1
Fair Work Act 2009
s.394—Unfair dismissal
Troy de Haan
v
Lipa Pharmaceuticals Ltd
(U2013/10567)
DEPUTY PRESIDENT BOOTH SYDNEY, 20 DECEMBER 2013
Termination of employment - unfair dismissal remedy - whether genuine redundancy.
[1] In this matter Mr Troy de Haan (the applicant) makes application pursuant to s.394 of
the Fair Work Act 2009 (the Act) for an unfair dismissal remedy in relation to the termination
of his employment from Lipa Pharmaceuticals Ltd (the respondent) on 6 June 2013.
Background
[2] The respondent is a contract manufacturer of complementary medicines regulated by
the Therapeutic Goods Administration. It holds a licence to manufacture non-sterile
therapeutic goods in the form of tablets, capsules, powders, liquids and creams.
[3] The applicant was employed by the respondent on 27 June 2012 as a casual process
operator in the Compressing Department working Monday to Friday from 3pm to 11.10pm
each day.
[4] A conciliation was conducted between the parties by telephone with Conciliator
Terpstra on 26 July 2013 but this did not resolve the matter.
[5] The matter was listed for 11 October 2013 for the hearing of a jurisdictional objection
by the respondent on the grounds that the applicant was a casual and had not been employed
for the minimum employment period. The respondent is not a small business employer
pursuant to s.23 of the Act and so the minimum employment period in this case is 6 months.
[6] The respondent was directed to provide its submission in support of its jurisdictional
objection 14 days prior to the hearing. The respondent did not comply with these directions
and no submissions were received prior to the hearing.
[7] The matter came on before me on 11 October 2013. The applicant did not appear and
attempts to contact him were unsuccessful. The respondent was represented by
Mr Muhammad Khayum, Human Resources Manager for the respondent.
[2013] FWC 9928 [Note: An appeal pursuant to s.604 (C2014/2589) was
lodged against this decision - refer to decision dated 9 January 2014
[[2014] FWC 548] for result of appeal.]
DECISION
E AUSTRALIA FairWork Commission
https://www.fwc.gov.au/documents/decisionssigned/html/2014FWC548.htm
[2013] FWC 9928
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[8] On this occasion I directed that the respondent file an outline of submissions and any
other evidence upon which it relies with regard to the jurisdictional objection by 5pm on
25 October 2013 and that the applicant file an outline of submissions and any other evidence
upon which it relies in response to the jurisdictional objection by 5pm on 8 November 2013. I
did not further list the matter on that occasion on the basis that the matter may have been able
to have been determined on the papers with the agreement of the parties.
[9] On 19 October 2013 I received correspondence from Mr Khayum indicating that the
respondent makes its application under s.394(2)(b) of the Act. Section 394(2)(b) of the Act
concerns an application for an extension of time to lodge an application. The applicant was
dismissed on 6 June 2013 and lodged his application on 17 June 2013, well within the 21 day
time limit provided by the Act. It was apparent to me from a reading of the submission that
the respondent did not contend that the application was out of time but rather that the
applicant was dismissed because of his unacceptably high unplanned absence record and due
to a downturn in work load. The respondent contended that the applicant’s dismissal was a
case of genuine redundancy and the “case should not proceed any further”.1
[10] The applicant provided a response to the respondent’s correspondence on
28 October 2013. The response largely replied to the respondent’s submissions in relation to
his unplanned absence record and contended that he had “a very strong case for my unfair
dismissal claim” which I took to mean he believed he had been unfairly dismissed. He added
that operational reasons had not been given to him as a reason for his dismissal and that his
area was as busy as it had ever been.
[11] In the circumstances I decided that a hearing of the matter would be required to
determine the matter and that I would address the respondent’s jurisdictional objection along
with the applicant’s merit case, if necessary, together. The matter came on before me on
18 November 2013. The applicant was self represented and the respondent was represented by
Mr Khayum. I gave the applicant and the respondent the opportunity to give evidence
however both chose only to make submissions from the bar table.
Initial matters to be considered
[12] Section 396 of the Act requires the following initial matters to be considered.
(a) whether the application was made within the period required in subsection
394(2)
[13] I have already indicated that this was the case and there is no barrier to the application
proceeding on this ground.
(b) whether the person was protected from unfair dismissal
[14] Section 382 of the Act provides that a person is protected from unfair dismissal at a
time if, at that time, the person is an employee who has completed at least the minimum
employment period of, in this case, 6 months and is covered by an award or enterprise
agreement or earns less than the high income threshold.
[15] It is agreed that the applicant was engaged as a casual employee who was employed
on a regular and systematic basis with a reasonable expectation of continuing employment on
[2013] FWC 9928
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a regular and systematic basis from 27 June 2012 to 6 June 2013. It was agreed that he was
covered by the Lipa Pharmaceuticals Ltd Employee Collective Agreement 2008-2013 (the
Agreement) and earned $22.63 per hour for a standard working week. This equates to
$44,716.88 per annum which is less than the high income threshold of $129,300 per annum as
at 6 June 2013. There is no barrier to the application proceeding on this ground.
(c) whether the dismissal was consistent with the Small Business Fair Dismissal
Code
[16] The respondent employed 346 employees at the time the applicant was dismissed.2
The respondent was, therefore, not a small business pursuant to s.23 of the Act and
compliance with the Small Business Fair Dismissal Code does not arise.
(d) whether the dismissal was a case of genuine redundancy
[17] As already indicated above the respondent has submitted that the applicant was not
unfairly dismissed because the termination of his employment was a case of genuine
redundancy.
[18] The respondent has a complete defence to the application if it is found that the
termination of employment was a case of genuine redundancy.3 If I so find, the application
must be dismissed. On the other hand, if I find that his termination of employment was a not
case of genuine redundancy then the applicant’s case must be considered on its merits.
Jurisdictional objection
[19] The assessment of whether a person’s dismissal was a case of genuine redundancy
must be undertaken against the requirements of s.389 of the Act which reads 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.
[20] The onus is on the respondent to establish, on the balance of probabilities, that:
[2013] FWC 9928
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The applicant’s job was no longer required to be performed by anyone because of
changes in the operational requirements of the respondent and,
The respondent has complied with any obligation in a modern award or enterprise
agreement that applied to the applicant’s employment to consult about the
redundancy and,
It would not have been reasonable in all the circumstances for the applicant to be
redeployed within the respondent or the enterprise of an associated entity of the
respondent.
[21] I will address each requirement in turn
The applicant’s job was no longer required to be performed by anyone because of changes
in the operational requirements of the respondent
[22] The case generally regarded as being of assistance in understanding the meaning of the
phrase “no longer required the person’s job to be performed by anyone” is the decision of the
Full Bench in Ulan Coal Mines Limited v Howarth (Ulan Coal Mines).4
[23] This was an appeal against a decision at first instance by a Commissioner in which the
Commissioner found that the dismissals before him were not cases of genuine redundancy as
defined in s.389 of the Act because, amongst other things, it was not the case that the
Company no longer wanted the jobs of the applicants to be performed by anyone.
[24] The Full Bench at paragraph 9 explained the circumstances of Ulan Coal Mines as
follows:
“The evidence before the Commissioner was that in the first half of 2009 the Company
conducted a review of operations at its underground coal mine near Mudgee in New
South Wales. The object of the review was to improve the productivity and efficiency
of the enterprise. As a result of the review, various changes were decided upon,
including ‘reducing the number of employees, outsourcing ancillary and intermittent
functions, increasing the proportion of employees with trades qualifications in
underground crews and redistribution of labour.’ In consequence some 38 mineworker
positions (19 fixed term positions and 19 permanent positions), 6 staff positions and
75 contractor positions were determined to be surplus to requirements. As a result of
the desire of the Company to increase the proportion of mineworkers with trades
qualifications on some underground work crews, there was a need to increase the
trade-qualified mineworker positions at the mine by 11.”
[25] The Full Bench considered the words in the Explanatory Memorandum to the Act and
came to a conclusion about their meaning. The Full Bench stated at paragraphs 16 and 17:
“The Explanatory Memorandum to the Fair Work Bill 2008 provides examples as to
when a dismissal will be a case of genuine redundancy:
‘1547 Paragraph 389(1) (a) provides that a person’s dismissal will be a case of
genuine redundancy if his or her job was no longer required to be performed by
anyone because of changes in the operational requirements of the employer’s
[2013] FWC 9928
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enterprise. Enterprise is defined in clause 12 to mean a business, activity,
project or undertaking.
1548 The following are possible examples of a change in the operational
requirements of an enterprise:
a machine is now available to do the job performed by the employee;
the employer’s business is experiencing a downturn and therefore the
employer only needs three people to do a particular task or duty instead
of five; or
the employer is restructuring their business to improve efficiency and
the tasks done by a particular employee are distributed between several
other employees and therefore the person’s job no longer exists.’
It is noted that the reference in the statutory expression is to a person’s ‘job’ no longer
being required to be performed. As Ryan J observed in Jones v Department of Energy
and Minerals (1995) 60 IR 304 a job involves ‘a collection of functions, duties and
responsibilities entrusted, as part of the scheme of the employees’ organisation, to a
particular employee’ (at p. 308). His Honour in that case considered a set of
circumstances where an employer might rearrange the organisational structure by
breaking up the collection of functions, duties and responsibilities attached to a single
position and distributing them among the holders of other positions, including newly-
created positions. In these circumstances, it was said that:
‘What is critical for the purpose of identifying a redundancy is whether the
holder of the former position has, after the re-organisation, any duties left to
discharge. If there is no longer any function or duty to be performed by that
person, his or her position becomes redundant…’ (at p.308)
This does not mean that if any aspect of the employee’s duties is still to be performed
by somebody, he or she cannot be redundant (see Dibb v Commissioner of Taxation
(2004) FCR 388 at 404-405). The examples given in the Explanatory Memorandum
illustrate circumstances where tasks and duties of a particular employee continue to be
performed by other employees but nevertheless the ‘job’ of that employee no longer
exists.”
[26] At paragraph 20 the Full Bench concluded that the circumstances of Ulan Coal Mine
“readily fit within the ordinary meaning and customary usage of the expression in s.389(1) of
the Act where a job is no longer required to be performed by anyone because of changes in
the operational requirements of the employer’s enterprise.”
[27] Mr Khayum submitted that notwithstanding an uptick in production in early 2013 by
June 2013 customers’ orders to the respondent were reducing due to the falling of consumer
demand for the product and placing manufacturing orders with offshore suppliers. He
provided a series of messages to staff to substantiate this experience. Relevant to the period
around the dismissal of the applicant were communications on 4 April 2013 and
21 June 2013. On 4 April 2013 the Chief Executive Officer wrote to staff to advise them of
the substantial increase in work over the last few weeks but also that “June is looking quite
[2013] FWC 9928
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slow.” On 21 June 2013, after the applicant was dismissed, the Chief Executive Officer again
wrote to staff advising of a late July-early August plant shut-down, a circumstance that
Mr Khayum said corroborated his explanation of the downturn. In this communication he
said:
“Considering the above - we are not looking to reduce casual numbers or letting
people go in various support departments - but - we also have to manage our work
versus people numbers versus customer service versus being able to respond when
customers need us in order to remain competitive and viable.”5
[28] He submitted that the number of employees employed by the respondent was
reducing. He provided the Commission with a table showing employment numbers from
20 January 2013 to 20 October 2013 by department. The applicant was employed in the
Compressing Department and in that department there were 44 employees on
20 January 2013, 36 employees on 26 May 2013 and 34 employees on 23 June 2013,
subsequent to the applicant’s dismissal. Mr Khayum submitted that one employee resigned
and the applicant was dismissed and they were the two employee reductions in that
department between May and June. In that same window there were employment reductions
in Coating - 21 to 20; Mixing - 26 to 25; Soft Gel - 37 to 36; an overall reduction from 348 to
343. Mr Khayum did not submit that these reductions had been by way of redundancy.
[29] The applicant on the other hand submitted that he was not told his dismissal was due
to operational reasons and he regarded his area as being “as busy as it usually was” at the time
of his dismissal. At the hearing he indicated that he had not been provided with a letter of
termination. He said he was told by a supervisor to hand in his security card and leave the
premises with no reason given at all. However Mr Khayum contended that a letter of
termination had been sent to his home. It was not available on the day of hearing and was later
supplied to the Commission. It was dated 7 June 2013 and, amongst other things, stated:
“On 6th June we had formally informed you of your termination of employment with
Lipa Pharmaceuticals based on operations reasons.”
[30] The circumstances of the respondent are not analogous to those of Ulan Coal Mine.
The information provided by the respondent is inconclusive. The employment numbers are
not contested by the applicant however the reasons given for the employment reduction are
not substantiated by any evidence of the business conditions faced by the enterprise. The
content of the message of 21 June 2103 contradicts the submissions in that it states that “we
are not looking to reduce casual numbers or letting people go in various support departments”.
The area the applicant was employed in reduced employment by 2, from 36 to 34, from
26 May 2013 to 26 June 2013 one of whom resigned and the other is the applicant. By
20 October 2013 employment was up by 1 to 35. These employment figures do not provide
the evidence upon which I can base a finding that the job the applicant was doing was no
longer required to be performed by anyone because of changes in the operational
requirements. Taking into account all the circumstances I find that the respondent has not
discharged their onus in regard to this limb of s389 of the Act. As will be seen from the
consideration of the next limb of s.389 below, if I am wrong in this conclusion it does not
change the outcome.
[2013] FWC 9928
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The respondent has complied with any obligation in a modern award or enterprise
agreement that applied to the applicant’s employment to consult about the redundancy
[31] It was agreed that the applicant was covered by the Lipa Pharmaceuticals Ltd
Employee Collective Agreement 2008-2013 (the Agreement). Clause 24 of the Agreement
contains relevant provisions at subclauses 24.5 to 24.9 inclusive as follows:
“24.5 Where the Employer has made a definite decision to implement changes in
production, program, organisation, structure or technology that are likely to
have significant effects on Employees, the Employer shall as soon as possible
notify the Employees who may be affected by the proposed changes.
24.6 ‘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 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 Agreement makes provision for alteration of any of the matters
referred to herein an alteration shall be deemed not to have significant effect.
24.7 The Employer shall discuss with the Employees affected, among other things,
the introduction of the changes referred to in this clause and the effects the
changes are likely to have on Employees.
24.8 The discussions shall commence as early as practicable after a definite decision
has been made by the Employer to make the changes referred to in this clause
hereof.
24.9 Where redundancies occur within a group of same/similar positions, leading to
the need to make selections for retrenchment, the Employer will consider the
following in coming to a decision as to which Employee/s to be retrenched:
(a) ability to discharge duties (i.e. skills match, performance,
competencies, etc);
(b) special circumstances such as the need to retain specific skills;
(c) any formal disciplinary history;
(d) Employee preferences for retrenchment within the group;
(e) any other factors the Employer considers relevant.”
[32] Furthermore clause 49 of the Agreement reads as follows:
“49.1 Where the Employer is proposing significant changes in work practices, shift
arrangements, working hours or manning, consultation will occur with those
Employees affected to allow reasonable opportunities for their input.”
[2013] FWC 9928
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Did the respondent have an obligation to consult with the applicant arising from this
provision of the Agreement?
[33] In a recent decision of the Commission, Roe C considers a similar question in the
context of considering whether an employee is genuinely redundant. In Mr Georg Thomas v
InfoTrak Pry Ltd T/A Info Trak6 Roe C finds that the relevant award, the Professional
Employees Award 2010, contains clause 9 - Consultation regarding major workplace change
and that the Respondent had a duty to discuss change in accordance with Clause 9.2.
[34] In light of the employers admitted failure to do so Roe C finds that the termination of
the employee was not a genuine redundancy because there was a requirement to consult about
redundancy pursuant to the award which was not complied with.
[35] This clause is not in the same terms as the clause being considered by Roe C. However
like the clause considered by Roe C it is a provision that covers a wide range of
circumstances, arguably including employment reduction due to operation reasons.
[36] The Macquarie Concise Dictionary Third Edition defines “consult” as:
“1. To seek counsel from; ask advice of 2. Refer to for information 3. To have regard
for (a person’s interest, convenience, etc) in making plans 4. To consider or deliberate,
take counsel, confer”
[37] In the Ulan decision cited above the Full Bench considered the consultation obligation
of the employer in the context of a restructure of the operations of the mine. The Full Bench
considered that the employer had complied with their obligation in circumstances where they
had consulted with a group of employees. In coming to this conclusion they rejected the view
of the Commissioner that the obligation to consult did not relate to mineworker employees
generally but to the particular mineworkers who were dismissed due to redundancy, however
this was in the context of the individuals affected being included in the group of employees
with whom consultation had taken place.
[38] The Full Bench said at paragraph 25:
“The Commissioner considered that it was this group of mineworkers who are referred
to in sub-clause 23.1 as being the employees who were ‘directly affected’ (cl. 23.1(1))
or the ‘employees concerned’ (cl. 23.1(3)) and that the sub-clause required that the
discussions be held with them (par [49]).”
[39] The Full Bench said at paragraphs 28 – 32:
“[28]....It is clear that the intention in those cases is that the employees and their
representatives should be involved in the problems of redundancy as soon as a firm
decision has been taken that retrenchments might be necessary (see TCR Case [1984]
8 IR 34, at 62-64). This intention can also be discerned from the wording of sub-clause
23.1 of the Agreement itself. The requirement is for discussions to begin ‘as soon as is
practicable’ after a definite decision is made about redundancies. The decision is
described in the sub-clause as one which ‘may’ lead to termination of employment
(par 23.1(1)) and the discussions to be held will include consideration of the reasons
for ‘proposed terminations’ and measures to ‘avoid or minimise the terminations’ (par
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23.1(2)). The discussions as such will be of relevance to the entire workforce of an
enterprise or at least to that part of the workforce whose work or jobs will be affected
by terminations due to redundancy. In the present case, this would be the mineworker
employees at the mine. These are the employees ‘directly affected’ by the decision to
change the size and composition of the mineworker workforce at the mine and the
group with whom the Company must hold discussions. The discussions are envisaged
to take place before the number of terminations is finalised and the particular
employees to be retrenched are identified.
[29] The benefit of having discussions at an early stage of the process is that it will
allow the employees an opportunity to influence such decisions and to put proposals as
to measures to avoid or minimise the terminations and to mitigate any adverse effects
of the terminations on the employees concerned. In some cases, the discussions and
consultations may cover the basis on which employees to be retrenched due to
redundancy will be selected. However in the present matter this is determined by the
Agreement to be according to seniority. Were it not for this factor, we consider there
might be more weight to the Applicants’ submissions concerning more individualised
consultation in connection with the impending retrenchments.
[30] In the present case, the Company held discussions about the restructure and
consequent redundancies with the entire workforce, including the mineworkers who
were dismissed. There was evidence that each of the Applicants was present during the
consultation meetings. The CFMEU as the representative of the employees was also
involved and the discussions covered the matters referred to in paragraph 23.1(2) of
the Agreement, namely the reasons for the proposed terminations, measures to avoid
or minimise the terminations and measures to mitigate adverse effects.
[31] We do not consider, in the particular circumstances of the present matter and
having regard to the obligation under sub-clause 23.1 of the Agreement, that a further
round of discussions was required to be held by the Company with the employees to
be dismissed, either separately or as a group. This does not mean that such separate
discussions might not be worthwhile and appropriate e.g. as part of the consideration
of measures to mitigate the adverse affects of terminations or to ensure that
opportunities for other employment and assistance are properly examined. However
they are not part of the discussions envisaged and required under sub-clause 23.1 of
the Agreement and that is the test in these particular circumstances. In different
circumstances this will of course vary according to the terms of particular awards and
agreements.
[32] The Commissioner found that the Company had complied generally with the
obligation in the Agreement by consulting with the CFMEU and the mineworker
employees generally about the redundancies. This was sufficient to satisfy the
requirement in s.389(1)(b) of the Act.”
[40] In this case Mr Khayum conceded that there was no consultation with the applicant
about his redundancy and since no other employees were affected and in any event there was
no submission that employees generally had been consulted. I conclude that the respondent
has not complied with their obligation arising from the Agreement to consult about the
redundancy. Accordingly I find that the respondent has not discharged their onus in relation to
section 389(1) (b) of the Act.
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It would not have been reasonable in all the circumstances for the applicant to be
redeployed within the respondent or the enterprise of an associated entity of the respondent
[41] Guidance on the meaning of this provision of the Act was given by the Full Bench in
Ulan Coal Mines v Honeysett and Others7 in paragraphs 26-28 as follows:
“[26] First, s.389(2) must be seen in its full context. It only applies when there has
been a dismissal. An employee seeking a remedy for unfair dismissal cannot succeed
if the dismissal was a genuine redundancy. In other words, if the dismissal is a case of
genuine redundancy the employer has a complete defence to the application. Section
389(2) places a limitation on the employer’s capacity to mount such a defence. The
defence is not available if it would have been reasonable to redeploy the employee.
The exclusion poses a hypothetical question which must be answered by reference to
all of the relevant circumstances.
[27] Secondly, it is implicit in the terms of s.389(2)(b) that it might be reasonable for
an employee dismissed by one employer to be redeployed within the establishment of
another employer which is an entity associated with the first employer. It follows that
an employer cannot succeed in a submission that redeployment would not have been
reasonable merely because it would have involved redeployment to an associated
entity. Whether such redeployment would have been reasonable will depend on the
circumstances. The degree of managerial integration between the different entities is
likely to be a relevant consideration.
[28] Thirdly, the question posed by s.389(2), whether redeployment would have been
reasonable, is to be applied at the time of the dismissal. If an employee dismissed for
redundancy obtains employment within an associated entity of the employer some
time after the termination, that fact may be relevant in deciding whether redeployment
would have been reasonable. But it is not determinative. The question remains whether
redeployment within the employer’s enterprise or the enterprise of an associated entity
would have been reasonable at the time of dismissal. In answering that question a
number of matters are capable of being relevant. They include the nature of any
available position, the qualifications required to perform the job, the employee’s skills,
qualifications and experience, the location of the job in relation to the employee’s
residence and the remuneration which is offered.” (my emphasis)
[42] There is no submission concerning the existence of any associated entity or entities of
the respondent therefore I will confine my consideration of this limb of s.389 to a
consideration of whether it would have been reasonable in all the circumstances for the
applicant to be redeployed within the respondent.
[43] Mr Khayum’s submisions in relation to this point were confined to an assertion that
there were no other jobs within the respondent for the applicant to be redeployed to. However
there was no indication that this possibility was discussed with the applicant. To discharge its
onus under s.389(2) the respondent must satisfy the Commission that it was not reasonable to
redeploy the applicant and simply asserting that there were no other jobs available is
insufficient in my view.
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[44] I find that the respondent has not discharged their onus in relation to s.389(2)(a) of the
Act.
[45] In these circumstances the jurisdictional objection made pursuant to s.389 of the Act
by the respondent is dismissed.
Merit argument
[46] When a jurisdictional objection on the grounds of genuine redundancy is dismissed it
often follows that because no other reason has been advanced for the dismissal, there is no
valid reason for the dismissal related to the person’s capacity or conduct.
[47] In such circumstances further inquiry to determine whether the dismissal was harsh,
unjust or unreasonable and thus unfair might not be called for. However this is not such a
case. In this case the respondent advanced two reasons for the dismissal of the applicant.
Genuine redundancy, which I have not accepted, and the unplanned absence record of the
applicant.
[48] Therefore I will consider the merit of the applicant’s case that he was unfairly
dismissed.
Statutory framework
[49] The Fair Work Commission exercises its discretion in relation to an application for an
unfair dismissal remedy pursuant to Part 3-2 Unfair Dismissal of the Act. Section 385 of the
Act reads 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.
Note: For the definition of consistent with the Small Business Fair Dismissal Code:
see section 388.
[50] Section 385 of the Act makes it clear that for a person to be found to have been
unfairly dismissed the person must have been dismissed in the first place. The meaning of
dismissed is found in s.386 of the Act. The applicant in this matter meets this definition.
386 Meaning of dismissed
(1) A person has been dismissed if:
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(a) the person’s employment with his or her employer has been terminated on
the employer’s initiative; or
(b) the person has resigned from his or her employment, but was forced to do
so because of conduct, or a course of conduct, engaged in by his or her
employer.
(2) However, a person has not been dismissed if:
(a) the person was employed under a contract of employment for a specified
period of time, for a specified task, or for the duration of a specified season,
and the employment has terminated at the end of the period, on completion of
the task, or at the end of the season; or
(b) the person was an employee:
(i) to whom a training arrangement applied; and
(ii) whose employment was for a specified period of time or was, for
any reason, limited to the duration of the training arrangement;
and the employment has terminated at the end of the training arrangement; or
(c) the person was demoted in employment but:
(i) the demotion does not involve a significant reduction in his or her
remuneration or duties; and
(ii) he or she remains employed with the employer that effected the
demotion.
(3) Subsection (2) does not apply to a person employed under a contract of a kind
referred to in paragraph (2)(a) if a substantial purpose of the employment of the person
under a contract of that kind is, or was at the time of the person’s employment, to
avoid the employer’s obligations under this Part.
[51] Section 385 of the Act also makes it clear that a person who has been dismissed in
circumstances where the Small Business Fair Dismissal Code was appropriately applied or the
dismissal was a case of genuine redundancy is not unfairly dismissed. Neither of these
conditions prevail in this case.
[52] Therefore, in determining whether the applicant in this matter was unfairly dismissed,
I must consider whether the dismissal was harsh, unjust or unreasonable.
[53] Case law suggests that these words are to be given their ordinary non-technical
meaning and are to be applied objectively.8
[54] Also that they can be considered separately, but of course may overlap. In Byrne v
Australian Airlines Pty Ltd,9 McHugh and Gummow JJ said:
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“It may be that the termination is harsh but not unjust or unreasonable, unjust but not
harsh or unreasonable, or unreasonable but not harsh or unjust. In many cases the
concepts will overlap. Thus, the one termination of employment may be unjust
because the employee was not guilty of the misconduct on which the employer acted,
may be unreasonable because it was decided upon inferences which could not
reasonably have been drawn from the material before the employer, and may be harsh
in its consequences for the personal and economic situation of the employee or
because it is disproportionate to the gravity of the misconduct in respect of which the
employer acted.”
[55] Section 387 of the Act provides a set of matters that I must take into account.
[56] The section reads as follows:
387 Criteria for considering harshness etc.
In considering whether it is satisfied that a dismissal was harsh, unjust or
unreasonable, FWC 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 FWC considers relevant.
[57] If I find that the applicant was unfairly dismissed I then must apply the provisions of
Division 4, Remedies for Unfair Dismissal of Part 3-2 of the Act in order to determine the
appropriate remedy as between reinstatement or the payment of compensation.
[2013] FWC 9928
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Consideration
Valid reason
[58] A valid reason is one that is sound, defensible and well founded10. It is not the function
of the Commission to stand in the shoes of the employer but to assess whether the employer
had a valid reason connected to the employee’s capacity or conduct.11
The Act requires an examination of whether there was a valid reason for dismissal, not
whether the reasons given to the employee for the dismissal were valid.
[59] In Aperio Group (Australia) Pty Ltd T/A Aperio Finewrap v Sulemanovski a
Full Bench of FWA said at paragraph 21:12
“[21] It is apparent that in applying s.387(a) of the Act, Commissioner Ryan limited
his consideration to whether the reason that Mr Sulemanovski refused to sign the
undertaking was a valid reason for the termination of the employment. The
Commissioner was obliged to consider more broadly whether there was a valid reason
for the dismissal related to Mr Sulemanovski’s capacity or conduct, as required by
s.387(a) of the Act. In restricting his consideration to whether the refusal to sign the
undertaking was a valid reason for the termination the Commissioner erred, acting
upon a wrong principle and misapplying the statutory requirements.”
[60] This decision is consistent with the decision of the Full Bench of the
Australian Industrial Relations Commission (AIRC) as it then was, in MM cables (A Division
of Metal Manufacturers) v Victor Zammit13 where they say at paragraph 42:
“[42] We think that there are two difficulties in the approach adopted by the
Commissioner to the question of whether there was a valid reason for Mr Zammit’s
termination of employment. First, the Commissioner seems to have confined himself
to determining whether the reason given for Mr Zammit’s termination was a valid
reason. The question in s.170CG(3)(a) is not so limited. Rather the Commission is
obliged to consider whether there was a valid reason for the termination - that inquiry
is not limited to the reason given by the employer for the termination.”
[61] The applicant had what would reasonably be regarded as a poor attendance record in
2012. He was absent from work due to illness or other reason (in which case he said he had
the permission of his supervisor) for 1 day in September 2012, 3 days in October 2012, 6 days
in November 2012 and 1 day in December 2012. His submission was that as a casual
employee who did not receive payment for personal leave he did not appreciate that he had
the same obligations as a permanent employee in relation to taking days off. He was not
aware of the Agreement or the respondent’s policy in relation to absence from work. He said
once he was made aware of the policy he complied with it and noted that he had no absences
between December 2012 and June 2013.
[62] He received a warning on 13 May 2013 about his attendance. Based on the
submissions of the respondent this can only have been in relation to the applicant’s record for
2012. Curiously the warning letter contained the following:
“A critical part of your employment contract and responsibility to Lipa is for you to be
available on the job when one is expected to be there. Your absenteeism is well
[2013] FWC 9928
15
beyond any average or comparable level when compared to all other departments. It is
now (my emphasis) having a direct and negative impact on your work and the ability
of your department to meet its objectives.”
[63] However, there were no absences recorded in 2013 save for the absences in June 2013,
after the warning was given, and immediately prior to the dismissal. These absences were due
to illness for which the applicant had obtained a medical certificate. However, he was
dismissed on his return to work immediately after the three days off and did not have the
opportunity to provide the medical certificate to the respondent.
[64] I find that the applicant’s attendance record did not constitute a valid reason for
dismissal.
Procedural fairness
[65] I must also consider the facts of the process of the applicant’s dismissal against the
matters set out in s.387(b)-(g) of the Act. The manner of the applicant’s dismissal was not
contested save for the applicant contending that he did not receive a letter of termination. It is
agreed that the applicant was dismissed by a new supervisor of the respondent with no
explanation at all. He was approached as he entered the premises on 5 June 2013 and asked
for his swipe card. If his absence record played a part in his dismissal he was given no chance
to discuss or respond to the respondent’s concerns and I have found that he was not offered
the opportunity of consultation in relation to the operational reasons advanced in his letter of
termination. He was not offered a meeting of any kind let alone one in which he was given the
opportunity of having a support person present. He was warned about his attendance record in
May 2013, however, the warning was in relation to his performance in 2012 with an
indication that the situation would be monitored over the next 6 months. Mr Khayum
submitted that a termination letter had been sent to the applicant, however, the applicant was
adamant that he had not received it. The letter that was provided to the applicant and the
Commission subsequent to the hearing cited operational reasons, not unplanned absences, as
the reason for dismissal. These are significant procedural flaws that weigh in favour of a
finding that the dismissal was harsh, unjust and unreasonable. The respondent employed
around 350 employees at the time of the dismissal and has a dedicated human resource
function, therefore, I do not think that the provisions of s.387(f) and (g) mitigate the
procedural flaws identified in the process of dismissal.
[66] This all weighs in favour of a finding that the applicant’s dismissal was harsh, unjust
and unreasonable and thus unfair.
Any other matters that the Commission considers relevant
[67] The applicant’s employment status seems to have been a factor in the mindset of both
the applicant and the respondent in this matter. The applicant thought that as a casual he did
not have the same obligations to comply with the Agreement in relation to absence from
employment as permanent employees. The respondent conceded that the applicant was a
casual employee who was employed on a regular and systematic basis with a reasonable
expectation of continuing employment on a regular and systematic basis. Yet their initial
response to the application contained in the Form F3 appeared to rely on his employment
status. In answer to the question, what were the reasons for dismissal, they replied:
[2013] FWC 9928
16
“Reduce staff. He was a casual and as business slows down, his services were no
longer required.”
[68] As the structure of employment relationships in our economy evolves it is important
that employees and employers understand their rights and responsibilities and as a casual
employee the applicant was no less entitled to be treated fairly in the termination of his
employment than a permanent employee.
Conclusion
[69] Taking all of the above into account I conclude that there was no valid reason for the
applicant’s dismissal and the dismissal was harsh, unjust and unreasonable and thus unfair.
Remedy
[70] It follows from this conclusion that I must apply the provisions of Division 4,
Remedies for Unfair Dismissal of Part 3-2 of the Act in order to determine the appropriate
remedy as between reinstatement or the payment of compensation.
[71] Section 390 of the Act reads as follows:
Section 390 When the FWC may order remedy for unfair dismissal
(1) Subject to subsection (3), the FWC may order a person’s reinstatement, or the
payment of compensation to a person, if:
(a) the FWC 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) The FWC may make the order only if the person has made an application under
section 394.
(3) The FWC must not order the payment of compensation to the person unless:
(a) the FWC is satisfied that reinstatement of the person is inappropriate; and
(b) the FWC 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.
[72] The Act is clear that reinstatement is the primary remedy in circumstances where the
Commission finds that a dismissal is unfair and only when the Commission is satisfied that
reinstatement is inappropriate is the alternative remedy, compensation, to be considered.
[2013] FWC 9928
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[73] The applicant seeks reinstatement and the respondent submits that reinstatement would
be impractical due to the downturn in the demand for the products of the respondent and the
factory shut down scheduled for 13 December 2013 to 20 January 2014.
[74] I am not convinced that the applicant was dismissed for operational reasons and I am
not convinced that for operational reasons his reinstatement would be inappropriate. Upon
reinstatement he will be subject to the lawful directions of the respondent in relation to any
matters pertaining to a factory shut down but of itself that is no reason not to reinstate him.
[75] In the circumstances I believe the appropriate remedy is reinstatement and I will order
that he is restored to the position he was in immediately prior to his dismissal from
23 December 2013 with full continuity of employment pursuant to s.392(2) of the Act and,
pursuant to s.391(3) of the Act, reimbursement of remuneration for the period from his
dismissal to his reinstatement.
[76] The applicant is required to provide the respondent with an account of his gross
earnings between the date of his dismissal and the date of reinstatement and pursuant to
s.391(4) that amount is to be deducted from the amount that is to be reimbursed to the
applicant to satisfy the decision above.
[77] An order reflecting this decision will issue.
DEPUTY PRESIDENT
ORK COMMISSION
[2013] FWC 9928
18
Appearances:
T de Haan, the Applicant
M Khayum for Lipa Pharmaceuticals Ltd
Hearing details:
2013.
Sydney:
11 October, 18 November.
Printed by authority of the Commonwealth Government Printer
Price code C, PR545841
1 Respondent’s Submissions p3
2 Form F3 - Employer’s Response to Application for Unfair Dismissal Remedy
3 Ulan Coal Mines v Honeysett and Others[2010] FWAFB 7578 PN26
4 [2010] FWAFB 3488
5 Exhibit K3
6 [2013] FWC 1134
7 [2010] FWAFB 7578
8 Sheppard and Heery JJ in Bostik (Australia) Pty Ltd v Dimitrja Gorgevski (No 1) (1992 41 IR 452 at 459) where their
Honours said this in relation to the wording of Clause 9 of the Manufacturing Grocers Award 1985
9 1995 185 CLR 410 at 465
10 Selvachandran v Peteron Plastics Pty Ltd 1995 62 IR 371 at 373
11 Walton v Mermaid Dry Cleaners Pty Ltd 1996 142 ALR 681; Miller v University of NSW 2001 110 IR 1 at 30
12 [2011] FWAFB 1436
13 S8106 [2000] AIRC 61
