Wood v Acumen Linemarking Pty Ltd

[2014] FCCA 2660

FEDERAL CIRCUIT COURT OF AUSTRALIA

WOOD v ACUMEN LINEMARKING PTY LTD [2014] FCCA 2660

Catchwords:
INDUSTRIAL LAW – Fair Work matter – Applicant seeking redundancy payment.

Legislation:

Fair Work Act 2009, s.548(3)

Applicant: PATRICK JAMES WOOD

Respondent: ACUMEN LINEMARKING PTY LTD

File Number: BRG 471 of 2014

Judgment of: Judge Baumann

Hearing date: 26 September 2014

Date of Last Submission: 26 September 2014

Delivered at: Brisbane

Delivered on: 7 November 2014

REPRESENTATION

For the Applicant: In person

For the Respondent:  Mr North

ORDERS

1. The Respondent to pay to the Applicant a redundancy payment of $4970.35 within 60 days.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT LAUNCESTON

BRG 471 of 2014

PATRICK JAMES WOOD

Applicant

And

ACUMEN LINEMARKING PTY LTD

Respondent

REASONS FOR JUDGMENT

1. On 23 May 2014, the Applicant in this small claims fair work division application, Patrick Wood filed an application seeking that the Respondent Acumen Linemarking Pty Ltd pay him $4,970.35, for a redundancy payout.

2. The Respondent, represented by its managing director Mr Frank North, asserts that the Applicant’s employment was properly terminated and that the reasons for the termination does not trigger a payment for a redundancy. The Respondent relies upon a response filed 20 August 2014.

3. The application was dealt with as a “small claims” proceeding and the procedure prescribed by s.548(3) of the Fair Work Act 2009 applies, namely that the Court is not bound by the rules of evidence and may act informally, and without regard to legal forms and technicalities. As a result, when the matter was heard by me on 26 September 2014, both Mr Wood and Mr North were sworn in at the bar table and provided answers asked by both the bench and the other party. I found both parties honest and creditable, and ultimately it evolved, that the determination of the dispute arises from the application of the facts, as found, to the Acumen Linemarking Pty Ltd Employee Collective Agreement 2012 (“the agreement”)  being Annexure 1, to the Affidavit of Mr Wood filed 10 September 2014.

The Agreement

1. Both parties accept the agreement applies to their employer/employee relationship. Relevantly the agreement provides, inter alia, that:-

   a)Clause 5.6.1 of the Agreement provides that “the employment can be terminated” by either party on the giving of the prescribed notice. As the Applicant had been employed for three years and two weeks (8 March 2011 to 25 March 2014) a three week notice period was prescribed, and (in accordance with clause 5.6.3) the employer elected to make a payment in lieu of notice. That was made, in the sum of $2,117.88 and no dispute about that payment exists.

   b)Clause 11.1 of the Agreement provides:-

   “11.1 Definition

   Your position can be made redundant and your employment may be terminated by us in circumstances where:-

   (a) A specific job is no longer required to be performed by you or anybody; and/or

   (b) There is a reduction in the amount of work available to you because of technological, operational and/or mechanical changes; and/or

   (c) There is a reduction in the work available because of economic or market conditions; and/or

   (d) There is a restructuring of the enterprise and/or reorganisation of work systems or staffing levels”.

The Employer’s Evidence

1. Mr North asserts in his evidence, consistent with his letter to the employer of 3 April 2014 that “none of the sub-clauses are relevant or contributed to the termination” and further that “clause 11.4 doesn’t ‘kick in’ as no formal notification of redundancy was made nor was any conversations had that would construe the termination was in fact a redundancy”.

2. The mention of clause 11.4 of the Agreement is a reference to the calculation of “severance” pay if a redundancy event has occurred. In that regard Mr North fairly conceded that the calculation by the employee of $4,970.35 is correct if the Court finds a redundancy payment is payable.

3. In the letter dated 25 March 2014, which has been carefully worded in the Court’s view, the employer terminated the employee’s employment and asserts that:-

   “We are in “survival” mode and we have stalled this decision as long as financially possible, with phase 1 being the management restructure then the last thru the last half of 2013.

   The termination is not a reflection of your work performance but one of sustainability and business reasons”

4. Although the evidence produced by the respondent reveals the financial difficulties the business was experiencing (and the Court accepts the company undertook some earlier “management restructure” to cut costs), the correspondence is silent about the “business reasons” that lead to the termination.

5. In this regard, under questioning, Mr North admitted that the same work is being undertaken with two people less. This is “more productive”. He said his workforce is doing more with less staff effectively. Mr North submitted that he believes that Mr Wood must demonstrate events had changed before the date of termination not after it.

Discussions

1. When a business is proving less profitable, it is to be expected that a business has to either:-generate more income; reduce costs or “work smarter”.

2. In my view Mr North presented as a compassionate and sensitive employer who, I assess, took all reasonable steps to retain his workforce. However, I have come to the conclusion that by “reorganising” his work force he could reduce his work force and save some costs.

3. Unfortunately for Mr Wood, he was chosen as an employee who had to go. He was shocked as he did not see the termination coming. The letter of termination makes it clear that the termination “is not a reflection of your work performance”, and re-employment would be considered “as work loads and demands increase”.

4. Whilst the Court can understand why the Respondent employer would try to argue that a redundancy payment is not payable, based on all the evidence. I am satisfied that a redundancy has occurred under the terms of Clause 11.1 of the Agreement particularly sub-clauses (c) being “a reduction in work available” and sub clause (d), being a “reorganisation or work systems or staffing levels”.

5. As a result the Court will order that the Respondent shall pay to the Applicant a redundancy payment of $4,970.35 within 60 days.

I certify that the preceding fourteen (14) paragraphs are a true copy of the reasons for judgment of Judge Baumann

Associate: 

Date: 7 November 2014