity of the meeting, I find that the Respondent did discuss with the Applicant the introduction of change that it had decided upon and its effect on the Applicant, being his termination.

[26] It is clear also that there was no discussion regarding measures to avert or mitigate the adverse effect of the changes. Based on the evidence this was because there were, in the Respondent’s view, no such alternative measures available. While the Applicant says he was not given an opportunity to offer an alternative, he did not say that he raised any alternatives or that he asked to discuss alternatives and that this was denied. Indeed, in the proceedings before me the Applicant did not raise any such measures that might have been taken. In all the circumstances, I find that given that there were no measures available to avert or mitigate the adverse effects of the change and noting the size of the workplace, it cannot be said that there was a material failure by the Respondent to comply with that requirement in the Award.

[27] Clause 9.2(a) of the Award also requires the Respondent to give prompt consideration to matters raised by the Applicant in relation to the changes. As observed earlier, the Applicant asked for the reasons three times and was given an answer three times. It was not the Applicant’s case that he asked for consideration of anything else and that he was rebuffed by the Respondent. I find that the Respondent gave prompt consideration to the few matters raised by the Applicant.

[28] I find that on the material before me that the discussions occurred as early as practical after the decision had been made by the Respondent. (Clause 9(b))

[29] As to clause 9(c) of the Award, it is clear that at the meeting of 12 November 2010 the Respondent gave the Applicant a written letter of termination. Whether the letter contained relevant information about the changes must be viewed in the context of the meeting where such information was provided (albeit with some brevity). Consequently, in those circumstances, I find that all relevant information was provided in writing to the Applicant.

[30] Given my findings above, I find that the Respondent has complied with obligations under the Award to consult about the redundancy.

[31] As a result of my findings in [9] and [11] and [30], I find that the Applicant’s dismissal was a case of genuine redundancy.

[32] Consequently this was not a case of unfair dismissal because one of the necessary preconditions (section 385(d)) was not met.

[33] The application is dismissed.

COMMISSIONER

Appearances:

W.J. Shaw self applicant.

A. Paterson Australian Business Lawyers, for the respondent.

Hearing details:

2011

Sydney:

February 4.

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