1
Fair Work
Act 2009
s.394—Unfair dismissal
Maria Ranchod
v
Dog and Bone Holdings Pty Ltd T/A Dog & Bone
(U2021/2587)
DEPUTY PRESIDENT ASBURY BRISBANE, 12 OCTOBER 2021
Application for an unfair dismissal remedy – Objection on the ground of genuine redundancy
– Genuine redundancy under the Fair Work Act 2009 – Evidentiary onus to establish objection
– Respondent’s failure to establish objection – Consideration of whether dismissal unfair –
Finding that dismissal was unfair – Reinstatement not appropriate – compensation awarded.
Overview
[1] Ms Maria Ranchod (the Applicant) applies under s. 394 of the Fair Work Act 2009 (the
Act) for an unfair dismissal remedy in respect of her dismissal by Dog and Bone Holdings Pty
Ltd T/A Dog & Bone (the Respondent). The Applicant and the CEO and Director of the
Respondent, Mr Lee Ranchod, are married. In November 2020 they separated but continued to
reside together and at the time the application was made were in the process of dissolving their
marriage. Understandably there is acrimony associated with the dissolution of the marriage and
related litigation, which impacted the hearing of this application.
[2] The Respondent is engaged in the technology industry and develops and sells products
such as phone cases and smart locks. The Applicant states that she co-founded the Company
and commenced working for the Respondent on 1 January 2012. The Applicant was employed
by the Respondent as Marketing Director and contends that she brought skills to the Company
developed in her studies for a Business Communications degree majoring in Marketing and PR,
and twenty years’ experience working in a senior capacity for various companies. The
Respondent disputes that Applicant co-founded the Company in 2012 and maintains that her
employment only started in July 2016. It is common ground that the Applicant was notified of
her dismissal on 2 March 2021 and that the dismissal took effect on 23 March.
[3] The Applicant contends that her dismissal was not a case of genuine redundancy and
was a ruse to remove her from the Company because of the breakdown of her marriage to Mr
Ranchod. The Respondent objected to the application on the basis that it asserted that the
dismissal was a case of genuine redundancy and in the alternative, on the ground that the
dismissal was consistent with the Small Business Fair Dismissal Code (the Code).
[2021] FWC 6093
DECISION
AUSTRALIA FairWork Commission
[2021] FWC 6093
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[4] The Respondent did not agree to participate in a conciliation conference before the
jurisdictional objection was determined and the matter was subsequently allocated to me for
hearing and determination. At a Mention/Directions hearing on 4 May 2021, the Respondent
withdrew its objection to the application based on the Code and maintained its objection based
on the contention that the dismissal was a case of genuine redundancy. The parties agreed that
the hearing would determine the jurisdictional objection and merits.
Procedural matters
[5] Directions were issued for the filing of material in relation to:
Whether the dismissal was a case of genuine redundancy (the jurisdictional objection);
and
In the event the jurisdictional objection is not upheld, whether the dismissal was unfair
on the basis that it was harsh, unjust or unreasonable (merits); and
If the dismissal was unfair, the remedy, if any, that should be granted.
[6] The Directions required that the Respondent file evidence and submissions in relation
to its jurisdictional objection (genuine redundancy), and at the same time, the Applicant file
evidence and submissions in relation to merit (whether her dismissal was unfair). The
Directions then provided for each party to respond to the material filed by the other party. The
requirements set out in the Directions were explained to the parties at the Mention/Directions
hearing. All relevant legislative provisions were appended to the Directions and they included
links to template documents to assist in the preparation of outlines of submissions and witness
statements. The Directions also dealt with requirements for tendering documents by appending
them to a witness statement.
[7] In support of her assertions about the real reasons for her dismissal, the Applicant
referred in her material to documents, including a Family Report prepared by a family
counsellor, and quoted sections of those documents without attaching them to a witness
statement. It became apparent that the Family Report was prepared for the purposes of family
law proceedings and other than an assertion from the bar table by the Applicant, there was no
evidence that the author of the Report had been informed that it was to be tendered to the
Commission or that permission from the Court had been sought. It was also apparent that the
Applicant was seeking to rely on the Report to establish that Mr Ranchod had made certain
statements to the author of the Report and that she did not intend to call the author of the Report
to give evidence. Mr Ranchod denied making the statements recorded in the Report and
contended that he had sought advice from his legal representatives during an adjournment
granted to the parties for this purpose, who advised that he should object to the Report being
tendered. In those circumstances, I did not allow the Applicant to tender the Report. Other
witness statements filed by the Applicant contained some hearsay and irrelevant material but
were admitted without the persons who made the statements being required for cross-
examination. I have considered the evidence of those witnesses where relevant.
[8] The evidence filed on behalf of the Respondent was also unhelpful and consisted of a
series of assertions without proper supporting documentary evidence. Notwithstanding the
detailed Directions issued in this matter, the Respondent through Mr Ranchod, generally failed
to file material that was responsive to the Directions and the material that was filed did not deal
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properly with the matters necessary to make out the Respondent’s jurisdictional objection. The
Respondent filed one tranche of material and did not file a response to the Applicant’s material.
Further, the outline of submissions filed by the Respondent stated that: there were no changes
to the operational requirements of the Respondent’s business; answered “No” to a question as
to whether the Respondent no longer required the employee’s job to be done by anyone because
of changes to the operational requirements of the business; and stated that the Respondent had
not considered the possibility of moving the Applicant into another position.
[9] The Applicant represented herself at the hearing and gave evidence on her own behalf.1
Witness statements in support of the Applicant’s case were provided by her father Mr
Emmanuel Castrisos2 and her friend Ms Leona Cooke3. Mr Castrisos and Ms Cooke were not
required for cross-examination and their statements were tendered without objection. As
previously noted, the statements contained hearsay and some material that was not relevant to
the matters in dispute to which I have attached little weight. Mr Ranchod gave evidence for the
Respondent4 and also represented the Respondent at the hearing.
[10] Despite Mr Ranchod’s failure to file material in response to that of the Applicant, or to
provide cogent and probative evidence about the Respondent’s financial position, he was
allowed to give oral evidence and I questioned him to attempt to elicit evidence in response to
that of the Applicant. Mr Ranchod was also permitted to file evidence to establish his assertions
about the Respondent’s financial incapacity after the hearing concluded and the Applicant was
permitted to respond. Both the Applicant and Mr Ranchod exceeded the grant of leave to file
additional material about financial capacity and proceeded to engage in tit for tat email
exchanges wherein each questioned the veracity of the other. The further material filed by the
Respondent was also problematic and did not establish to the required standard, the assertions
that were being made about its financial position nor respond to those made by the Applicant.
This is also a matter to which I will return.
[11] Section 396 of the Act requires that four specified matters must be decided before the
merits of the application may be considered:
(a) the application was made within the period required by s.394(2);
(b) the Applicant was a person protected from unfair dismissal;
(c) the Respondent was not a “small business employer” as defined in s.23 of the FW
Act; and
(d) the dismissal was not a case of genuine redundancy.
[12] It is not in dispute that the application was made within the period required by s.394(2)
of the Act or that the Applicant was a person protected from unfair dismissal. As previously
noted, the Respondent withdrew its objection to the application on the ground that it was
consistent with the Code and pressed its objection on the ground that the dismissal was a case
of genuine redundancy.
[13] Consistent with s. 397 of the Act, I decided to conduct a hearing to determine the matter
on the basis that there were disputed issues of fact and I considered this to be the most
appropriate means to resolve them. The hearing was held in Brisbane on 26 May 2021. As
previously noted, the parties continued to send unsolicited correspondence to the Commission
making various unsubstantiated assertions up until 27 August 2021.
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“Genuine Redundancy” under the FW Act
[14] If a dismissal is “a case of genuine redundancy” as defined in s. 389 of the FW Act, the
employer has a complete defence to an unfair dismissal application5 and the Commission has
no jurisdiction to deal with the question of whether the dismissal was unfair. Section 389
provides 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] An employer seeking to rely on the genuine redundancy exclusion would ordinarily be
expected to adduce evidence as to the following matters:
That the employer no longer required the dismissed employee’s job to be performed by anyone because
of changes in the operational requirements of the employer’s enterprise;
Whether there was any obligation in an applicable modern award or enterprise agreement to consult
about the redundancy and whether the employer complied with that obligation; and
Whether there was a job or position or other work within the employer’s enterprise (or that of an
associated entity) to which it would have been reasonable in all of the circumstances to redeploy the
dismissed employee. 6
[16] These matters are generally within the knowledge of the employer seeking to establish
the exclusion. Where an employee leads evidence that the dismissal is not a case of genuine
redundancy, the employer’s evidence needs to be sufficient to rebut any evidence from the
dismissed employee to the contrary.
[17] To determine whether the duties performed by a person in a particular role or position
are no longer required to be performed by anyone because of changes in the employer’s
operational requirements, it is necessary to draw a distinction between the employee’s job and
the employee’s duties.7 A dismissal may be a redundancy within the meaning in s. 389(1)(a) of
the Act in circumstances including where:
the duties remain and operational changes result in fewer employees being required to
perform those duties;8
all or some aspects of an employee’s duties are performed by someone else as a result
of operational change;9 or
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structural change has eliminated the need for specific duties or the employer has found
another way to have those duties performed;10
[18] From the perspective of the dismissed employee, the important distinction between a
job and the duties that comprise the job is often lost in circumstances where the duties of the
dismissed employee are being done by others who remain in employment or are being done in
a different way. While the terminology used in the legislation has a long history and a settled
meaning, it is apt confuse, particularly in the case of self-represented parties in unfair dismissal
matters.
[19] A dismissal for cause is not a redundancy. Where there is no change in operational
requirements due to restructuring, reorganisation, change to a role, change to the composition
of a workforce or a reduction in employees, and a dismissed employee can show that he or she
was simply exited from the business and replaced with another person performing the same or
substantially the same duties, a dismissal may not meet the definition in s. 389(1)(a).
[20] If an employee whose position is said to be redundant is not covered by a modern award
or enterprise agreement, then there are no consultation obligations for the purposes of s.
389(1)(b) of the Act and it is not necessary for the employer to establish that the employee was
consulted about the redundancy to establish the genuine redundancy defence to an unfair
dismissal application.
[21] In relation to redeployment, s. 389(2) of the Act provides an exception to the
circumstances in which a person’s dismissal will be a case of genuine redundancy within the
meaning in s. 389(1) of the Act if it would have been reasonable in all the circumstances for the
person to be redeployed.11 If s. 389(2)(a) is enlivened, a person’s dismissal will not be a case
of genuine redundancy even if the person’s employer no longer requires the job to be performed
by anyone because of changes in the operational requirements of the employer’s enterprise and
any relevant consultation obligations have been met.
[22] As a Full Bench of the Commission noted in Appeal by Technical and Further
Education Commission T/A TAFE NSW12 (Pykett) the circumstances that enliven the exception
are that: “it would have been reasonable in all the circumstances for the person to be redeployed
within… the employer’s enterprise.”13 The use of the past tense in s. 389(2) directs attention to
the circumstances which pertained at the time the person was dismissed. The Full Bench in that
case also held that the term “redeployed” should be given its ordinary meaning, including
“transfer to another job, task or function.”14
[23] The Full Bench in Pykett also held that it is not necessary that the Commission identify
a particular job or position to which the dismissed employee could have been redeployed. For
the purposes of s. 389(2), the Commission must find, on the balance of probabilities, that there
was a job or a position or other work within the employer’s enterprise (or that of an associated
entity) to which it would have been reasonable in all the circumstances to redeploy the
dismissed employee. There must also be an appropriate evidentiary basis for such a finding.15
[24] The job (or position, or work) to which it is said that an employee could have been
redeployed, must be suitable, in the sense that the employee should have the skills and
competence required to perform it to the required standard either immediately or with a
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reasonable period of retraining. Considerations such as the location of the job and the
remuneration attached to it may also be relevant.16 The availability of a more junior role that
the employee may have accepted to avoid dismissal on the ground of redundancy could provide
a basis for a finding that a redundancy was not genuine or that a dismissal was harsh, unjust or
unreasonable.17
[25] In short compass, to enliven s. 389(2) of the Act is not sufficient for the Commission to
simply find that an employer failed to consider redeployment of the dismissed employee within
its enterprise or the enterprise of an associated entity. It is also necessary for the Commission
to be satisfied that there was a job, role, position or work that could have been performed by
the dismissed employee and having made that finding to then determine that it would have been
reasonable in the circumstances for the dismissed employee to be redeployed. It is not necessary
that a specific job role or position is identified for the purpose of determining whether the person
could have been redeployed. It is sufficient if there is work that the person could have done.
[26] Consideration of the question of whether redeployment was reasonable involves
questions of suitability including the skills and competence of the employee, the training that
would be required and factors associated with the job such as remuneration and location. It may
also involve an assessment of whether the dismissed employee would have been willing to
accept redeployment.
[27] The term “a case of genuine redundancy” has a particular meaning in the context of
unfair dismissal provisions of the FW Act, which is essentially that the criteria in s. 389(1) have
been met and that it would not have been reasonable in all the circumstances to redeploy the
person as provided in s. 389(2).
[28] It is possible that an employer genuinely no longer requires the job of the dismissed
employee to be done by anyone because of changes in its operational requirements, but that the
Commission will find that the dismissal is not “a case of genuine redundancy” because the
employer has not complied with an obligation in a relevant modern award or enterprise
agreement to consult the employee or where the Commission finds that it would have been
reasonable for the dismissed employee to have been redeployed within the employer’s
enterprise or the enterprise of an associated entity. Confusingly, such a case may be a bona
fide redundancy, notwithstanding that it does not meet the other requirements in s. 389(1)(b) or
s. 389(2) and is therefore not “a case of genuine redundancy” for the purposes of the defence
to an unfair dismissal application provided by that section.
[29] The result in such a case is that the employer does not have a complete defence to an
unfair dismissal application and the Commission is required to consider whether the dismissal
is unfair having regard to the matters s. 387 of the Act which are in the following terms:
(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
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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.
[30] Matters in s. 387 relating to the conduct or capacity of the employee will generally not
be relevant if the dismissal is because the employer genuinely no longer requires the job of the
dismissed employee to be done by anyone resulting from changes in its operational
requirements. If the employer seeks to raise conduct and capacity issues relating to the
dismissal of an employee that the employer has unsuccessfully argued was a case of genuine
redundancy, the requirements in ss. 387(b), (c) and (e) which broadly relate to procedural
fairness may not have been met, because the reason for the dismissal at the time it was carried
out is redundancy and not conduct or capacity.
[31] Failure to consult a dismissed employee as required by s. 389(1)(b) may not render a
dismissal unfair when considered against the matters in s. 387. If the dismissal is a bona fide
redundancy because of changes to the employer’s operational requirements and the job not
being required to be done by anyone it may be found not to be unfair if consultation would not
have negated the operational reasons for the dismissal or led to any other substantive change
and the employee would have been dismissed in any event.18 Even if failure to consult in such
cases renders a dismissal unfair, the remedy may be limited to compensation for a reasonable
period for consultation to have occurred.19 Similar considerations may arise in circumstances
where s. 389(2) of the Act is enlivened, however, consideration of whether a dismissal is unfair
on the basis of failure to redeploy may involve a fine balance, because of the way the provision
is framed and the matters that are required to be assessed.
Evidence and submissions
[32] The Applicant contends that she co-founded the business with Mr Ranchod in 2012 and
has been employed by the Respondent since that time. Mr Ranchod claims that the Applicant
was not employed by the Respondent until July 2016 and was in a marketing role from then
until her role was made redundant.
[33] The Applicant has a Business Communications degree majoring in Marketing and PR,
and twenty years business experience working in a senior capacity for various companies. She
stated that Mr Ranchod is qualified as an Electrician and had very limited business experience
through mobile accessory distribution, and no experience in launching a brand when they
started their business. The Applicant stated that she supplied personal funds earned through her
marketing career to kick-start their business ventures, and while she started the business jointly
with Mr Ranchod, he “self-appointed himself” as CEO, and it was a mistake on her part to allow
this to occur.
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[34] The Applicant maintained that the value of the business is evidenced by more than $6.3
million of investor funding raised and said that a term sheet signed by Mr Ranchod in 2019
referenced a value of $16.5 million. The Applicant said that on 7 November 2020, after
attending a rugby game, Mr Ranchod returned to their home and was overheard telling a friend
that the business was worth more than ever and investors were pushing on a capital raising
coupled with their other investment businesses to raise more capital. Mr Ranchod also told his
friend that the Applicant was not aware of this information and would not be told.
[35] The Applicant stated that she undertook a variety of roles for the Respondent ranging
from marketing, business planning and customer service, to product development and product
testing. The Applicant also performed tasks relating to sales and packing orders and asserted
that these roles and tasks remain within the operational needs of the business. The specific work
undertaken by the Applicant, as listed in the Applicant’s witness statement, included: 20
Business strategy and direction including preparing business plans, marketing
strategy, new business documents, investor snapshots and presentations;
Managing all strategic and operational marketing and customer relationship activities;
Providing market feedback regarding competitive offerings, and comparative analysis
on product development ideas;
Developing brand and product messaging;
Supporting and driving retailer and other partner promotions;
Concepting, copywriting and managing marketing materials whether that be for the
website, product instruction manuals, packaging, brochures, promotional and
demonstrational videos, point-of-sale and display materials, advertising – online/print,
or detailed buyer information packs;
Preparing sales guides and other sales support materials;
Developing customer retention strategies;
Researching, concepting and planning trade show displays and activities;
SEO, SEM and social media;
Driving corporate and product publicity and promotions;
Strategising and planning new product launches; and
Evaluating and reporting on marketing activity and sales.
[36] The Applicant said that as the first employee of the Respondent, in addition to marketing
functions, she has performed everything from product testing and development to customer
service, sales and packing orders. The Applicant also said that Mr Ranchod had barely worked
in the business or showed any concern about its financial status prior to her dismissal, and spent
time excessively playing on his X Box during working time. The Applicant also said that Mr
Ranchod informed her that the reason for her dismissal was due to their personal situation and
that he did not wish to work with her any longer. In June 2020 the Applicant was informed by
Mr Ranchod that she was fired, during a heated discussion during which the Applicant said that
she questioned some concerning behaviours on the part of Mr Ranchod in relation to his internet
searches on his work laptop.
[37] The Applicant also maintained that Mr Ranchod told a number of people, including the
Applicant’s father, her friend Ms Cooke and the author of the Family Law Report referred to in
the Applicant’s evidence, that he did not want to work with the Applicant and stated that he had
[2021] FWC 6093
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been trying to get rid of her for years because of their personal situation. The Respondent
moved offices in November 2020 and the Applicant was not provided with a key to the new
office. The Applicant said that Mr Ranchod told her that she no longer needed a key. The
Applicant also said that Mr Ranchod told her that they could not continue to work together after
their split and asked the Applicant why she would want to work with him. In response the
Applicant told Mr Ranchod that it was not his decision to make and that she would not be forced
out. Further, the Applicant told Mr Ranchod that if he felt strongly about working with her then
he should leave the business and that she was okay with continuing on together in the business
on a professional basis.
[38] According to the Applicant, after their personal split, Mr Ranchod sent her a text
message on 2 December 2020 stating: “… you want this to be war I will come after everything
…. and I will spend every last cent on this. Mr Ranchod also advised in multiple conversations
that he would hire other people via Upworks to do her job. The Applicant also gave evidence
about Mr Ranchod stating to her in January 2021, that she was no longer needed and was fired,
and would be replaced by his hockey friend Mr Zach Daunt. In January and February 2021, the
Applicant attempted to comply with a request from Mr Ranchod to prepare a press release. The
Applicant said that Mr Ranchod did not provide her with information she requested and that a
meeting she attended with Mr Daunt was not attended by Mr Ranchod which meant that she
could not seek information she had requested in relation to the reason for the meeting.
[39] On 21 January, Mr Ranchod sent an email to the Applicant stating that: “Zach is running
our marketing drive and direction” even though this is what the Applicant was employed to do.
The Applicant said that she was still employed and being paid JobKeeper at the time and there
was no reason to cost the business money by employing someone else to do the job that she
was qualified to do. The Applicant contended that the only logical reason for this was to lock
her out of the business. The Applicant disputed Mr Ranchod’s evidence that there were no new
products and said that there was a new product, being the keyless door lock and that she was in
the process of doing the launch for that product. The company also has websites that are still
active and need to be managed.21
[40] The Applicant said that she had worked in her role since 2012 compromising her
corporate and career opportunities and taking a pay cut compared to her previous employment
when she founded the business with Mr Ranchod. The Applicant contended that because of her
personal relationship with Mr Ranchod breaking down, she has been robbed of her income,
without a cent in redundancy payments and has not been paid her outstanding wages and leave
entitlements, including the March 2021 JobKeeper payments collected by the Respondent on
her behalf.
[41] In response to Mr Ranchod’s evidence about the financial position of the Respondent,
the Applicant tendered financial statements from 2016 to 2020.22 These statements showed that
the Company had made the following losses from ordinary activities before income tax:
2016 - $3,023,902.82;
2017 - $802.087.50;
2018 - $1,043,555.32;
2019 - $1,023,103.03;
2019 - $1,214,681.52; and
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2020 - $1,001,245.95.
[42] Mr Ranchod accepted that the documents tendered by the Applicant were the
Respondent’s financial statements.23 No explanation was provided as to why there are two sets
of figures for the year 2019. The documents also indicate that they should be read in
conjunction with a compilation report which was not tendered by either party. The Applicant
contended that the losses in previous years were more significant than the losses in the year she
was made redundant and that this also evidenced that her redundancy was not based on financial
considerations but rather, was a ruse to remove her from the business.
[43] In response to Mr Ranchod’s evidence about the financial issues confronting the
Respondent, the Applicant said that in previous years the Respondent had made losses
exceeding $1 million and that this is expected in a start-up business. Ms Ranchod also said that
in the previous year the loss made by the Respondent was smaller and that there was a profit in
one of the quarters identified by Mr Ranchod in his witness statement. According to the
Applicant this meant that she should have remained in employment. In response to the
investors’ position that they would not provide any more funds to the Respondent, the Applicant
said that Mr Ranchod had boasted to his friends and made comments to various persons about
the Respondent going to a public raising with other products and that the business was worth
more than it had ever been.
[44] Under cross-examination, the Applicant was asked whether she could undertake certain
tasks. The Applicant agreed that she had not previously installed locks in an apartment block
but maintained that she could do this if shown how and that she had developed handbooks for
the locks. The Applicant also said that Mr Ranchod had stated that anyone could install the
locks. Further, the Applicant agreed that she did not know what chip the Respondent was using
or what backend configuration the Respondent was running to support its network. In response
to a question from me, the Applicant said that all of the technical work is done overseas but that
when “Paul” came on board, he had undertaken this work. The Applicant also said that the
door lock is a new product and that she lacked current knowledge about it due to having been
locked out of the business by Mr Ranchod.
[45] The Applicant said that Paul did not have technical expertise and that before he was
employed, the Applicant and Mr Ranchod did everything from packing orders to customer
service and managing MYOB accounts. The Applicant also said that Paul had been performing
poorly and that she had stepped in to test technical products. The Applicant maintained that
there was nothing that Paul could do that she could not do although some instruction may be
required. In response to a question from me about the fact that Paul is on a lower salary of
$65,000.00 per annum and whether she would have been prepared to accept a salary reduction,
the Applicant said that she would have to consider this and had not been given the option. Later,
the Applicant said that if offered redeployment to a lower paid role, she would have likely
accepted because she knows that this is not the real reason for her dismissal and as long as she
could stay in the business she could make sure that it was given every success it deserved. The
Applicant said that she could have undertaken the CFO role on the basis that she had previously
done the finances and an external accountant had done the books. I asked the Applicant whether
she could have continued to work with Mr Ranchod, and in relation to this had the following
exchange with her:
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“Okay, which brings me to my final question, and you can disagree or agree with it, okay. I haven't
formed any view, but sitting here today, it seems to me like the relationship between the two of you is
difficult? --- Yes, it is, and I know where you're probably getting at with this, and people have - and Lee's
asked me himself, and whilst I'm getting a little bit emotional today, and I apologise for that; it's not
usually how I am, I am a professional and I can put that all to one side and get in and get the job done,
and I know once we move past this I will 100 per cent forget about everything that he's lied about or said
and get on with getting the job done, because (1) that's what I've chosen, and that's my right, I believe,
and (2) I believe honestly that there is a responsibility to those shareholders that I do so, because when
we started this business I was the backbone of the business experience. Lee didn't have the business
experience, he had an electrician's qualification, and I was the one steering the business and leading
everything, but unfortunately, because we both started it and I'm not ego driven or position driven, he self
appointed himself as a CEO role. Well, before we had investors on board it was only the two of us, and
now, looking back, that was a big mistake, because I could have self appointed myself as a CEO role and
we'd be in a different position now, where I could make him redundant because we've split up. I feel that
in today's environment, with the way women are treated in the workplace, this is cookie cutter example
of how we're being mistreated. Through no fault of my own, I'm being pushed to one side, and I guess
I'm partly doing it for my right to be in this job, and as I said, whilst it may appear I'm emotional today,
which I clearly am, I am professional. In my whole 20 years of corporate marketing experience I have
never cried on the job or lost my professionalism.”24
[46] Mr Castrisos said that the Applicant told him numerous times leading up to the receipt
of her redundancy letter, that Mr Ranchod had stated that he would not allow the Applicant to
work for the Respondent because of their personal relationship troubles. The Applicant also
informed Mr Castrisos that she was being shut out of the business activity for months preventing
her from doing her job, prior to the receipt of the redundancy letter and that Mr Ranchod had
fired her on several occasions when in the middle of a personal disagreement. Mr Ranchod
also confirmed to Mr Castrisos in telephone calls that he no longer wanted the Applicant
working in the business because of the breakdown of their personal relationship. Mr Ranchod
also told Mr Castrisos that the business was doing very well and worth millions of dollars.
[47] Mr Castrisos said that he was not surprised that Mr Ranchod had issued the Applicant
with a redundancy letter on what appeared to unreasonable and unjustifiable grounds. Mr
Castrisos has known Mr Ranchod for over 20 years. While they had a good father-in-law/son-
in-law relationship, Mr Castrisos contended that Mr Ranchod is untrustworthy, an opportunist
and prone to lying and Mr Ranchod has previously skited about cheating the system and his
ability to win any court case or pre-court mediation settlement matter he had been in, whether
with staff or previous business associates, regardless of whether he was in the wrong.
[48] Ms Cooke and her husband have been long-time friends of Mr Ranchod and the
Applicant and Ms Cooke has been “across the journey of their business”. Ms Cooke’s house
was the venue for an interview the Applicant scheduled with channel 7 News on 25 June 2014
and Ms Ranchod was interviewed a day later and appeared on the Channel 7 Sunrise program
regarding their business and the latest technology.
[49] Ms Cooke completed a digital marketing course with the Applicant in November 2020
and spent a lot of time at the house shared by the Applicant and Mr Ranchod, to run through
course content and bounce off marketing strategies. The Applicant primarily worked from home
and was involved in developing a digital marketing strategy for the Respondent’s new keyless
blue tooth door locks – LockSmart. During this period, Mr Ranchod told Ms Cooke many times
how well the business was going and that it was doing well financially. Mr Ranchod also told
Ms Cooke prior to the Applicant’s dismissal, that the Applicant was no longer working in the
business because he wanted to keep personal and business matters separate.
[2021] FWC 6093
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[50] Ms Cooke also said that during the same period, the Applicant advised that she was
being edged out of the business because of personal issues and that this had worsened after her
formal separation from Mr Ranchod. The Applicant told Ms Cooke at this time that Mr
Ranchod had prevented her from doing her job by withholding information and that the
Applicant had no longer been provided with a key to the workplace. Ms Cooke also observed
Mr Ranchod engaging in what she observed to be a daily ritual of sleeping in until 9.00 am,
going out during the morning and then enjoying lunch and long sessions playing on his X Box.
It is Ms Cooke’s view that the dismissal of the Applicant was instigated due to the relationship
breakdown between Mr Ranchod and the Applicant, given that Mr Ranchod had previously told
Ms Cooke how good the Applicant was for the business.
[51] In her closing submissions, the Applicant said that Mr Ranchod had not been truthful in
his evidence to the Commission and that a conclusion should be drawn that her dismissal was
because of their personal relationship and not because her role was redundant. Of the three
roles that remain in the business (excluding Mr Ranchod’s role), the Applicant said that Paul
was a poor performer and the CFO resides in America and it seemed illogical that the person
that would be dismissed is the one who has been employed the longest, understands the business
and is present in Australia. The Applicant also contended that she was doing those roles before
the persons currently holding them came on board and that the redundancy was obviously a
ruse to remove her from the business for personal reasons.
[52] In relation to the Respondent’s financial position, the Applicant asserted that as a start-
up a business is not based on profit and there had been four capital raisings in the past. The
Respondent now has over 100 investors evidencing that it is not “a one-off hit pony to get
capital raising” and that there are options for further capital raisings. The Applicant also
pointed to the fact that while the Respondent is currently operating at a loss, it has had worse
losses in the past and it is her view that Mr Ranchod is using the temporary down-turn resulting
from COVID-19 to cover what is really an unfair dismissal on the basis that Mr Ranchod simply
wants to get rid of her because of the breakdown of their personal relationship.
[53] The Applicant stated that she has not gained employment since her dismissal but had
been looking.25 The Applicant also said that if this case did not go the way she hoped, an
alternative job would be her next route but would take time because she had been with the
Respondent for 9 years and had sacrificed her own corporate marketing career to start the
business with Mr Ranchod and took a pay cut compared to her previous employment. The
Applicant stated that she has been robbed unfairly of her income and her employment in the
business without a cent in redundancy nor being paid her outstanding wage and leave
entitlements including the March 2021 COVID-19 pay collected by the business on her behalf,
and that this had occurred because of the breakdown of her personal relationship.
[54] A copy of the Applicant’s contract of employment was tendered by Mr Ranchod at the
hearing, which was signed by the Applicant and Mr Ranchod.26 Mr Ranchod relied on this
contract of employment as evidencing that the employment relationship did not begin until
2016. The contract states the Applicant’s commencement date with the Respondent was 1 July
2016 in the role of Business/Marketing Director reporting to Mr Ranchod, CEO and Director.
[2021] FWC 6093
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[55] The Applicant’s contract of employment included the following details about the
Applicant’s role:
“Role Purpose
The Business Director directs the business development and marketing activities of the organization,
playing a key role in the company's marketing and bottom line.
Minimum Skills Required
Attention to detail
Experience in working with senior management to align sa les strategies and solutions
Experience of working in a corporate/business focused environment
Excellent negotiation skills, proven track record of successfully pitching for new business
Personal Specification
A strong work ethic and 'can-do' problem solving attitude
Proactive and results driven whilst being personable and flexible internally and with clients
Ability to multitask, prioritize and work to deadlines
Tasks and Responsibilities
Responsible for the overall management of all strategic and operational Marketing and Customer
Relationship activities.
Provide market feedback to the company leadership regarding competitive offerings, prospect needs and
generate product development ideas.
Take ownership of the management of the sales and marketing functions of the business.
Drive increased revenue and profit to achieve the Company's ambitious growth.
Working to stringent targets, the job holder will be required to adopt a professional and knowledgeable
approach to each new business call.
Planning and coordinating the implementation of business plans and the penetration of new markets.”
[56] The contract states that the total remuneration package for the Applicant’s role was
$153,300 per annum, comprised of a salary of $140,000 and $13,300 in superannuation
contributions. The contract does not include reference to the provision or use of a Company
vehicle. The Applicant contended that her employment commenced before she signed the
contract of employment and that prior to 2016, written contracts of employment were not
provided by the Respondent. The Applicant said that this only occurred when investors came
on board.
[57] In his witness statement, Mr Ranchod said that in March 2020 as the COVID-19
pandemic began in Australia, he decided that the Company had to make huge cutbacks on all
fronts as a result of cashflow issues. All staff were either let go or converted to part-time as the
Company could not afford to keep on any full-time staff. The Company relied on JobKeeper
to keep part-time staff on, and at the time of the hearing, the situation had not changed. The
Applicant was also employed on a part-time basis during this time.
[58] Mr Ranchod said that due to the financial situation of the Company and other business
factors, the Respondent decided that a marketing person was not affordable nor required at this
stage. The Applicant was previously in charge of tasks like press releases and product launches,
but the company did not have any new products so there was not much for the Applicant to do
in relation to marketing.27
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The Applicant was notified by letter on 2 March 2021 that her position would be made
redundant and was given 3 weeks’ notice that her employment would end. The letter informing
the Applicant that her position was redundant was in the following terms:
“Dear Maria,
Notice of Redundancy
We regret to inform you that your position in the company has become redundant due to which we are
serving you this notice.
Based on your length of service, your notice period is 3 (three) weeks, being 23 March 2021.
Your final payment will be actioned upon proper handover of all company assets including:
1. Company laptop
2. All company passwords and login details
3. Company vehicle (Mercedes Benz, [Registration details])
4. Any other property belonging to the company
Wishing you all the best in your future pursuits.”
[59] Mr Ranchod contended that there were no other suitable roles in the company which the
Applicant was qualified to perform and that the Applicant’s duties were distributed to other
employees of the business. Other than Mr Ranchod as CEO, there were only two part-time staff
working at the Company at the date of the hearing, neither of whom are employed in a
marketing capacity. The remaining staff assist in daily operations, including book-keeping and
running the business.
[60] In oral evidence, Mr Ranchod said that the Respondent was claiming JobKeeper for the
period it was available, which ended in March 2021. From a cashflow point of view, the
remaining employees were still part-time. Mr Ranchod also said that the CFO was working for
roughly five to six hours a week, which was somewhere around $2,000 per month as she is paid
on an hourly basis.28 The technical/operations employee (Paul) was continuing to be paid $750
which was about five hours per day. Further, Mr Ranchod said that at the time of the hearing,
he had not drawn a wage for about seven weeks and had been receiving Job Keeper. Mr
Ranchod’s wage was previously $180,000.00 per annum.29
[61] Mr Ranchod maintained that there was no more money and that Company had to make
cuts to avoid insolvency. As CEO of the Company, Mr Ranchod’s first responsibility is to
shareholders and Mr Ranchod stated that they had drawn a clear line in the sand by advising
that they would not provide further funding to the Company.30 Mr Ranchod said that as the
business is not making profit, it is required to make cuts and cannot just keep running on as
there is not an endless stream of money.31
[62] Mr Ranchod did not tender any of the Respondent’s financial records and instead, set
out in his witness statement what he described as “a summary of the Company’s financials over
the past three quarters.” The figures set out by Mr Ranchod indicate that in the September
2020 quarter the Company made a Net Loss of $58,473.00, a Net Loss of $90,823.00 in the
December 2020 quarter and a net Profit of $255.00 in the March 2021 quarter, with an overall
[2021] FWC 6093
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Net Loss during this period of $149,041.00. This was said to establish that the Company was
running at a substantial loss and the “reason the cut backs had to happen”.32
[63] In his oral evidence at the hearing, Mr Ranchod stated that at the time of the hearing,
the company was around three months from insolvency. According to Mr Ranchod, the
Company had to cut costs, and the biggest cost the business had was staff. Mr Ranchod’s
evidence was that the Applicant was on a $153,300 salary and had an $80,000 car, making the
Applicant the most expensive staff member on the books, and therefore the Applicant had to be
made redundant.33 Mr Ranchod also said that Applicant’s role was shared with existing staff,
as the Respondent did not have a budget for a dedicated marketing position or any other position
due to cashflow issues. Mr Ranchod further stated that due to costs factors, the only marketing
the company can do presently is emailing, as there is no cost associated with that.34
[64] In response to questions from me, Mr Ranchod said that prior to the events that caused
a reduction in the Respondent’s employees to four, there had been ten to twelve employees.
The Respondent had slowly been scaling down because funding from its investors was drying
up before COVID-19 hit. Mr Ranchod also said that the Applicant was not performing any
duties at the time it was decided to make her role redundant and no-one in the office had seen
the Applicant for six or seven months. Mr Ranchod said that at the point the Applicant was
dismissed, the Respondent had four employees who were working on a part-time basis and in
receipt of JobKeeper payments – Mr Ranchod as CEO, the Applicant in a marketing position,
“Anne” as the CFO and “Paul” as a technical and operations employee who does “all the
technical and operational stuff with the products”.35 The Applicant’s salary was $153,300 plus
a vehicle, the CFO’s salary was $100,000 and the salary of the technical and operations
employee, was $65,00.00.36 Mr Ranchod also said that the CFO was working remotely from
the United States and continues to do so, working roughly five hours per week equating to a
salary of $2,000.00 per month based on her annual salary of $100,000.00 per annum. In the
period prior to the Applicant’s position being made redundant, the Applicant was doing minimal
campaigns and there were emails going back and forth.
[65] Mr Ranchod said that prior to the reduction in the Respondent’s business referred to in
his evidence, the Applicant’s duties were primarily restricted to marketing. Mr Ranchod stated
that the Applicant did not “co-found” the business in 2012, and her employment only started in
July 2016.37 Mr Ranchod also said that the Applicant was “a mum at home to our two children”
and did “a few little things” with their business, which at the time, was a wholesale business.38
[66] According to Mr Ranchod, after the Applicant commenced employment with the
Respondent, she did marketing and Public Relations but did not run sales as stated in her
evidence. Mr Ranchod stated that the Applicant is extremely talented at what she does and that
there were no issues with her work. Mr Ranchod also stated that the Respondent would have
liked to keep the Applicant on and would need someone in a marketing role moving forward
“when we potentially get funds”. Mr Ranchod went on to say that the Respondent does not have
funds now and this is the reason for the Applicant’s dismissal.39
[67] Mr Ranchod was asked by me whether he considered any other roles for the Applicant
within the Respondent’s business before deciding to terminate her employment. Mr Ranchod
said “absolutely” and that there were never any issues with the Applicant’s work. Mr Ranchod
said that the Applicant could not do the CFO role because she is not a Certified Practicing
[2021] FWC 6093
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Accountant and the Respondent needed a person with this qualification because it is a publicly
listed company. Mr Ranchod also said that the Applicant is not technically minded so could
not do the technical operations and support role.
[68] In relation to the engagement of Mr Daunt in marketing, Mr Ranchod said that Mr Daunt
did some contracting work in marketing for the Respondent for about two months commencing
in January and the Respondent could not afford to pay him. The Applicant had a meeting with
Mr Daunt because the Respondent wanted them to work together but this did not work out. In
response to questions from me about what discussions he had with the Applicant about the
possibility of her position being made redundant, Mr Ranchod said that the Applicant was aware
of the company’s financial status and in December 2019, he sent the Applicant full financial
records and said that they were going to have to make cutbacks and potentially part ways
because they could not afford her. Mr Ranchod also said that while the letter advising the
Applicant that her position had been made redundant gave the Applicant three weeks’ notice of
the termination of her employment, payment in lieu of notice was not made to the Applicant
and had not been made when this application was heard.
[69] Mr Ranchod said that the Applicant’s notice and accrued entitlements had not been paid
because she had not returned her Company vehicle and indicated that while the Applicant had
accrued entitlements they would not be paid until she returned the vehicle. The Applicant said
in response that although the vehicle had been purchased through the Company it was her
personal vehicle and used for transporting the children she shares with Mr Ranchod. In
response to a proposition put by me that the Respondent was not entitled to withhold payment
of entitlements to the Applicant in such circumstances and that if the Respondent had a claim
on the vehicle it should pursue that through a court, Mr Ranchod said that while this was correct
in normal circumstances “…it’s a little bit of a tricky situation because she is my ex-wife and I
was trying to hopefully come to a reasonable resolution rather than going down that road.”
[70] Under cross-examination, Mr Ranchod agreed that the Applicant’s vehicle was not
provided for in her contract of employment. In response to the proposition that they had gone
to purchase their vehicles together and that the Applicant had her vehicle before she worked for
the business, Mr Ranchod said that the vehicle is registered to the business. Mr Ranchod also
said that the vehicle was not relevant and would be dealt with by another court.
[71] Under cross examination, Mr Ranchod agreed that the Applicant was the only person
whose employment was terminated at the time of the COVID-19 Pandemic impacting. In
response to a proposition that he came home from work and played X Box while the Applicant
was working, Mr Ranchod said that the Applicant was working on a marketing course rather
than the business and disagreed that he had commented that the Applicant was working too
much. Mr Ranchod was asked whether he had a contract of employment with the Respondent
and said that as a founder of the business he did not have a contract. Later, Mr Ranchod’s
contract of employment with the Respondent, also dated 1 July 2016 was shown to him during
cross-examination and tendered.40 Mr Ranchod accepted that he had signed a contract of
employment in 2016 and said that he may have been required to sign the document because the
Company was publicly listed in 2016. 41
[72] Mr Ranchod was also asked in cross-examination why the Applicant’s position was
listed as “Founder and Marketing Director” in business documentation, marketing material and
[2021] FWC 6093
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on Wikipedia. Mr Ranchod said that this was because the Applicant wrote these documents.42
Mr Ranchod was also cross-examined about an appearance the Applicant undertook on the
Sunrise television show in 2014, where she discussed the Respondent’s products. It was put to
Mr Ranchod that the footage had been used in the Respondent’s marketing on YouTube and in
all marketing material and in presentations to investors. Mr Ranchod maintained that he could
not remember the Applicant appearing on the Sunrise television show in 2014.
[73] Mr Ranchod also said that in a marriage you do things together in partnership and
conceded that prior to 2016 the Applicant was helping out with the Company.43 Mr Ranchod
disagreed with the proposition that including references to the Applicant being a founder the
business in marketing material sent to investors, was dishonest and said:
“…Technically – I didn’t give that a lot of thought at the time, but technically you were my partner at the
time, which at the end of the day we were together. I didn’t have an issue with calling you a founder, and
I still don’t have an issue if you want to call yourself a founder. That’s not why we are here today.”44
[74] In response to a proposition that he had lied on multiple instances about the Applicant’s
involvement in the business Later Mr Ranchod said it was “technically incorrect” to give
investors information stating that the Applicant was a founder of the business. Mr Ranchod
further confirmed that the Applicant was classed as an owner of the business because of their
marriage, which meant that she would get a share of whatever he had in the business. Mr
Ranchod also stated that the Applicant was technically an owner, but not on paper.45
[75] Mr Ranchod accepted that the business has made losses of over $1 million in previous
years and that it had made a smaller loss in the three quarters set out in his witness statement.
However, Mr Ranchod maintained that the only reason for this was that in previous years the
Respondent had 12 or 13 employees and was now down to three. In response to the proposition
in cross-examination that the Applicant could have been redeployed into the technical support
role, Mr Ranchod said that Paul who is in that role is the Respondent’s main technical support
person. In this role, he installs locks, does handovers, undertakes problem solving and deals
with customer issues. Mr Ranchod did not agree with the proposition that the Applicant had
briefed suppliers which was now undertaken by Paul and maintained that she did not understand
coding. In response to the proposition that installation was done by a contractor, Mr Ranchod
said that this is no longer the case. Mr Ranchod agreed that there had been some issues with
Paul’s performance but maintained that these had been addressed and that the Applicant did not
have the technical expertise to undertake this role.
[76] Mr Ranchod maintained that he told the Applicant in advance that her position was to
be made redundant and said that the written evidence of this is the letter sent to the Applicant
advising her of her dismissal. Mr Ranchod denied stating that he did not want to work with the
Applicant because of their marriage breakdown but agreed that he asked the Applicant why she
would want to work with him. Mr Ranchod said that he did this out of concern that the
Applicant would be comfortable after their marriage breakup which can be quite traumatic.
[77] In his closing submissions, Mr Ranchod maintained that the Respondent made the
Applicant redundant as it would have done so regardless of the identity of the person in her
role. The dismissal had nothing to do with the personal relationship between Mr Ranchod and
the Applicant but was about the best interests of the shareholders and the fact that the
Respondent could not afford the Applicant’s salary. Mr Ranchod contended that if the business
[2021] FWC 6093
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did not turn around in the next three months it would be insolvent. According to Mr Ranchod,
there are three people in the business and the “first port of call” if the business survived would
be returning them to full time employment. There would be no point having a fourth person
employed on a part-time basis and cuts had to be made.
[78] In response to a question from me as to why cuts had not been made in the past, despite
the Company previously making losses, Mr Ranchod said that this was because the funders
were previously happy to keep funding the Company and there was potential business on the
horizon with a few big deals that had subsequently fallen through. Mr Ranchod was unable to
state when the deals fell through but stated that the Respondent’s investors had advised just
before COVID-19 hit, that there was no more funding. In response to a question in relation to
the form that the advice from investors took, Mr Ranchod said it consisted of a telephone call
and a meeting in Melbourne with Mr Ben Morrisey of Shaw and Partners, the principal investor
in the Respondent, who stated that there was no more funding for the Company. Mr Ranchod
maintained that if any award of compensation was made to the Applicant the Respondent would
be insolvent.
[79] Despite Mr Ranchod’s failure to provide any cogent evidence or submissions in relation
to the Respondent’s financial capacity, I gave the Respondent a further opportunity to file such
material. Mr Ranchod filed further material which was of little probative value in relation to
his assertions. The material filed by Mr Ranchod consisted of a letter from Mr Ben Morrissey,
Senior Client Adviser, Shaw and Partners Limited. The letter is in the following terms:
“I have been asked to provide a letter detailing Dog and Bone’s financial position, Shaw and Partners
have been and continue to be the major investors in Dog and Bone Holdings and have been since we
started funding the business in 2015. The business has been unprofitable and burning through investors’
capital for many years. This situation has deteriorated further still over the past 15 months due to the
crippling effects of COVID-19.
We do not have any desire nor capacity to continue to fund the business. The business is on life support
and we will not be bailing it out again. If an order is granted against the business, it will result in the
company’s insolvency, and all lenders and investors losing their money.
The remaining three staff are being remunerated on a part time basis and are called upon when required.
We have only allowed the CEO, Lee Ranchod, to draw one monthly payment since the end of March
when Jobkeeper rolled off.
The redundancy of Ms Maria Ranchod was both essential and long overdue given the complete lack of
revenue generation by Dog and Bone. The company is on its knees which a 10 second glance at the
accounts will attest to, and all cost cutting decisions have been made in an effort to keep the business
alive.
I understand that Lee Ranchod and Maria Ranchod are undergoing a separation which is a private and
deeply painful process and is the only reason that I can think of as to why Ms Ranchod is seeking some
sort of payment from the company. But to be brutally honest, I have been pushing for her removal for
well over two years and it was actually Lee who convinced me to keep her employed. That time has well
past, and we are now entirely focussed on the company’s survival.”
[80] A covering email sent by Mr Ranchod with the letter from Mr Morrissey, stated:
“Please see attached letter from our investment group. I have also attached a trade creditors list and an
image of our total cash in hand. As you will note, we currently have $273,861.00 in debt and have a total
of Approx $20K AUD in our bank. We have wages to come out on the 15th of next month totalling
[2021] FWC 6093
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approx. $6,000 and we have to service the trade creditors list. The only income the business has is approx.
$12,000 to come in at the end of June which will go straight to servicing the debt so we remain solvent.
The company has also been paying for the company car at the cost of $1300 per month for the lease that
she has for the past four years and will not return.”
[81] A list of trade creditors and what appear to be screen shots of various bank accounts,
was also attached to the email. The Applicant made a submission in response to this material,
which included statements and documents that were not related to the Respondent’s further
material on financial capacity and which could and should have been included in the
Applicant’s witness statements or tendered by the Applicant at the hearing. I have disregarded
that material. To the extent that the Applicant’s further submission was responsive to the
material said to evidence financial incapacity filed by Mr Ranchod after the hearing, the
Applicant contended that the Respondent had failed to provide full financial statements
resulting in insufficient evidence that it would be insolvent if an award of compensation was
made in her favour. The Applicant said that it would seem unthinkable that the Directors of a
business that have received over $6million in investor funding, in addition to the initial
investment by the owners, would allow the business to go insolvent because of a justifiable
employment claim, which is small in comparison with the costs of developing the technology
and running the business. The Applicant also pointed to the fact that in its outline of argument,
the Respondent had ticked boxes on the Commission’s pro-forma document responding as to
the following questions as set out below:
“Do you still need someone to do the employee’s job? Yes.
Have there been changes to the operational requirements of the business? No.
Do you no longer require the employee’s job to be done by anyone due to the operational requirements
of the business? No.”
[82] The Applicant said that Mr Morrissey’s letter was a display of “boys club” culture, and
this is the view of one shareholder from an estimated 100 shareholders within the business.
Consideration
Whether the dismissal was a case of genuine redundancy
Evidence
[83] It is necessary to make some general comments about the evidence tendered by the
parties in this matter. The Respondent raised a jurisdictional objection to the application on the
grounds that it asserts the Applicant’s dismissal was a case of genuine redundancy. The
Respondent’s objection will fail unless the Commission is satisfied, in accordance with s.
389(1), that:
the employer no longer required the dismissed employee’s job to be performed by
anyone because of changes in the operational requirements of the employer’s
enterprise; and
if there was any obligation in an applicable modern award or enterprise agreement to
consult about the redundancy the employer complied with that obligation.
[2021] FWC 6093
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[84] The Commission must also be satisfied as to whether the exception in s. 389(2) to a
dismissal being found to be a genuine redundancy is enlivened on the ground that redeployment
would have been reasonable in all the circumstances. To the extent that the Respondent’s
objection would fail if no evidence or further evidence about these matters was given, the
evidentiary onus to establish them lies with the Respondent.46
[85] The Respondent filed material in relation to the jurisdictional objection which made
various assertions and contained no documentary evidence to support those assertions. The
Respondent did not tender financial records in relation to its position both before and after the
Applicant’s dismissal and instead set out figures in Mr Ranchod’s statement, for a limited
period of time encompassing the September 2020 to March 2021 quarters. The Respondent did
not file evidence about the composition of its workforce before and after the Applicant’s
dismissal or the nature of the work that was required to be performed by each employee before
and after the Applicant’s dismissal, how that work was performed and who was performing it.
It was necessary for me to attempt to elicit relevant evidence from Mr Ranchod.
[86] While I appreciate Mr Morrissey’s advice that a ten second glance at the Respondent’s
accounts would attest to the fact that it is “on its knees”, I have not been provided with those
accounts by the Respondent. It would have been of assistance if Mr Morrissey had provided
more and better financial information. Mr Ranchod’s evidence about the Respondent’s
financial position, operations and staff was surprisingly vague and was insufficient to establish
the basis for a jurisdictional objection on the ground of genuine redundancy. This was despite
Mr Ranchod being given several opportunities to place such evidence before the Commission
and a further opportunity to establish an evidentiary basis for his assertions about the
Respondent’s financial incapacity and that it would be insolvent if any award of compensation
was made in favour of the Applicant.
[87] Further, in the template document used by the Respondent to set out its outline of
argument in relation to the jurisdictional objection, a box is ticked indicating that there have
been no changes in the operational requirements of the Respondent’s business. In response to
a template in that document, as to whether it no longer requires the employee’s job to be done
by anyone because of changes to its operational requirements, the Respondent has also ticked
a box to answer the question: “No”. Also in response to a question in the template document
about whether the possibility of moving the Applicant into another position, the box has been
ticked to answer the question “No”. While the Respondent cannot be criticised for using a
Commission template to set out its outline of argument, it is regrettable that the information
provided is at odds with Mr Ranchod’s evidence in these proceedings. The Respondent also
failed to file material in response to the Applicant’s material, contrary to the Directions. As a
result there is evidence from the Applicant which is uncontested, other than by the assertions
of Mr Ranchod in cross-examination and in response to questions from me.
[88] The Applicant in the present case contends that there is a basis upon which the
Commission could be satisfied that her dismissal was not a case of genuine redundancy.
Accordingly, the Applicant also carries an evidentiary onus to establish the facts on which she
relies by placing evidence before the Commission that supports the finding she seeks. The
Applicant has given evidence to the Commission which, if accepted, could support such a
finding. By failing to advance evidence sufficient to support its case risks that evidence being
accepted if it does not advance evidence to the contrary or evidence to establish an alternative
conclusion that it submits the Commission should reach.
[2021] FWC 6093
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[89] The Directions I issued in the present matter reflected that the onus proof may shift in
the manner I have outlined above. For this reason, the Directions required that the Respondent
file evidence and submissions in relation to its jurisdictional objection (genuine redundancy),
and at the same time, the Applicant file evidence and submissions in relation to merit (whether
her dismissal was unfair). The Directions then provided for each party to respond to the material
filed by the other party. While there were issues with the form (and some of the content) of the
Applicant’s evidence and submissions, the Applicant filed material in accordance with the
Directions, and addressed the relevant legislative provisions.
[90] In assessing the evidence given by the Applicant and Mr Ranchod, I have made
allowances for the apparent acrimony between them as a result of the breakdown of their
marriage. Even making such an allowance for Mr Ranchod I did not find him to be a convincing
witness. Mr Ranchod was vague about details of when various events occurred and gave every
impression of doing all that he could to downplay the role that the Applicant played in
establishing the business. Mr Ranchod’s comments that the Applicant was a mum who looked
after their children did him no credit and I accept the Applicant’s clear and cogent evidence
about her role in getting the business established and the skills she brought to it. That Mr
Ranchod would forget that his then spouse appeared on a national television program promoting
their business and its products is surprising and strains credibility despite the fact that this
occurred in 2014.
[91] Mr Ranchod’s insistence that he had not signed an employment contract was a further
indication of his preparedness to deny a matter to simply damage the Applicant’s case. Clearly,
the fact that both contracts were signed on the same day supports the Applicant’s version of
events to the effect that the written contracts were entered into when the business was publicly
listed and that her contract of employment was signed well after she commenced working in
the business. It is also significant that Mr Ranchod only produced the Applicant’s contract of
employment at the hearing and did not append it to a witness statement to place the Applicant
on notice of his contentions based on the contract. Despite this the Applicant provided a
credible explanation for the date her contract of employment was signed and tendered a copy
of Mr Ranchod’s contract, which was signed on the same date, to support her evidence on this
point.
[92] Further, Mr Ranchod’s explanation for the Applicant being held out to investors and the
public as a co-founder of the business, to the effect that this was because the Applicant prepared
the documents making these statements, is not credible. Alternatively, Mr Ranchod’s evidence
indicates that Mr Ranchod is unconcerned about incorrect information being promulgated by a
Company of which he is a Director and CEO.
[93] In contrast and making allowances for her anger and distress about matters relating to
the breakdown of her marriage to Mr Ranchod, I found the Applicant to be a credible witness.
The Applicant made concessions when it was appropriate for her to do so and used her best
endeavours to articulate her case. Mr Ranchod cannot complain of lack of information about
the Applicant’s case and his failure to properly respond to it suggests that he was simply going
through the motions of advancing a jurisdictional objection to the unfair dismissal application
and cannot be explained by any failure on the part of the Applicant.
[2021] FWC 6093
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[94] In general, the Applicant presented as an intelligent and articulate person with the
capacity to undertake the role she claims to have undertaken with the Respondent including
some, but not all, aspects of the roles now performed by the technical operations person and the
CFO. It is also apparent that the Applicant has a detailed knowledge of the Respondent’s
business and its history. I accept that the Applicant co-founded the business and invested her
personal funds to do so. Further I accept that notwithstanding her caring responsibilities to her
then husband and children, the Applicant worked in the business and made a significant
contribution to it from its inception in 2012 and that her employment commenced at that time
rather than in 2016 as asserted by Mr Ranchod. Mr Ranchod’s assertion that the Applicant was
helping him out with certain tasks because he was her husband, is totally at odds with the
evidence tendered by Ms Ranchod establishing her significant role in the business well before
2016 when she signed a contract of employment. I accept that the contract was signed in 2016
to regularise what was an existing employment relationship because the Respondent was to be
publicly listed, and that Mr Ranchod signed an employment contract at the same time, for the
same reason.
[95] However, I am also conscious that I am dealing with an application for an unfair
dismissal remedy relating to the Applicant’s rights as an employee. Any interest, equitable or
otherwise, that the Applicant has in the Respondent’s business, other than an interest relevant
to whether she has been unfairly dismissed, is a matter for other proceedings. I turn now to
consider the evidence in this case relevant to the matters I am required to determine.
Whether the employer no longer required the employee’s job to be performed by anyone
because of changes in the operational requirements of the employer’s enterprise (s 389(1)(a))
[96] As I have previously noted, having raised the jurisdictional objection to the application,
the Respondent bore the onus of establishing that it no longer required the employee’s job to
be performed by anyone because of changes in the operational requirements of the employer’s
enterprise. In my view, the Respondent has not met its onus. While I accept that Mr Ranchod’s
evidence established a reduced need for marketing, and that COVID-19 has adversely affected
the Respondent’s business, there is insufficient evidence about the operational requirements of
the enterprise, much less that there have been changes to those operational requirements, for
me to be satisfied that the Respondent no longer required the Applicant’s job to be performed
by anyone, because of changes in those requirements.
[97] There was no detailed evidence about the products that the Respondent sells or its
customer base or market. Mr Ranchod said that the Company had no new products and that
marketing was not required. The Applicant asserted that the Respondent was in the process of
bringing a new lock to the market and that there was a need for a marketing campaign with
respect to this product. Mr Ranchod did not contradict this evidence and gave evidence in
apparent contradiction to his earlier evidence and stated that the new lock had been installed in
two apartment buildings.
[98] Contrary to Mr Ranchod’s evidence about a reduction in the need for marketing, the
evidence of the Applicant, which was also not contradicted by Mr Ranchod, established that
before her dismissal, the Respondent engaged a contractor to work with the Applicant on a
marketing strategy. The fact that this did not succeed is not to the point. What is relevant is
that several months prior to the Applicant’s dismissal, the Respondent, through its CEO Mr
[2021] FWC 6093
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Ranchod, engaged an additional marketing person. Given Mr Ranchod’s emphatic evidence
about how good the Applicant was at her job and that her dismissal had nothing to do with her
work performance, I do not accept Mr Ranchod’s attempt to suggest later in his evidence that
the additional marketing person was engaged because Ms Ranchod’s performance in her role
was inadequate.
[99] On balance, I accept Mr Ranchod’s evidence that the Respondent is in difficult financial
circumstances. The fact that Mr Ranchod has been talking up the business despite these
difficulties is not to the point. The Applicant’s witness Mr Castrisos said that Mr Ranchod has
been known to skite about the success of the business and the Applicant cannot rely on his
comments to potential investors to found an argument that the business is doing well, in light
of the losses it has sustained. However, it is also apparent from Mr Ranchod’s evidence that the
Respondent is seeking new funding and its present difficulties may be temporary situation. Mr
Ranchod also gave evidence that he anticipates that a dedicated marketing person will be
required in future if he turns the Company around as he hopes to do.
[100] I also accept the Applicant’s contention that the Company has operated at a loss from
the outset and its position in the current financial year is comparatively stronger than it has been
in previous years despite the impact of COVID-19. While this may be because of reductions
in staff numbers, the figures tendered by Mr Ranchod cover quarters when the Applicant was
still employed. If the recent improvement is based on an injection from the Respondent’s
investors, then this has also occurred in the past to keep the Company operating when it has had
bigger financial losses. As the Applicant contended, it is likely that investors, having sunk such
significant sums into the Respondent, would consider that the best option to recoup those funds
would be to invest more and hope for an improvement post COVID-19 on the basis of new
products.
[101] Further, I accept the force of the Applicant’s assertion that investors who have expended
these amounts would not allow the Company to become insolvent over an award of
compensation for unfair dismissal which will be significantly less than the amounts the
investors stand to lose, and which they will not recoup, if the business does become insolvent.
Essentially, it is equally probable that investors will invest more funds to avoid losing the funds
that they have previously invested.
[102] It is also the case that Mr Ranchod reduced the hours of work and salaries of other
employees during the period when COVID-19 impacted and there is no reason why he could
not have attempted to take this step with the Applicant in order to maintain her in employment
until the situation improved. That the Applicant may not have accepted such a proposal is a
matter to which I will return.
[103] The letter from the Respondent’s investor Mr Morrissey, was tendered in the context of
Mr Ranchod attempting to establish that the Respondent could not pay an award of
compensation if the jurisdictional objection did not succeed and the Applicant was found to
have been unfairly dismissed. The letter is not directed to the substance of the jurisdictional
objection on the basis of genuine redundancy. It also makes clear that Mr Morrissey has been
pushing for the Applicant’s “removal” for over two years, well before the changes wrought by
COVID-19 and at least suggests that there is some other reason for the Applicant’s dismissal.
Accordingly, I place little if any weight on Mr Morrissey’s statement for the purposes of
[2021] FWC 6093
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considering whether the employer no longer required the employee’s job to be performed by
anyone because of changes in the operational requirements of the employer’s enterprise. There
is no reason why a statement from Mr Morrissey could not have been filed by the Respondent
in accordance with Directions and Mr Morrissey made available for cross-examination. The
failure to take these steps is a further reason why I place little weight on the statement.
[104] Finally, I note that the outline of argument filed by the Respondent specifically states
that there are no changes in the operational requirements of the Respondent and answers a
question as to whether Applicant’s job is no longer required to be done by anyone, in the
negative. The outline of argument also states that redeployment of the Applicant was not
considered. While this may be an error on the part of the person who completed the submission,
it is consistent with the balance of the evidence which did not address the necessary criteria for
the jurisdictional objection to be upheld.
[105] I am left with the view that the downturn associated with COVID-19 was a convenient
basis for the Respondent to dismiss the Applicant on the ground of redundancy, when in truth,
had the Applicant and Mr Ranchod still been happily married, the Applicant would have
remained in employment (albeit probably on a lesser income) while Mr Ranchod attempted to
turn the business around to attract further funding from investors. There were no changes to the
operational requirements of the business and based on Mr Ranchod’s evidence a marketing
person would be required moving forward if the business survives. I also note that Mr Ranchod
said in his evidence that further investment would be needed to revive the business and the
Applicant’s uncontested evidence that her expertise includes investor relations.
[106] Accordingly, I am unable to be satisfied, on the balance of probabilities, that the
employer no longer required the employee’s job to be performed by anyone because of changes
in the operational requirements of the employer’s enterprise.
Compliance with any consultation obligation in a modern award or enterprise agreement that
applied to the employment (s 389(1)(b))
[107] For a dismissal to be a case of genuine redundancy within the meaning of s.389 of the
Act, the Respondent must have complied with any obligation in a modern award or enterprise
agreement to consult about the redundancy. In the present case, the Applicant does not assert
that she was covered by a modern award. Given that the Applicant was a marketing manager
earning a salary of $153,300.00 per annum, I find that the Applicant’s employment was not
covered by a modern award, and there was no relevant consultation obligation for the purposes
of s. 389(1)(b) of the FW Act.
Would it have been reasonable in all the circumstances for the person to be redeployed within
the employer’s enterprise or the enterprise of an associated entity of the employer (s 389(2))
[108] As I have previously noted, the Respondent bears the onus of establishing an evidentiary
basis for a finding that a dismissal was a case of genuine redundancy. Section 389(2) is framed
in the past tense, so that the question of the reasonableness of redeployment is considered from
the starting point of whether “it would have been reasonable in all the circumstances for the
person to be redeployed”. That question is also considered on the basis that s. 389(2) is an
exception by which a redundancy which is effected in a manner consistent with the
[2021] FWC 6093
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requirements in s. 389(1) can otherwise be found not to be a genuine redundancy for the
purposes of the employer having a complete defence to a claim for unfair dismissal.
[109] In my view, the circumstances which may be relevant to this consideration include
whether the employer contemplated redeployment options and sought the views of the
employee concerned about this matter, where it would have been reasonable to do so. In short,
a retrospective assertion by an employer at a hearing in relation to an objection on the ground
of genuine redundancy, to the effect that there were no positions into which the employee could
have been redeployed, may not be sufficient to bring the dismissal within the meaning of
genuine redundancy for the purposes of s. 389. This is particularly so in circumstances where
there is no evidence of consideration of redeployment at the time the employee was dismissed,
[110] The only limitation on the circumstances which may be considered for the purposes of
s. 389(2) is whether the matter is relevant to the reasonableness of redeployment. I do not
accept that Mr Ranchod considered redeployment of the Applicant or offering her part-time
employment in order to retain her until the impact of the COVID-19 Pandemic had subsided.
Other relevant circumstances against which I have assessed the reasonableness of redeployment
include the fact that all employees of the Respondent were on JobKeeper and working part-time
at the point the Applicant was dismissed. The Respondent had attempted to engage a contractor
to perform a marketing role prior to the dismissal of the Applicant, in circumstances where that
was the Applicant’s role.
[111] It is relevant that the Applicant had been employed by the Respondent from its inception
and was a co-founder. The Applicant had invested her own funds to assist in starting the
business and was the spouse of the CEO (albeit estranged). The Applicant had an interest, both
as an employee and effectively as a part-owner through her relationship with Mr Ranchod, in
the ongoing success of the Company. Further, on Mr Ranchod’s own evidence there was no
substantive work for any employee because of the impact of COVID-19, which begs the
question as to why the Applicant was the employee whose role was considered to be no longer
required. As I have already noted, there was no evidence of a change to the operational
requirements of the enterprise related to the Applicant’s role as distinct from any other role.
[112] It was also the case that the Applicant had performed a range of work outside her
marketing duties and there was some work she could have done, in the context of a small
business with four employees, who were all working part-time and where there was a new
product in the process of being launched. I see no reason why the Applicant could not have
been offered a role with reduced hours and in my view, a part-time role performing similar
duties to those an employee performed in a full-time role, is capable of being considered as
redeployment for the purposes of s. 389(2) of the Act. It is relevant that the Applicant and Mr
Ranchod were not on good terms at the time the Applicant was dismissed and this may be
considered as a basis for a finding that redeployment would not have been reasonable. However,
balanced against this consideration is the Applicant’s evidence that she could have conducted
herself professionally despite her antipathy to Mr Ranchod.
[113] While the Applicant may not have been able to undertake all of the duties performed by
the technical employee who was retained, her uncontested evidence was that she had undertaken
part of those duties when the business was started. The Applicant had also done some book-
keeping and could have taken on at least some of the duties undertaken by the CFO. This is
[2021] FWC 6093
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particularly the case when the CFO was located in the United States and was working on a
limited basis. While it is true that a publicly listed company may require a more sophisticated
financial and account keeping process than is undertaken by a book-keeper, on Mr Ranchod’s
own evidence about the effect of COVID-19 on the Respondent, it is unlikely that there were
many financial transactions to complete. Mr Ranchod’s evidence did not address redeployment
and if he did consider this option at the time the Applicant was dismissed, it was only to a
marketing position in circumstances where he also claimed that there was no such position. It
was necessary for me to question Mr Ranchod to attempt to elicit evidence about consideration
of redeployment and the oral evidence given by Mr Ranchod was inconsistent and
contradictory.
[114] Accordingly, the Respondent has not established to the required standard, that it would
not have been reasonable in the circumstances to redeploy the Applicant. I conclude that it
would have been reasonable to do so, even if only to offer the Applicant a part-time position,
consistent with other employees, to retain her in the business until the situation improved.
Conclusion on genuine redundancy
[115] I find that the Applicant’s dismissal was not a case of genuine redundancy within the
meaning of s. 389 of the Act and that the jurisdictional objection fails. Accordingly, the
Respondent does not have a complete defence against the Applicant’s unfair dismissal
application and it is therefore necessary to consider whether the Applicant’s dismissal was
unfair on the basis of the criteria in s. 387.
Whether the dismissal was unfair
Section 387 considerations
[116] The reason for the Applicant’s dismissal was not related to capacity or conduct and s.
387(a) of the Act is not relevant to whether the dismissal was unfair. The Applicant was not
dismissed on the basis of capacity or conduct and the criterion in s. 387(b) in relation to
notification of the reason for dismissal is also not relevant. In relation to s. 387(c) as the
Applicant was not dismissed on the grounds of capacity or conduct, it is not necessary to
consider whether she was given an opportunity to respond to allegations or had been warned
about matters relating to capacity and conduct.
[117] In relation to s. 387(d) of the Act, there were no discussions related to the dismissal and
no unfairness arises with respect to a support person. No unfairness arises on this basis. With
respect to s. 387(f) and (g) of the Act the Respondent is a small business and does not have
dedicated human resources management specialists. I have had regard to the size of the
enterprise and the likely impact of the absence of such specialists on the manner in which the
Applicant’s dismissal was dealt with.
[118] There are other relevant matters in relation to whether the Applicant’s dismissal was
unfair which I have considered pursuant to s. 387(h). I am unable to be satisfied that the
Applicant’s dismissal was a bona fide redundancy. In my view, Mr Ranchod took the
opportunity of a downturn in the Respondent’s business due to the impact of COVID-19 to
disguise the dismissal of his estranged wife as a redundancy. Mr Ranchod was unable to
[2021] FWC 6093
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establish that the dismissal was a case of genuine redundancy due to his failure to place cogent
evidence before the Commission to support his assertions, in circumstances where financial
statements, information about organisational structure and restructure (if this had occurred),
operational requirements, position descriptions and related matters, should all have been within
his direct knowledge.
[119] There are other aspects of the dismissal which render it unfair. There was a failure to
have any discussion with the Applicant or to consult her in relation to the decision to dismiss
her on the ground of redundancy. Notwithstanding that there was no Award requirement to do
so for the purposes of s. 389, this is also a relevant consideration under s. 387(h) in relation to
whether the dismissal was unfair. The Applicant’s uncontested evidence is that she was locked
out of the workplace for several months prior to her dismissal and advice that her role was to
be made redundant was conveyed to her by letter. This was completely inappropriate in
circumstances where the Applicant was a co-founder of the Respondent and had worked for the
Company since its inception and had made a significant professional and financial contribution
to the Company. It is not to the point that the personal relationship between Mr Ranchod and
the Applicant was acrimonious. If Mr Ranchod wishes to deal with the Applicant on the basis
that she is an employee who can be removed from the business by dismissal, then the quid pro
quo is that the Applicant is entitled to exercise any rights that she has under employment law,
including in relation to unfair dismissal.
[120] There was no consideration by Mr Ranchod as to whether the Applicant could be
redeployed to another position within the enterprise or to giving the Applicant the option of
reverting to part-time employment in the same way as other employees who remained in
employment had done. The Applicant asserted that she was not consulted before her hours were
reduced and she received JobKeeper payments and there has been a lack of consistency with
respect to wages she has been paid while the Respondent was in receipt of JobKeeper subsidies.
The Applicant was good at her job as was conceded by Mr Ranchod and if the business is turned
around, a person to undertake marketing as the Applicant did, will be employed. Mr Ranchod
does not assert that the Applicant was consulted about the reduction of her hours and I also note
the Applicant’s evidence that she was excluded from the workplace for some months before her
dismissal, another matter not disputed by Mr Ranchod. The failure to consult the Applicant
about these matters is a further consideration going to the unfairness of her dismissal.
[121] It is also the case that the Applicant was a long serving employee who was a co-founder
of the Respondent, had invested her own funds to assist with the establishment of the business,
and on Mr Ranchod’s evidence had some rights as an owner because of their marriage. While
I do not have jurisdiction to resolve any claim by the Applicant for unpaid wages, I am also of
the view that failure to pay the Applicant her entitlements on termination, is a matter going to
the unfairness of her dismissal. I note that if the Applicant was employed from the inception of
the Company, her entitlement to notice is four weeks rather than three weeks. Secondly, the
Respondent has purported to withhold this payment on the basis that the Applicant has not
returned a Company vehicle. The Applicant’s evidence is that the vehicle was purchased
through the Company for her personal use as was the vehicle driven by Mr Ranchod, and as
such is not an entitlement under her contract of employment. Other than asking a rhetorical
question of the Applicant as to whether the vehicle is registered to the Company, Mr Ranchod
did not dispute the Applicant’s evidence on this point. The Applicant’s contract of employment
[2021] FWC 6093
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also contains no reference to a company vehicle and Mr Ranchod accepted that this matter
would be dealt with in other proceedings.
[122] I doubt that the Respondent has the right to withhold payment of notice and the
Applicant’s accrued entitlements on termination, which are statutory entitlements under the
National Employment Standards, because she has not returned a company vehicle. In any
event, I accept the Applicant’s evidence that the vehicle is not a company vehicle. I am also of
the view that if there was a genuine claim for the vehicle Mr Ranchod would have taken legal
steps to repossess it. Further, I note that this is not a case of a former employee with no ongoing
relationship with the Respondent, retaining its property. Fourthly, the Applicant is the spouse
of Mr Ranchod, shares two children with him and uses the vehicle for purposes including
transporting the children.
[123] The unfairness of withholding the Applicant’s statutory entitlements is further
exacerbated by the unusual circumstances of this case, in that Mr Ranchod knew that the
Applicant is at least partly responsible for the care and maintenance of the children he shares
with her and withheld money which the Applicant would have needed to meet those
responsibilities. This factor adds to the unfairness of withholding the Applicant’s statutory
entitlements on termination while insisting that she returned a vehicle which is arguably not an
incident of her contract of employment.
[124] Finally, I am of the view that when the evidence is considered in its totality, it is more
probable than not that the fact that the Applicant was the estranged spouse of the CEO Mr
Ranchod at the relevant time, played a role in her dismissal. Mr Ranchod’s attempts to
rationalise the Applicant’s dismissal on the grounds of redundancy were entirely unconvincing
and the letter provided by Mr Morrissey is also suggestive that other factors were at play in the
decision to dismiss the Applicant. My view in this regard is also supported by the fact that the
Applicant and Mr Ranchod separated in November 2020 and the Applicant was dismissed on
23 March 2021 after being excluded from the office for some months. In previous years when
the financial situation of the Respondent was arguably worse than it was at the time the
Applicant was dismissed, the Applicant was retained in employment. Further, at the point she
was dismissed the Respondent was introducing a new product – a smart lock – the launch of
which the Applicant was well equipped to be involved in and the Respondent will also require
a further capital raising, involving shareholder relationships which the Applicant has
considerable experience managing.
Conclusion in relation to unfair dismissal
[125] In all of the circumstances of this case, I am of the view that the dismissal was unfair.
The dismissal was harsh because of its effect on the Applicant’s economic situation and in
circumstances where the Applicant had a personal involvement in the business which went
beyond that of an employee. The dismissal was unjust because it was implemented without
any discussion with the Applicant with respect to options for her to remain employed in
circumstances where there is evidence that the skills the Applicant holds will be required in the
future if the business is able to be turned around. The dismissal was unreasonable because there
was no valid basis for it in terms of the Applicant’s conduct and capacity and because no
consideration was given to an alternative that was offered to other employees, to be employed
on a part-time basis while attempts were made to turn the business around.
[2021] FWC 6093
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Given that I have found that the dismissal was unfair it is necessary to consider the question of
remedy. As required by s. 390 of the Act I am satisfied that the Applicant is a person protected
from unfair dismissal and that she was unfairly dismissed. I am also of the view that the
Applicant should have a remedy for her unfair dismissal.
Remedy
Appropriate remedy and statutory considerations
[126] Having found that the Applicant was protected from unfair dismissal, and that her
dismissal was unfair, it is necessary to consider what, if any, remedy should be granted to her.
The Applicant sought reinstatement, which was opposed by the Respondent. While
reinstatement is the primary remedy, I do not accept that it is appropriate in the circumstances
of this case. Notwithstanding the Applicant’s insistence that she could work professionally
with Mr Ranchod, despite their obvious and mutual antipathy, I am satisfied that reinstatement
is inappropriate. In my view, after observing the conduct of Mr Ranchod and the Applicant at
the hearing, their professional relationship is irretrievable and it would be inappropriate for both
of them to be put back in a position of working together. I am also of the view that the
Applicant’s principal reason for wanting reinstatement is to protect the interest she has in the
business, other than her employment. That interest is not a matter over which the Fair Work
Commission has jurisdiction and it is not a basis for granting a remedy of reinstatement.
[127] I am satisfied that an order for compensation would be appropriate. The Respondent
has used its right as an employer to dismiss the Applicant from her employment with the
Respondent, and by dismissing the Applicant has also effectively removed the Applicant from
direct involvement with a Company she co-founded and in which she has a personal and
financial stake. The Respondent has dismissed the Applicant from her employment because of
reasons including the demise of her personal relationship with the Director and CEO of the
Respondent. While the Applicant’s rights as a former spouse are not matters that can be
litigated under the Act, the has a right to seek a remedy for unfair dismissal. For the reasons
set out above, I have concluded that the Applicant was unfairly dismissed and that reinstatement
is not appropriate.
[128] I have made the necessary findings that are prerequisite to awarding compensation. In
relation to the assessment of compensation, s. 392 of the Act provides as follows:
“392 Remedy—compensation
Compensation
(1) An order for the payment of compensation to a person must be an order that the person’s
employer at the time of the dismissal pay compensation to the person in lieu of reinstatement.
Criteria for deciding amounts
(2) In determining an amount for the purposes of an order under subsection (1), the FWC must take
into account all the circumstances of the case including:
(a) the effect of the order on the viability of the employer’s enterprise; and
[2021] FWC 6093
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(b) the length of the person’s service with the employer; and
(c) the remuneration that the person would have received, or would have been likely to
receive, if the person had not been dismissed; and
(d) the efforts of the person (if any) to mitigate the loss suffered by the person because of
the dismissal; and
(e) the amount of any remuneration earned by the person from employment or other work
during the period between the dismissal and the making of the order for compensation; and
(f) the amount of any income reasonably likely to be so earned by the person during the
period between the making of the order for compensation and the actual compensation; and
(g) any other matter that the FWC considers relevant.
Misconduct reduces amount
(3) If the FWC is satisfied that misconduct of a person contributed to the employer’s decision to
dismiss the person, the FWC must reduce the amount it would otherwise order under subsection (1) by
an appropriate amount on account of the misconduct.
Shock, distress etc. disregarded
(4) The amount ordered by the FWC to be paid to a person under subsection (1) must not include a
component by way of compensation for shock, distress or humiliation, or other analogous hurt, caused to
the person by the manner of the person’s dismissal.
Compensation cap
(5) The amount ordered by the FWC to be paid to a person under subsection (1) must not exceed
the lesser of:
(a) the amount worked out under subsection (6); and
(b) half the amount of the high income threshold immediately before the dismissal.
(6) The amount is the total of the following amounts:
(a) the total amount of remuneration:
(i) received by the person; or
(ii) to which the person was entitled;
(whichever is higher) for any period of employment with the employer during the 26 weeks
immediately before the dismissal; and
(b) if the employee was on leave without pay or without full pay while so employed during
any part of that period—the amount of remuneration taken to have been received by the
employee for the period of leave in accordance with the regulations.”
[129] The approach to the calculation of compensation is set out in a decision of a Full Bench
of the Australian Industrial Relations Commission in Sprigg v Paul’s Licensed Festival
Supermarket.47 That approach, with some refinement, has subsequently been endorsed and
adopted by Full Benches of the Commission in Bowden v Ottrey Homes Cobram and District
[2021] FWC 6093
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Retirement Villages inc T/A Ottrey;48 Jetstar Airways Pty Ltd v Neeteson-Lemkes49 and
McCulloch v Calvary Health Care (McCulloch).50
[130] I turn now to the particular criteria I am required to consider in deciding the amount of
compensation to be awarded to the Applicant for her unfair dismissal. In assessing
compensation, I am required by s 392(2) of the Act to take into account all the circumstances
of the case including the specific matters identified in paragraphs (a) to (g) of this subsection.
The established approach to assessing compensation in unfair dismissal cases was set out in
Sprigg v Paul Licensed Festival Supermarket 51 and applied and elaborated upon in the context
of the current Act by Full Benches of the Commission in a number of cases as follows:52
Step 1: Estimate the remuneration the employee would have received, or have been likely to have
received, if the employer had not terminated the employment (remuneration lost).
Step 2: Deduct monies earned since termination.
Step 3: Discount the remaining amount for contingencies.
Step 4: Calculate the impact of taxation to ensure that the employee receives the actual amount he or she
would have received if they had continued in their employment.
Step 5: Apply the legislative cap on compensation.
Remuneration the Applicant would have received, or would have been likely to receive, if she
had not been dismissed (s 392(2)(c))
[131] To calculate the remuneration the Applicant would have received or would have been
likely to receive had she remained in employment, it is first necessary to determine an
anticipated period of employment. This involves an element of speculation because the task
involves an assessment of what would have been likely to happen in the future had the employee
not been dismissed.53
[132] While the Applicant’s employment and the breakdown of her personal relationship with
Mr Ranchod were two separate matters, it is unrealistic to assume the Applicant would have
remained in employment for a lengthy period. The Respondent is a small business and at the
point the Applicant was dismissed, had four employees. The Applicant and Mr Ranchod are
engaged in other legal proceedings and the proposition that the Applicant could continue to
level accusations and allegations at Mr Ranchod of the kind that were levelled in the hearing of
her application and work amicably alongside him, is one that I am unable to accept. It is not
necessary that I repeat those allegations in this Decision.
[133] Mr Ranchod is the Director and CEO of the Respondent, and any interest the Applicant
had, other than in her role as an employee, was as his wife. The Applicant has no right as an
employee to insist on remaining in employment indefinitely and Mr Ranchod has the right to
dismiss the Applicant, subject to exercising that right in a manner that is not unfair or unlawful.
My estimation is that things would have come to a head within four months of the date the
Applicant was dismissed, and the Applicant’s employment would have ended in any event. If
the Applicant was offered part-time employment or a lower paid role, she may not have
accepted the offer or may have accepted it for a limited period before obtaining other full-time
employment. It is also likely that the personal relationship between the Applicant and Mr
[2021] FWC 6093
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Ranchod would have deteriorated further making its continuation impracticable and that Mr
Ranchod would have dismissed the Applicant or she would have resigned her employment.
[134] The Applicant’s contract of employment provided for an annual salary of $140,000.00
plus superannuation contributions of $13,000.30. This equates to an amount of $2692.30 per
week in wages and $250.00 as superannuation contributions. The Applicant was dismissed
with effect on 23 March 2021. The JobKeeper program ended on 28 March 2021 and at that
time the Applicant would have been in receipt of JobKeeper payments in the amount of
$1,000.00 per fortnight. Accordingly, during the anticipated period of employment the
Applicant would have earned $500.00 from JobKeeper entitlements. Thereafter, in normal
circumstances, the Applicant would have earned $40,384.50 – 15 weeks at a salary of $2692.30.
This is a total of $40,884.50.
[135] However, the circumstances at the time were not normal. Mr Ranchod’s evidence is
that all other employees had their hours reduced to part-time and had their wages reduced
proportionately. Mr Ranchod states that he was also working part-time during the COVID-19
period and that he then received JobKeeper payments and then a part-time amount. Mr Ranchod
also said that at the date of hearing, he had not drawn a wage since April 2021. Mr Morrissey’s
correspondence did not enlighten me further and simply stated that investors had only allowed
Mr Ranchod to draw one monthly payment after the end of March 2021.
[136] Mr Ranchod also said that the Technical Operations employee was working five hours
per day and being paid $750.00 per week, and the CFO was working 5 hours per week remotely
from the United States and being paid approximately $2,000.00 per month. I am satisfied that
had the Applicant remained in employment her hours would have been reduced and her salary
would also have reduced proportionately. Based on the hours being worked by the Technical
Operations employee I find that the Applicant would have worked 25 hours per week and by
dividing by a notional 38 hour week equating to an hourly rate of $70.85, the Applicant’s
weekly earnings would have been $1,771.25 for the 15 week period from 30 March 2021,
totalling $26,568.75. With the addition of the $500.00 JobKeeper payment for the week of 23
to 30 March 2021, the total amount of compensation is $27,068.65. In addition, the Applicant
would have earned superannuation contributions in the amount of $2,571.50.
Remuneration earned (s 392(2)(e)) and income reasonably likely to be earned (s 392(2)(f))
[137] The Applicant has not obtained other employment and given the Applicant’s evidence
that she has applied for some jobs and will increase her efforts if she does not achieve
reinstatement in these proceedings, it is unlikely that she will find alternative employment in
the period I have estimated that she would have remained employed. The Applicant’s
explanation for not making concerted efforts to seek new employment is reasonable in the
circumstances. Accordingly I make no deduction from the award of compensation on this basis.
Viability (s 392(2)(a))
[138] At the hearing, Mr Ranchod gave evidence that any award of compensation would send
the company insolvent.54 In his oral evidence, Mr Ranchod said that the Respondent had
approximately $12,000.00 in the bank. In the additional material filed after the hearing, Mr
Ranchod said in an email that the Respondent has $20,000.00 in its bank account and needed
[2021] FWC 6093
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to pay wages of approximately $6,000.00 on 15 June 2021. According to Mr Ranchod, the only
income the Respondent has is $12,000.00 to come in at the end of June which will go to service
debt so that the Company can remain solvent. Further, Mr Ranchod said that the Commission
should have regard for the payment of $1,300.00 per month the Company has made for the
Applicant’s vehicle. Mr Ranchod also tendered the letter from Mr Morrissey set out above as
evidence that an award of compensation to the Applicant would have an adverse effect on the
Respondent’s viability.
[139] I do not accept Mr Ranchod’s evidence on this point. As I have previously noted, Mr
Ranchod had two opportunities to establish any argument in relation to the effect of an award
of compensation on the Respondent’s viability. There is insufficient evidence upon which I
could be satisfied that the Respondent is insolvent as there is no information about its assets.
While the financial situation appears to be dire, the Applicant makes a valid point – the interests
of shareholders should not trump her rights to compensation for an unfair dismissal. Further,
the Respondent’s investors have put money into the Company, and presumably have continued
to do so, in order to protect their initial investment. If there is a risk of insolvency, then the
investors can continue their past practice or not, and this is no reason to deny the Applicant
compensation for her unfair dismissal.
[140] I am also of the view that if the Respondent circumstances are as dire as the figures
advanced by Mr Ranchod suggest, then an award of compensation will make no difference to
the Respondent’s position. If those figures are correct, and the Respondent has insufficient
assets to meet its debts, then it is arguably insolvent regardless of any award of compensation
to the Applicant. For the reasons set out above, I do not consider that the Applicant’s vehicle
is part of her remuneration package and I accept that it is simply her personal vehicle bought
through the Company. Accordingly, I make no deduction for the Applicant’s vehicle.
Length of service (s 392(2)(b))
[141] I am satisfied and find that the Applicant has 9 years’ service with the Respondent and
that this supports an award of compensation.
Mitigation efforts (s 392(2)(d))
[142] For reasons set out above, the Applicant has made some attempt to mitigate the loss of
her employment and has provided a reasonable explanation for her failure to obtain other
employment. I make no deduction on this basis.
Any other relevant matters (s 392(2)(g))
[143] Given the period over which I have assessed compensation, I do not intend to make any
deduction for contingencies. The Applicant has an interest in the Respondent’s business based
on marriage to Mr Ranchod. That interest will be addressed in other proceedings. The Applicant
may also have rights in relation to unpaid wages in addition to the amount of compensation I
have assessed. The compensation amount does not include consideration for unpaid wages.
The compensation amount recognises the Applicant’s rights as an employee and the fact that
she was unfairly dismissed.
[2021] FWC 6093
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Misconduct (s 392(3))
[144] The Applicant did not engage in misconduct and I make no deduction on that basis.
Shock, distress or humiliation, or other analogous hurt (s 392(4))
[145] The amount of compensation I have awarded does not include compensation for shock,
distress or humiliation or other analogous hurt. The Applicant’s claim in relation to the time,
effort and financial investment she has expended to assist Mr Ranchod in the business, is a
matter for other courts.
Compensation cap (s 392(5)-(6))
[146] It is not necessary to apply the cap in the circumstances of the amount of compensation
I have determined to award.
Instalments (s 393)
[147] The Applicant pointed to the fact that compensation may be paid in instalments in
response to Mr Ranchod’s evidence about the effect an order for compensation would have on
the Respondent. If the Respondent seeks to advance a proposal for compensation to be paid in
instalments, he should do so by 4.00 pm on Monday 18 October 2021. Mr Ranchod should
note that any proposal he makes should be reasonable and that my provisional view is this
would involve no more than four instalments over a four month period, with the first instalment
being payable 28 days from the date of release of this Decision. Mr Ranchod should also note
that any order for compensation to be paid in instalments would include a provision to the effect
that a failure to pay an instalment would result in the total outstanding amount becoming
immediately due and payable. If the Applicant wishes to respond to any submission Mr
Ranchod may make in relation to paying compensation in instalments, she may do so by
Monday 25 October 2021.
Conclusion
[148] In summary I find as follows:
a. I am not satisfied that an order for the payment of compensation would affect
the viability of the Respondent’s business (s.392(2)(a)).
b. The length of the Applicant’s service favours the making of an order for
compensation and no diminution of any amount that might otherwise be
determined is warranted because of this circumstance (s.392(2)(b)).
c. The remuneration that the Applicant would have been likely to receive, but for
her dismissal, is $27,068.65 in wages and superannuation contributions in the
amount of $2,571.50.
d. I make no deduction for contingencies
[2021] FWC 6093
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e. I make no deduction on the basis of mitigation as I am satisfied that the
Applicant has made reasonable attempts to mitigate the loss of her employment
and provided a reasonable explanation for having not obtained employment at
this point (s.392(2)(d)).
f. I make no deduction for remuneration earned since dismissal (s.392(2)(e)).
g. I make no deduction for income likely to be earned during the period between
the making of the order and the actual compensation (s.392(2)(f)).
h. I make no deduction for payment in lieu of notice or redundancy payments
made or owing to the Applicant and the Applicant is at liberty to seek to recover
any amount of unpaid wages owing to her.
i. I make no deduction for misconduct (s.392(3)).
j. It is not necessary to cap the amount payable to the Applicant.
[149] I have taken into account all of the circumstances of the case and all of the matters I am
required to take into account pursuant to subsections 392(2), (3) and (5). I am satisfied that it is
appropriate to order that the Respondent pay the Applicant compensation in the amount of
$27,068.65 less tax according to law and superannuation contributions of $2,571.50 to the
Applicant’s nominated superannuation fund. If the Respondent wishes to make an application
to pay the amount of compensation in instalments, having regard to the matters set out above,
it should make such an application by 4.00 pm on Monday 18 October 2021. The Applicant
may provide a response to such application by 4.00 pm on Monday 25 October 2021. If no
application to pay the amount of compensation in instalments is made by the Respondent, an
Order will issue requiring that the full amount is paid within 28 days of the date of release of
this Decision.
DEPUTY PRESIDENT
Appearances:
The Applicant on her own behalf.
Mr L Ranchod for the Respondent.
Hearing details:
26 May.
FAIR AL OF THE FAIR WORK .C MMISSION THE
[2021] FWC 6093
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2021.
Brisbane.
Printed by authority of the Commonwealth Government Printer
PR734706
1 Exhibit A3 Updated Witness Statement of Maria Ranchod.
2 Exhibit A1 – Statement of Emmanuel Castrisos dated 11 May 2021.
3 Exhibit A2 – Statement of Ms Leona Cooke dated 11 May 2021.
4 Exhibit R1 – Witness Statement of Lee Ranchod dated 6 May.
5 Ulan Coal Mines Limited v Honeysett and Others [2010] FWAFB 7578.
6 Technical and Further Education Commission T/A TAFE NSW v Pykett [2014] FWCFB 714 at [36].
7 Ulan Coal Mines Ltd v Howarth [2010] FWAFB 3488.
8 Ibid at [19].
9 Johnston v Blue Circle Southern Cement Pty Ltd [2010] FWA 5149 at [44].
10 Margolina v Jenny Craig Weightloss Centres Pty Ltd [2011] FWA 5215 at [6].
11 Technical and Further Education Commission T/A TAFE NSW v Pykett [2014] FWCFB 714 at [22].
12 [2014] FWCFB 714.
13 Ibid at [23].
14 Ibid at [24] – [25] and see Ulan Coal Mines Pty Ltd v Honeysett and Others [2010] FWAFB 7578.
15 [2014] FWCFB 714 at [36].
16 Ulan Coal Mines Pty Ltd v Honeysett and Others [2010] FWAFB 7578 at [34].
17 MacLeod v Alcyone Resources Ltd T/A Alcyone [2014] FWCFB 1542 at [32].
18 Maswan v Escada Textilvertrieb (t/as ESCADA) [2011] FWA 4239 at [39].
19 UES (Int’l) Pty Ltd v Harvey (2012) 215 IR.
20 Witness Statement of Maria Ranchod at page 1-2.
21 Transcript at PN293.
22 Exhibit A5.
23 Transcript PN594.
24 Transcript PN704.
25 Transcript at PN702- PN703.
26 Exhibit R2 – Applicant’s contract of employment.
27 Transcript at PN131.
28 Transcript at PN120- PN121.
29 Transcript at PN123- PN130.
30 Transcript at PN60- PN61.
31 Transcript at 376.
32 Exhibit R1 Statement of Lee Ranchod.
33 Transcript at PN58 - PN59.
34 Transcript at PN164.
35 Transcript at PN97.
[2021] FWC 6093
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36 Transcript at PN99- PN108.
37 Transcript at PN145- PN146.
38 Transcript at PN153- PN 154.
39 Transcript PN158.
40 Exhibit A6 Contract of Employment of Lee Ranchod
41 Transcript PN659.
42 Transcript at PN361- PN363.
43 Transcript at PN368- PN369.
44 Transcript PN367.
45 Transcript at PN370-PN371.
46 Piyush Jain v Infosys Limited T/A Infosys Technologies Limited [2014] FWCFB 5595.
47 (1998) 88 IR 21.
48 [2013] FWCFB 431.
49 [2014] FWCFB 8683.
50 [2015] FWCFB 2267.
51 (1998) 88 IR 21.
52 Tabro Meat Pty Ltd v Heffernan [2011] FWAFB 1080; Read v Golden Square Child Care Centre [2013] FWCFB 762;
Bowden v Ottrey Homes Cobram [2013] FWCFB 431.
53 Double N Equipment Hire Pty Ltd v Humphries [2016] FWCFB 7206 at [16]-[17]
54 Transcript at PN835-PN836.