Williams v The Building Connection Group Pty Ltd

[2017] FWC 30

[2017] FWC 30

FAIR WORK COMMISSION

DECISION

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

Jodi Williams
v
The Building Connection Group Pty Ltd
(U2016/9336)

COMMISSIONER WILSON MELBOURNE, 3 JANUARY 2017

Application for unfair dismissal remedy - whether extension of time should be granted for out of time application; whether dismissal genuine redundancy.

[1] Jodi Williams was employed by The Building Connection Group Pty Ltd (The Building Connection) from 21 September 2015 as its Darwin Branch Manager until her dismissal on 4 April 2016. The Building Connection characterises Ms Williams’ dismissal as being for reason of genuine redundancy, which is disputed by Ms Williams, who claims that the purported redundancy is a sham and that she was dismissed for other reasons.

[2] Section 396 of the Fair Work Act 2009 (the Act) requires the determination of four initial matters before consideration of the merits of the application, with the section providing;

396 Initial matters to be considered before merits

The FWC must decide the following matters relating to an application for an order under Division 4 before considering the merits of the application:

(a) whether the application was made within the period required in subsection 394(2);

(b) whether the person was protected from unfair dismissal;

(c) whether the dismissal was consistent with the Small Business Fair Dismissal Code;

(d) whether the dismissal was a case of genuine redundancy.

[3] At the time that Ms Williams was dismissed, and according to its Employer Response Form, The Building Connection employed 17 employees, and so a question of her dismissal being consistent with the Small Business Fair Dismissal Code does not arise. For the same reason, the minimum employment period in relation to Ms Williams was six months. Both for that reason, as well as that her earnings at the time of dismissal were less than the high income threshold, it is the case that at the time of her dismissal Ms Williams was a person protected from unfair dismissal.

[4] With her application having been filed in the Fair Work Commission on 11 July 2016, Ms Williams’ lodgement of her application for unfair dismissal remedy is appreciably outside of the 21 day time limit for the making of such applications, and so it is necessary for consideration to be given to whether an extension of time should be granted by the Commission.

[5] This decision deals with both the question of whether an extension of time should be granted to Ms Williams for the making of her application and whether in all the circumstances her dismissal was a genuine redundancy.

[6] For the reasons set out below, I find that there are exceptional circumstances for Ms Williams to be granted an extension of time for the making of her application, and that her dismissal was a genuine redundancy within the meaning of the Act. It follows therefore that Ms Williams has not been unfairly dismissed within the meaning of s.385 of the Act and that her application must be dismissed.

THE EVIDENCE

[7] Ms Williams was employed by The Building Connection as its Darwin Branch Manager from September 2015. In that position her salary was $95,000 per year and she had private use of a company provided telephone and motor vehicle. At the time she was employed, The Building Connection operated three branches: one in Perth, one on the Gold Coast, and one in Darwin. An accounting employee of the business works out of Mount Gambier, in South Australia. The Building Connection is owned and managed by Ben McEntee and the business sells building consumables to the construction industry.

[8] As part of her duties as the Darwin Branch Manager, Ms Williams managed a small team of three other employees. At various times during her employment there had been a delivery driver, warehouse manager and sales representatives, although there had been some turnover in those positions during the period of her employment and the services of the casual delivery driver had been terminated shortly before her own dismissal. Ms Williams had moved to employment with The Building Connection from another company in Darwin operating in the same field.

[9] Both Ms Williams and Mr McEntee gave evidence in the matter. Evidence was also provided by Mr Donald Johnson, Ms Williams’ support person.

[10] The evidence shows that towards the end of March 2016 Ms Williams had been on leave and that she was due to return to work on Monday, 4 April 2016. On Friday, 1 April 2016 Ms Williams had received a text message from the business’ casual delivery driver letting her know that she had been told that her services would no longer be required. When she attended for work as usual on Monday, 4 April 2016, after being there for a short time Mr McEntee came into her office, at about 8:30 AM, and told her that he was making her position redundant “because last months sales were really low”. 1 Ms Williams was told that the redundancy was effective immediately, which she accepted, and after collecting her personal belonging she left the office within an hour of being told of the termination of her employment.

[11] Ms Williams’ evidence is that at the time she had no reason to question the veracity of her dismissal or the reason given to her, although about a week later she had heard that the business had employed a new delivery driver.

[12] Having left The Building Connection’s employment, Ms Williams struggled to obtain further employment at her level, particularly because of a reduced construction environment in Darwin. In addition to making several applications for employment she also worked as a casual kitchen hand for a period of about four weeks, earning during that time about $300 per week for each of the weeks that she worked. While initially unsuccessful in locating alternative employment in her field and at the level from which she was dismissed, Ms Williams was fortunate enough to obtain employment at a company working in the same field as The Building Connection and earning slightly more than the salary she had once received. Whereas The Building Connection paid her $95,000 per year with access to private use of the company motor vehicle and mobile phone, a new employer remunerated her at rate of $97,000 per year, also with private use of a motor vehicle and mobile phone. She commenced employment as a Branch Manager of her new employer from around 14 or 15 June 2016. The new position is described as ongoing employment.

[13] As part of her efforts to obtain further employment, Ms Williams subscribed to email notifications from the SEEK website. In July 2016 she received one such notification advertising the position of Branch Manager at The Building Connection in Darwin. The particular advertisement indicates that the position was first listed on 7 July 2016 and includes the following terms;

“The Opportunity

We are currently seeking an accomplished leader with demonstrated ability to successfully motivate and challenge a team. We need a dynamic team player with the strength to build and maintain successful business relationships across our Yarrawonga site. As a Branch Manager, this is a pivotal support and leadership role committed to maximum output and consistent high productivity.

Reporting to the Operations Manager, duties include the efficient and cost effective administration of the branch with particular emphasis on the service and stock control, branch budget, employee relations and staffing needs.

Got what it takes?

As the successful candidate you will possess the following skills:

· Proven experience in a similar role
· Champion of morale
· Proven ability to manage people through team building to achieve set targets
· Leadership qualifications with the ability to build a cohesive team with a common goal
· Excellent interpersonal skills with employees, peers and customers
· Strong written and verbal communication skills
· Supportive and "can do" attitude
· A demonstrated commitment to safety and the environment

You will possess a professional and proactive approach to your work with experience in supporting high performing teams. As a strong communicator and influencer you will have the ability to work effectively with all levels of the business and will be adept in negotiating and problem solving.

The Building Connection Group culture is about energy, enthusiasm, contribution and being able to make a difference with what we do at work and beyond. You will be able to maximise value whilst providing the leadership to continuing the investment we have in our most important asset, our people.” 2

[14] At or around about the same time Ms Williams received a further notification from SEEK, this time advertising the position of Sales Representative at The Building Connection, with that advertisement indicating a listing date of 8 July 2016. The advertisement for the Sales Representative includes the following;

“The Opportunity

We are currently seeking an accomplished Sales Representative with demonstrated ability to successfully grow our customer base. We need a dynamic team player with the strength to build and maintain successful business relationships across our Yarrawonga site. As a Sales Representative, this is a pivotal role committed to maximum output and consistent high productivity.

The successful applicant will have 2-3 years previous sales experience, be results-driven, and needs to be a highly motivated, hard working person, with a go getting attitude and be prepared to knock on numerous doors and cold call to building sites and factories throughout the area. They will be able cope working under pressure, have intermediate computer skills and enjoy working in a team environment.” 3

[15] Ms Williams’ evidence is that she received these notifications shortly after the listing dates but that it took a few days for them to come to her attention. Once she had seen the advertisements she concluded that the position, at least as far as the advertisement for the position of Branch Manager was concerned, was similar, if not identical, to the position from which she had been dismissed. As a result of receiving the notification and drawing the conclusion she did, she commenced an unfair dismissal action against The Building Connection on Monday, 11 July 2016. It is to be noted that the listing date of the Branch Manager position, 7 July 2016, was a Thursday, and the listing date for the Sales Representative position, 8 July 2016, was a Friday.

CONSIDERATION – EXTENSION OF TIME

[16] Section 396 of the Act requires the determination of four initial matters to be considered before considering the merits of the application. One such matter is the question of whether the unfair dismissal application was made within the 21 day time limit for the making of such applications prescribed within s.394(2) of the Act. Plainly this application is made outside of that time period and, in order for Ms Williams’ application to survive, it is necessary to consider whether exceptional circumstances exist warranting a further period to be allowed for the making of her application.

[17] The Building Connection does not dispute that there are exceptional circumstances for the making of Ms Williams’ unfair dismissal application that would lead the Commission to make a finding that an extension of time should be allowed to Ms Williams for the making of her application. While a concession of that nature is appropriate to be made on the part of the Respondent, it is nonetheless necessary for me to consider the criteria set out within s.394(3) of the Act before acceding to the request that is made.

[18] In considering an application for an extension of time for the making of an unfair dismissal application, the Actrequires I must be satisfied that there are exceptional circumstances for the making of the application taking into account the criteria which are specified within s.394(3) of the Act. The Full Bench has held that the test for granting an extension of time involves both a broad discretion and a high hurdle of exceptional circumstances, and the longer the delay in making the application the more difficult it will generally be to get over that hurdle. 4 A decision as to whether to extend the time period under s.394(3) involves the exercise of a discretion.5

[19] In considering whether an extension of time should be granted to Ms Williams, I am required to consider all of the criteria in s.394, which I now do.

[20] The first criterion to be taken account of is the reason for the delay (s.394(3)(a)). In this regard it is relevant to explain that the 21 days for lodgement does not include the date that the dismissal took effect, and the first day of the period commences on the day following the dismissal. If the final day of the 21 day period falls on a weekend or on a national public holiday (where the Commission is closed) the timeframe will be extended until the next business day. However, public holidays or weekends that fall during the 21 days will not extend the period of lodgement. 6

[21] In this matter the delay to be taken account of by the Commission is the period between the expiry date of the statutory filing period, which was Tuesday, 26 April 2016 (noting that had the preceding day not been the ANZAC Day Public Holiday the expiry date would have been 25 April 2016), and 11 July 2016, when the application was made. Plainly the reason in this case was that Ms Williams had no reason to query her dismissal until a few working days before making her application. The evidence discloses that once she had become aware that her purported redundancy may not have been the real reason for her dismissal, she made a timely application to the Commission. In the overall circumstances of the matter I consider Ms Williams’ explanation for the delay to be a satisfactory one.

[22] In relation to the other criteria within s.394(3), I find that this is not a matter in which Ms Williams first became aware of her dismissal after it had taken effect (s.394(3)(b)); that she took no action to dispute here dismissal because there was no reason for her to do so until she saw the job advertisements in July (s.394(3)(c)); there is no argument of prejudice on the part of the employer if an extension of time were to be granted (s.394(3)(d)); that the merits of Ms Williams’ application go to the question of whether or not it was a genuine redundancy (s.394(3)(e)); and finally a question of fairness as between Ms Williams and other people in a similar position do not arise in this matter (s.394(3)(f)).

[23] Having considered all of the criteria relating to the matter of an extension of time for the making of Ms Williams’ application I am satisfied that there are exceptional circumstances within the meaning of s.394(3) and therefore grant Ms Williams an extension of time for the filing of her application until 11 July 2016.

CONSIDERATION – GENUINE REDUNDANCY

[24] Having dealt with one of the outstanding initial matters provided for within s.396 of the Act, I turn to the second, namely, the question of whether Ms Williams’ dismissal was a genuine redundancy. Section 385 of the Act provides that for a finding to be made that a person has been unfairly dismissed, the Commission must be satisfied that the dismissal was not a case of genuine redundancy. That term is defined within s.389 of the Act, which provides the following;

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.

[25] In relation to these criteria Mr McEntee puts forward that, when he and his business made its decisions about Ms Williams, The Building Connection was experiencing significant trading difficulties and that it had an obligation to reduce its costs, which it did through the termination of a number of people in Darwin, including Ms Williams. His evidence includes that although Ms Williams was employed in September 2015 on terms supported by his business’ needs at that time, in the six months after she was employed there was a substantial decline in sales and profitability. He attributes the reduction in net profit to the economic climate and notes that in three of the six months after Ms Williams was employed the company’s business ran a loss.

[26] Mr McEntee gave evidence that in February 2016 the business closed its Perth branch due to the continuing trading issues and that he relocated to Darwin to assist with running that branch. When he relocated to Darwin he noticed that the downturn in construction work was significantly affecting the profitability of the business and that it needed to be restructured in order to improve its efficiency.

[27] Mr McEntee’s evidence is that at the time he terminated Ms Williams’ services the work that she was then performing was able to be redistributed to other employees of the business, and that he did precisely that. His evidence is also that at the time there were no alternative available roles into which Ms Williams could be redeployed in either the business’ Darwin or Gold Coast branches.

[28] Mr McEntee elaborated on these contentions as well as providing supporting financial material. That evidence includes that at the time he made the decision to make Ms Williams redundant, she was the business’ most expensive employee and that he could not afford to continue the employment of someone on that level of salary without the business going further backwards financially. Mr McEntee related that he seriously thought about closing the branch, and that at the time he was managing the business as if it was in “panic stations” and that he needed to “stop the bleeding”. His primary motivation in making Ms Williams redundant was to save money in order to pay other wages. I am satisfied that Mr McEntee’s evidence in this regard supports that The Building Connection was in a difficult trading position and that he was generally responding to an imperative to significantly reduce costs in order to return the business to profitability.

[29] His evidence then turns to what occurred after Ms Williams had left the business. His evidence was that while he put on a new delivery driver within a few weeks of the termination of the former one, the replacement person was working fewer hours than the original driver.

[30] Mr McEntee also gave evidence about the considerations he took into account in advertising two Darwin based positions in July, which were the positions of Branch Manager and Sales Representative. The business was, at that time, breaking even, and is now just profitable, with it not experiencing the negative trading position that had been occurring a few months previously. His decision to re-advertise the position of Branch Manager included a desire to find a way to enable him to move back to the Gold Coast from Darwin in December. In advertising the position he expected to pay appreciably lower than the amount that was paid to Ms Williams. Instead of a headline salary of $95,000 per year, he expected to be able to fill the position with a salary in the range of $65,000-$70,000 per year.

[31] Mr McEntee’s evidence was that the business has not filled the Branch Manager position advertised in July and now does not expect to do so until there is a further improved financial position. Mr McEntee expects to relocate to the Gold Coast in December 2016. Instead of employing a full-time Branch Manager in Darwin after December 2016, Mr McEntee and the person located in Mount Gambier will alternate in their travels to Darwin to manage the branch. They expect that to be a month-about arrangement.

[32] Ms Williams rejects these contentions, arguing instead that Mr McEntee is hiding behind his financial position; that it was entirely predictable when she and another person were employed that two major construction projects were coming to an end; and that the advertised Branch Manager position was the same role in which she was employed and that Mr McEntee’s desire to engage someone on a lower salary remains to be seen.

[33] For a dismissal to be characterised as a genuine redundancy within the meaning of s.389 of the Act, the Commission is obliged to find that a person’s employer no longer required their job to be performed by anyone because of changes in the operational requirements of its enterprise; that the employer has complied with any applicable consultation obligation in the modern award or enterprise agreement; and that it would not have been reasonable in all the circumstances for the person to be redeployed either within the employer’s enterprise or that of an associated entity of the employer.

[34] It is accepted in this regard that an employer no longer requiring a person’s job to be performed by anyone includes a circumstance in which there has been a rearrangement of an organisational structure in which the functions, duties and responsibilities of a single position have been distributed amongst other employees. An employee’s job can be found to no longer exist even though the tasks and duties they performed may continue to be performed by other employees. 7 It is accepted that the test is whether the previous job has survived restructure or downsizing rather than being a question as to whether the duties have survived in some form.8 In parallel to this reasoning, the Federal Court has held the following about issues to be considered in relation to a “bona fide redundancy” within the meaning of taxation legislation;

“We consider that it is more accurate to say that an employee becomes redundant when his or her job (described by reference to the duties attached to it) is no longer to be performed by any employee of the employer, though this may not be the only circumstance where it could be said that the employee becomes redundant. Reallocation of duties within an organisation will often lead the employer to consider whether an employee, previously employed to perform specific functions assigned to a particular “job”, will be able to perform any available “job” existing after such reallocation. Even if the employee’s job, defined by reference to its duties, has disappeared, he or she may be able to perform some other available job to the satisfaction of the employer. In that case, no question of redundancy arises. It is only if the employer considers that there is no available job for which the employee is suited, and that he or she must therefore be dismissed, that the question of redundancy arises. If, in good faith, the employer:

• has reallocated duties;



• considers that the employee is not suitable to perform any available job, defined by reference to those reallocated duties, existing after the re-allocation; and



• for that reason, dismisses the employee,

then, for the purposes of s 27F, the employee is dismissed by reason of his or her bona fide redundancy. In the above discussion we have used the word “available” as meaning “vacant”, and the word “suitable” as meaning “within the employee’s capacity”. 9

[35] In the present case, the Applicant invites the finding that the reasons advanced for her dismissal were other than those put forward by The Building Connection. However, there is no evidence that such was the case, and instead, the evidence about the company’s trading position is substantial. A branch was closed; the owner relocated to Darwin; other staff were put off; and the financial reports provided to the Commission would suggest some level of financial stress. Even now, the evidence discloses that the company’s position is not entirely satisfactory.

[36] I am satisfied from the evidence that, at the time she was dismissed, The Building Connection no longer required Ms Williams’ job to be done by anyone because of changes in the operational requirements of its enterprise. After she had left the organisation, the work that Ms Williams had been performed was distributed to others and the businesses owner, Mr McEntee, took a greater role in its operations. Whereas he contemplated engaging another Branch Manager in Darwin on a lower salary than had been paid to Ms Williams, the evidence leads only to the conclusion that at the time of the hearing in this matter there had been no person employed in that position and that it was unlikely that one would be engaged in the immediate future.

[37] There is no enterprise agreement that applies to Ms Williams’ employment and the Respondent contends that there is no modern award applying to her employment either. Ms Williams did not contest that proposition or invite me to make a finding that she was covered by a modern award.

[38] There is also no evidence before me that Ms Williams could have been redeployed into another position either within the Darwin branch or the company’s Gold Coast branch. To the contrary, the evidence leads to the conclusion that because of the company’s financial difficulties and its imperative to reduce its cost of operations there was no such position into which Ms Williams could be redeployed.

[39] As a result, I find that Ms Williams’ dismissal was a case of genuine redundancy within the meaning of s.389 of the Act and that because of that finding, together with the provisions of s.385, it is not possible for the Commission to make a finding that she had been unfairly dismissed.

[40] Accordingly Ms Williams’ application for unfair dismissal must be dismissed, which I now do. An order to that effect is issued at the same time as this decision.

COMMISSIONER

Appearances:

Ms J Williams and Mr D Johnson for the Applicant.

Ms C Phillips, solicitor, HWL Ebsworth Lawyers, for the Respondent.

Hearing details:

2016.

Melbourne (video link to Darwin):

24 November.

Final written submissions:

Applicant: 9 December 2016.

Respondent: 1 December 2016.

 1   Exhibit A1, Witness Statement of Jodi Williams.

 2   Exhibit A5, SEEK advertisement – Branch Manager 7 July 2016.

 3   Exhibit A6. SEEK advertisement – Sales Representative 8 July 2016.

 4   Lombardo v Commonwealth of Australia as represented by the Department of Education, Employment and Workplace Relations[2014] FWCFB 2288 at [21].

 5   Shaw v Australia and New Zealand Banking Group Limited T/A ANZ Bank[2015] FWCFB 287 at [9].

 6   see Hemi v BMD Constructions Pty Ltd[2013] FWC 3593 and Kristia Cahill v Bstore Pty Ltd[2015] FWCFB 103, citing Acts Interpretation Act 1901 (Cth) ss.36(1) and (2).

 7   Ulan Coal Mines v Howarth[2010] FWAFB 3488, (2010) 196 IR 32 [17].

 8   Ibid, with reference to Kekeris v A. Hartrodt Australia Pty Ltd[2010] FWA 674 [27].

 9   Dibb v Commissioner of Taxation [2004] FCAFC 126 (2004) 136 FCR 388 [43].

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