[2010] FWA 675 |
|
DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
COMMISSIONER LEWIN |
BRISBANE, 10 FEBRUARY 2010 |
Application for unfair dismissal remedy—termination of employment—jurisdiction—termination at the initiative of the employer—genuine redundancy—redeployment—valid reason—harsh, unjust or unreasonable.
[1] This decision concerns an application under s.394 of the Fair Work Act 2009 (the Act) by Ms Tracey Wright alleging that the termination of her employment by Cheadle Hume Pty Ltd t/as Macedon Spa (the respondent) was harsh, unjust or unreasonable.
[2] The application was lodged in Fair Work Australia on 16 September 2009. On 18 September 2009 the matter was listed for conciliation by telephone. On 25 September 2009 the respondent lodged a Form F3—Employer’s Response to Application for Unfair Dismissal Remedy in which the respondent sought to defend Ms Wright’s application on the ground that Ms Wright was not dismissed from her position as a chef. On the same day, the respondent also lodged an adjournment request in the Tribunal. The adjournment request was not granted and the telephone conference was conducted at 9.15 am on 5 October 2009 as listed.
[3] The matter did not settle as a result of the telephone conference. On 10 November 2009 the application was listed for Conference and Hearing before me at 10.00 am on 2 February 2010. On 18 January 2010 Mr John Sweetman lodged a Form 53—Notice of representative commencing to Act on behalf of the respondent. On 22 January 2010 Mr Sweetman filed a Form F4—Objection to Application for Unfair Dismissal Remedy in the Tribunal on the ground that the termination of Ms Wright’s employment was a genuine redundancy.
[4] At the Hearing on 2 February 2010, Mr Gary Dirks appeared for Ms Wright. Mr Steve Eastwood appeared on behalf of the respondent. I decided, upon consultation with the parties, to conduct the proceedings as a Hearing.
[5] Ms Tracey Wright, the applicant, gave evidence in support of her application. Mr Ben Oost, General Manager of the respondent and Mr Steve Eastwood, Proprietor of the respondent, gave evidence for the respondent.
[6] Ms Wright’s employment came to an end on the 13 September 2009 in circumstances which are contentious as a matter of fact, to some degree, in this matter. On that day, Mr Oost, the General Manager of the respondent had arranged to meet Ms Wright. Ms Wright arrived at the meeting and her evidence is that Mr Oost said that “we are going to let you go”. Mr Oost’s evidence is that he said “I think we may have to let you go. It is what Steve wants and what is best for the business.”
[7] The subject of the way in which the reference was made by Mr Oost in his speech at this meeting to, letting Ms Wright go, was a point of conflict in the evidence of the two witnesses. I have decided to accept Ms Wright’s evidence of what was said. I have done so because I found Ms Wright’s oral evidence more certain and convincing and her demeanour more assured of the details of the conversation than that of Mr Oost.
[8] It is uncontentious that when Mr Oost uttered these words Ms Wright left the meeting. However, Ms Wright and Mr Oost met again shortly afterwards and Ms Wright gave evidence that at this second encounter, she said to Mr Oost “why am I the one who is going?” and that he replied by offering some comments about aspects of Ms Wright’s work performance, which will be referred to in greater detail below. There does not seem to be a great deal of conflict, if any, in the evidence of Ms Wright and Mr Oost as to the conversational exchange during their second encounter on 13 September 2009. Mr Oost gave evidence that Ms Wright broke off this conversation too.
[9] The background to the encounters which led to the end of the employment relationship is that Mr Eastwood, the proprietor of the business, had instructed Mr Oost to arrange the meeting because he had decided that as a result of a downturn in business between Monday to Friday the facility would no longer offer a cooked breakfast, which was a significant part of the role performed by Ms Wright at the time. Mr Oost gave evidence that the work which was performed by Ms Wright as the breakfast chef was a job, in general terms, the facility no longer required to be performed by anyone.
[10] Mr Oost gave evidence that it was his intention to redeploy Ms Wright by changing her rostered hours of employment. He also gave evidence that he knew that the hours he had in mind would likely prove impracticable or unsuitable to Ms Wright because they would involve some work between the late afternoon and extending into the night until around 9.00 or 10.00 pm. Mr Oost gave evidence that he knew that Ms Wright had family responsibilities for her children and he considered this would likely conflict with what he intended.
Jurisdictional Objections
[11] The respondent has submitted that the application is beyond jurisdiction because:
[12] I turn now to consider whether or not the termination was at the initiative of the employer.
[13] In my view, a statement by an employer, as I have found it to have been made, that “we’re going to let you go” can reasonably be taken by an employee to mean that the employment is being terminated by the employer at the employer’s initiative. Whatever Mr Oost was otherwise thinking about when he uttered this to Ms Wright on her arrival at the meeting he had arranged on 13 September 2009 and any subjective intention he may have harboured cannot alter the fact that when Ms Wright acted on the basis that her employment was to be terminated and departed the interview there can be no suggestion that the termination of her employment was initiated by her. Accordingly, I find that the termination of Ms Wright’s employment was at the employer’s initiative. I shall return to the consequences of this aspect of the relevant evidence in due course.
[14] I now turn to consider the assertion by the respondent that the termination of Ms Wright’s employment is beyond jurisdiction because it was a case of genuine redundancy within the meaning of the Act. Section 389 of the Act defines the meaning of genuine redundancy 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.”
[15] It will be observed that subsection (2) of s.389 of the Act defines a circumstance where a person’s dismissal will not be a case of genuine redundancy. On the evidence before me, I am satisfied that it is more probable than not that it would have been reasonable in all the circumstances for Ms Wright to be redeployed within the respondent’s enterprise. It is clear that there were various hours of work available for chefs within the enterprise, and that such hours have been performed by various employees, some of them new employees since the termination of Ms Wright’s employment. Given this finding, the termination of Ms Wright’s employment is not a case of genuine redundancy within the meaning of the relevant statutory provisions.
[16] For these reasons I dismiss both jurisdictional objections.
The employer’s intention
[17] Much of the respondent’s defence of the application rests upon evidence of what was said to be their unexpressed intention, at the time of the termination of Ms Wright’s employment, given by both Mr Oost and Mr Eastwood. Before addressing any implication which might arise from the intention which the respondent claims to have held at the time of the termination of Ms Wright’s employment it is useful to consider some of the evidence which was brought by the respondent.
[18] The respondent tendered exhibits designed to establish that there was a logical reason, comprised of a significant reduction in business during the weekdays Monday to Friday to rationalise the costs of providing guests with breakfasts, by abandoning the provision of cooked breakfasts and substituting prepared continental style breakfasts served in the guests’ rooms rather than in the facility’s restaurant. This evidence is consistent with a decision to terminate the employment of the employee who performed the relevant work, as the chef principally responsible for preparing those breakfasts.
[19] I consider it inherently improbable that if the meeting arranged by Mr Oost on Mr Eastwood’s instruction for the 13 September 2009 was not to terminate Ms Wright’s employment but rather to arrange for a different roster of hours in light of the decision not to offer a cooked breakfast in the restaurant, that she would have been greeted at the outset with the words “we’re going to have to let you go”.
[20] If the object and purpose of the meeting was to arrange different hours of work and meal service to be performed by Ms Wright I consider it more inherently probable that the purpose of the meeting would have been stated accordingly at the outset. It is extremely difficult to reconcile evidence on behalf of the respondent that there was no intention to terminate Ms Wright’s employment with Mr Oost’s utterance at the commencement of the meeting as I have found it.
[21] My conclusions in this respect are fortified by my consideration of the evidence of what occurred after Ms Wright became upset and broke off the encounter with Mr Oost when this statement was made to her.
[22] I accept Ms Wright’s evidence as follows:
“55. I was in shock and walked out of the office and sat on stair outside.
56. Ben came out and sat down and said “I am sorry.”
57. I asked, “Why is it that I am the one that is going? What have I done wrong?”
58. Ben said, “There have been just a few issues. Like we run out of eggs the other week and chips.”
59. I said, “Where is that my fault?”
60. Ben said, “You do the ordering don’t you?”
61. I said, “Yes, but Sentil used up all the eggs doing crème caramel that had green food colouring in them and they looked disgusting and we had to throw them out. They weren’t required because I had already done crème caramels.
62. Ben said, “Also the lemon tarts you made for the function weren’t that great. Did you blind bake them?”
63. I said, “Yes I did blind bake them. I followed the recipe I was given.” There was no change from the usual approach but it was not a usual item. I am not a pastry chef.” 1
[23] Mr Oost’s evidence concerning this part of the encounters between himself and Ms Wright on 13 September 2009 is that Ms Wright was upset and that notwithstanding the conversation set out above, which he does not contest took place, it was his intention at some point to inform Ms Wright that the company did not intend to terminate her employment but rather to propose different hours of work and meal service duties. I find myself unable to accept this evidence. Whilst both encounters may have been brief it seems to me that if there was an intention to assure Ms Wright that, in fact, her employment was not being terminated there was ample opportunity to do so. To make a statement to this effect would have only required a brief moment in the second encounter in order to correct any error or misunderstanding which may have been created when Mr Oost had opened the original encounter with the words “we’re going to let you go”. Rather than take the opportunity of the second encounter to overcome any miscommunication immediately Mr Oost first apologised and then digressed to issues of Ms Wright’s performance of her duties, in response to a question by her for a reason for the termination of her employment. In the circumstances if the subjective intention claimed existed there was a manifest failure to express it.
[24] There is one final matter concerning the respondent’s evidence of their claimed intentions on 13 September 2009 which leads me to conclude that these intentions did not extend to the redeployment of Ms Wright within the enterprise. During Mr Eastwood’s evidence he was asked what action was taken by the employer, if any, to contact Ms Wright after her departure and reassure her that there had been a misunderstanding of the respondent’s intentions and that they were, in fact, not intending to terminate her employment but rather to redeploy her on different hours and meals service. Mr Eastwood accepted that no action of this kind was taken. However, Mr Eastwood stated that the respondent simply waited for Ms Wright to return to work. He claimed that Ms Wright had on an occasion in the past become upset and left the premises only to return later. Unfortunately, this evidence is in contradiction with some of the material emanating from the respondent.
[25] Exhibit A2 in these proceedings is a copy of a final payslip which includes payment for accrued annual leave entitlements and annual leave loading. It will be recalled that the employment came to an end on 13 September 2009 which was a Sunday. Ms Wright according to Mr Eastwood’s evidence was rostered off on Monday 14 and Tuesday 15 September 2009. However, the date of issue of the final payslip is Monday 14 September 2009. Moreover, in the form F3 filed by the respondent with Fair Work Australia in this matter the following is stated: “we have still paid her one week’s wages in lieu of notice and all accumulated holiday pay but we could have withheld one week’s pay due to her walking out on the business”. It is contradictory to assert, as did Mr Eastwood, that on 14 September 2009 no attempts were being made to contact Ms Wright to inform her that her employment had not been terminated because the respondent was waiting for Ms Wright to return to work on Wednesday 16 September 2009, whilst at the same time issuing a final payslip which included accrued holiday pay.
[26] When considering an application under s.394 of the Fair Work Act 2009 in Conference or Hearing, the Tribunal is required to take into account the matters set out in s.387 of the Act. I turn to do so. The Statutory provisions are set out below:
“387 Criteria for considering harshness etc.
In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, FWA must take into account:
(a) whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees); and
(b) whether the person was notified of that reason; and
(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and
(d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and
(e) if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal; and
(f) the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal; and
(g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and
(h) any other matters that FWA considers relevant.
Valid reason
[27] There is nothing in the evidence, apart from the issues concerning the stock of eggs, potato chips on hand and an allegedly unappetising lemon tart, which could be said to relate to Ms Wright’s capacity as a chef and there were no issues of conduct which have been established to my satisfaction that would constitute a valid reason for the termination of Ms Wright’s employment. Mr Oost’s evidence discounts the importance of the abovementioned issues concerning food and preparation.
[28] I have already found that it would have been reasonable in all the circumstances for Ms Wright to have been redeployed. In my view, the respondent has not attempted to refute such a conclusion and its evidence does not contradict this finding.
[29] I find there was no valid reason for the termination of Ms Wright’s employment.
Notification
[30] Where there is no valid reason for the termination of an employee’s employment related to the person’s capacity or conduct, whether or not the person was notified about the reason is not relevant to my consideration 2. However, it is obvious that the termination was a surprise to Ms Wright.
Opportunity to respond
[31] Whether or not Ms Wright was given an opportunity to respond to the reason for the termination of her employment is likewise irrelevant 3. However, what substantive opportunity, if any, Ms Wright had to respond was inadequate in the circumstances, if the issues raised by Mr Oost in the second encounter were considered as reasons for the termination of her employment.
Support person
[32] Ms Wright was unaware of the reason for the meeting at which her employment was terminated. Hence, she would have given no consideration to having a support person present at the meeting. There was no such request and no refusal by the employer in the circumstances.
Performance
[33] In my view, with the exception of the very limited references to issues of Ms Wright’s performance in the second stage of the encounter on 13 September 2009, there was no evidence of any unsatisfactory performance and there was no evidence of any warning having been given to Ms Wright concerning the performance of her duties. Mr Oost’s evidence was to the effect that those deficiencies mentioned in the second encounter were not the reason for the termination of Ms Oost’s employment and were insignificant in themselves.
Size of the employer’s enterprise
[34] I am unable, on what is before me, to reach a conclusion that the size of the employer’s enterprise had a significant impact upon the procedures followed in effecting the termination of Ms Wright’s employment.
Human resource management expertise
[35] I consider the absence of dedicated human resources specialists or expertise in the enterprise likely had some impact on the procedures followed in effecting the dismissal. However, there is nothing put to me either through the evidence or in submissions which effectively elaborates on the particularity of any such impact in the circumstances which is useful for the purposes of my decision.
Other matters
[36] There are no other matters I consider relevant.
Harsh, unjust or unreasonable
[37] I have reached the conclusion that the termination of Ms Wright’s employment was harsh, unjust and unreasonable. There was no valid reason for the termination of Ms Wright’s employment. The termination was also harsh because of its effects on the personal circumstances of Ms Wright and unjust because the decision to terminate her employment was effected without adequate notification of the reason for the termination of her employment or opportunity to respond. The termination was unreasonable as I have rejected the evidence of the alleged subjective intention to redeploy Ms Wright and in any event any such intention was never made manifest despite reasonable opportunities to do so.
Remedy
[38] The relevant statutory provisions governing any remedy that may be ordered by the Tribunal for unfair dismissal are set out in Division 4 of Chapter 3, Part 3–2 of the Act. When the Tribunal may order a remedy is set out in s.390 of the Act which is set out below:
“390 When FWA may order remedy for unfair dismissal
(1) Subject to subsection (3), FWA may order a person’s reinstatement, or the payment of compensation to a person, if:
(a) FWA is satisfied that the person was protected from unfair dismissal (see Division 2) at the time of being dismissed; and
(b) the person has been unfairly dismissed (see Division 3).
(2) FWA may make the order only if the person has made an application under section 394.
(3) FWA must not order the payment of compensation to the person unless:
(a) FWA is satisfied that reinstatement of the person is inappropriate; and
(b) FWA considers an order for payment of compensation is appropriate in all the circumstances of the case.
Note: Division 5 deals with procedural matters such as applications for remedies.”
[39] I turn first to deal with the requirements of s.390(3)(a) of the Act. Ms Wright does not seek reinstatement to her employment. Notwithstanding that, evidence was given by the respondent that it would be available to her in their employment. Subsequent to the termination of her employment, Ms Wright sought alternative employment successfully and is now employed by another employer at a rate of pay $2.00 per hour less than that which applied during her employment with the respondent. Apparently the working arrangements with her new employer are suitable to her and presumably are manageable having regard to her family responsibilities. On my understanding of the evidence of the respondent, it is possible that the work which would be available in their employment of Ms Wright could conflict in some way with her family responsibilities. In these circumstances I consider it inappropriate to reinstate Ms Wright.
[40] I turn now to consider s.390(3)(b) of the Act, and to consider whether or not it is appropriate to make an order of compensation in the circumstances of this case. Section 392 of the Act sets out the criteria applicable for deciding amounts of compensation. However, before proceeding to determine an amount of compensation it is necessary to decide whether or not it is appropriate to make such an order. I have decided that it is appropriate to do so having regard to my finding that the termination of Ms Wright’s employment was harsh, unjust or unreasonable, the inappropriateness of reinstatement in the circumstances of the case and the adequate mitigation of the economic losses suffered by Ms Wright as a result of the termination of her employment. While I consider that there must be some doubt about the likely duration of Ms Wright’s employment if she were to have been redeployed rather than dismissed, I consider this is a factor which should be reckoned with in considering the amount of compensation to be ordered.
[41] I therefore now turn to the provisions of s.392(2) of the Act and deal with each of the criteria set out therein for the purpose of deciding an amount of compensation to be ordered.
Viability
[42] There is no evidence before me to suggest that the effect of any order for compensation within the jurisdiction of the Tribunal would effect the viability of the employer’s enterprise.
Length of service
[43] Ms Wright commenced employment with the respondent on 21 October 2008 and the employment was terminated on 13 September 2009. Therefore, Ms Wright was employed for a period of approximately 11 months. This is not a lengthy period of service and therefore would not weigh in favour of a significant amount of compensation.
Remuneration that would have been received
[44] In order to determine an appropriate amount of compensation in lieu of reinstatement in this case it is necessary to have regard to the evidence that there may have been some difficulty for Ms Wright in working the hours or all of them which would have been available had she been redeployed. If Ms Wright had been able to find a suitable redeployment there is also the question of how long the employment would have continued. This consideration arises because the evidence indicates some friction in the employment relationship between Ms Wright and another employee. Moreover, on the evidence, although it is sketchy, it seems that the employment of chefs is attended by a high level of turnover and that there are sometimes disputes over access to particular shifts or hours of work preferred by various employees. Accordingly, I judge that the employment horizon for Ms Wright was unsettled and I am unable to be satisfied that it would more likely than not have extended for a period of greater than six months in the circumstances. Therefore, the remuneration which would have been received by Ms Wright but for the termination of her employment, I judge to be equal to the amount she would have earned in the six months immediately after the termination of her employment.
Mitigation
[45] Ms Wright has mitigated her losses by obtaining similar employment.
Other remuneration
[46] Since the termination of Ms Wright’s employment she has earned a total amount of $12,954.00.
Income reasonably likely to be earned
[47] Ms Wright continues to be employed as described above and there is no reason to believe that she will not be so employed during the period of the making of an order for compensation and the payment of the compensation.
Calculation of amount
[48] In light of my consideration of the criteria above and taking into account all the circumstances of the case, I consider the approach to compensation should be as set out below consistently, with the approach of the case of T. Sprigg v Pault’s Licensed Festival Supermarket 4:
a. Calculate the losses resulting from the termination of Ms Wright’s employment as if the employment had continued on the same basis of remuneration between the date of termination and six months thereafter;
b. Deduct one week’s pay (paid in lieu of notice);
e. Apply a contingency deduction of 50% having regard to the potential difficulty Ms Wright may have experienced in taking advantage of any redeployment available during the 26 weeks.
The calculation is as follows:
a. |
$943.27 x 26 |
= |
$24,525.02 |
b. |
$943.27 |
= |
$23,581.75 |
c. |
$12,954.00 |
= |
$10,627.75 |
d. |
$4164.00 |
= |
$6,463.75 |
e. |
– 50% |
= |
$3,231.86 |
[49] On this calculation, the amount payable to Ms Wright in lieu of reinstatement is $3,231.86.
[50] In the case of Re: Moore Paragon Australia Pty Ltd 5 the Full Bench of the Australian Industrial Relations Commission said as follows:
“If an application of the guidelines in Sprigg yields an amount which appears either clearly excessive or clearly inadequate, then the member should reassess any assumptions or intermediate conclusions made or reached in applying the guidelines so as to ensure that the level of compensation is in an amount that the member considers appropriate having regard “to all the circumstances of the case” including the matters listed in s.170CH(7) and subject to the ‘cap’ provided for in s.170CH(8) and (9). In this context it should be borne in mind that the result yielded by an application of the Sprigg guidelines may vary greatly depending upon particular findings in relation to the various steps including, in particular, step one, which necessarily involves assessments as to future events that will often be problematic.”
[51] I consider that there is no reason to conclude that the amount calculated above is clearly inadequate or excessive in all the circumstances of this case.
[52] An Order will issue accordingly.
COMMISSIONER
Appearances:
Mr Gary Dirks for Ms Tracey Wright, the applicant.
Mr Steve Eastman (Proprieter) for the respondent.
Hearing details:
Melbourne
2 February
2010
1 Exhibit A1 to the transcript of proceedings.
2 Chubb Seurity Australia Pty Ltd and John Thomas, PRS2679 (Paragraphs 36 – 41).
3 Chubb Seurity Australia Pty Ltd and John Thomas, PRS2679 (Paragraphs 36 – 41).
4 (C. No. 35979 of 1998) paragraph 32.
5 Lawler VP, Kaufman SDP, Mansfield C, 20 January 2004, [PR942856]
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