Wayne Desveaux v Sparesbox Pty Ltd T/A Sparesbox

[2019] FWC 2466

[2019] FWC 2466

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Wayne Desveaux
v
Sparesbox Pty Ltd T/A Sparesbox
(U2018/11820)

COMMISSIONER MCKINNON MELBOURNE, 10 APRIL 2019

Application for unfair dismissal remedy – whether case of genuine redundancy.

Introduction

[1] Sparesbox Pty Ltd (Sparesbox) is a ‘startup’ selling automotive parts and accessories online as well as offering car servicing and repairs. It employed Wayne Desveaux in 2016 on a casual basis. From 1 July 2017, Desveaux was employed on a permanent basis as its Customer Service/Experience Manager. His employment was terminated on the grounds of redundancy on 31 October 2018.

[2] On 16 November 2018, Desveaux applied to the Commission for an order granting a remedy for unfair dismissal under section 394 of the Fair Work Act 2009 (the Act).Desveaux says his dismissal was not a genuine redundancy and was unfair.

[3] On 21 November 2018, Sparesbox filed its response to the application, denying that the dismissal was unfair.

[4] The matter was conciliated on 16 January 2019 and was not settled. After seeking the views of the parties, I decided it was most effective and efficient to hold a determinative conference in the matter on 13 February 2019 in Melbourne.

Preliminary matters

[5] The application was filed within the standard 21 day time limit required by the Act.

[6] Under section 382, a person is protected from unfair dismissal if, at the relevant time:

•  They have completed at least the minimum employment period; and

•  They are either covered by a modern award, employed under an enterprise agreement that applies to them or earn an annual income of less than the “high income threshold”.

[7] There is no dispute that Desveaux was dismissed from his employment and that his period of employment was longer than the minimum employment period. The parties agree that Desveaux’s annual income was $77,000 including superannuation. 1 That amount is less than the high income threshold. Desveaux is protected from unfair dismissal.

[8] Under section 385, a person has been unfairly dismissed if the Commission is satisfied that they have been dismissed in circumstances that were harsh, unjust or unreasonable, and the dismissal was neither consistent with the Small Business Fair Dismissal Code nor a case of genuine redundancy. 2

[9] At the time of dismissal, Sparesbox employed 80 employees. 3 It was not a small business employer at the time of the dismissal4 and the Small Business Fair Dismissal Code is not relevant to the application.5 The question of redundancy is, however, a relevant consideration.

Was the dismissal a case of genuine redundancy?

[10] The expression ‘genuine redundancy’ is defined in section 389 of the Act, 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.”

Was Desveaux’s job no longer required because of changes in operational requirements?

[11] As Customer Service Manager, Desveaux’s role reported to the Head of Supply Chain & Operations. His role was not precisely defined, but in essence it required him to lead, mentor and train the Sparesbox customer service team. 6 The title of his role was referred to interchangeably as Customer Experience Manager. Desveaux was promoted into the role after working for Sparesbox as a Customer Service Agent and then Team Leader, Customer Service Team. He was the first person to hold the role of Customer Service Manager, and it is evident that the expectations of the role evolved as the business grew.

[12] In early 2018, Sparesbox decided to expand their operations to Melbourne. 7 In or around mid-2018, Desveaux initiated discussions with the Directors of the business about engaging someone with relevant expertise to help develop a process for customers to collect purchases in person which was “way over [his] head”.8  His proposal was for a consultant or adviser. Instead, a new role was advertised and a new Head of Customer Experience, Luke Byrnes, was employed approximately one month before Desveaux’s dismissal.

[13] Desveaux came up with the title for the new role while developing an organisation chart at the request of Florian Poppe, Chief Operating Officer. The job advertisement had also been created by Desveaux, to recruit agents earlier in the year. 9 Nevertheless, Desveaux was taken by surprise when he saw the advertisement because he felt it was a direct replacement for his role.10

[14] I accept that the Head of Customer Experience role was closely aligned to the role of Customer Service / Experience Manager. It involved:

1. Reporting to the Chief Operating Officer and working closely with the Service Manager (that is, Desveaux);

2. Developing critical processes and procedures to high standards;

3. Developing engaging, integrated and innovative consumer shopping experiences;

4. Setting up customer management process infrastructure;

5. Collation and analysis of data, translating qualitative and quantitative data to prioritise work and introduce process improvements; and

6. Supervision and assistance with eCommerce customer interactions and the Customer Service teams in Sydney and Melbourne. 11

[15] The role was more clearly defined than Desveaux’s role. A key difference was the emphasis on data analytics to develop improved work functions.

[16] On 19 October 2018, the Chief Executive Officer of Sparesbox, Leon Saliba, held an ‘all-team’ meeting and sent an email to all employees announcing a change in Sparesbox’s marketing and customer acquisition strategy. 12 The email advised that three employees in the marketing team would be leaving their business and that there would be other organisational changes. The customer experience team was not mentioned. According to Saliba, he also flagged the prospect of additional redundancies verbally in the meeting. There is nothing to contradict that evidence and I accept it.

[17] On Thursday 25 October 2018, Sparesbox held a Board Meeting. Additional capital of $4.7 million was sought. The Board resolved to initiate a capital raise of $3.7 million. According to Saliba, that left the business with $1 million less operating capital than anticipated. 13 I accept his evidence to that effect.

[18] Desveaux had planned to work in the Sydney office from 31 October 2018 to 5 November 2018 for personal reasons and had advised as much to Byrnes, Poppe and Hannah McConchie, People Operations & Culture Manager on 15 October 2018. 14 At the time, Desveaux was having difficulty working with Byrnes and Poppe and was upset at how his partner and fellow employee, Sarah Sabater, was being treated. He had proposed a move out of the customer experience team into the content / marketing team, partly in a bid to deal with his difficulties with Byrnes and Poppe.15

[19] On 28 and 29 October 2018, Desveaux spoke twice over the telephone with Andrew Palmer, Director of Sparesbox, in response to his own request for a quick chat and some advice. The first conversation was wide ranging and dealt with Desveaux’s recent health issues affecting his work, difficulties working with Poppe, and options for him to relocate within the business. Palmer indicated that a move to the content/marketing team was unlikely due to recent cutbacks. He asked Desveaux if he wanted to continue with the company and Desveaux confirmed that he did. Palmer mentioned the possibility of a pay out to assist financially. In the second conversation, Palmer asked Desveaux if he had thought about their previous conversation. Desveaux indicated that it would help him if he could have two weeks paid leave from work to clear his head. Palmer advised that he would speak to Saliba. 16

[20] On Wednesday 31 October 2018, Desveaux was working from the Sydney office. At approximately 12.30pm, McConchie sent him a “Catch up” meeting invitation with Saliba and Palmer. Desveaux asked McConchie about the reason for the meeting. McConchie advised that she did not know. That was untrue. Saliba gave evidence that he asked her to set up the meeting “for the purpose of notifying” Desveaux of his redundancy. He explained her reason for withholding that information may have been Sparesbox’s concern about an alleged threat to drain its accounts made by Desveaux to Byrnes at some point between 19 October 2018 and before 31 October 2018. According to Saliba, it took the threat seriously because Desveaux was the person with access to its PayPal account. 17

[21] The meeting commenced at approximately 4.00pm. Desveaux was advised that his role was being made redundant. The minutes of that meeting largely align with the evidence of Desveaux, except that he does not recall being offered a Customer Experience agent role. The minutes are in evidence and I accept them as an accurate record of the meeting. 18 I do not accept Desveaux’s denial that the offer was made.

[22] The minutes record Saliba advising of the Board’s decision to reduce his budget by 20%, that the redundancy was not personal but that the Customer Experience team now had too many levels. They record Desveaux’s concern that he felt ‘frozen out’ by Poppe since Byrnes had arrived and that his issues with Poppe had contributed to the redundancy decision. Saliba denied that was the case. Desveaux acknowledged the need for the higher position (created for Byrnes) because his own skillset was not there to “grow Sparesbox into a household name”. They record Saliba offering continuing employment to Desveaux in the customer experience team at a lower rate of pay, and his outright rejection of that offer. The last page of the minutes separately records a meeting the following day with another employee, ‘Hieu’, whose position was also made redundant.

[23] Desveaux was given a letter of termination and asked to pack his things. He was then escorted out of the office. 19 He was paid four weeks’ notice and 6 week’s redundancy following the dismissal.

[24] Desveaux submits that the real reason for his dismissal was his medical condition, resulting in seizures at work at the start of 2018 and June 2018 and a related seizure at home on 2 October 2018. The evidence does not support a finding to that effect. 20

[25] There is no dispute that Sparesbox was in a loss making financial position at the time of the dismissal – as a start-up, that had been the case since inception. In my view, the business had developed to a point where the skills required of Desveaux’s role had eclipsed his capacity. The employment of Byrnes was intended to remedy that concern. I find that at the time Byrnes was employed, it was intended that he would work together with Desveaux to build the customer facing side of the business. So much is clear from the advertisement for his role and from Saliba’s evidence during the hearing.

[26] I do not accept that the announcement on 19 October 2018 was related to redundancies in the customer experience team, or to the pending redundancy of Desveaux’s position. I am, however, satisfied that the imperative on Sparesbox to reduce labour costs by approximately $450,000 was fortified after the Board decision on 25 October 2018. 21

[27] On that day, unbeknown to Desveaux, a decision was made to reduce Sparesbox’s operating capital by $1 million. 22 A few days later, he approached Palmer for advice about a range of difficulties he was having with work. He was unhappy. There was a discussion about the situation with his partner, whose hours of work had recently been reduced. The subject of Desveaux’s health and its effect on his work performance was discussed, as were his happiness and stress levels, and his commitment to the company. Desveaux had previously had cause to apologise for his ‘general attitude’ at work and the negative effect it was having on others, relating to his move to Melbourne, stress due to high volumes of work and the side effects of medication he was taking.23 Palmer referred to a ‘pay out’ and ‘help financially’. In the second conversation, Desveaux asked if Palmer was suggesting redundancy and asked for a couple of weeks paid leave to ‘clear his head’. Palmer indicated that Desveaux’s happiness was his priority.

[28] Palmer did not give evidence in the proceeding, and I accept Desveaux’s account of his conversations with Palmer on 28 and 29 October 2018 as an accurate record of those conversations from his perspective. In my view, it is likely that as co-founders of the business, Palmer and Saliba were in close contact about the financial position of the business and its future plans. That discussion led, after 25 October 2018, to a decision to extend the redundancy round to Desveaux. In my view, the decision was motivated by the need to reduce labour costs in light of the recent Board decision. It was informed by the discussions between Desveaux and Palmer outlined above, and Palmer and Saliba’s assessment of Desveaux’s capacity to meet the challenges ahead, both in terms of his commitment to the business and his level of skill to deliver on a more customer facing approach. It was informed by the availability of Byrnes, who they considered had the necessary skills to lead the next phase of development in the customer experience team. It was not a decision made because of Desveaux’s medical condition. Had that been the real reason for his dismissal, the decision to make Hieu redundant that same week would not make any sense.

[29] Taking all of these factors into consideration, I am satisfied that Sparesbox no longer required Desveaux’s job to be performed by anyone because of changes in its operational requirements.

Did Sparesbox comply with any obligation in the Award to consult about the redundancy?

[30] Sparesbox submits that Desveaux was covered by the Vehicle Manufacturing, Repair, Services and Retail Award 2010 24 (Award), and Desveaux’s application is premised on that basis, because he relies on the alleged failure of Sparesbox to meet relevant consultation obligations in that Award. However, I am not satisfied that the Award covered or applied to Desveaux in his capacity as Customer Service / Experience Manager.

[31] A modern award covers an employee if the award is expressed to cover the employee in relation to their particular employment. 25 The “principal purpose test” is relevant to whether an employee is covered by a modern award or enterprise agreement.26 The test was summarised in Carpenter v Corona Manufacturing27as follows:

“In our view, in determining whether or not a particular award applies to identified employment, more is required than a mere quantitative assessment of the time spent in carrying out various duties. An examination must be made of the nature of the work and the circumstances in which the employee is employed to do the work with a view to ascertaining the principal purpose for which the employee is employed. In this case, such an examination demonstrates that the principal purpose for which the appellant was employed was that of a manager. As such, he was not "employed in the process, trade, business or occupation of ... soliciting orders, obtaining sales leads or appointments or otherwise promoting sales for articles, wares, merchandise or materials" and was not, therefore, covered by the Award.”

[32] Clause 4.1 of the Award sets out the employers and employees who are covered by the Award. Sparesbox is plainly covered by the Award as an employer of employees who are engaged in vehicle industry repair, services and retail and its undertaking is principally connected with the selling and distributing of motor vehicle parts, components or accessories as well as repairing and servicing motor vehicles. Sparesbox is also in the vehicle manufacturing industry to the extent that it undertakes the repair of motor cars.

[33] The fact that Sparesbox is covered by the Award does not mean that Desveaux was also covered by the Award in relation to his particular employment.

[34] There is no evidence that Desveaux was engaged in vehicle manufacturing. Accordingly, Sections 2, 3 and 4 of the Award are not relevant.

[35] An employee is engaged in vehicle industry repair, services and retail if they are covered by one of the classifications in clause 33 of the Award and Section 1 of the Award (which deals with vehicle industry repair, services and retail employees) applies to them.

[36] Clause 33 of the Award requires that all adult employees (other than apprentices) be classified according to the structure in clause 33.4, according to the skill levels and duties required to be exercised by the employee in order to carry out the principal function of the employment as determined by the employer.

[37] Clause 33.4 contains the following classifications:

Classifications	Wage group level
Vehicle RS&R industry employee—Level 1	R1
Vehicle RS&R industry employee—Level 2	R2
Vehicle RS&R industry employee—Level 3	R3
Vehicle RS&R industry employee—Level 4	R4
Vehicle RS&R industry employee—Level 5	R5
Vehicle industry RS&R—tradesperson or equivalent Level I	R6
Vehicle industry RS&R—tradesperson or equivalent Level II	R7

[38] Skill level definitions under which employees are classified are set out in Schedule B to the Award. Level 1 covers employees who perform routine duties essentially of a manual nature. The following classifications are contained within Level 1:

•  Car cleaner/washer

•  Workshop cleaner

•  Car polisher—by hand

•  Detailer—other

•  Driveway attendant

•  Office cleaner

•  Parking attendant

•  Process worker

•  Tradesperson’s assistant (see also Level 2)

•  Employee not elsewhere prescribed as contained in clauses 10 and 11 in previous award (relating to trainees, apprentices and unspecified classes of work that are the subject of a dispute over rates to be fixed). 28

[39] There is no evidence that Desveaux’s duties were of a manual nature. I am not satisfied that they were or that Desveaux would fall within the Level 1 classification.

[40] Level 2 covers employees who have completed up to three months structured training and who work “under direct supervision either individually or in a team environment”. It contains the following classifications:

•  Battery repairer

•  Brake servicer—first six months

•  Driver of courtesy car or vehicle in relation to sales or sales promotion or in the course of registration, collection from or delivery to customer—vehicles up to and including maker’s capacity of three tonnes

•  Exhaust repairers—first six months

•  Grinder and/or buffer metal—using a portable machine

•  Lubritorium attendant

•  Operator on warming mill

•  Operator detreading, buffing, gouging, etc.

•  Roadhouse attendant, when required to cook take away meals only

•  Spring service worker

•  Tradesperson’s assistant (see also Level I)

•  Tyre fitter

[41] Desveaux was not working under direct supervision and nor was he employed in any of the classifications described above. I am not satisfied that Desveaux was a Level 2 employee under the Award.

[42] Level 3 covers employees who have “completed eight modules of a nationally accredited repair, services and retail (RS&R) Certificate or equivalent training” and who use skills above that of a Level 2 employee. It contains a range of classifications from Assembler to Wrecker. There is no evidence that Desveaux has completed RS&R certificate modules or equivalent training and he was not employed in any of the specified classifications. I am not satisfied Desveaux was a Level 3 employee under the Award.

[43] Level 4 covers employees who perform work above and beyond the skills of a Level 3 employee and who would normally have completed 16 modules of a nationally accredited RS&R certificate or equivalent. In the case of retail employees, it covers employees who are qualified to perform work within the duties and functions of an automotive parts salesperson other than an experienced salesperson. The classifications contained in Level 4 range from Bodymakers to Windscreen fitters and repairers. The most relevant classification for present purposes is automotive parts salespersons. There is no classification in which employees are required to perform managerial functions.

[44] At the time of his dismissal, I am not satisfied that Desveaux was employed as a salesperson. There is no evidence that his was a direct sales or customer facing role. The limited evidence of his interaction with customers was an email expressing concern about “random people coming to the office” on 19 June 2018 and proposing a process to limit office staff exposure to irate customers by redesigning labels. 29 He also contacted customers in the context of seeking to develop a good customer experience.30 Desveaux’s submissions in this matter constantly took exception to what he saw as attempts by Sparesbox to downplay the complexity and seniority of his role.

[45] Consistent with Desveaux’s submissions, I find that his role was a managerial role, the principal purpose of which was to develop the customer service and experience side of the business. 31 He consistently worked alongside the Senior Leadership Team.32 He moved interstate to establish a customer experience team in Melbourne. He had input into employment, hiring and firing matters, and was tasked with managing labour costs and training in his team.33 I am not satisfied that the principal purpose of Desveaux’s employment was to work within the duties and functions of a salesperson or that he had any qualifications to perform that work. I find that he was not a Level 4 employee under the Award.

[46] Level 5 covers employees who perform work above and beyond the skills of a Level 4 employee and who have 20 modules of nationally accredited RS&R certificate or equivalent training. It covers retail employees who are qualified to perform the work of an experienced automotive spare parts salesperson and who may be required to co-ordinate work in a team environment or to work individually under limited supervision. It includes the classification of Automotive parts salesperson—experienced. That classification is defined in clause 3 of the Award as “an employee who has had three or more years’ adult experience in the automotive parts distribution industry and who is required by their employer to perform the duties related to automotive parts sales and distribution and who in the performance of such duties is required to utilise knowledge of the workings of vehicles and the component parts thereof.”

[47] An email sent by Desveaux to the Directors and the customer experience team on 19 July 2018 regarding his plans for a dedicated ‘Fitment Team’ of experts to respond to customer technical queries states that, until that time, the sole person with responsibility for technical queries was his colleague ‘Hieu’. Hieu was expected to impart parts knowledge to the rest of the team, because there were no other experts employed.

[48] Desveaux was not employed as a salesperson at the time of his dismissal. I am not satisfied that he meets the description of automotive parts salesperson – experienced, both because he was not a salesperson and because there is no evidence that he had the relevant period of experience to qualify as a Level 5 employee. I find that he was not a Level 5 employee under the Award.

[49] Level I employees under the Award hold a Trade Certificate, Tradesperson’s Rights Certificate or equivalent national accredited training qualifications. Level II employees have the qualifications of a Level I employee but also hold a Certificate IV automotive qualification. They perform technical duties to the level of their training. There is no evidence that Desveaux held qualifications of the requisite kind. I find that he was not a Level I or Level II employee under the Award or that he was required to perform the type of work contemplated by those classifications.

[50] For the reasons set out above, none of the relevant Award classifications encompass the principal purpose of Desveaux’s role, which was to develop and manage the customer service and experience side of the business. I am not satisfied that Desveaux was covered by the Award as the Customer Service / Experience Manager for Sparesbox.

[51] There is no evidence that Sparesbox was covered by an enterprise agreement or that it applied to Desveaux’s employment.

[52] The result is that there was no relevant obligation on Sparesbox to consult with Desveaux about the redundancy under either the Award or an enterprise agreement.

Would it have been reasonable in all the circumstances for Desveaux to be redeployed within Sparesbox or an associated entity of Sparesbox?

[53] At the time of dismissal, I accept Desveaux’s evidence that there were vacancies in the customer experience team in Sparesbox’s call centre and in the warehouse. The minutes of the meeting with Desveaux on 31 October 2018 confirm that employment in the customer experience team was offered to Desveaux and rejected. There is no evidence that a warehouse role was offered to Desveaux, but given his response to the offer of the customer experience role, I do not consider it likely that he would have accepted any similarly lesser offer of employment in the warehouse.

[54] Desveaux had sought a transfer from the customer experience team to the content/marketing team to assist with the difficulties he was facing at work. As noted above, his request was not approved by Sparesbox because of the restructure going on in that area of the business, related to its financial position.

[55] There is no contention or evidence that Sparesbox has any associated entities.

[56] I am not satisfied on the evidence that it would have been reasonable for Desveaux to be redeployed within Sparesbox or even that there was an available and appropriate role into which he could have been redeployed.

Conclusion

[57] For the reasons set out above:

1. Sparesbox no longer required Desveaux’s job to be performed by anyone because of changes in its operational requirements;

2. There was no relevant obligation on Sparesbox to consult with Desveaux about the redundancy under either the Award or an enterprise agreement; and

3. It would not have been reasonable for Desveaux to be redeployed within Sparesbox or an associated entity.

[58] It follows that the dismissal was a case of genuine redundancy.

[59] The application is dismissed.

COMMISSIONER

Appearances:

W Desveaux, Applicant

L Saliba and H McConchie for the respondent

Hearing details:

2019.

Melbourne:

February 13.

Printed by authority of the Commonwealth Government Printer

<PR706822>

 1   Exhibit 1, Attachment 3; Form F3

 2   Fair Work Act 2009 (Cth), s.385

 3   Form F3

 4   Fair Work Act 2009 (Cth), s.23

 5   Fair Work Act 2009 (Cth), s.388

 6   Exhibit 1; Job advertisement for Customer Service Manager – eCommerce (26 September 2016); Sparesbox Letter of Offer, 6 June 2017

 7   Exhibit 1

 8   Exhibit 3: slack message between Desveaux and ‘Grace’; Exhibit 5: email from Desveaux to Saliba and others, 1 August 2018 at 1.17pm

 9   Exhibit 1

 10   Exhibit 5: emails from Desveaux to Saliba and others on 18 July 2018 at 2.56pm and 1 August 2018 at 1.17pm

 11   Exhibit 1, Attachment 5; Job advertisement for Customer Service Manager – eCommerce (16 July 2018)

 12   Exhibit 5: Email from Saliba to “Sparesbox All” re Changes to Sparesbox Marketing & Tech Teams, 19 October 2018 at 10.36am

 13   Exhibit 6; Audio file of hearing, 13 February 2019

 14   Email from Desveaux to Byrnes and Poppe, 15 October 2018

 15   Exhibit 2; Exhibit 5: slack messages

 16   Exhibit 1

 17  Audio file of hearing, 13 February 2019

 18   Exhibit 5

 19   Exhibit 1

 20   See, for example, Exhibit 1: email from Saliba to Desveaux, 7 June 2018 at 10.54am; Audio file of hearing, 13 February 2019; email from Palmer to Desveaux, 5 October 2018 at 3.07pm

 21   Audio file of hearing, 13 February 2019

 22   Exhibit 3

 23   Exhibit 1: email from Desveaux to colleagues, 7 June 2018, 10.28am

 24   MA000089

 25   Fair Work Act 2009 (Cth), s.48.

 26   See, for example, Graham v Globus Medical Australia Pty Ltd [2016] FWCFB 5495; McMenemy v Thomas Duryea Consulting Pty Ltd [2012] FWAFB 7184; Layton v North Goonyella Coal Mines Pty Ltd [2007] AIRCFB 713; The Australasian Meat Industry Employees Union v Teys Australia Beenleigh Pty Ltd[2014] FWCFB 5643

 27 122 IR 387 (AIRC, 17 December 2002) at [9].

 28   Vehicle Industry - Repair, Services and Retail Award 2002 AP824308CAV, clauses 10 and 11

 29   Exhibit 3: email from Desveaux to Palmer, Saliba and Poppe, 19 June 2018 at 12.37pm

 30   Audio file of hearing, 13 February 2019

 31   Exhibit 3, audio file of hearing, 13 February 2019

 32   Exhibit 3

 33   Exhibit 3: see, for example, email from Desveaux to Poppe, 15 June 2018 at 11.02am; email to Saliba and Poppe, 7 August 2018 at 4.15pm