1
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Mr David Priest
v
HFB Pty Ltd ATF HFB Admin Trust T/A Howe Ford & Boxer
(U2015/12142)
COMMISSIONER JOHNS BRISBANE, 5 FEBRUARY 2016
Application for Relief of Unfair Dismissal – genuine redundancy – job no longer required as
opposed to the continuing need for the performance of functions – consultation obligations –
redeployment – redundancy, but not a genuine redundancy.
Introduction
[1] On 6 October 2015, an application pursuant to s.394 of the Fair Work Act 2009 (FW
Act) for a remedy for unfair dismissal was lodged by David Priest (applicant).
[2] Attempts to conciliate the matter were unsuccessful. Consequently, the matter was
listed for hearing. At the hearings conducted on 4 February 2016:
a) the applicant represented himself and gave evidence on his own behalf.
b) HFB Pty Ltd ATF HFB Admin Trust T/A Howe Ford & Boxer
(respondent/employer/HFB) was represented by its sole director Terry Ford. Mr
Ford gave evidence on behalf of the respondent and was cross-examined by the
applicant.
c) Mr Ford called Shona Sherman, Practice Manager – HBF Accounting Pty Ltd, to
give evidence. Ms Sherman had filed two witness statements (Exhibit “R1” and
“R2”) and was cross-examined by the applicant.
d) Mr Ford also filed witness statements by:
i. Chris Heavon-Jones, the respondent’s financial planner (Exhibit “R6”);
ii. Timothy Davis, the sole director of HFB Accounting Pty Ltd (Exhibit
“R7”);
iii. Clair Harrison, principal of Harrison Human Resources, a HR consulting
firm (Exhibit “R8”);
iv. Emily Banks, a former employee of the respondent and now an employee
[2016] FWC 802
DECISION
E AUSTRALIA FairWork Commission
[2016] FWC 802
2
of HFB Accounting Pty Ltd (Exhibit “R9”); and
v. Helen Dundon, an employee of the respondent (Exhibit “R10”).
[3] The Respondent did not call upon any witnesses other than Ms Sherman and Mr Ford
to give evidence and, therefore, they were not available for cross-examination. However, the
applicant did not object to the Commission receiving Exhibits “R6” – “R10 into evidence.
[4] In coming to this decision the Commission, as presently constituted, has had regard to
all of the evidence filed in the proceeding and evidence of the witnesses who attended at the
Commission on 4 February 2016.
[5] In addition the Commission, as presently constituted, has had regard to the
submissions filed on behalf the parties (Exhibits “A2”, “R3” and “R4”).
[6] During the hearing the parties referred the Commission to a number of authorities as
follows:
Applicant
a) UES (Int'l) Pty Ltd v Harvey [2012] FWAFB 5241;
b) Ball v Metro Trains Melbourne T/A Metro Trains [2012] FWA 8384;
c) Irnya Margolina v Jenny Craig Weight Loss Centres Pty Ltd [2011] FWA 5215;
Respondent
d) Millen v Electrix Pty Ltd [2014] FWC 6912;
e) Ventyx Pty Ltd v Mr Paul Murray [2014] FWCFB 2143; and
f) Guerra v Speedie Waste Pty Ltd [2014] FWC 8940.
[7] In coming to this decision the Commission, as presently constituted, has had regard to
those authorities. Except in relation to one of the authorities (to which I return below at [32]),
the Commission, as presently constituted, accepts the correctness of the authorities to which it
was referred and has applied the same.
Background
[8] The following matters were agreed between the parties or not otherwise contested.
a) The applicant’s employment with the respondent commenced on 14 May 2012.
b) The applicant was employed as a Para-planner.
c) The applicant was employed on a full-time basis working approximately 37.5
hours per week.
d) The applicant’s weekly wage was $1094, that being an annual salary of $56,880.
e) The applicant’s employment was terminated during a meeting which occurred on
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16 September 2015. The letter of termination (Exhibit “R11”) indicated that the
applicant was not required to work out his notice period (four weeks) and that his
last day with the respondent would be 17 September 2015.
[9] The applicant submits he was unfairly dismissed and seeks an Order that he be
compensated.
Protection from Unfair Dismissal
[10] An order for reinstatement or compensation may only be issued where the
Commission is satisfied the applicant was protected from unfair dismissal at the time of the
dismissal. In the present matter this is not an issue in dispute in the proceeding, the
respondent concedes the same.
[11] There is no dispute, and the Commission, as presently constituted, is satisfied, the
applicant has completed the minimum employment period, and is covered by the Banking,
Finance and Insurance Award 2010 (Award). Consequently, the Commission, as presently
constituted, is satisfied the applicant was protected from unfair dismissal.
[12] I will now consider if the dismissal of the applicant by the respondent was unfair
within the meaning of the FW Act.
Was the dismissal unfair?
[13] A dismissal is unfair if the Commission is satisfied, on the evidence before it, that all
of the circumstances set out at s.385 of the FW Act existed. Section 385 provides the
following:
“385 What is an unfair dismissal
A person has been unfairly dismissed if the FWC 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.”
Was the applicant dismissed?
[14] A person has been unfairly dismissed if the termination of their employment comes
within the definition of “dismissed” for purposes of Part 3–2 of the FW Act. Section 386
contains the relevant definition. In this present matter this is not an issue in dispute in the
proceeding, the respondent concedes the same.
[15] Consequently, the Commission, as presently constituted, finds that the applicant was
dismissed from his employment with the respondent within the meaning of s.386 of the FW
Act.
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Was the dismissal consistent with the Small Business Fair Dismissal Code?
[16] A person has not been unfairly dismissed where the dismissal is consistent with the
Small Business Fair Dismissal Code (the Code). However, the Code is only relevant if the
valid reason for the termination asserted by the small business employer relates to summary
dismissal, conduct or performance. None of these are relevant in the present matter. So much
so was conceded by Mr Ford during the hearing. Consequently, compliance with the Code is
not a relevant consideration.
Was the dismissal a genuine redundancy?
[17] The respondent submits the Commission should dismiss the application because the
dismissal was a case of genuine redundancy. Section 389 of the FW Act defines the meaning
of genuine redundancy:
“389 Meaning of genuine redundancy
(1) A person’s dismissal was a case of genuine redundancy if:
(a) the person’s employer no longer required the person’s job to be performed by anyone
because of changes in the operational requirements of the employer’s enterprise; and
(b) the employer has complied with any obligation in a modern award or enterprise agreement
that applied to the employment to consult about the redundancy.
(2) A person’s dismissal was not a case of genuine redundancy if it would have been reasonable in all
the circumstances for the person to be redeployed within:
(a) the employer’s enterprise; or
(b) the enterprise of an associated entity of the employer.”
Was the applicant’s job no longer required to be performed?
[18] To be satisfied the dismissal was a case of genuine redundancy, the Commission must
be satisfied the role of Para-planner was no longer required to be performed by anyone
because of operational changes to the respondent. While the applicant makes the point that
the functions performed by him continued to be performed after the termination of his
employment it has not been contested by the applicant that the job of Para-planner was no
longer required.
[19] At the time that the employment of the applicant was terminated the following people
were engaged in the business of the respondent:
a) Mr Terry Ford, 50% partner in the business;
b) Mr David Boxer, 50% partner in the business;
c) Mr Chris Heavon-Jones, Manager / Financial Advisor;
d) the applicant, Para-planner;
e) Ms Helen Dundon, administration.
[2016] FWC 802
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[20] The evidence of Mr Ford was that “A Para-planner is a person who works with a
Financial Planner and completes non-client tasks involved in preparing a financial plan for a
client. The preparation of a financial plan requires, report writing, analysing statistics and
research and managed fund investments.” The fact that each element of the applicant’s job
still needed to be done, does not mean that his job was still required. An employee’s job
comprises the job title and the discrete duties which are attached to it. In the present matter,
the applicant’s job title and the discrete duties attached to it ceased to exist on 17 September
2015.
[21] The FW Act does not define the term “operational requirements”. It is a broad term
that permits consideration of many matters including the state of the market in which the
business operates and the application of good management to the business.1 Some examples
of changes in operational requirements include a downturn in trade that reduces the number of
employees required and the employer restructuring the business to improve efficiency
including the redistribution of tasks done by a particular person between several other
employees thus resulting in the person’s job no longer existing.2
[22] The onus is on the employer to prove that, on the balance of probabilities, the
redundancy was due to changes in operational requirements.3
[23] Mr Ford gave evidence that operational changes were implemented due to a reduction
in the sales performance for the year ended 31 October 2015 when compared with the year
ended 31 October 2014. His evidence was that there had been a 49% drop in sales
performance. Further, his evidence was that the economic state of uncertainty in the financial
market that the business operates in resulted in a reduction in the requirements for staff and
the introduction of outsourcing (external contractors to perform para-planning duties). Mr
Ford gave evidence that the respondent restructured the business to improve efficiency and
redistributed the tasks performed by the applicant between other employees. In essence, the
duties performed by the applicant were assumed by Mr Heavon-Jones.
[24] The applicant took issue with Mr Ford’s characterisation of the business’ need to make
his position redundant. He points to the fact (conceded by Mr Ford) that during the period of
his employment revenue raised by the financial planning department had increased from
$330,000 to over $550,000. In reply Mr Ford explained the difference between a gross
increase in fees and a reduction in the size of the business occasioned by the non-generation
of new business. The Statutory Declaration of Mr Heavon-Jones went into some detail about
the financial affairs of the financial planning business. In large part it confirmed the evidence
of Mr Ford. This was not contested by the applicant.
[25] Mr Heavon-Jones also observed that the applicant was employed in the full-time para-
planning position to ease his workload and enable him to focus more on client interaction
including meetings. This allowed work to be fed to the applicant on a regular basis. Mr
Heavon-Jones’ evidence was that when the full-time para-planner position was made
redundant the roles “merely reverted back to [me]”. This evidence was not contested by the
applicant.
[26] Consequently, the Commission, as presently constituted, accepts the respondent’s
1 Nettlefold v Kym Smoker Pty Ltd (1996) 69 IR 370, 373.
2 Explanatory Memorandum, Fair Work Bill 2008, [1548].
3 Keiselbach v Amity Group Pty Ltd (unreported, AIRC, Hamilton DP, 9 October 2006) PR973864, [34].
[2016] FWC 802
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submissions that as a result of its assessment of sales performance and the activity levels of its
employees, the role of Para-planner was no longer required to be performed as a result of
changes in the operational requirements of the respondent’s enterprise.
Did the respondent comply with any consultation obligations?
[27] I must now consider whether the respondent was obliged by a modern award or
enterprise agreement to consult with the applicant about the redundancy prior to the dismissal.
[28] At the time of the dismissal the Award applied to the employment relationship. The
application of the Award is not disputed by the parties.
[29] The consultation provisions in the Award appear at clause 8.1. It is important to set out
the clause of the Award:
8.1 Consultation regarding major workplace change
(a) Employer to notify
(i) Where an employer has made a definite decision to introduce major changes in production, program,
organisation, structure or technology that are likely to have significant effects on employees, the
employer must notify the employees who may be affected by the proposed changes and their
representatives, if any.
(ii) 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 elimination or diminution of job
opportunities, promotion opportunities or job tenure; 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 award makes provision for alteration of any of these matters an alteration is deemed not
to have significant effect.
(b) Employer to discuss change
(i) The employer must discuss with the employees affected and their representatives, if any, the
introduction of the changes referred to in clause 8.1(a), the effects the changes are likely to have on
employees and measures to avert or mitigate the adverse effects of such changes on employees and
must give prompt consideration to matters raised by the employees and/or their representatives in
relation to the changes.
(ii) The discussions must commence as early as practicable after a definite decision has been made by
the employer to make the changes referred to in clause 8.1(a).
(iii) For the purposes of such discussion, the employer must provide in writing to the employees
concerned and their representatives, if any, all relevant information about the changes including the
nature of the changes proposed, the expected effects of the changes on employees and any other matters
likely to affect employees provided that no employer is required to disclose confidential information the
disclosure of which would be contrary to the employer’s interests.
[30] The evidence of Ms Harrison was that Mr Ford first sought advice and support about
the restructure of the financial planning business, including the making of one position
redundant, on 8 September 2015. Ms Harrison says she provided that advice to Mr Ford and
a draft letter to the employee for him to consider on 14 September 2005.
[31] The respondent submitted that, despite clause 8.1 in the Award, there was no
obligation to consult with the applicant (about the decision to make his position of Para-
planner redundant) because the abolition of one position is not a “major workplace change”.
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In support of this submission the respondent relied upon the decision in Millen v Electrix Pty
Ltd.4
[32] The decision in in Millen v Electrix was made by a single member of the Commission.
I have carefully considered the determination made by the Commissioner in Millen v Electrix.
He determined that he was “satisfied that the abolition of one position is not major workplace
change as set out in Clause 8” of the Clerks Modern Award. With respect to my brother
Commissioner, is not entirely clear from his decision the reasoning for that determination.
Without further explanation it seems that the Commissioner‘s reasoning should be confined to
the facts and the relevant modern award before him. There is no reason to form the view that
the determination made by the Commissioner was intended as a statement of broad
application.
[33] In the present matter a decision was made to reduce the number of employees engaged
by the respondent by one third. A decision was made to take all of the functions once
performed by the applicant and distribute them amongst the remaining two employees (more
likely, principally Mr Heavon-Jones). In the present matter, therefore, the Commission, as
presently constituted, finds that the employer made a definite decision to introduce major
changes in its organisation or structure. Consequently, the respondent had an obligation to
consult with the applicant.
Was there consultation?
[34] The evidence of the applicant about how he came to know about his position being
made redundant is substantially uncontroverted. His evidence was that at approximately 2.00
p.m. on 16 September 2015 the operations manager for HFB Accounting Pty Ltd, Ms Shona
Sherman, approached him and asked him to come to the boardroom for a meeting. The
meeting was not prearranged and there was no warning about the subject of the meeting. In
the boardroom Ms Sherman introduced the applicant to a human resources consultant named
Claire Harrison. Ms Harrison then proceeded to tell the applicant that, due to a restructure in
the business, his position was no longer required, there was no possibility of being moved to
another role and hence he was being made redundant. Ms Sherman, who attended the meeting
as a witness for the respondent, confirmed the correctness of the applicant’s recollection of
the meeting of 16 September 2015.
[35] It is well established that:
a) the consultation should be meaningful and should be engaged in before an
irreversible decision to terminate has been made;5 and
b) “Consultation is not perfunctory advice on what is about to happen ...
[c]onsultation is providing the individual, or other relevant persons, with a bona
fide opportunity to influence the decision maker.”6
[36] Ms Harrison gave evidence that the applicant “was given an opportunity to provide
feedback on the new structure, the decision that his position was no longer required, and
4 [2014] FWC 6912.
5 Construction, Forestry, Mining and Energy Union v Newcastle Wallsend Coal Company (1998) 88 IR 202, 218; cited in
Steele v Ennesty Energy Pty Ltd T/A Ennesty Energy [2012] FWA 4917 (unreported, Jones C, 21 June 2012) [20].
6 Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v
Vodafone Network Pty Ltd (unreported, AIRC, Smith C, 14 November 2001) PR911257 [25].
[2016] FWC 802
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options around redeployment.” Ms Harrison was not made available for cross-examination.
The applicant denies that any genuine consultation occurred. The applicant had a calm
demeanour and readily answered questions without prevarication. He made himself available
for cross-examination. He presented as a witness of truth. His recollection of the events of 16
September 2015 is to be preferred. Any opportunity afforded to him to provide feedback was
a false opportunity.
[37] The uncontroverted evidence in the present matter is that the applicant was called to a
meeting on 16 September 2015 and advised that his job was redundant and that he was being
dismissed. The dismissal was effective immediately with the applicant being paid four weeks
in lieu of notice. There is nothing in the evidence to suggest that the applicant had any prior
knowledge of the intention of the respondent to declare his position redundant and to dismiss
him. The evidence is that the applicant first became aware that his job was redundant on 16
September 2015.
[38] Applying the evidence to the requirements of the Award is clear that the requirements
of the Award relating to consultation were not complied with.
[39] Consequently, the Commission, as presently constituted, is not satisfied the respondent
complied with the requirement to consult with the applicant about the redundancy prior to
dismissing him. By reason of that finding the respondent’s conduct was contrary to
s.389(1)(b) of the FW Act. Compliance with s.389(1)(b) of the FW Act is an essential step if
the redundancy is to be considered a “genuine redundancy” within the meaning of s.389(1) of
the FW Act. Non-compliance with s.389(1)(b) of the FW Act means that the redundancy was
not a “genuine redundancy”.
[40] Because I have found that the redundancy in the present matter was not a “genuine
redundancy” (by reason of the respondent failing to comply with its obligation to consult) it is
unnecessary for me to consider if redeployment was appropriate in all the circumstances of
this case. It is sufficient, at this juncture, to dismiss the respondent’s jurisdictional objection
to the Commission hearing and to now go on to determine the merits of the applicant’s unfair
dismissal application.
Harsh, unjust or unreasonable
[41] Having been satisfied of each of s.385(a),(c) and (d) of the Act, I must consider
whether I am satisfied the dismissal was harsh, unjust or unreasonable. The criteria the
Commission must take into account when assessing whether the dismissal was harsh, unjust
or unreasonable are set out at s.387 of the Act:
“387 Criteria for considering harshness etc.
In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the 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
[2016] FWC 802
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(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 the FWC considers relevant.”
[42] Normally I would be under a duty to consider each of these criteria in reaching my
conclusion.7 However, being satisfied that dismissal was not a case of genuine redundancy
(because of the respondent’s failure to consult) the consideration of the matters specified in
s.387(a), (b) and (c) are neutral, unless in the circumstances another valid reason is identified.
No other valid reason was identified by the respondent. Matters arising from the redundancy;
such as the failure to consult fall within s.387(h).8
[43] For completeness I will now consider each of the criteria at s.387 of the Act
separately.
Valid reason - s.387(a)
[44] The reasons for the dismissal of the applicant were not related to his capacity or
conduct. Accordingly there cannot have been and there was not a valid reason for his
dismissal related to his capacity or conduct. In the circumstances of this case I regard this
element of s.387 as a neutral matter with respect to my consideration as to whether the
dismissal of the applicant was harsh, unjust or unreasonable.
Notification of the valid reason and opportunity to respond - s.387(b), (c)
[45] The matters in s.387(b) and (c) of the FW Act deal with whether there was procedural
fairness in respect of a reason for dismissal related to capacity or conduct. The dismissal of
the applicant was not related to capacity or conduct. In the circumstances of this case I regard
this element of s.387 as a neutral matter with respect to my consideration as to whether the
dismissal of the applicant was harsh, unjust or unreasonable.
Unreasonable refusal by the employer to allow a support person - s.387(d)
[46] Where an employee protected from unfair dismissal requests a support person be
present to assist in discussions relating to the dismissal, the employer should not unreasonably
refuse that person being present.
[47] In the present matter the applicant was not provided with an opportunity to bring a
support person to the meeting on 16 September 2015. It would have been decent had he been
provided with such an opportunity. However, the failure to provide the applicant with an
7 Sayer v Melsteel [2011] FWAFB 7498.
8 UES (Int’l) Pty Ltd v Harvey (2012) 215 IR 263.
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opportunity to bring a support person does not constitute an unreasonable failure to refuse the
same. In the circumstances of this case I regard this element of s.387 as a neutral matter with
respect to my consideration as to whether the dismissal of the applicant was harsh, unjust or
unreasonable.
Warnings regarding unsatisfactory performance - s.387(e)
[48] The dismissal of the applicant did not relate to his unsatisfactory performance, so this
matter is not relevant to my consideration as to whether the dismissal was harsh, unjust or
unreasonable. In the circumstances of this case I regard this element of s.387 as a neutral
matter with respect to my consideration as to whether the dismissal of the applicant was
harsh, unjust or unreasonable.
Impact of the size of the Respondent on procedures followed and Absence of dedicated human
resources management specialist/expertise on procedures followed - s.387(f), (g)
[49] The size of a respondent’s enterprise may impact on the procedures followed by it in
effecting a dismissal. Further, the absence of dedicated human resource management or
expertise in a respondent’s enterprise may have impact on the procedures followed by it.
[50] In the present matter the respondent is a small business within the definition of the FW
Act. Immediately prior to the termination of the applicant’s employment the respondent
employed only three people. It did not have a dedicated human resources management
specialist or expertise within its business. The termination meeting was conducted by a HR
consultant.
[51] Having engaged a HR consultant to conduct the termination meeting it is surprising
that a specialist in the area does not appear to have turned her mind to the obligation to
consult. Having regard to the finding I have made that the respondent failed to comply with
its obligation to consult under the Award, it seems apparent that the size of the respondent and
its lack of in-house HR capacity had a detrimental impact on the procedure that it followed in
effecting the termination of the applicant’s employment.
[52] However, having engaged a HR consultant the respondent can be expected to have
done a better job in its dealings with the applicant. As a matter of common decency it could
have explored with him a reduction in his hours or the opportunity to do the work on a
consultancy basis (noting the respondent’s intention to outsource the work). Mr Ford, the
principal of the business and the decision-maker, did not even have the courtesy to
communicate the decision (that he had made) directly to the applicant. In such a small
operation and in respect of an employee who had rendered loyal service for more than three
years, it would have been preferable if Mr Ford had explained the decision to the applicant.
However, he abdicated that role to Ms Harrison.
[53] Further, the haste with which the applicant was dispatched from the respondent’s
office was unnecessary. He was given less than two hours to leave. He was escorted “out the
back door”. There was no evidence that there were any concerns with the applicant’s conduct
or performance. There was no evidence that the respondent had any reason not to trust the
applicant to continue to safeguard its interests during the course of his departure. The
treatment of the applicant on 16 September 2015 was indecent. In the circumstances of this
case I regard this element of s.387 as telling in favour of determining that the dismissal of the
applicant was harsh, unjust or unreasonable.
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Other relevant matters - s.387(h)
[54] Section 387(h) provides the Commission with a broad scope to consider any other
matters it considers relevant. I consider the following matters to be relevant to the
determination of whether the dismissal of the Applicant was harsh, unjust or unreasonable:
a) There was a sound, defensible and well-founded reason for the termination of the
applicant’s employment, being that the respondent no longer required his discrete
job as a Para-planner to be performed by anyone because of changes in the
operational requirements of its enterprise. This matter tells against a conclusion
that the dismissal was harsh, unjust or unreasonable.
b) There were limited (if any) opportunities to redeploy the applicant within the
respondent. During the hearing the applicant indicated that he would have been
prepared to accept a reduction in his hours of work to mitigate against the adverse
consequences of the termination of his employment. His preparedness to undertake
part-time work was uncontested and I accept the genuineness of his evidence in
this regard. Of course, by reason of the failure of the respondent to comply with its
obligations to consult, no conversation occurred with the applicant about what
steps might be put in place to mitigate the adverse consequences of the termination
of employment. However, having regard to the evidence of Mr Ford and Mr
Heavon-Jones about the state of the business and utilisation rates of employees in
September 2015, while I think that discussion should have occurred, I am not
satisfied that, had the discussion occurred, the respondent would have been in a
position to accommodate part-time work for the applicant. This matter tells
against a conclusion that the dismissal was harsh, unjust or unreasonable.
c) There was no associated entity into which the applicant could be redeployed. The
applicant submitted that Mr Ford was a partner in another business that should be
considered an associated entity, namely an accounting business called HFB
Accounting Pty Ltd. However, it was the uncontroverted evidence of Mr Ford that
he is not a director of HFB Accounting Pty Ltd, rather, he is a minority
shareholder of 20%. The evidence was that he has no control or influence over the
financial or operating practices of HFB Accounting Pty Ltd. Mr Tim Davis is the
sole director of HFB Accounting Pty Ltd. He is not a shareholder in the
respondent and has no control or influence over its financial or operating practices.
But for Mr Ford’s 20% shareholding in HFB Accounting Pty Ltd and some cross
referral of clients there was no evidence that the respondent controls the
operations, resources or affairs of HFB Accounting Pty Ltd, or vice versa. The
Commission, as presently constituted, is not satisfied that the respondent and HFB
Accounting Pty Ltd are associated entities within the meaning of the Corporations
Act 2001(Cth). There being no associated entity into which the applicant could be
redeployed tells against a conclusion that the dismissal was harsh, unjust or
unreasonable.
d) By reason of the respondent being a small business (as defined by the FW Act) the
applicant was not entitled to a severance or redundancy payment on the
termination of his employment. His only entitlement was to notice and the
respondent made a payment to him in lieu of notice. Understandably the applicant
is aggrieved that he did not receive a redundancy payment. Had the respondent not
been a small business employer the applicant would have been entitled to 7 weeks’
pay. The applicant makes the point that when he commenced employment with
the respondent it was not a small business employer. It did not become a small
business employer until 14 July 2014 when the accounting business was sold to
[2016] FWC 802
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Mr Davis. The impact on the applicant of the respondent becoming a small
business employer (i.e. becoming disentitled to 7 weeks redundancy pay) is
significant. However, it is not appropriate that that disadvantage be cured through
this proceeding. Mr Ford and his business partner, Mr David Boxer, were entitled
to sell their accounting business. There is no evidence that they made that decision
(in July 2014) in an attempt to deliberately deprive the applicant of a severance or
redundancy payment in September 2015. The fact that the respondent was a small
business employer at the time that the termination was affected tells against a
conclusion that the dismissal was harsh, unjust or unreasonable.
e) The significant matter that possibly tells in favour of a conclusion that the
dismissal was harsh, unjust or unreasonable is the respondent’s failure to consult
with the applicant as required by the Award. As stated above, the usual rule is that
consultation must not be perfunctory advice about what is about to happen (and
this is what occurred in the present matter). The exception to the usual rule arises
in circumstances where consultation is highly unlikely to negate the operational
reasons for the dismissal or lead to any other substantive change. In those
circumstances the failure to consult may not be so strongly considered by the
Commission in determining whether it was an unfair dismissal.9 Having regard to
all the evidence before me, while I think the respondent should have consulted
with the applicant, I am not satisfied that the failure to meet the consultation
obligation in the Award is significant in the overall context of determining whether
the termination was harsh, unjust or unreasonable. The Commission, as presently
constituted, finds that the explanation for the termination on 16 September 2015
and the limited options available at that time were such that more extensive
consultation would not have altered the outcome arrived at by the respondent. The
absence of consultation in accordance with the Award means the redundancy was
not a “genuine redundancy”, but it was not so serious a procedural deficiency to
support a conclusion that the dismissal was harsh, unjust or unreasonable.
Conclusion
[55] The Commission, as presently constituted, is satisfied that the applicant was protected
from unfair dismissal but that the dismissal was not a case of genuine redundancy within the
meaning of s.389 of the FW Act because of the respondent’s failure to comply with its
consultation obligations.
[56] However, having considered each of the matters specified in s.387, the Commission,
as presently constituted, is not satisfied that, overall, the dismissal of the Applicant was harsh,
unjust or unreasonable. In this case, deficiencies in the consultation about the redundancy
would not have altered the outcome arrived at by the respondent and provides little support
for a finding that the termination was harsh, unjust or unreasonable. Accordingly, the
Commission, as presently constituted, finds the Applicant’s dismissal was not unfair within
the meaning of the FW Act. The applicant’s application for an unfair dismissal remedy must,
therefore, be dismissed.
[57] An order will be issued with this decision.
9 Maswan v Escada Textilvertrieb T/A ESCADA [2011] FWA 4239 (unreported, Watson VP, 8 July 2011) [39].
[2016] FWC 802
13
COMMISSIONER
Appearances:
Mr Priest the Applicant
Mr Ford for the Respondent
Hearing details:
Thursday 4 February 2016
Printed by authority of the Commonwealth Government Printer
Price code B, PR576802
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